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.

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