4th ed.develop project charter

7/28/2019 4th Ed.Develop Project Charter

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PROJECT CHARTER

Process Group: Initiating

Knowledge Area: Project Integration Management

efore a project will commence, a document will have to be prepared and

released to officially start off the project. This document is a document of

power and authority. It describes, among other things, the project that is to

be undertaken, what is to be achieved at the end and the objectives of achieving that

end. It establishes key stakeholders [like project sponsor, program and portfolio

managers, etc.] and outlines their roles on the project. A project charter also

indicates who signs off on the project as successful. A Project Charter must indicate

acceptance criteria and assign some person or persons who inspect the final

deliverable and state whether or not the projects objectives have been delivered.

Another crucial role or assignment a project charter establishes is who is to be the

project manager the one to lead a team to attain the objectives of the project. This

assignment gives the project manager the authority to command and apply resources

within the project area (just as when a president is sworn in, the activity gives him

the authority to command a nations resources). The power or authority level of aproject manager will vary from one organization to another, and from one project to

another based on how much the requesting organization will want him to have.

Most of the times, the organization type [projectized, functional or matrix] sets the

precedence for the varying degree of power a project manager exerts on a project.

A Project Charter is a document that formally authorizes a project.

A project charter is typically prepared by the requesting organization, project

sponsor, or any team the requesting organization deem fit. But it is recommended

that a project manager joins in. If the project will be performed by the requesting

organization, then the organization is likely to have its own project manager, who

can join in the preparation of the charter right from the start.

B


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If the project is to be carried out by an external organization, it means the requesting

organization is separate from the organization that would perform the work, and the

project charter should include a contract document to spell out conditions of

partnership or agreement.

Some charters will go further to highlight pre-identified risks, constraints and

assumptions associated with the project. On complex projects, some information

derived during the later planning stage may even be included [by iteration of

course] in the project charter. What is included is dependent on the needs of the

project and what is of serious concern to the requesting organization.

In multi-phased projects, a project charter should authorize all phases that exist

within the project. However, some multi-phased projects may prepare separate

charters to authorize each phase. Much is dependent on the reason for phasing and

a justification for the preparation of separate project charters for each phase.

The Project initiator or sponsor signs the project charter to officially authorize the

project. A Charter may contain the signature of other stakeholders as well. Now,

lets take a look at what goes into the preparation of a project charter:

DEVELOP PROJECT CHARTER

Develop Project Charter is the process of preparing a document to formally

authorize a project or a phase and stipulating initial requirements that fulfill

stakeholders needs and expectations. On the project charter level, these

requirements are documented on a high-level. When we talk of high-level we refer

to definitions that are usually in brief sum as against definitions that are

comprehensively elaborated. For instance, if a project is to come out with a 40-room

Iteration is the practice of going back and forth to update a document because [new] relevant

information has been realized or obtained.


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office complex, a narrative description of what is to be created can only be on a high-

level definition within the project charter like the one below:

to put up a three-storey 40-room office complex

This is a high-level definition. By this we are only able to tell in sum what the project

is expected to create. The items to be contained in the building, their quality and

quantity, etc. will all be comprehensively elaborated during the planning stage. The

project charter as a matter of fact usually contains only high-level definitions. These

contents only set precedence for detailed planning.

INPUTS

1. Project statement of work

Product Scope Description

A project statement of work is that aspect of the charter that spells out or describes

the product or service that the project is required to deliver.

Take a look at my own statement of work as I put together this very book you are

presently reading:

This project is to come out with a book that will offer a simplistic rendition to

the study of PMP with easy-to-understand English that will use simple but

enduring words, interspersed with contextual examples.

Tools & TechniquesInputs Outputs

1. Project Statement of work2. Business Case3. Contract4. EEFs5. OPAs

1. Expert Judgment 1. Project Charter


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Business Need

This is not all. A project statement of work should also include the need or why the

project is being undertaken in the first place. This is known as the business need.

This need is what triggers the project, hence, the business need usually points to the

project triggers: market demand, legal requirement, technological advancement, you

know them. Yours is to look through to find which need compels you to undertake

the project. Take a look at mine:

This project is to come out with a book that will offer a simplistic rendition to the study of

PMP with easy-to-understand English that will use simple but enduring words, interspersed

with contextual examples to assist students preparing to write their PMP Examination.

Did you see that? To assist students preparing to write their PMP Examination is

the rationale for my project. It is akin to a market demand, because I know there are

students out there, especially those of whom English is a non-native language, and

would need assistance in a more simplistic approach to study for their examination.

Strategic Plan

A project statement of work should also link the product/service that is to beproduced to the organizations strategic plan or goal. No one who would want to be

influential in the music industry goes about all day working on wood carvings. Every

organization has its own strategic goal, and whatever an organization undertakes

must be aligned to their strategic goals. Take a look at my strategic goal:

To be influential in the offering of PMP Education

Now, do you think the production of this book is aligned to my strategic goal as a

PMP lecturer?


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A project statement of work starts from a product scope description through to a

business need to a strategic plan.

Project statement of work:

Product scope description what are we doing? Business need why are we doing it?

Strategic plan where does it fall on our strategic plan as an organization?

For external projects (an external organization that is being asked to undertake the

project), a project statement of work will be presented in a contract, a bid document

or other like documents. How else would an external organization know what to do

if it is not told?

2. Business Case

Notice that a business case is the second input in preparing a project charter. Do not

confuse it with the business need. So, what is the business case?

When you make a case for something, you make a justification for it; you make a

defense for it; you state why it is necessary and worthwhile for that thing to be

undertaken by outlining its benefits.

In making a business case for a project, you state why a project needs to be

undertaken from a business standpoint. You state why the project deserves the

required resources, energy, effort, time and attention. A project trigger may not

make sense to a company, business or organization if it stands to gain nothing from

the project. In shorts, the identified business need must contain benefits which the

organization will want to have.

Typically, we say that a cost-benefit analysis is added to a business need to make abusiness case for the project.

Business Case = Costbenefit Analysis + Business Need


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One may ask, what is benefit? Benefit is a gain that can only be measured in relative

terms. Most business benefits are expressed in terms of money, profit or something

of a sort: directly or indirectly. A project to expand an office building may not bring

in direct monetary profits as compared to a project to put up estate houses that

would be put up for sale on completion. But the office building expansion surely

would bring in benefits that would facilitate operations and even go a long way to

influence monetary profits. Not-for-profit organizations undertake projects that may

not accrue monetary gains, but such benefits as they would call good gain.

3. Contract

When the project is to be performed by an external organization (different from a

requesting organization), a contract is needed to bind the two parties together. A

contract is a legally binding document that is subject to remedy in a court of law. We

will study more of contracts under Project Procurement Management.

A contract document is needless when the requesting organization will

perform its own project.

4. EEFs

The organization must take a look at Enterprise Environmental Factors that would

have a profound effect on the project, its execution, and the product/service it

would create. See Enterprise Environmental Factors to know more about what they are

and sample lists.

5. OPAs

There may be a couple of Organizational Process Assets that would help in thepreparation of a project charter. Some helpful OPAs, if they exist, include Project

Charter templates, Historical information, learned lessons, etc.


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A quick review of Inputs to develop project charter:

1. Project statement of work

Product scope description

Business need

Strategic plan

2. Business case

3. Contract

4. EEFs

5. OPAs

TOOLS AND TECHNIQUES1. Expert Judgment

Throughout the PMP Course, we will come across expert judgment as a technique in

many processes. When we talk of expert judgment, we mean person(s) with technical

knowledge or expertise in the area under discussion. Expert judgment includes but is

not limited to team members with highlighted expertise, external persons acting as

consultants, professional unions, subject matter experts, etc. In order to know which

expert judgment is applicable, dont hesitate to look at the heading of the process or

the activity to be accomplished, and then you will know which experts are needed to

furnish any information or fix a problem. This process is Develop Project Charter.

In developing project charters, expert judgment is used to analyze the inputs and

integrate them to form a project charter. This expert judgment may include persons

who have been preparing project charters, persons with technical knowledge and

information in the deliverable that is to be created, persons abreast with the project

environment within which the project will take place, etc.


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OUTPUT

1. Project Charter

We set forth to develop project charter; hence, a project charter is what we have.

When you go back to re-peruse the inputs and their accompanying explanation, youshould get the content of the project charter.

A sample project charter can include the following details:

Project/Product description (High-level) a narrative description of what the

project is intended to create (product/service).

Business need

Customer need fulfillment the product will bring to those who will use it.

Business case/project justification

Project Objectives

Success/Acceptance Criteria criteria to measure project success.

Requirements (High-level) what we need to achieve the projects deliverable.

Pre-identified risks (High-level)

Summary milestone schedule periods at which sub-deliverables are expected to

be delivered.

Summary budget

Project Sponsor Project Manager Assigned responsibility and authority level.

Assignment

Please attempt this assignment to figure out the product scope description, the business need

and the strategic plan of Milano, a manufacturing company.

Milano Co. Ltd. is a manufacturing company engaged in the production of food and

beverages for sub-Saharan Africa. The company is poised to roll out a project next

year to come out with a powdered milk to be packaged in 40g sachet packs. Cowley

Co. Ltd. is a rival company that came out with a similar product last year, and

Cowley seems to be growing its brand among the student population.

4th ed.develop project charter

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