How does project planning work? (With steps and FAQs)

By Indeed Editorial Team

Updated 5 December 2022

Published 30 November 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

One of the most important stages of a project's life cycle is the planning phase. This is where the project manager, client and stakeholders produce a document that details the project's most important information, such as its goals, scope and tasks. If you're a project manager or interested in project management, understanding how to plan a successful project can be very valuable. In this article, we explain what project planning is, how you can develop a plan in five steps and answer some frequently asked questions.

What is project planning?

Project planning is a key phase in the life cycle of a project. Most projects divide into four to five phases, such as initiation, planning, implementation and closing. Some methodologies might add a fifth step before the closing phase, which is usually called monitoring and controlling. The implementation phase is also known as the execution phase. The planning phase is where the project manager, together with input from clients, stakeholders and team members, develops a detailed plan for the project. This plan includes the project's goals and objectives, available resources, scope, time scale and smaller milestones.

The project plan is important because it stipulates a pre-determined set of expectations that can both the project manager and the client can refer to. It also typically includes plans for risks, resource and personnel management, quality planning and how to manage and organise the project team. The absence of a clear plan can increase the risk of major issues arising throughout the course of the project.

Related: Project management skills and how to improve them

The main components of a project plan

Project plans are comprehensive documents and can often be quite lengthy. They tend to include a large amount of detail and help guide the project manager and the rest of the team until the project reaches completion. Typically, the more detail you can include in the project plan, the more smoothly it's going to progress, especially if the plan contains contingency planning and risk management. A good project plan often includes the following sections:

  • Project scope: A project's scope is a detailed list of a project's deliverables, goals, costs, deadlines and associated tasks. This is also known as the project's 'terms of reference', and establishes the project's boundaries and the processes for verifying the completion of work.

  • Project organisation: Most projects involve input from diverse professionals who are typically split into dedicated teams. Project plans can stipulate how to organise these teams, what each one is responsible for, their respective hierarchies and positions within the wider project and how to enforce accountability.

  • Schedule and timeline: Almost every project has a deadline by which the clients and stakeholders require the team to complete all relevant tasks, although there can be some flexibility in this regard. A good project plan includes this final deadline, in addition to smaller milestones for specific deliverables.

  • Risk planning: Most projects encounter certain risks or threats that you can account for. These are typically identified during the project's planning or initiation phase through a SWOT analysis and then included in the project plan along with measures to minimise them.

  • Budget: Every project has a pre-determined budget that's either set by the client or the result of a negotiation. The project plan typically stipulates the size of the budget, how to allocate it, who's responsible for allocating and distributing funds and processes for handling irregularities.

  • Quality planning: In addition to completing project deliverables within a specified budget and timeline, the outputs also require a minimum standard of quality. The project plan often stipulates what this minimum standard is, how it's determined and who's responsible for maintaining it.

  • Communication planning: A project's manager, teams, clients and stakeholders often want to communicate regularly to provide updates, make requests and give feedback. Project plans often include methods and networks for managing and scheduling intra-project communications.

Related: Time-management skills: definition, examples and tips for improvement

How to develop a project plan

Most project managers either have their own approaches for planning a project or develop one over time as they gain experience. There are quite a few factors that are necessary to develop an effective project plan. Here are some steps you may wish to consider when planning your next project:

1. Outline the project's goals

The first aspect of a project plan is the goals, which are going to guide and inform a lot of subsequent activity and planning. These goals are typically already determined prior to the planning stage by the project manager, together with any clients and stakeholders. The goal determines what the expectations are once the team completes the project in more general terms, such as the completion of a particular structure, achievement of a certain outcome or removal of a specified problem.

Related: Objective vs. goal: what are the key differences?

2. Define the project's scope

Once you've stipulated the project's goals, you can go into greater detail through the scope. This is a much more in-depth set of measurable objectives, what their characteristics are, how your team is going to achieve them and what the boundaries of the project are. It's very important to have a clearly defined project scope with boundaries that everyone involved can understand and agree upon. This helps prevent 'scope creep', which is where certain activities occur that exceed the boundaries of the project. Scope creep can happen inadvertently due to conflicting priorities or misunderstandings.

3. Stipulate the project's major deliverables

This section identifies a number of specific and measurable deliverables that the project teams can expect to produce. Whereas the scope of a project encompasses the entirety of the project's activities, the deliverables are the individual products, services and other outputs that the team produces during the project's life cycle. In this part of the project plan, you can also specify who's responsible for each of these deliverables and how quality assurance is going to happen.

Related: What is a project baseline? (Plus definition and tips)

4. Create a work structure

The next step is to determine how to allocate work to the various members of the project's team. This might involve separating all of these professionals into smaller teams with individual team leaders who are responsible for their group's performance. You can develop this into a structured hierarchy of roles, responsibilities and workloads. This might also include bringing in outside help and expertise, such as consultants and external contractors who can provide specific services at certain points in the project's life cycle.

You can also extend this by developing a detailed plan for each of the project's resources, who's responsible for them and how long they're going to be available. This can help team leaders determine their own workflows and milestones. It also gives all team members clarity about the resources available to them throughout the project.

Related: How to use the PDCA cycle (with benefits and example)

5. Perform a risk assessment

A proper risk assessment can be invaluable to a project, as this outlines the potential threats that the project may face, their scope and how to handle them. You can identify a project's potential risks, in addition to other important factors, with a SWOT analysis. This stands for strengths, weaknesses, opportunities and threats. You can think of the weaknesses as internal risks and the threats as external risks.

This is a commonly used approach in project management that you can complete alongside a PESTLE analysis, which stands for political, economic, social, technological, legal and environmental. These are the various external factors that might impact a project. This type of analysis allows you to go into more detail regarding external risks.

Project planning frequently asked questions

Below is a collection of some frequently asked questions that relate to planning for a new project, together with their respective answers:

How is the planning phase different to the initiation phase?

Initiation is the first stage of a project's life cycle and the precursor to the planning phase. During initiation, the abstract idea that necessitates a project becomes a real goal. This often includes developing a business case and a broad, mutual understanding of the project's goals between the project manager, client and any other stakeholders. You can think of this as an initial proposal or brainstorming phase, after which the more detailed planning stage takes place.

Related: What Are Project Initiation Documents and Their Uses?

Are there methodologies for goal development?

Yes, there are a few established approaches to developing effective project goals. One of these is the SMART method, which stands for specific, measurable, achievable, relevant and time-based. You can use this method during the planning phase to establish effective, easily understandable goals to guide the project.

Related: How to develop SMART goals

Can project plans change?

Yes, although it's important to plan for this in advance. There are different approaches for project management, such as the waterfall or agile methodologies. The former is quite rigid and not amenable to change, whereas the agile method incorporates regular updates and feedback to change processes and scope consistently. Try to choose an approach that best suits the nature of the project.

Related:

  • 13 productive project planning activities (plus importance)

  • How to meet deadlines (Plus tips on being organised)

  • Agile project planning (with characteristics and benefits)

  • What is the definition of a project (with planning steps)?

  • Project scope: how to develop it


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