“A recent PMI research revealed that the companies that undervalue the importance of creating a project plan report a project failure rate of 67% on average.”
The absence of a project plan can have dire consequences on project health as it increases the risk of budget/schedule overruns. Moreover, when there is no proper roadmap, project team members may not clearly understand the goals, priorities, or task dependencies. This misalignment can lead to confusion, delays, and subpar deliverable quality, ultimately resulting in project failure.
That’s why the significance of creating a well-structured project plan cannot be overstated. A meticulous project planning process enables managers to ensure every critical attribute is well accounted for and thoroughly documented. Therefore, it helps organizations minimize disruptions and ensure successful project delivery.
This blog sheds light on the fundamentals of a project plan and the steps to create an effective one.
But first, let’s start with the basics.
What is a Project Plan?
A project plan, also known as a work plan, is a formal document that serves as a roadmap for planning and executing the project. It clearly outlines the goals, scope, schedule, resource requirements, potential risks, communication protocols, and deliverables of the projects. Moreover, a project plan is accompanied by several other critical documents, such as a project charter, risk register, communication strategy, stakeholder management, etc.
A project plan is a well-defined roadmap of a project’s lifecycle that helps managers steer the project successfully.
How Long Does a Project Planning Process Take?
The duration of a project planning process depends on multiple factors, such as the project’s complexity, scope, resource availability, team expertise, and industry. Typically, it ranges from a few weeks to several months. It involves key steps such as gathering requirements, breaking the project into manageable tasks and sub-tasks, assigning responsibilities, and developing a comprehensive schedule.
It’s important to remember that project plans are living documents that evolve over time and are refined regularly through progressive elaboration. Therefore, the timeframe for creating a well-defined plan can vary drastically from project to project.
Here is an example of what a project management plan looks like.
Read More: What is Project Scheduling, and Why is it Important?
A Project Plan Example
Consider you as a project manager preparing a construction project plan for building a new residential complex.
Below is a small mock-up of the project plan for the above-mentioned project.
- Project Scope: Complete the construction of a commercial building focusing on quality, safety, and adherence to the timeline.
- Project Objective & Deliverables: Finish construction within budget, meet all safety standards and complete the project by the deadline.
- Milestones: Design approval, permit acquisition, foundation work completed, structural framework finished, exterior completed, interior finishes started, final inspection passed.
- Budget: $2 million
- Schedule: January 15, 2025 – April 15, 2026
- Project completion date: April 15, 2026
- Roles: Project Manager, Architect, Engineers, Construction Crew, and Safety Officer
- Communication schedule: Weekly progress meetings with the construction team and monthly updates for stakeholders.
- Resources: In-house construction team, supervisors, and additional contractors for specialized tasks (e.g., electrical, plumbing).
- Risks: Delays due to weather, material shortages, materials procurement delays, unexpected site conditions
This project plan serves as a framework to guide the construction process and ensure successful completion.
Let us now dive deeper into the different components of a project plan.
Read More: A Detailed Guide to Construction Management Plan
Components of a Project Plan
Here’s a rundown of some critical project plan components that you shouldn’t miss while formulating the roadmap:
Project Scope and Deliverables
The project plan first defines the objectives and scope. It outlines what is included and excluded from the project, serving as a guide to manage expectations and prevent scope creep. It identifies the key objectives and breaks the project into manageable tasks and subtasks to simplify the complexities of the project and allow seamless resource planning.
Project Timeline and Budget
The financials and timeline are the critical components that are planned at the start of the project. It helps project managers adhere to the stipulated budget and timeline and monitor the deviation between planned vs. actual cost to take necessary corrective measures ahead of time.
Work Breakdown Structure
The foundation of project planning starts by creating a WBS (work breakdown structure), which divides the project into logical tasks. Using a WBS, managers break down the project into manageable components that are further split into subcomponents, activities, and tasks. It allows project managers to build a link between tasks and activities, identify resource requirements, and avoid duplication of efforts.
Read More: Effective Ways to Create a Work Breakdown Structure
Project Milestones
After the tasks are determined, the next crucial component is to define project milestones. They are the progress indicators that act as checkpoints in the project. They can be treated as mini projects with their own deliverables. This makes it convenient for managers to monitor the project’s progress and offer a sense of accomplishment to the teams.
Resource Plan
An effective resource plan enables managers to foresee the skill demand, fill the gap proactively, and avoid last-minute firefighting. It allows project managers to schedule the right resource with the right competencies for the right task and ensure productive utilization of the workforce.
Risk Management
The risk management framework detailed in the project management plan helps stakeholders to identify, assess, and mitigate potential issues that could derail the project. This strategy focuses on implementing reasonable control measures to eradicate or lessen the impact of these risks if they occur.
Communication Plan
A communication plan outlines how the team and stakeholder communication will be managed throughout the project lifecycle. It also explains what updates they can expect, which decisions need reviews and approval, and who’s responsible for each action. Moreover, it also clarifies the mode and frequency of communication between the involved parties.
Stakeholder Management
One of the key functions of project managers is maintaining a healthy balance with stakeholders. It involves assessing their expectations, getting buy-in for major decisions, and developing appropriate strategies to execute their expectations in alignment with project activities.
Change Management
If any change request (regarding budget, timeframe, resources, and quality factors) arises, a change management plan helps managers evaluate the impact on the project’s performance. If proven feasible, managers can get approval from the change control board to introduce the amendments.
Read More: How Can You Improve Organizational Change Management Strategies?
The following section discusses the importance of creating a project plan.
Why are Project Plans Important?
“Research from the Project Management Institute indicates a substantial correlation between a project plan and project success.”
The better your plan, the better the outcome. For example, let’s take two scenarios. One is where all the project details are defined before the execution begins, and the second is where there is no clear visibility of the scope, deliverables, resources, risks, etc.
Which scenario will lead to successful project completion? Certainly, the former.
The project plan sets the stage for the entire project. It brings together all the project-related information in one place, opens doors for seamless communication, and provides a shared vision and clarity to all stakeholders and team members.
The initial project planning steps comprise forming a work breakdown structure and dividing the project into smaller tasks. Once the tasks are enlisted, it facilitates seamless resource planning and allows managers to create a systematic and precise project schedule.
In addition, during the execution stage, the project plan serves as a reference/blueprint for the entire team, stakeholders, and managers. It determines whether or not the project tasks are on schedule and helps to deliver the agreed-upon products or services. Using the project plan, managers can mitigate risk and maintain quality at all project stages, from initiation to completion.
Thus, good project management always starts with a project plan. It is a key component that propels the completion and delivery of projects within time and budget.
Read More: What is Resource Planning, and Why is it Important in Project Management?
Keeping these points in mind, it’s time to get the steps right.
10 Steps to Create an Effective Project Plan
Below are nine vital steps that can help you create an effective project management plan. It will also ensure your project is completed on time and within budget.
Define Your Project Scope
Defining project scope is the foundation of any project. It distinctly clarifies goals and objectives and gives clear visibility of what work must be done to achieve the project deliverables. The project manager can start by identifying the client’s needs and expectations. Following this, the project budget and deadline can be specified.
Further, the main deliverables can be broken down into milestones as they will help to estimate the appropriate resource demand. Once all the above steps are outlined, project managers can create a WBS and SOW for the systematic division of tasks. Defining the project objectives sets a reference for the entire project and prevents scope creep at the later execution stage.
Read More: What is a Project Scope Document, and How to Create an Effective One?
Determine Project Budget
The project budget is the combined costs of all activities, resources, equipment/tools that the project must fulfill. In short, the total amount of money required to finish the project should be approved by all the stakeholders involved.
Once the project budget is specified, managers can prioritize resources based on availability and cost-efficiency, ensuring optimal allocation. This offers the potential for creating a realistic project schedule that aligns with financial constraints and resource capacity.
Outline Project Dependencies, Milestones, and Deliverables
Project managers must identify dependencies, which are tasks that rely on others for completion, and plan their sequence logically to prevent bottlenecks. They can use a dependency matrix or Gantt chart to visualize these relationships across project teams. Moreover, it helps them identify the critical path.
Then, they must define the milestones and deliverables as checkpoints to measure progress and maintain momentum. Project supervisors can document these details to set clear expectations for quality and timelines. Thus, outlining dependencies, milestones, and deliverables helps project teams to stay aligned with the overall goals.
Estimate Project Resource Requirements
This step is crucial for understanding the materials, equipment, and human resources needed to complete the project. First, managers need to understand each task diligently, along with the skills and team members to be involved. Assessing the skill demand helps managers estimate the best-fit available resources and do justice to the project tasks.
Second, before scheduling the resources for the project, managers must check their available capacity to avoid overbooking or double-booking. If the required resources are unavailable, managers must conduct planned hiring or initiate training/upskilling to create the right project resource mix.
Read More: Effective Strategies for Resource Estimation in Project Management
Create a Project Schedule
A project schedule is a roadmap of tasks to be accomplished during the project’s course to reach the finish line. Once the manager has analyzed the resource demand and availability, he can form a precise project schedule.
Sometimes, the schedules of booked resources are also stretched thinly. In this case, project managers must implement resource optimization techniques such as leveling and smoothing to maintain the resource health index. Thus, when all the parameters of resources are checked, managers can allocate resources to the project.
Establish Project Performance KPIs
After the schedule is created, project managers must establish the KPIs. For that, they must first define the key objectives and outcomes that the project is expected to achieve. These objectives should be specific, measurable, and aligned with project goals. Key areas they must consider include time, cost, quality, and scope.
In addition, project managers should set clear targets for each indicator and establish a system for regular tracking and progress reporting. This includes determining how data will be collected, the frequency of measurement, and the tools or software used to track performance.
Assess Potential Project Risks
An essential aspect of project planning is identifying the factors that may derail your project. So, managers must identify and list all potential project risks, such as unplanned leave, sudden attrition, scope creep, budget escalation, etc. After that, they can categorize and prioritize risks based on their severity and probability.
Project managers can then develop a well-defined risk management plan that clearly defines the corrective measures the team must implement if a risk occurs. Furthermore, they can create a risk register to identify, track, and manage potential risks throughout a project’s lifecycle.
Read More: How to Mitigate Resource Risk in Project Management?
Set a Communication Plan
Poor communication contributes to project failure and might result in substantial financial losses to the company. Thus, project managers should create an efficient communication strategy to determine how essential information will be communicated throughout the project with stakeholders and other teammates.
In the communication plan, managers should define the channels that should be used for collaboration. They can be emails, chats, one-on-one meetings, etc. Moreover, they can specify how frequently the team should meet and what modes of communication are to be used in different scenarios.
Visualize Through What-If Analysis
Project managers can implement modeling and simulation techniques to compare different variables and assess the outcomes. Then, based on this analysis, they can select the best-fit plan for the project.
Managers can foresee potential bottlenecks and form a backup or an action plan. One can also compare the changes made in each scenario to various project finances such as budget, revenue, and ROI before applying the viable option to the actual resource plan.
Present the Project Plan to Stakeholders
Since the project plan is used by managers for successful project execution, it needs to be formally approved by stakeholders. Typically, the project management plan is often evaluated and approved by the project sponsors, C-level executives, or the decision-makers of a firm.
The aim is to be clear and persuasive so that the stakeholders understand the overall project and resource-based strategy and agree with the priorities. Upon official approval of the project plan, managers can assemble a team to complete a project on time and within budget.
Read More: Who are Project Stakeholders and How to Manage Them Efficiently?
Key Takeaway: Project Planning Best Practices
In conclusion, below are some additional tips that you may use to create a perfect project plan.
Use project resource management software to form a real-time resource schedule in the Gantt chart.
Forecast the project resource demand and use capacity planning solutions to gauge the skillset and futureproof the workforce.
Collaborate with stakeholders who have handled similar projects in the past to rectify the mistakes in a project plan or add the missing components.
Continuously review and update the project plan. This meticulous monitoring will help prevent the project from scope creep.
The Glossary
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