Aim: To understand the Processes those are part of Project Integration Management in the Project Initiation Phase. i.e., “Develop Project Charter”
After a decision is made to initiate a project, the collection of input information begins. This is where the project boundaries can be a little unclear, but it is generally accepted that activities starting with the collection of inputs for initiating are part of the project. Remember that the project has not yet been authorized, so all resources required for the initiating processes must be funded explicitly by the project initiator. In other words, someone has to pay for the time spent by the people required to produce the project charter.
It is entirely possible that the organization decides not to pursue a project after it sees the project charter. The project charter might show that the project will not be worth the resource expenditures. In such a case, the resources already expended to produce the project charter have actually saved the organization from wasting many more resources. Therein lies part of the value of the initiating processes.
Exam Watch:The specific project management process that results in the project charter is the Develop Project Charter process.
A project charter doesn't always result in a successful project initiation. Let us say, you are working for a Car Manufacturer and are assigned with a project to create a low cost, highly fuel efficient luxury car. The company has set a budget for each car and has also set a profit margin expected from each unit sold. Armed with this information, you perform the due diligence and figure out the fact that, you cannot manufacture such a luxury car under the set budgets & profit margins. Once you provide with your senior management with this information, they could do either of the below actions:
1. Drop the project as, this new car will not be profitable under the set circumstances. This effectively means that your project is scrapped and wont continue.
2. Assign extra budget for each car and adjust the profit margin accordingly. This effectively means that the project will continue.
The Inputs, Tools & Techniques and Output for this process are as follows:
| Develop Project Charter | ||
|---|---|---|
| Inputs | Tools & Techniques | Outputs |
| Project statement of work Business Case Contract Enterprise environmental factors Organizational process assets | Expert Judgment | Project Charter |
During the project charter development, you use your own expert judgment as well as the expert judgment of subject matter experts in various areas to create the output or deliverable. Expert judgment involves using all of the project selection techniques in your project manager bag of tricks.
In the case of the project charter, the only output is the project charter itself. The main point to listing each of the inputs, tools and techniques, and outputs for each process is to understand each component of each process.
Because the development of the project charter is the first project activity, much of the work to produce the input for this process occurs either before the project initiation or within the scope of another project. Most of the input for this process serves to define the project and the environment in which it exists.
After the input information has been collected, the project initiator compiles and issues the project charter. The initiator must be someone who holds the authority to fund the project. Although it is desirable to assign a project manager early in the process, the project manager is not absolutely necessary to issue the project charter. It is important that the stakeholders have a material role in the creation of the project charter. The project manager, if one has been assigned at this point, can be the one to actually do the work of compiling the stakeholders’ needs, but the actual input for the project charter and the authority to issue it comes from the project initiator. The main reason so much emphasis is put on the project charter is that it provides the first and best opportunity for the stakeholders to really think through a project before the work begins, and it gives everyone a chance to consider the project before committing to it.
You can learn more about the “Develop Project Charter” Process by Clicking Here
Project Selection Methods
PMI encourages organizations to employ formal methods to select projects. Formal methods make it possible to compare multiple projects and select the one(s) that will produce the most benefit for an organization without being persuaded by emotional ties to certain projects. Additionally, organizations can set specific standards potential projects must meet to be accepted. There are two main selection method categories you need to know for the PMP exam. It is not important that you have an in-depth knowledge of these methods, but you need to be able to identify each type of method and understand their basic differences.
1. Benefit Measurement Methods
Benefit measurement methods document the relative benefits of completing each project. This approach enables organizations to compare projects by comparing their impact. Each specific method uses different measurements and results in different types of output. You don’t need to understand how to assess the relative measurements for the exam. Just know that these methods produce relative output an organization can use to compare projects.
2. Mathematical Models
Mathematical models analyze project description data to result in a more standardized set of output values. Simply put, a mathematical model can rate a project on a scale from 1 to 100. The organization then decides how desirable a single project is based on its rating. Usually projects with higher numbers are chosen over the ones with lower numbers. For ex: If your company is to produce two cars that have comparable production costs, the car that has the higher profit margin would be chosen for production.
Project Management Methodology
The organization’s standard practices when conducting project activities, along with the project management standards, make up the project management methodology. Any standards, guidelines, procedures, or common practices work together to form the general way of managing projects within any organization. The particular methodology you use depends on the culture of your organization, and all these factors affect the content of the project charter.
Project Management Information System
The project management information system (PMIS) is the collection of computerized tools used to collect, store, analyze, and interpret project information. Although most project managers use software to schedule projects, the PMIS often consists of far more than just project management software. When managing a project, learn which tools are available and use them to support the project throughout its life cycle.
Expert Judgment
The primary tool and technique referenced in creating the project charter is tapping into the expert judgment of others. Expert judgment of the project manager is included here if the project manager has been assigned. Some technical or procedural details might require input from an expert in a specific area. Such experts can be stakeholders or customers of the project, or they can be totally unrelated to the project. PMI encourages using any available source for project information input. When considering input sources for the project charter, or any needed expert input, consider any of these alternatives:
• Internal organization assets with specific expertise
• External consultants
• Stakeholders, including customers
• Professional or trade associations
• Industry or user groups
Prev: Chapter 5
Next: Chapter 7
Another important aspect in creating a project charter is its file format. For optimum results the project should be saved in multiple file formats for maximum viewer versatility.
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