Project Initiation

The following are the important themes from the PMI Perspective that you need to remember about the Project Initiation Phase.

1. Project Initiation is the first logical step in Project Management process
2. Initiation formally authorizes a project to begin or to continue to the next phase.
3. Initiation formally links a project to the work to the strategic objectives of the organization.
4. Someone external to the project team and higher up in the organization must issue the project charter. (Usually the Sponsor)
5. The project charter gives the project manager authority to “get the job done.” Yes, you read it right. The Charter is the document that officially gives us the right to do our jobs to manage the Project.
6. The project charter establishes the targets for the project.
7. A signed contract can serve as an input or predecessor to a project charter. Sometimes for small projects, the contract itself can be considered the Charter.
8. The two types of project selection methods are benefit measurement methods and constrained optimization methods.
9. Management by Objectives (MBO) supports project initiation by linking projects to corporate objectives.
10. MBO supports project management through its use of goal-setting and periodic reviews.
11. Many project management activities during initiation are further elaborated during planning.
12. Identifying Stakeholders is one the most important activities in the life of a project. Many a project has been known to fail after months of hard work because the manager failed to identify a critical stakeholder and that stakeholder prevented the sign-off at the end of the Project

Other PMI Themes:

General PMI Themes
Project Framework
Project Planning
Project Execution
Project Monitoring & Controlling
Project Closure
Ethics & Professional Responsibility

Chapter 5: Initiating Process Group

Aim: To understand the Initiating Process Group

The initiating process group is the first step in the project life cycle. In fact, much of the work performed in this process group is actually outside the scope of the actual project being executed. The main purpose of initiating is to authorize a project to begin or continue. Notice that the initiating process group serves two potential roles. It generally occurs at the beginning of a project, but can also occur several more times throughout the life of a project. Some larger projects define specific milestones that require revisiting the initiating processes to continue the project. Invoking the initiating processes at the start of each phase helps keep the project focused on the business need the project was undertaken to address.

The Purpose of Initiating a Project

Initiating usually occurs at the beginning of a project and can also be required at certain points throughout the project. For example, a large project with the goal of producing a prototype of a commercial road car will likely encounter several points along the project life cycle at which important decisions must be made. After the engine and transmission have been produced and joined together, they must be tested to evaluate performance against project goals. If the performance does not meet certain standards, the components must be reworked to meet standards before continuing. Alternatively, the whole project could be terminated if the product is deemed to be unable to effectively meet the project standards. This phase in the project is a crucial go/no-go decision point and constitutes activities in the initiating process group.

Exam Watch:
Although the most common time for these activities to occur is at the beginning of a project, don’t overlook the fact that they can be taken up during the project at any point in time. It is not uncommon for large projects to call for initiating processes several times throughout the project life cycle. Any time you need to assess the progress of a project, reevaluate its merit, and request approval to continue, initiating processes are executed.

In all cases, initiating processes require input from preceding activities. The entities charged with deciding whether to proceed require substantiating information on which to base a decision. When initiating occurs at the beginning of a project, at least some of the input must be created in tasks that are not part of the project. This work predates the project initiation date and can make the actual project start point may seem incorrect. The points in time at which a project begins and ends are referred to as the project boundaries. Because a substantial amount of the inputs to the initiating processes is created outside the scope of the project, the starting boundary can be unclear. A project always starts as a result of a business need, and the business need develops before the project commences. Likewise, any documentation of the need for the project is developed before the actual project starts.

Exam Watch: You need to know the inputs and outputs of each process defined in the PMBOK. That’s 42 separate input and output sets! The exam includes several questions that require you to know process inputs, outputs, and general information flow. Memorizing them may seem like the easier option, but if you understand and rationalize what inputs are required for each process and what outputs it might generate, it would be easier to remember.

Subsequent initiating iterations during the project life cycle will use inputs from preceding activities. It is important to understand that the activities in the initiating process group always result in a critical project decision. The end of the initiating process group is represented by a decision to continue the project, go back and redo some of the work, or terminate the project altogether.

In most projects, you should include any customers and other stakeholders in many of the activities in the initiating process group. Including as many stakeholders as possible in the early project activities fosters a sense of pride and shared ownership of the project. Any stakeholder who feels a sense of ownership is apt to be more diligent about ensuring the project succeeds. Stakeholder participation increases the success of setting the project scope, gathering project requirements, and defining the overall criteria for project success.

The Project Manager Assignment

PMI requires that the project manager be assigned prior to any project planning taking place. Practically speaking the project manager doesn’t have to be assigned until the end of the initiating process group. However, it makes sense to assign the project manager earlier. A project manager who helped create the project charter is more comfortable with a project and has an easier time planning the project.

It is the responsibility of the project initiator, or project sponsor, to officially assign the project manager. After the project managers are assigned, the project charter identifies the project managers and provides them with the authority to carry out project management tasks.

The Project Charter and Its Purpose

The initiating process group consists of two processes. The first process is the development of the project charter, and the second process is identifying stakeholders. The project charter is the initial document that describes the project at a high level and formally authorizes the project. PMI requires that a project charter be created and accepted before a project is considered official for starting. As a PMP, you are required to insist on a project charter before proceeding in the role of project manager.

Exam Watch:
The PMBOK requires a project charter for every project. The lack of a project charter is a project stopper. Remember that you cannot start a project (As per PMI) without a project charter. Even though, there may have been or will be situations where you may be forced to do so, for the exam it is a No-Brainer and no project can start without the approved project charter.

Authorization from the project sponsor, the project management organization (PMO), or portfolio steering committee is necessary for the project manager to allocate resources and actually perform the work of the project. Even before bestowing authorization, the stakeholders must assign the project manager to the project. The project charter provides the framework for carrying out these actions. It is also the first deliverable of the project and sets the basement for the whole project to build on.

There is no standard format for a project charter, but each project charter should address these basic areas:
• Purpose or justification
• Project objectives
• High-level requirements
• Project description
• Risks
• Summary milestone schedule
• Summary budget
• Approval requirements
• Project manager
• Authorizing party

Note: Each area of the project charter provides information on the business need and how the project will meet the need. It is important to have a general understanding of the project charter contents for the exam. Although you aren’t asked specific questions about the project charter’s contents, you are asked questions about the project charter as a whole and its purpose.

Exam Watch:
The PMP exam asks a few questions about the roles of the project initiator, or sponsor, and the project manager. The project initiator starts the official project process. All of the project manager’s authority comes from the project initiator and the initial stakeholders. For this reason, the project charter must be issued by someone with the authority to fund the project and assign resources to it. The project initiator’s role is to describe and authorize the project, assign the project manager, and fund the project. The project manager’s role is to plan and execute the project.

Prev: Chapter 4

Next: Chapter 6

Elements of a Project Charter

We all know that a Project Charter is the official document that formally authorizes a Project Manager to start work on a project. In other words, a project starts or kicks off only after a formal project charter is created and approved. A typical project charter has many elements. They are:

1. Business need - Describes the business reason for initiating the project, specifically stating the business problem that the project will resolve
2. Measurable objectives and success criteria - Defines the measurable business goals and objectives and factors that are deemed critical to the success of a project. These criteria are used to measure what must be done for the project to be acceptable to stakeholders
3. Project requirements - Describes what is needed to perform the work to the required specifications
4. Product scope description - Describes the product to be delivered and establishes the boundaries of the project
5. Milestones and deliverables schedule - Describes the deliverables which are a set of outputs for each milestone delivery date. This information provides checkpoints for monitoring project progress and validating work
6. Summary budget - Provides an itemized forecast of estimated or intended expenditures
7. Approval requirements - Describes the quality objectives for each deliverable in terms of output standards and approval requirements. This includes all the product-related reviews and processes that will be carried out during the project
8. Nominated project manager - Establishes the authority of the named individual to make decisions and lead the project, and identifies this person's main responsibilities and their authority level
9. Project sponsor approval - Names the person who has ultimate responsibility for the project and who has the formal authority to approve the project charter

Depending on the organization where the charter is being prepared, it may have some more details but the list above is the bare minimum requirement that any project charter is expected to contain in order to serve its intended purpose.

Important Terms and Definitions - Project Initiation

The following are some important Terms that we have learnt as part of the Project Initiation Phase.

• Assumption - A factor that you consider to be true without any proof or verification. Assumptions can appear in both the input and the output of various processes.
• Constraint - A restriction that can affect the performance of the project.
• Initiating process group - A process group that contains two processes: develop project charter and develop preliminary project scope statement.
• Project charter - A document that states the initial requirements to satisfy the stakeholders’ needs and expectations and also formally authorizes the project.
• Project Management Information System (PMIS) - An information system that consists of tools used to store, integrate, and retrieve the outputs of the project management processes. This can be used to support all stages of the project from initiating to closing.
• Project scope - The work that must be performed to deliver a product, service, or results with the specified features. The project scope draws the boundaries around the project: what is included and what is not.
• Stakeholder management strategy - The approach developed to deal with the stakeholders in the best interests of the project.
• Stakeholder register - A document that identifies the project stakeholders and the relevant information about them.
• Statement of work (SOW) - A document that describes the products or services to be delivered by the project. It is an input to developing the project charter and the preliminary project scope statement.

Previous: Summary - Project Initiation

Next: Project Planning

Chapter 20: Developing a Project Charter

In the previous chapter we saw how projects are selected for execution by organizations. As the first step towards starting a project for execution, a Project Charter needs to be prepared. In this chapter, we are going to take a look at how to create a Project charter.

So, lets get started!!!

What is the Project Charter?

The project charter is a document that states the initial requirements to satisfy the stakeholders needs and expectations. It is the document that formally authorizes the project.

Trivia:
The project charter is the document that formally authorizes a project, which includes naming the project manager and determining the authority level of the project manager.

Developing a Project Charter

Obviously a Project charter has to be developed/created by someone. Let us see how it is created.

Look at the image below:

The input to developing the project charter comes from the origin of the project and from within the organization that will perform the project. The possible input items for the process of developing a project charter are:

1. Business Case
2. Project Statement of Work
3. Enterprise Environmental Factors
4. Organizational Process Assets
5. Contract

Business case - The origins of the business case are pretty much the same as the origins of a project. The business case is built on the business need addressed by the project that justifies the project. This will determine whether the project is worth the effort and the investment (Money). The business case may contain the cost benefit analysis that compares the benefits that would be received by executing the project to the money invested in running this project. The business case is written by either the person or the group within the performing organization that is proposing the project or by an external organization or the customer who is requesting the project or the product that will be produced by the project.

If the organization that is requesting the project is a separate entity than the organization that is performing the project, both may have their own business cases. In this case, the business case that goes into the project is the business case of the performing organization. The business case of the requesting organization will make its way to the project through the contract or the statement of work.

Project statement of work (SOW) - The statement of work is a document that describes the products, services, or results that will be delivered by the project. For an internal project, the SOW is provided by the project initiator or the project sponsor, whereas for an external project, the SOW is received from the customer as part of a bid document, such as a request for proposal, a request for bid, or a request for information. Alternatively, it could come as part of the contract. The SOW includes or refers to the business need that this project will satisfy, the product scope, and the strategic plan of the organization supported by the project.
Enterprise Environmental Factors - During the development of the project charter, you must consider the performing organization’s environmental factors relevant to this task, that might affect the project execution and outcome.

You can refer to the chapter on Environmental Factors for more details on them.

Organizational Process Assets – As with the Enterprise Environmental Factors, the Organizational Process Assets too can have a profound impact on the project execution and outcome. You can refer to the chapter on Organizational Process Assets for more details on them.

Contract - A project for a customer who is external to the performing organization is usually done based on a contract. This contract will outline the terms and conditions and the monetary aspects involved in executing a project.

You take the available input and apply the relevant tools and techniques to develop the project charter. The most important tool used in developing the project charter is the expert judgment described in the previous chapter.

The output of the Develop Project Charter process is a formal document called the project charter. It is a high-level document that summarizes the business needs, the understanding of customer requirements and needs, and how the new product or service will satisfy these requirements.

Any Project Charter, that is prepared by an experienced Project Manager would contain the following:

1. The project justification, which includes the purpose of the project and the business case for the project, which in turn may include return on investment.
2. A high-level project description that includes the business needs that the project addresses and the high-level product requirements.
3. High-level project requirements based on the needs of the customer, the sponsor, and other stakeholders.
4. Project objectives and success criteria, which are derived from the purpose section. This section explains exactly what will be done by this project and what exactly will be the outcome of this project. The most important point is that the objectives must be measurable.
5. High-level risks, which will be identified during the project planning. However, some high-level risks may be apparent during the time of developing the project charter.
6. Milestone schedule, some kind of high-level schedule.
7. A budget summary, A high-level summary of the project cost estimate with some kind of timeline.
8. Project approval and acceptance requirements , which include the name and responsibility of the person or committee that will approve and accept the project when it’s finished.
9. An assigned project manager, a specified authority level for that project manager, and the influences that the stakeholders might have.
10. Project sponsor, the name and authority level of the project sponsor authorizing the project charter.

Apart from these, the charter might include other elements like the list of functional departments of the organization and their roles (Like the Technical Support Team that would be supporting the Network and Hardware that the project team will be working on). Also, other external assumptions and constraints are outlined in this document.

An assumption is a factor that you consider to be true without any proof or verification. For example, an obvious assumption that any Project Manager might make during this stage is the fact that, his company will have sufficient personnel with the requisite skillsets that he needs to execute this project.

It’s important to document such assumptions clearly and validate them at various stages of the project because assumptions carry a certain degree of uncertainty or risk with them, and these risks can always have a negative impact on the Project if left uncontrolled.

A constraint is a restriction (or a limitation) that can affect the performance of the project. For example, there could be a schedule constraint that the project must be completed by a predetermined date. Similarly, a cost constraint would limit the budget available for the project.

The project charter provides the project manager with the authority to use organizational resources to run the project. Remember that formally speaking, project charters are prepared external to project management by an individual or a committee in the organization. In other words, the actual project management starts from where the project charter ends. But practically speaking, the project manager who is going to manage this project might actually be involved in writing the project charter. The project approval and funding will still be external to the project management boundaries.

Once you have the project charter, you know the high-level product (or service) requirements that the project will satisfy. However, a high-level requirement written in a certain way might mean different things to different stakeholders. So, after you get the project charter, your first task is to develop a common understanding of the project among the project stakeholders. You as the project manager must ensure that each stakeholder knows what is going to happen and what he/she can expect out of this project at the various timelines.

Once the project charter is developed, the project manager has enough information to identify all the project stakeholders.

Previous: Understanding Project Selections

Next: Identifying Project Stakeholders