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 a project 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. 1|Page

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 highlevel 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. 2. 3. 4. 5. Project Statement of work Business Case Contract EEFs OPAs

Tools & Techniques

1. Expert Judgment

Outputs
1. Project Charter

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. 3|Page

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 be produced 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 a business 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 the preparation 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 TECHNIQUES

1. 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, you should 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.

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