How to Define Project Scope: Best Practices for IT Outsourcing Partnerships

The pandemic-propelled growth of online consumption proved that technologies are businesses’ lifeblood. Successful IT projects generate extra revenue and reduce operations costs. They take you to competitive markets and help you go through the crisis.

But IT projects also overrun projected costs and timelines. According to McKinsey, only one in 200 IT projects delivers results on time and within budget. Indeed, you’d want to avoid the fate of those 199.

A crucial part of launching a successful project is the definition of your scope. Clear scope helps you envision what you get in the end. But most importantly, it helps identify how much time, resources, and work you need to get there.

What is a Project Scope?

Project scope is a detailed outline of all activities, resources, and deliverables required to complete a project. Project scope depicts what the project entails but even more so what it does not cover.

You will define the scope during the planning stage and evolve it further in a project scope statement. 

According to PMI, the scope should also include:

  • Project justifications (reason for the project initiation)
  • Project deliverables (results marking project completion)
  • Project objectives (measurable success criteria)

Critical Elements of a Project Scope

project scope elements

Project Scope vs. Product Scope

PMI separates project scope and product scope:

  • Project Scope: Activities needed to develop a product, create a service, or achieve a tangible result.
  • Product Scope: Functions and features that comprise a product, service, or tangible result.

Vital note: Meeting project scope does not guarantee post-launch success. Sometimes, a project excels from a scope/schedule/budget point. Yet the final product falls short (e.g., failing to generate revenue or win customer approval). It happens when market demands evolve mid-project and don’t match the original plan. To avoid it, ensure you have a robust change management process to handle scope changes.

But watch out: uncontrolled scope expansion leads to scope creep. According to the Pulse of Profession Report, scope creep is among the most vexing issues in 33-37% of projects.

What is a Scope Creep?

Scope creep is the unplanned addition of new features and activities beyond the original scope.

One feature turns into five. Simple, minimalistic design suddenly needs more elements. Developers work overtime. Your project is three months longer than expected.

Scope creep is likely to occur when you gain new project knowledge. But it may also be a sign of scope change made without regard for:

  • Customer’s approval
  • Time, cost, or resource implications
  • Protocol for change management

Unmanaged scope creep leads to project delays, extra costs, substandard product quality, and low team morale. As a preventative measure, make it a rule to:

  1. Implement a robust scope control process for all your key stakeholders.
  2. Keep track of all authorized scope changes.
  3. Regularly check how much the current project’s activities differ from the original scope.
  4. Identify and document all unapproved changes, along with their justifications and severity.

Benefits of a Proactive Definition of a Project Scope

A well-defined scope informs your teams about their project responsibilities and expected outcomes. It helps them make the right decisions to drive the project forward within the agreed time and budget.

Project scope is a mechanism for managing stakeholder expectations. All investors, managers, and vendors understand what contributions they need to make for the project to launch.

The project helps identify which tasks to delegate when forming outsourcing partnerships. It’s a reference point for selecting a service model and assembling a dedicated team with the right competencies. As a vital part of IT service contracts, the scope indicates if your partner lives up to their promises.

Benefits of a Well-Defined Project Scope

benefits of a project scope

How to Define a Project Scope?

To write a project scope, gather all information discussed during ideation and planning. Analyze previous similar projects for insights about the size, cost, timeline, risks, and lessons learned. If available, use the following documents as inputs:

  • Project vision statement – a high-level overview of project goals and their fit within the organization’s strategy.
  • Assumption log – a document discussing project assumptions and constraints that can influence success.
  • Requirements documentation – an outline of stakeholder requirements for the end product (features, functionality, and user value).
  • Risk register – a log of potential risks and potential mitigation strategies.

Pro tip: Your vendor can offer a discovery phase – a series of meetings to formalize project vision, define project scope, and elicit initial project requirements.

Once you have gathered your initial information, detail your project scope with these steps.

1. Communicate with Key Project Stakeholders

Identify who handles information about the project’s goals, expectations, deliverables, and scaling plans. PMI refers to these people as a Planning Process Group – a team dedicated to defining your project and product scope.

We suggest the following composition of a Planning Process Group for an outsourcing project:

The company’s C-level management and decision-makersShare information about the project’s vision and goals.
Provide the organization’s procedures, policies, and overall business strategy.
Suggest the expected timeline and budget.
Identify if other projects/activities that depend on this project.
In-house tech expertsExplain a pre-established SDLC process.
Share tech documentation and operational instructions.
Outsourcing vendor’s representatives (CTO, solution architect)Advise on the SDLC model (if needed).
Recommend optimal team composition, technology stack, and service model.
Advise on a timeline and budget.
Help identify outsourcing risks.
Business analyst (on your or vendor’s side)Translates obtained information into requirements and KPIs.
Project manager (on your or vendor’s side)Formalizes the project objectives and documents success criteria.
Performs work breakdown structure.
The development teamEstimates low-level tasks.
Advises on a tech stack.
External IT consultants (optional)Consult on areas where you (or your vendor) lack expertise.

Hold workshops – a series of meetings to align your Planning Process Group better. Organize successful remote workshops with your outsourcing vendor following our experience-backed recommendations:

  1. Outline the agenda before a workshop
  2. Test your communication tools before the meeting 
  3. Prepare ice-breaking and trust-building exercises
  4. Explain the workshop rules (turn the video on, mute by default)
  5. Make sure to include the breaks
  6. Write down the outputs

2. Document Goals, Requirements, and Acceptance Criteria

First, your team should set a clear vision for the project by articulating project goals and value. Discuss:

  • What prompted the project’s initiation? 
  • Which business outcomes do you want to achieve? 
  • Why do your users need a solution? 
  • How should your product perform to deliver customer value? 

With a rough idea of your final destination, set boundaries to avoid straying off course. Gather initial requirements and compose a list of features and characteristics you’d like to see in your product. How should these features function? How should they not behave?

But just reaching the endpoint won’t be enough. You need to determine what exactly will constitute success. Does “project success” mean producing an MVP as quickly as possible? Does it imply meeting defined quality and security standards? Delivering a “good enough” solution under budget limitations? Find standard acceptance criteria to satisfy all stakeholders – your business and tech specialists.

Now that your reasoning, destination, and strategy are clear, it’s time to plot a more detailed path.

3. Clearly Set In-Scope and Out-of-Scope Project Activities

You must understand all components in the project scope to estimate the necessary resources realistically. That’s where work breakdown structure (WBS) comes in. Using WBS, your team can break down the scope of a project into smaller activities. Such decomposition will help:

  • Identify dependencies between tasks and recognize planning gaps
  • Clarify team roles and evenly distribute duties.
  • Make assumptions about the required physical resources for each activity.
  • Estimate a realistic timeline and budget for each activity.
  • Define out-of-scope tasks for your external vendors.

Elements of a Work Breakdown Structure

Work breakdown structure

Source: Wrike

Defining scope exclusions to manage expectations and avoid ambiguous interpretations is equally essential. For instance, your vendor should clarify that they will not create a UI/UX design or be responsible for the rollout.

4. Estimate Project Timeframe and Budget

Specify the timeline and budget expectations based on the previous steps’ input. How many people do you need to perform all activities? How fast will they perform work using the allocated budget? Would you need to scale up in time? Do you need external expertise?

As per PMI, the flexibility of your timeline and budget will largely depend on the software development methodology:

  • Specific estimations: A predictive project life cycle, such as Waterfall, keeps the project scope almost intact throughout the process. As a result, you define schedules and costs during planning. Mid-process changes follow a highly formalized process.
  • Rough estimations: An iterative project life cycle, like Agile, uses rough estimates to identify the scope of a project. Estimates of deadlines and costs vary as the project team obtains a deeper understanding of the product with each iteration.

As a rule, when the project scope changes, time and budget must be modified accordingly (and vice versa):

Project scope, time and budget

Source: Asana

With this final step, you should have enough input to write a project scope statement.

What is a Project Scope Statement?

The project scope statement is a detailed outline of your project boundaries and requirements.

According to PMI, the statement includes four elements: high-level description, deliverables, acceptance criteria, and project exclusions.

In reality, the structure is flexible. You may highlight tasks, deadlines, budgets, RACI matrix, governance rules, team composition, and other elements.

Using a project scope statement, your team can proceed to more extensive planning (defining low-level requirements and performing work breakdown structure). It is also a valuable point of reference when you tackle scope creep and manage change requests.

Example of a Project Scope Statement in Outsourcing

Project NameModernization of a System X
DescriptionTo rebuild the legacy codebase of System X and increase its availability
Date of Project’s ApprovalMay 12, 2023
Project ManagerBrendon Smith
GoalsTo upgrade the codebase from Java 10 to Java 16 and migrate it to microservices infrastructure
DeliverablesA modernized and unified codebase of a System X with thoroughly preserved business logic
Tasks1) To rebuild the application in Java 16 while preserving its scope and specifications
2) To rehost the application on Microsoft Azure
3) To implement tools for monitoring application availability
Out-of-Scope ItemsDevelopment of new functionality
Governance1) Policy: Submit all code feedback according to template A in a Jira Portal
2) Team: The vendor’s team must be available five months after the product’s rollout for consulting purposes
Success Criteria1) Maintenance costs decreased by 40%
2) Increased system availability to 99,5%
Service ModelManaged team
Team Composition4 developers, 2 QA engineers, 1 SRE specialist, 1 PM

What’s Next?

With a project scope at hand, communicate it to all relevant stakeholders and facilitate an efficient knowledge-sharing process. Mid-project, your team will control the project scope, ensuring the final product matches changes in the business environment, market conditions, customer perceptions, and other unpredictable variables.

In outsourcing partnerships, always update your vendor about all scope, time, and budget changes. At Edvantis, we need proactive notification to find relevant specialists if you plan to expand the engagement. If you scale down, we’ll need time to compile and transfer all the gathered project knowledge, documents, and lessons learned.

Need a mature outsourcing vendor to fill your IT project’s tech skills gap? Contact us!

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