Project Initiation, Part 2 – What Goes Into Your Project Charter

This article, on project charters, is my second article related to project initiation.
Purpose of the Project Charter
The purpose of the project charter is to formally approve a new project. It authorizes resources to be allocated for additional project initiation activities and the subsequent processes of project planning, execution, control, and closeout. It designates the project sponsor and project manager. As noted in the previous article, the project charter may be the project manager’s only basis for authority during project planning, execution, and control. The person who signed the project charter becomes the project sponsor, and he/she has the authority to support the project manager, as well as to prevent resources from disappearing.
Typical Components of a Project Charter
Below I have listed typical components of a project charter, and provided example entries for a fairly straightforward project.
Project Name and Goal
Example:
Project Name – Purchase and Install New Accounting Software
Goal – Same as above, as well as no interruption to data entry, billing, tracking, and reporting
Objectives
Example:
Select software package
Install, test, and train
Complete backup and changeover in a single weekend
Perform final validation
Scope
Example: This project will replace the company’s accounting system. The accounting and IT departments will jointly prepare a list of requirements, then research commercial off-the-shelf software packages appropriate for a company our size, including anticipated growth over the next five years, and within the specified budget. Pros and cons of two or three alternatives will be presented to upper management. After a decision is made, a bid package will be prepared and sent to at least two qualified providers (qualified based on checking references). Selection will be based both on price and ability/desire to comply with our requirements. The provider may have suggestions that slightly modify his scope from what we anticipated. Modify the contract if necessary, sign contract, and adhere to the project plan. Running two systems in parallel for approximately one month and the weekend changeover will require overtime. Report to upper management at the completion of each major deliverable/milestone, or immediately if issues arise. A detailed statement of work, budget, and schedule will be developed during project planning.
Assumptions
Example: No hardware upgrades or additions
Constraints
Example:
Prior data must migrate into the new system
Old and new systems must run in parallel for at least one complete billing cycle
Backup and changeover must occur over a single weekend
Must interface with our accountant’s tax preparation software
Budget
Example:
External providers, not to exceed $50,000.00 without upper management’s prior written approval
Internal labor, not to exceed 200 hours (75 of which can be overtime) without upper management’s prior written approval
Major Deliverables and Other Milestones
Example:
Develop two to three alternatives for management review
Gain approval for one alternative
Prepare bid package for potential providers
Evaluate bids, negotiate scope, quality, cost, schedule, establish contract
Beta test; confirm by running old new systems in parallel until positive
Training
Complete system backup, on site and off site (on a Friday night)
Weekend changeover
Final validation and report to upper management
High-Level Schedule
Example:
Project plan completed Week # 01
Bid package completed Week # 05
Contract signed Week # 08
Beta test confirmed, training completed Week # 12
Changeover Week # 13
Final validation Week # 14
Project debrief, lessons learned meeting Week # 14
Key Roles and Authorities
Roles
Example:
Project sponsor name
Project manager name
Accounting representative name
IT representative name
Authorities
Example:
Project sponsor enforce project charter
Project sponsor approve project plan
Upper management selection; sign contract
Project manager enforce project plan
Accounting representative confirm testing and training
IT representative confirm backups complete
Accounting and IT representatives confirm changeover complete
Project manager certify completion
Project sponsor changes to plan
Upper management changes to charter
Signatures
Example:
Project sponsor sign
Project manager sign
Dated date
What the Project Charter is Not
As can be seen from the above list, when the project charter is signed, only basic project information is available. It would have been premature to prepare a detailed statement of work, specific requirements for the various deliverables, the work breakdown structure, a technical proposal, cost estimate, detailed schedule, staffing plan, quality assurance plan, etc. before upper management had even affirmed the project was worth undertaking.
Next Article in This Series: More on project initiation.
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About the Author
An engineer by training, Randy Klein has 30 years of consulting experience, 20 of which have included project management duties. His project management curriculum has been used by a variety of university continuing education departments and private resellers. He invites your questions and comments related to project management, quality assurance, and organizational improvement. Contact Randy at (801) 451-7872 or projects@streamlineut.com.
Category: Business Growth & Strategy
Tags: Business Process, Improvement, Process, Project, Project Charter, Project Initiation, project management, Project Sponsor, Projects, Randal Klein