Terms of reference

From CEOpedia | Management online

Terms of reference are a document that outlines the scope, purpose, and participants of a project or activity. They are used to provide a clear understanding of the boundaries of a project, and to ensure that everyone involved understands the expectations of the project.

Example of Terms of reference

This document outlines the Terms of Reference for the XYZ Project. The purpose of this project is to develop a new website for XYZ Corporation. The scope of this project includes the design and development of the website, as well as the hosting of the website for one year. The participants in this project include XYZ Corporation, the project manager, the web development team, and any external vendors that are contracted for the project. The timeline for this project is six months, beginning on 1 January and ending on 1 July. The budget for this project is $50,000, with $25,000 allocated to the design and development of the website, and $25,000 allocated to hosting.

Content of Terms of reference

Terms of reference typically include:

  • The purpose of the project: The purpose of the project is the main goal and should be clearly articulated. It should include an explanation of the expected outcomes.
  • The scope of the project: The scope of the project outlines the boundaries of the project, including what is and is not included. It should include any limitations or restrictions, and any assumptions made.
  • The participants: The participants should include all stakeholders involved in the project. This can include team members, sponsors, and external parties.
  • The timeline: The timeline should include the start and end dates of the project, as well as any key milestones and deliverables.
  • The budget: The budget should include an estimate of the total cost of the project, and any details on how the budget will be managed.

When to use Terms of reference

Terms of Reference can be used in a variety of different situations. They can be used for projects and activities, such as business initiatives, research studies, and task forces. They can also be used for meetings, such as board and committee meetings. Terms of Reference are also useful for formalizing agreements between two parties, such as contracts and Memorandum of Understanding (MOU).

Types of Terms of reference

  • Project Terms of Reference: Project Terms of Reference include all the necessary information to define the scope, purpose and participants of a project.
  • Activity Terms of Reference: Activity Terms of Reference are used to outline the scope, purpose and participants of a particular task or activity within a project.
  • Program Terms of Reference: Program Terms of Reference are used to outline the scope, purpose, and participants of a program, which includes multiple projects.

Steps of Terms of reference

  1. Establish the purpose and scope
  2. Identify the participants
  3. Set the timeline
  4. Establish the budget

Establishing the purpose and scope of a project is the first step in creating Terms of Reference. This includes articulating the main goal of the project and outlining the boundaries of the project. It should include any limitations or restrictions, and any assumptions made. Next, identifying the participants should include all stakeholders involved in the project. This can include team members, sponsors, and external parties. Third, setting the timeline should include the start and end dates of the project, as well as any key milestones and deliverables. Lastly, establishing the budget should include an estimate of the total cost of the project, and any details on how the budget will be managed. In summary, these steps provide the necessary information to create Terms of Reference that will ensure a successful project.

Advantages of Terms of reference

There are several advantages to using Terms of Reference.

  • Clarity: Terms of reference provide a clear understanding of the project, and ensure that everyone is on the same page.
  • Efficiency: By outlining the project, it ensures that the project team is focused on the right tasks.
  • Accountability: Terms of reference provide a record of the project, and helps to hold everyone involved accountable.

Limitations of Terms of reference

  • Time-bound: The Terms of Reference are time-bound, meaning that they may become outdated and no longer relevant to the project. It is important to review and update Terms of Reference regularly.
  • Rigidity: The Terms of Reference may be too rigid, making it difficult to make changes or adjustments to the project.
  • Clarity: The Terms of Reference should be clear and unambiguous. If the Terms of Reference are not clearly understood, the project may not be successful.

Other approaches related to Terms of reference

Other approaches related to Terms of reference include project charters and statement of work.

  • A project charter is a document that outlines the purpose and objectives of a project, and provides the project manager with the authority to execute project activities.
  • A statement of work is a document that outlines the services provided by a contractor or supplier, and is typically used to define the scope of work for a project.

In summary, Terms of Reference are an important document that outlines the scope, purpose, and participants of a project or activity. Other approaches related to Terms of reference include project charters and statement of work, which provide additional detail and clarity on the roles and responsibilities of those involved in a project.


Terms of reference — recommended articles
Tasks of project manager — Contract for project — Project boundary — Project management plan — Objectives of the project — Governance of project management — Project team — End of the project — Deliverable of the project

References

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