d tool: project charter purpose: formalizes purpose, goal, and scope of the project for tracking and...

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Tool: Project CharterPurpose: Formalizes purpose, goal, and scope of the project for tracking and accountability.

It builds on the information you brainstormed for the A3 Problem Statement, Current Situation and Target Goals.

The Lean Office uses it to submit projects to the Board of Trustees.

Project Charter

Project Name

Strategy Linkage Nature of Benefit

College/Division Supports vision to become a top 20 public university. Cost Savings

Department Provide every student opportunities for engagement and leadership. Re-allocation of Resources

Champion/Sponsor Recruit, retain and reward faculty and staff quality, performance and productivity. Risk Avoidance

Process Owner Build competitive technology and information infrastructure. Soft Savings

Mentor Maintain an environment that is healthy, safe and attractive. Revenue Generating

Team Leader Increase the reputation of the University: state, national, and international.

Business Issue/ Opportunity

Project Metrics

Metric Baseline Target Target Date

Project Goals & Objectives

Resources

Department Employees Involved Resource Demand

Scope

Project Team

Lean ProgressStatus

DeliverablesDMAIC phase Date Started/ Completed Red, Yellow, Green.

Stakeholders

Key Subject Matter Experts

Project Notes/ Comments

Project Charter DProject Charter Form

DProject Charter

Filling in the Charter

Filling in the charter

Use the format: Department: Descriptive Title

• Provide a Project Name for reference

Project NameProcurement: Leverage Industry

Norm Payment Terms

College/Division Finance

• Name the College/Division that is responsible for this project.

DProject Charter



• List the Department responsible.

• A project Champion/Sponsor is most likely the head of your division. This is usually the person who gives approval for the project to go forward.

Department Procurement Department

Champion/Sponsor Procurement- Mike Nebesky

Process Owner Mike Nebesky

• The Process Owner is the individual who is ultimately responsible for the process being improved.

DProject Charter



• The Lean Office will designate the Team Leader.

• Identify the assigned project Mentor and the contact information.

MentorLisa Knox- G06 Sikes; (864) 123-

4567

Team Leader Lisa Knox- REPI

What do I want to fix?

What is the problem’s

background?

DProject Charter


Business Issue

• Draw on your initial A3 answers to explain the problem.

Business Issue /

Opportunity

• Be sure to include briefly:

• Who is being impacted? (This is your customer.)

• What is the issue that is impacting the customer?

• Where and when do the customers encounter the problem with the process?

• What is the impact to the customer when the problem occurs?

DProject Charter


Business Issue

What do I want to fix?

What is the problem’s

background?

DProject Charter


Business Issue

• Now we can begin to define the situation. Drawing again on the A3…

Business Issue /

Opportunity

DProject Charter


Business Issue, example

• In this example, then:

• Who: Clemson University

• What: Paying vendors upon approval

• Where/When: Delays past discount windows

• Impact: Foregone savings

Business Issue /

Opportunity

Clemson University currently pays vendors upon approval. CU does not leverage early payment

discounts. Industry standard discounts are generally 2% for payment in 10 days and 1% for

payment in 30 days.

How far would I like to get?

DProject Charter


When would I like to get there?

Project Goals/Objectives


Tool: Benchmarking

Purpose: provide realistic goals and direction; monitor performance; improve processes to match the best in Higher Education.

Benchmarking is the technique of comparing practices and processes to the best in the industry.

Remember: Some processes should be compared to norms outside of Higher Education!

DBenchmarking

Establishing benchmarks

• Call similar departments at other universities or businesses.

• Consult other departments within Clemson University.

• Contact individuals who have experience with or ties to other organizations.

DBenchmarking

Benchmarking

Benchmarking

DProject Charter


As appropriate, include,

• What are my measures of success that are aligned to the project objective? OR

• What are the goals for primary and secondary metrics? OR

• What change in performance level will be considered a success? OR

• How much does the primary metric need to change for your project to be considered a success?

Be sure to include,

• How long will it take you to complete this project?

Goal/Objective considerations

• Goal: Save $1MM annually

• Deadline: 7/1/2011

DProject Charter


Goal/Objective example


Develop and implement vendor payment terms that yield $1M

annually by 7/1/2011.

What do I

want to fix?

DProject Charter


How does this

process run?

What areas can I target?

Scope questions

Scope

DProject Charter


Be sure to consider,

• What authority do we have?

• What processes are we addressing?

• What is not within scope?

• What are the starting and ending points of the process?

• What components of the business are/are not included?

• What, if anything, is outside of the project boundaries?

• What constraints must the team work under?

Scope considerations

DProject Charter


BEWARE Scope Creep

• Not your job!Upstream Process

• Stick with beginning /end points.

PROCESS • Not your job!Downstream Process

Create boundaries and maintain them!

Scope Creep

• current payment process• current vendor base• vendors accepting industry

standards

DProject Charter


Scope example

Note the limitations:

Scope

The scope of this project is limited to the current payment

process and vendor base. Focus is on the vendors that have already agreed to accept

industry standard payment terms.

DProject Charter


• List your Project Team.


Project TeamLisa Knox, Taylor Vick, Mike

Nebesky, Angie Wiggins

• List Stakeholders -- individual consumers, employees, etc. who could gain or lose from this project. Be specific!

StakeholdersEmployees involved in the

current AP process, Vendors

DProject Charter


Stakeholders and Experts

• Identify Subject Matter Experts, people with technical skills or experience that could help complete this project.

Key Subject Matter Experts Mike Nebesky - Procurement

• Add any additional (or quarterly updated) Comments you may have about the project, stakeholders, team, etc.

Project Notes/ Comments

Use this section to update each quarter savings to date, revenue,

etc.

Strategy Linkage

Supports vision to become a top 20 public university.

Provide every student opportunities for engagement and leadership.

Recruit, retain and reward faculty and staff quality, performance and productivity.

Build competitive technology and information infrastructure.

Maintain an environment that is healthy, safe and attractive.

Increase the reputation of the University: state, national, and international.

• Place an “X” in each box in which you believe the project will align with our current University Strategy.

DProject Charter


Strategy Linkage

Nature of Benefit

Cost Savings

Re-allocation of Resources

Risk Avoidance

Soft Savings

Revenue Generating

• Place an “X” in each box that you believe will be a benefit from completing this project.

DProject Charter


Nature of Benefit

Various Financial Benefits

Project Charter


Some benefits like new revenue, higher profitability, or faster growth result in tangible dollar amounts and are easy to measure.Others, like cost avoidance, reduced labor, or reduced process time are harder to measure but can be calculated.Customer satisfaction, employee morale, risk avoidance and image are hardest to quantify.

Hard dollar

s

Calculated dollars

Intangible

D

Kinds of financial benefits

“Nature of Benefit,” explained

DProject Charter


•Direct expense reduction

•Yield improved bottom line

Cost Savings

•Reduction of non-value-added work

•Typically employee time

Resource Re-

allocation

•Calculated value of removing the threat of financial culpability or penalty

Risk Avoidance

Nature of Benefit, explained

“Nature of Benefit,” explained

DProject Charter

Filling in the Charter •Financial

benefits that are difficult to quantify but still mission-critical

•For example: satisfaction, image, ranking

Soft Savings

•Development of new income streams or expansion of existing ones

•Recorded in income statements

Revenue Generatin

g

Nature of Benefit, explained

• Establish metrics, baseline, targets and target dates.

Where do we stand?

What are some ways to measure

this?

DProject Charter


How far would I like to go?

When would I

like to get there?

Project Metrics

Metric Baseline TargetTarget Date

Project metrics

What is a metric?• A measured variable that can be

tracked and used to detect errors, inefficiency, or improvement. It can be a process metric or and organizational metric.

Process metrics apply to specific processes or programs like time, cost, or quality.

Organizational metrics address organization-wide issues like employee satisfaction and turnover.

DProject Charter

Understanding

Metrics

Choose one or more to describe accurately your process’ efficiency.Defining metrics

Kinds of Metrics• Time Metrics

– Value-added time

– Non-value-added time

– Processing time

– Cycle time• Cost Metrics

– Cost savings– Opportunity

cost– Decreased

waste

• Quality Metrics– Customer

satisfaction– Percent

complete and accurate

• Output Metrics– Backlog– Work in

process

DProject Charter

Understanding

Metrics

Kinds of metrics

DProject Charter

Understanding

Metrics

You must have a baseline to

measure improvement.

The Lean Office will help establish your baseline metrics.

Baseline

• Enter your metrics and goals.

DProject Charter


Project Metrics

Metric Baseline TargetTarget Date

$ Saved 0 $400K 5/15/2011 Vendors discounting Current All 7/1/2012

Project metrics, example

Be sure to document your inputs, assumptions and reasoning in setting your baseline, target and timeline in the electronic version of your project charter.

We must be able to replicate your baseline and savings!

• Now that you have your metrics, targets and deadlines established...

DProject Charter


What offices will be

involved?

Which people in those offices

do I need?

How much of their time?

Considering resources

DProject Charter


Resources

Department Employees InvolvedTime

CommitmentProcurement Mike Nebesky 50%

REPI Lisa Knox 5%Procurement Angie Wiggins 30%

Admin Support many as neededVendors many as needed

• Under Department, list the offices involved.

• Under Employees Involved, list the specific individuals.

• Estimate how much time (per day/week/month) will be necessary for successful project completion. This is the Time Commitment.Resources, example

DProject Charter

Filling in the Charter The Lean Office will

immediately enroll your team members in Purple Belt training.

Note that this is where you create your team.

Creating the team

• Now, from a high level, apply DMAIC to the project to define the activities and plan to complete them.

DProject Charter


Deliverables

Define the issues and metrics involved in the procurement process

Measure the current cost of not leveraging payment terms.

Conduct analysis of the procurement process.

Improve the process by publishing revenue and receivables plan.

Control the process by implementing performance measures.Deliverables

Next make a thorough list of everything necessary to achieve each of those high level goals. These are your Deliverables. This list will include steps like:– make a plan– define what the customer wants– identify those involved– establish a process for

communication– define the ideal system or norm– understand the current process– determine what data to collect and

how– analyze the current process for

improvement opportunities– evaluate the options for the most

benefit– prepare the ground for selected

changes– prepare the solution– train in the new format– implement changes and monitor

DProject Charter


Deliverables plan

– make a plan

– define what the customer wants

– identify those involved

– establish a process for communication

– define the ideal system or norm

– understand the current process

– determine what data to collect and how

– analyze the current process for improvement opportunities

– evaluate the options for the most benefit

– prepare the ground for selected changes

– prepare the solution

– train in the new format

– implement changes and monitor

DProject Charter


Define

Measure

Analyze

Implement

ControlDeliverables and DMAIC

Step

Tool

Phase Define

Project Charter

Make a plan

Voice of Customer

Define what

customer wants

Stakeholder Analysis

ID those involved

Benchmark

Establish ideal

DDefine

Deliverables and DMAIC

Define phase

Step

Tool

Phase

Measure

Current State Map

Draft the current process

Metrics

ID data to collect and

how

DDefine


Measure phase

Step

Tool

Phase Analyze

5 Whys

Find main causes for problems

Fishbone

Find all contributo

rs to problems

Pareto Chart

ID primary contributo

r

DDefine


Analyze phase

Step

Tool

Phase

Improve

Implementation Plan

Define how the solution will happen

Future State Map

Draft the end-goal for the

process

DDefine


Improve phase

DDefine

Ongoing Deliverables

Leadership

Change Management

Plan

Help stakeholders accept and

embrace change

Communication Plan

Define what stakeholders need to know

Set up ways to inform and

engage stakeholders

Project Charter Revise and update quarterly

Good planning is

critical!

DProject Charter


You need a thorough list to make a reasonable timeline. You need a reasonable timeline to achieve your target date.

Timeline formulation

• Fill in the Deliverables, Phase and relevant Date under Status.

DProject Charter


Lean ProgressStatus

DeliberablesDMAIC phase

Date Started/

Completed

Red, Yellow, Green

Define 3/7/2011 Complete Identify current university deliverablesMeasure 3/7/2011 Complete Develop a detailed data collection toolMeasure 3/7/2011 Complete Create a high level SIPOC diagramMeasure 3/7/2011 Complete Collect revenue and receivables dataMeasure 3/7/2011 Complete Collect internal customer dataMeasure 3/7/2011 Complete Create a value stream map

Analyze 3/7/2011 CompleteConduct value-added/non-value-added

analysis

Analyze 3/7/2011 CompleteCreate prioritization and cost benefit

matrix

Implement 3/7/2011 CompleteDevelop comprehensive communication strategy

Implement 3/7/2011 CompletePublish revenue and receivables

strategic planImplement 3/7/2011 Complete Develop change management plan

Implement 3/7/2011 CompleteRFP written for procurement website

development upgradeImplement 2/12/2011 Started Website completeImplement 2/24/2011 Started Develop training planImplement Plot future stateImplement Implement performance measures

Control Implementation completeLean Progress

• Keep in mind that the Project Charter template is just a template; it may need modifications to fit your project.

• Consult the Lean Office to determine how best to adjust the template for your project needs.

DProject Charter


Charter as template

d tool: project charter purpose: formalizes purpose, goal, and scope of the project for tracking and...

Documents

project championsponsor

d project charter slide

reference project

project charter purpose

d project charter draw

d project charter list

assigned project mentor

d tool