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Opportunity Cost - to - Ownership of Quality Responsibility

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Opportunity Cost

The value of an opportunity that is lost or sacrificed when the choice of one course of action requires that another course of action must be given up. A non-accounting value that can be significant in certain circumstances, usually as a consequence of limited resources. It is measured by the profit that could have been generated had the resources been available. [D05153]

Opportunity Phase

The first phase in the generic project life cycle is often split into two stages.

• In the first stage, i.e. concept or marketing, initial work on defining the opportunity should be enthusiastic and open-minded. Definitional work should be comprehensive, several different options should be investigated and should lead to a full statement of the strategy/project management plan.
• In the second stage, the opportunity should be subject to a thorough and critical review, e.g. should we go ahead with the investment, should we bid, and if so, are we doing this in the optimal way? Generally during this stage, only one (or two) options will be investigated, but will be done so in detail. Modeling of the options and their realization should be as extensive as is cost effective. The aim should be to find ways of meeting the project objectives/KPIs more effectively, to check if the proposed way forward is feasible, and to understand the risks and opportunities associated with each potential.

The experience of project management has consistently shown that project personnel generally wish they had been more thorough and/or spent longer at this project "front end". [D03449]

Optimism

An inclination to put the most favorable construction upon actions and events or to anticipate the best possible outcome. [D03105]

Optimistic

See Optimism. [D03104]

Optimistic Duration

The shortest of the three durations in the three duration technique or PERT. [D03879]

Optimistic Time

Roughly speaking, this is the best-case time to complete an activity. The term has a more precise meaning which is defined in PERT literature. [D03725]

Option

A clause in a Contract permitting an increase in the quantity of supplies, or the extent of work, or the time allowed, beyond the amounts stated in the base contract. [D03662]

Oral

Spoken communication. [D01108]

Order of Magnitude

See Order of Magnitude Estimate. [D03106]

Order of Magnitude Estimate

(Accuracy -25, +75 Percent) This is an approximate estimate made without detailed data, that is usually produced from cost capacity curves, scale up or down factors that are appropriately escalated and approximate cost capacity ratios. This type of estimate is used during the formative stages of an expenditure program for initial evaluation of the project. Other terms commonly used to identify an Order of Magnitude estimate are preliminary, conceptual, factored, quickie, feasibility and SWAG. [D01110]

See also Estimate. [D01109]

An estimate carried out to give a very approximate indication of likely out-turn costs. [D04466]

Organization

A company, corporation, firm or enterprise, whether incorporated or not, public or private. [D01113]

"Organ in action". In business, government, and other kinds of endeavor, the collective functioning of a group to achieve mission, goals and objectives. [D01111]

The administrative or executive structure of a business or project. [D01112]

A structured arrangement of people. [D04599]

Organization and Methods Study

the study of the best form of organization, systems and procedures to accomplish the project. It includes line and staff relationships, communication and coordination interfaces between disciplines and responsibility areas and so on. Setting down the framework establishes working relationships recognized by the whole team. This improves necessary information transfer and reduces unnecessary communication, work load and stress on the project organization. [D03079]

Organization Breakdown System

See Organizational Breakdown Structure. [D03107]

Organization Chart

A graphical display of the organization structure. [D03108]

Organization Development

The use of behavioral science technology, research, and theory to change an organization's culture to meet predetermined objectives involving participation, joint decision making and team building. [D01114]

Organization Plan

A plan describing how the organization will be set up for the project, how it will evolve and retire during the course of the project, and who will be involved, with what authorities and responsibilities. [D03109]

Organization Resources

The people required to staff the project organization. [D03110]

Organization Structure

Identification of participants and their hierarchical relationships. [D01115]

A structure that defines the reporting relationships, processes, systems and procedures of the project. Issues typically important in the structuring of a project include the degree of project/functional orientation, the extent of the project management (office) authority, collocation of project members, the allocation of resources, work packaging and interface management, and the definition of control, authorization and reporting procedures and systems. There are three basic kinds of organization structure:

1. Functional - where resources are controlled totally from within their respective functional unit
2. Project - where resources are allocated on a dedicated basis to a project, from where they are controlled
3. Matrix - where resources are controlled functionally by their functional head and concerning their project requirements by the project manager

The choice of structure should take account of cultural and environmental influences and may change as the project evolves through the project life cycle and because of different types and conditions of contract. [D03450]

Organization Unit

A collection of business workers, business entities, relationships, business use-case realizations, diagrams, and other organization units. It is used to structure the business object model by dividing it into smaller parts. [D04862]

Organizational Breakdown Structure ("OBS")

A hierarchical structure designed to pinpoint the area of an organization responsible for each part of a project. [D01117]

A depiction of the project organization arranged so as to relate work packages to organizational units. [D01116]

A functionally oriented structure indicating organizational relationships and used as the framework for the assignment of work responsibilities. The organizational structure is progressively detailed downward to the lowest levels of management. [D04644]

Organizational Constraints

Limitations on the project. [D02201]

Organizational Design

The design of the most appropriate organization for a project, including definitions of roles and responsibilities of the participants. The five basic kinds of structure are:

1. Functional
2. Coordination
3. Balanced
4. Seconded, and
5. Project Matrix.

[D03880]

Organizational Factors

The availability of expertise of personnel, labor relations, physical resources, relevant project experience, corporate image, senior management attitudes, employee morale, the enterprise's market position, project execution track record, and so on. [D02332]

Organizational Influences

See Organizational Constraints. [D03111]

Organizational Learning

The ability of the organization as a whole to capture knowledge and experience from past projects and apply that to future projects. A relatively new management concept designed to improve the overall performance and responsiveness of an enterprise and avoid the loss of this information when individual personnel leave the enterprise's employment. [D03112]

Organizational Planning

The process of identifying, assigning and documenting project responsibilities and relationships. [D01118]

Organizational Politics

The informal process by which personal friendships, loyalties, and enmities are used in an attempt to gain an advantage in influencing project decisions. [D01119]

Organizational Requirements

Those requirements, usually resources, necessary to enable an organization to meet its goals and objectives. [D03113]

Organizational Strategy

The strategy adopted by an organization designed to meet its goals and objectives. [D03114]

Organizational Style

The overall style, or culture, of the organization, or that is evident in its program and/or its project activities. [D03115]

Orientation

An overview or introduction to a topic. [D05195]

Original Budget

Budget on which the decision to start the project is based. [D01120]

The initial budget established at or near the time a contract was signed or a project authorized, based on the negotiated contract cost or managementês authorization. [D01121]

Original Duration

See Baseline Duration. [D01122]

The first estimate of work time needed to execute an activity. The most common units of time are hours, days and weeks. [D01123]

Originator

The person who submits a change request (CR). The standard change request mechanism requires the originator to provide information on the current problem, and a proposed solution in accordance with the change request form. [D04741]

OTB

See Over Target Baseline

Other Bid Considerations

An evaluation of personnel and financial resources, facilities, performance record, responsiveness to contract terms and conditions and the general willingness to perform the work. [D01124]

Other Direct Costs ("ODC")

A group of accounting elements which can be isolated to specific tasks, other than labor and material. Included in ODC are such items as travel, computer time, and services. [D01125]

Out of Scope

Requirements not included in the current contract and beyond the limits of the change clause. See also Contract Changes [D04168]

Out Put Requirements

The documented functionality and characteristics of the project's deliverables. [D03116]

Outcome

Something that follows as a result or consequence. [D03117]

Outlays

See Actual Costs. [D03663]

Outline

A hierarchical structure for a project that shows how some tasks fit within broader groupings. [D01126]

Out-of-Sequence Progress

Progress that has been reported even though activities that have been deemed predecessors in project logic have not been completed. [D01127]

Output

Any artifact that is the result of a process step. See deliverable. [D04742]

Output Format

Information that governs the final appearance of a report or drawing.
Note: Usually refers to computer-generated documents. [D04467]

Outsourcing

The practice of purchasing goods or services from specialty suppliers. [D04169]

The practice of subcontracting manufacturing work to outside and especially foreign or nonunion companies.
Editor's Note: Can also apply to the contracting out of services, rather than using in-house resources. [D03118]

Over Target Baseline ("OTB")

A baseline which results from formal reprogramming of an overrun, used only with the approval of the customer. [D04645]

Overall Change Control

Coordinating changes across the entire network. [D01128]

Overall Control

Control at a high level and providing general direction only. [D03119]

Overall Cost

See Life Cycle Costing. [D03630]

Overall Project

The project in its entirety.
Editor's Note: The word "overall" is really redundant and is used only to provide emphasis. [D03120]

Overall Quality Philosophy

The universal belief throughout a company that quality is important and performance is based on conformance to requirements/specifications, based on established quality policies and procedures. These policies and procedures become the basis for collecting facts about a project for study and analysis. [D01130]

The universal belief and performance throughout the company, based on established quality policies and procedures. Those policies and procedures become the basis for collecting facts about a project in an orderly way for study (statistics). [D01129]

Over-allocation

The result of assigning more tasks to a resource than the resource can accomplish in the work time available. [D01131]

Overhead

Costs incurred in the operation of a business which cannot be directly related to the individual products or services being produced. See also Indirect Cost. [D01133]

Costs arising from management and supervision, office expenses, interest-during-construction, and any other general costs associated with the project not directly attributable to design or construction. [D01132]

A general term often used to identify any indirect cost. [D03539]

Overload

The amount by which the resource required exceeds the resource limit. [D03881]

The amount of required resources which exceeds the resource limit. [D01134]

Overrun

An increase in the time or cost compared to the plan. A reduced scope without a corresponding reduction in the time or cost would be considered an overrun. [D01135]

Costs incurred in excess of the contract target costs on an incentive type contract or the estimated costs on a fixed fee contract. An overrun is that value of costs which are needed to complete a project, over that value originally authorized by management. [D01136]

Owner

The party legally responsible under the terms of a contract for financing the project. See also Sponsor. [D01137]

Owner Support

Support from the "owner" of the project, typically through the project's sponsor or its project director.
Editor's Note: Be aware that on many projects it is not clear who is the real owner. It is well worth taking steps to find out before problems arise! [D03121]

Ownership of Quality Responsibility

The situation when an individual performing a task has the ultimate responsibility for conformance to the requirements/ specifications. [D01138]