Planning is essential to keeping your project organized and on track. But, it can be challenging to know where to start.
From defining the scope of work and delivery timelines to putting together a team and assigning responsibilities to relevant stakeholders, a lot goes into building the project foundation.
Additionally, you must anticipate the roadblocks from third parties (such as vendors, freelancers, etc.) you may encounter during the project and plan ahead. Vendor risk management is essential in this context as it ensures potential risks related to third-party suppliers are identified.
Put simply, you have to be highly meticulous in project planning. In this article, we will discuss everything you should know and do before starting a new project.
While every project is different, there are a few general things to do in the pre-planning stage:
1. Plan the scope of your work and set SMART goals
First things first, set goals for your project. Provide as much detail as possible when setting them, and list all the tasks and responsibilities that you want the project team to shoulder. Follow the OKR methodology or apply the SMART technique to avoid any ambiguity in goal-setting:
- Specific: Be specific about your project. What is it?
- Measurable: Define the parameters to measure the success of the project goals.
- Attainable: Keep the goals achievable.
- Relevant: Make sure they are realistic and relevant to the project.
- Time-bound: Set practical deadlines; you should be able to finish all tasks promptly.
Next, create a Statement of Work (SOW) that defines the entire work scope for the internal project team and clients.
Include details like deadlines, work location, payment terms, other invoicing conditions and so on. It is incredibly useful when you are dealing with suppliers and want to minimize vendor risk management by setting expectations upfront.
2. Identify the skills required and assemble a team
When considering who you want in the team and how many, you must get an understanding of their skills and strengths and whether they will be able to work with clients and stakeholders. Run through the following checklist when shaping your team:
- Skills. What are they required to do?
- Budget. Can you afford them for the job?
- Stakeholders. Are they a right fit for coordination?
- Availability. Will they have the time to give to the task?
- Experience. Have they worked on similar projects before?
Do not do this activity in isolation. Speak to various department heads to get their help in outlining resource requirements and make a decision accordingly.
3. Decide who does what in the team and manage expectations
Managing everyone involved in the project can be an overwhelming task. That’s because when cross-functional team members work together, each brings with them their own vision, strengths, and approach to the project.
This can be counterproductive if expectations are not defined early on. Thus, list all the required activities, the expected project duration, and the end goal.
You can use a responsibility assignment metric or RACI chart to determine who is accountable, informed, and consulted for each task. This improves overall team efficiency.
Source: softwareadvice
Once these details have been finalized, sit down with the team to tell them as much as you know about the project and ask for questions or feedback. Write down all the considerations people bring up — the good and the bad. This helps you do two things:
- Change the resource if there is a fitment or vision alignment issue.
- Alter or modify the workflow to help the team members do their job.
In addition, do more than just have one meeting before the project kick-off. Have smaller refresher sessions instead spread throughout the weeks or months leading up to the project.
In this case, it would help if you had a fluid project communication plan to keep track of multiple independent resources or departments involved.
Lastly, set a cadence for meetings and fetching status reports, then schedule interdepartmental collaboration time so people can share their progress, exchange ideas, and resolve queries.
4. Budget your project in the most detailed manner possible
Even though the budget is not the only determinant of project success, it still massively influences it. If you had a bigger budget, you would obviously get more people to do the job, get all the best tools possible, and quickly deliver the project.
However, it does not matter how big or small the task is; ascertaining the bottom line will always be the same. Often, there is already an expectation of a project’s cost.
Estimating without knowing what you want to do or achieve can result in financial missteps and inaccurate projects. Here are four tools you can use for more accurate budget planning:
Cost of quality
Identify the cost of all your quality-related tasks in the overall budget. If something needs to be done right at the very start of the project, then make sure that happens.
Reserve analysis
Set aside some money for cost overruns. If your project could hit a specific roadblock, you should have the financial resources to deal with it when and if the time comes.
Resource cost rates
Consider the specific rate at which different team members will be working. Are there any software solutions you need for the project? If you are hiring freelancers or specialists, include their costs too.
Vendor bid analysis
Sometimes, you must work with an external supplier or vendor to complete the project. If you have multiple vendors bidding, choose one that fits your budget. But pay attention to factors such as compatibility, quality, and reliability.
It is vital to keep all supporting estimate info handy. That way, you will know the assumptions made when you come up with the numbers.
5. Define the deliverables and set a timeline for the tasks
Once you have the scope of work and the project team in place, it is much easier to set deliverables with deadlines. To start, divide the project into phases or components and create specific tasks:
- List who is responsible for creating, reviewing, and submitting the deliverable.
- Put a deadline against it. Keep some time aside for making amends and getting approvals.
- Identify any discrepancies that might hinder deliverable creation or delivery.
A timeline can help you streamline the tasks because everyone knows exactly what to do and when. Use a Gantt chart to visualize your entire project if you have multiple milestones.
You could also use project management software like Paymo to track progress, assign tasks, and ensure everyone stays on the same page. Enable real-time updates and foster collaboration within the team.
What is also important to note here is that projects change and evolve. So you need to be ready to adapt and shift the timelines and responsibilities accordingly.
For future reference, you must also document all project-related documents, such as the project plan, scope of work, and budget planning. You can also share these with the team members so that they have something to refer to whenever they face an obstacle.
6. Finalize core KPIs and establish benchmarks for success
Numbers speak louder than words. Metrics tied directly to the bottom line communicate the success or failure of a project more quickly than everything else. So before starting a project, decide the metrics you want to track. Some of them could be:
Earned value (EV)
Earned value (EV) is a key performance indicator (KPI) used to measure project performance. This metric shows the value earned from the money you have spent to date on a project. It compares the value of work completed within a specific timeline concerning the approved project budget.
The earned value is calculated by multiplying the total project budget by the percentage of project completion, like so:
EV = total project budget * percentage of project completion
where you express percentage of project completion as 1.00 for 100%, 0.90 for 90% and so on.
For example, a $50,000 project budget that is 60% done results in an earned value of $30,000.
The earned value helps provide deeper information on the project, and it can be used to answer three questions:
- Where were we?
- Where are we now?
- Where are we going?
The earned value is one of the critical few best practice areas for monitoring project performance from both a cost and schedule perspective.
Cost variance (CV)
Cost variance compares the budget that was set before the project started and what was spent. It is calculated by finding the difference between the earned value of work performed (EV) and the actual cost of work performed (AC).
CV = EV – AC
It shows the difference between the actual costs and the planned budget by a specific date. Cost variances can be positive or negative, depending on how closely the ACWP matches up to the BCWP. If the costs are over budget, the variance is negative.
Let’s take, for example, a $50,000 budgeted project that has an earned value of $30,000 and actual costs of $37,500. Using the formula, the cost variance for the project is -$7,500, which means that the project is over budget by $7,500.
Schedule variance (SV)
Schedule variance (SV) is a measure of the deviation between the planned schedule and the actual schedule. This examines whether the project is running ahead or behind the planned budget. How? A positive schedule variance indicates that the project is ahead of schedule, while a negative schedule variance indicates that the project is behind schedule.
Let’s break it down.
SV is derived by subtracting the budgeted cost of work actually scheduled, namely the planned value (PV), from the budgeted cost of work performed, or the earned value (EV).
SV = EV – PV
Taking our $50,000 project with an earned value (EV) of $30,000 and a planned value (PV) of $35,000 by August 15, the schedule variance for the project is -$5,000, which means that the project is behind schedule. In other words, you should have made more progress towards completion by another $5,000.
What is the difference between cost variance and schedule variance? Cost variance is based on costs spent, while schedule variance is based on time spent. CV helps track finances as the project progresses, while SV helps measure project schedule performance.
Resource utilization
Resource utilization refers to the measurement of how effectively resources, such as team members or employees, are being utilized within a project or organization.
Basically, it reflects how efficiently the resources have been used in the project. By monitoring this, you can find out which resources may be under or fully booked and make adjustments as necessary.
Here are common methods to measure resource utilization:
- Hours worked vs. total hours allocated. Divide the number of hours worked by the total number of hours allocated to the team to get a percentage. For example, 32 hours worked out of a 40-hour week equals 0.80, which is 80% utilization. This method may be the easiest, but it only tracks time, not efficiency.
- Opt for a project planning and tracking tool. Organize projects, set milestones, and monitor the progress of tasks according to the planned schedule (SV) using a Gantt chart or Kanban board for better visualization. The focus of this method is on tasks completed and milestones reached by your team. If your team is consistently behind schedule, make sure it’s not because of scope creep.
- Use resource scheduling software. When working on different projects, or your team is juggling billable and administrative tasks or strategic initiatives, you may want to use dedicated software when planning their work, such as Paymo’s Team Scheduler. The focus of this method is on optimized employee performance.
How do you track resource utilization? The simplest way is for your team to use a time tracker that automatically generates timesheets, add time entries to their weekly timesheet, or add time in bulk. Even widgets automatically calculate time utilization:
Ultimately, achieving optimal utilization enhances profitability. Read this guide on how to ensure profitability for your business.
Return on Investment (ROI)
Return on Investment (ROI) is a measurement tool that businesses use to gauge how successful they have been in achieving specific goals and objectives.
ROI is a financial KPI that specifically looks at the amount earned (net profit) for the amount invested (investment cost) in a project.
ROI = ((Net Profit / Investment Cost) * 100)
Net Profit is the total profit generated from the investment. This can be calculated by subtracting the total costs (including expenses, taxes, and other relevant costs) from the total revenue or income generated.
Investment Cost is the total cost incurred to make the investment, including initial investment, ongoing expenses, and any additional costs associated with the investment. Costs may include resources, team training, software overheads, and so on.
For example, let’s say a marketing campaign generated a net profit of $10,000, and the total investment cost for the campaign was $50,000.
Using the formula for our example, ROI = (($10,000 / $50,000) * 100) = 20%, the ROI for the marketing campaign would be 20%.
This means that for every dollar invested, the campaign generated a return of 20 cents.
Tip: Speak to team members, stakeholders, and vendors to specify the metrics they think are most critical to them, as each would bring in a unique perspective and insight. When people have a say in what is being measured, they will likely feel a greater sense of commitment. This buy-in can significantly influence project success.
Always remember three things:
1. Factor in time for meetings and delays
It is highly unlikely you are the only person working on a project. Most such undertakings require a team effort, meaning frequent interaction with people.
You may need to order supplies from a vendor, speak with a subject matter expert, gather market info from the sales team, or manage the physical space where the work is being conducted. All of this takes time.
What is more — it is very rare for either of the interactions to go off without a hitch. You may have to deal with shipping delays, the submission of incorrect data, or miscommunication. Lots of things can go wrong.
That is why it is essential to set aside buffer time to reduce stress, avoid missed deadlines, and handle unexpected situations more effectively.
2. List all possible threats and prepare for them
As tedious as it may sound, doing so will prevent you from dealing with more hiccups than necessary.
In addition, determine an appropriate protocol to follow if you face a problem. Resolve it quickly and move on so you do not disrupt the flow of your project.
3. Do not chase perfection
Instead, focus on the smallest steps required to progress the project.
Do not overthink; get them out of the way.
This advice is specifically relevant for projects that are likely to be tweaked after finishing — for example, writing a whitepaper.
If you’re finding it difficult to complete your unfinished tasks, try out these tips.
Set the ball rolling on Day 1 of your project.
By following the pre-planning steps outlined above, you can kick off the project with clarity and confidence. Also, take the time to arrange a team meeting on Day 1.
It can be a quick session to discuss the first step or task that everyone in the team needs to undertake. This results in higher productivity levels and efficient project completion.
Plus, when you have spent considerable time planning for the project, Day 1 automatically becomes easy and exciting.
First published on August 15, 2023.
Carl Torrence
Author
Carl Torrence is a Content Marketer at Marketing Digest. His core expertise lies in developing data-driven content for brands, SaaS businesses, and agencies. In his free time, he enjoys binge-watching time-travel movies and listening to Linkin Park and Coldplay albums.
Alexandra Martin
Editor
Drawing from a background in cognitive linguistics and armed with 10+ years of content writing experience, Alexandra Martin combines her expertise with a newfound interest in productivity and project management. In her spare time, she dabbles in all things creative.
