At the end of this chapter. Project Charter. What is a Project Charter? What is a Project Charter? Why is a Project Charter used?
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1 At the end of this chapter Project Charter Describe what a project charter is and why it is critical to project success. Explain what a project scope statement is and why it is important. List the various elements of a charter and tell why each is used. Create each section of a charter for a small sample project using given project information. Work with a team to create a complete charter for a real project. What is a Project Charter? An informal contract between the project team and the sponsor A contract is an agreement entered into freely by two or more parties. cannot arbitrarily be changed offers something of value for each party is a living document that can evolve with changing conditions if both parties agree and receive something of value for making the change What is a Project Charter? Signing a charter represents the transition from the project initiating stage into the project planning stage Why is a Project Charter used? The four major purposes for a charter are to: 1. authorize the project manager to proceed 2. help the project team and sponsor develop a common understanding 3. help the project team and sponsor commit 4. quickly screen out obviously poor projects 1. Authorize the project manager to proceed The project charter authorizes the commitment of resources to a project The project charter gives the project and the project manager official status within the parent organization. Project charter authorizes the the project and provides the the project manager the the authority to to apply resources to to project activities. PMBOK Guide 1
2 2. Common understanding Benefits associated with the common understanding include: Teamwork develops. Agreement, trust, communication, and commitment between the sponsor, project manager, and project team develop The project team does not worry if management will accept a decision. The sponsor is less likely to unilaterally change the original agreement. What is a preliminary scope statement? An elaboration on the charter For small projects, the preliminary scope statement may be part of the project charter For large projects, the scope statement and project charter are distinct documents Project scope statement a a definition of of the the project documents the the characteristics and boundaries of of the the project and its its associated products and services, as as well as as methods of of acceptance and scope control. PMBOK Guide Elements in a Project Charter The term charter may be substituted with project request, project submission form, project preplanning form Typical elements of a project charter include: Title Title Risks, Risks, assumptions, constraints Scope Scope overview Spending approvals/budget estimates Business case case Communication plan plan requirements Background Team Team operating principles Milestone schedule Lessons learned learned Signatures and and commitment Scope Overview High-level what and why of the project The elevator speech What needs to be accomplished and how it will be done Used to help prevent scope creep Considered to be the project boundaries Scope creep adding features and functionality (project scope) without addressing the the effects of of time, costs, resources, or or without customer approval. PMBOK Guide Business Case The project purpose or justification statement Answers the question why? Used to justify the necessity of the project It should clearly tie the project to the organization s strategy May be just the rationale or include high-level estimates of the costs and benefits of the project. Should persuade decision makers to support the project and inspire team members to work hard on it. Background Used to provide more detail to support the scope statement and business case statements The background statement is optional 2
3 Milestone Schedule with Acceptance Criteria Divides the project into 3 to 8 intermediate poits whose completion can be verified Lists major milestones and deliverables Milestone schedule a a summary-level schedule that identifies the the major schedule milestones or or significant points or or events in in the the project. PMBOK Guide Deliverable any unique and verifiable product, result, or or capability to to perform a service that must be be produced to to complete a process, phase, or or project. Often subject to to approval by by the the project sponsor or or customer. PMBOK Guide Milestone Schedule with Acceptance Criteria A column for acceptance criteria helps determine who will judge the quality of the deliverable and by what criteria Acceptance criteria represent the project s vital signs Acceptance criteria those criteria, including performance requirements and essential conditions, which must be be met before project deliverables are are accepted. PMBOK Guide Risks, Assumptions, and Constraints Risk an an uncertain event or or condition that, if if it it occurs, has a positive or or negative effect on on a project s objectives. PMBOK Guide Assumptions factors that, for for planning purposes, are are considered to to be be true, real, or or certain without proof or or demonstration. Project teams frequently identify, document, and validate assumptions as as part of of their planning process. Assumptions generally involve a degree of of risk. PMBOK Guide Constraint an an applicable restriction or or limitation, either internal or or external to to the the project, that will will affect the the performance of of the theproject. PMBOK Guide Risks, Assumptions, and Constraints Reminders of what could prevent successful completion of a project The more comprehensive, the more likely to discover problems before they occur A false assumption becomes a risk A constraint that limits money, time, or resources is a risk Risks Two reasons for examining project risks Any risk that may inhibit successful project completion needs to be identified and a plan must be developed to overcome it. A risk that can create a positive effect on a project can be considered an opportunity Contingency plans are developed for each major identified risk to lessen probability of risk or reduce impact of the risk An owner is assigned responsibility for each contingency plan Spending Approvals or Budget Estimates A preliminary budget should include the level of confidence in the estimate Some internal projects do not develop formal budgets Identify expenses the project manager can authorize or sponsor needs to control 3
4 Communication Plan Requirements A broad communications plan can be outlined in the project charter. Each stakeholder is identified along with: 1. what information each needs to know from us, 2. what information we need to learn from this stakeholder, 3. when the communication needs to take place 4. what method most effectively helps the receiver of each item of information to understand and act appropriately. Team Operating Principles Established to enhance team functioning Goal is to increase team effectiveness Ensure that all parties are aware of what is expected Useful team operating principles deal with conducting meetings, making decisions, accomplishing work, and treating each other with respect. Lessons Learned Successes and failures of previous projects become practical advice Avoid the risk of repeating mistakes from previous projects Lessons learned the learning gained from the the process of of performing the the project. PMBOK Guide Signatures and Commitment Who is involved Extent to which each person can make decisions Expected time commitment for each person The project sponsor, project manager, and core team members show commitment by signing the charter Lessons learned knowledge base a a store of of historical information and lessons learned about both the the outcomes of of previous project selection decisions and previous project performance. PMBOK Guide Constructing a Project Charter It is helpful if the sponsor creates the first draft The organization s leadership team may contribute information in addition to the business case and scope overview One to four sentences should be written for the scope overview and business case Scope Overview and Business Case Example 4
5 Milestone Schedule with Acceptance Criteria Instructions Six-Steps for Constructing a Milestone 1. Briefly describe the current situation that requires the project 1 st row of the milestone column 2. Describe the project at its successful completion Last row of the milestone column 3. Describe the acceptance criteria for the final project deliverables Bottom row of 3 rd and 4 th columns Six-Steps for Constructing a Milestone 4. Determine the few key points in the milestone column where quality needs to be verified 5. For each milestone, determine who the primary stakeholder(s) is(are) and how the resulting deliverable will be judged 6. Determine expected completion dates for each milestone Six Sigma Milestone and Acceptance Criteria Template Risks, Assumptions, and Constraints Instructions Brainstorm all things that could pose a risk to the schedule, budget, usefulness of deliverables, or stakeholder satisfaction Assumptions are especially important when a crossfunctional team is performing the project Quantify risks on one of several dimensions probability of occurring impact if realized timing of probable occurrence ability to detect Decide which risks should be considered major Major risks require a formal contingency plan Risk Quantification Example 5
6 Risk Contingency Plan Example Spending Approval Example A limit of spending authority for the project manager is often developed Communication Plan Requirements Instructions Communication Plan Example The project manager and team list each stakeholder and work through the milestone schedule and the risks to determine the communications needs. The project manager and team should also consider their own communications needs Team Operating Principles Instructions Team Operating Principles Example Establish how meetings will be conducted Establish how decisions will be made Establish how work gets done Establish how everyone will treat each other with respect 6
7 Lessons Learned Instructions Project Lessons Learned Example Consider what has worked well and what has worked poorly Each project should report lessons learned at key reviews and project completion Make lessons available in a lessons learned knowledge base The more specific the lessons, the more likely they will be found useful Ratifying the Project Charter The project manager and team formally present the project charter to the sponsor for approval Questions are presented for clarification and agreement The sponsor, project manager, and core team sign the project charter Summary The project charter is a vital document that enables the project sponsor, project manager, and core team to reach mutual understanding and agreement on the project at a high level. Charters typically include sections such as a scope overview, business case, milestone schedule, acceptance criteria, risks, and signatures. The sponsor meets with the project manager and core team to go over the charter in detail to ensure understanding and to reach agreement. The charter is the document that completes the project initiating stage. 7
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