This paper briefly discusses the importance and approach to development of a project management plan for the management. The management in consideration has not used project management methodologies in the past and thus, this document is being prepared to provide them an understanding of project management practices and give them an insights into the importance  and potential of preparing project management planning documents such as project charter. The report explains the importance of project charter and how each element of the same can be useful for management is being explained.

Project Charter is defined as the formal document that lists the components of the project in terms of its objective, scope and overview. The approval of this document authorizes the Project leader and the Project Manager to begin the project. It is a formal confirmation of authorization that is documented accurately. A document change control is also often included in the document which compiles the change history and change control of the charter document.

A typical project charter would contain following sections in it:

Table 1: Project Charter

Each of these areas included in the project charter can be of assistance to the project team and project manager in executing the project smoothly is mentioned below:

Project or product overview: In this part, a brief description of project or any associated product is included.  This would provide the management a high level of understanding of the project including major activities, time required for completion and the allotted budget. This description of the project would also answer questions like who would be responsible for what activities? When and where are these activities to be completed? What is the estimated duration in which the project can be completed? What would be the short terms and long term objectives of the project? The project overview would also give some illustration of how the goals of the project are aligned with the strategic goals of the business (CIO, 1997).

Scope: In the scope, objectives of project, its high level requirements, major deliverables, and project boundaries stating what is in scope and what is not in scope would be mentioned.  Objectives can include both business and technical perspectives as well as the expected results like product outcome or project accomplishments. The high level objectives defined in the scope can further be explored in great depth after the high level requirements are approved by the project sponsor (Bright Hub Media, 2015).

Project Organization: This section defines internal and external stakeholders of the company, their expectations, and roles and responsibilities of the members of the team. This would help management record the expectations stakeholders have from the project. As these are the most important people for any project and the objective of any project always remains to satisfy them, this could serve as a guide for the project to achieve success (CDC, 2006).

Duration: The major milestones and timelines of the project are defined in this section.  This would help management understand the expected time a project is going to take to complete and what significant achievements can be seen in that duration. This would thus help a project manager keep a tab on the project progress so as to understand if it is going as per the expectations from the plan (Caltrans, 2007). The duration includes the start and end date of the project along with the duration of each activity that will be involved in the project.

Budget estimate: This section, sources of funding are briefed along with the estimated budget required for completion of the entire project. The expenses incurred during the project progress should not exceed this budget any time (The Saylor Foundation , 2014).

Assumptions: There can be certain assumptions made before a project charter can be created and these are recorded here. Assumption can be some fact that is accepted as true without any formal furnishing of proof. These assumptions would be particularly helpful to the sponsor while taking decisions on the budget to be allotted (Creasey, 2007).

Constraints: A project may have certain internal and external limitations that can be presented in this section. These constraints can actually affect the performance of  a project and thus, are important to understand. These constraints would be helpful to the sponsor while taking decisions on the budget to be allotted (CDC, 2006).

Risks: In this section, high level risks that can possibly occur on the project are included and possible mitigation plan in case these occur. A risk is any incidence or event that can occur unexpectedly during the project can its occurrence can affect the project positively or negatively. These risks are also important to consider for the sponsor while taking decisions on the budget to be allotted (CIO, 1997). Risk estimation and mitigation may also be included in the charter document that would cover the risk ranking, risk level, impact, consequences and the steps to mitigate the same. These will aid in the success of the project and to come up with an alternative and rectification to save the project from deviating from its regular path.

There are some best practices of development of a project charter that may be followed for the current project such that most benefits may be received from the charter. These include:

• A project manager may be assigned at the very beginning of the project such that he or she is made the part of the planning process such that he or she can ensure smooth functioning of the project thereafter knowing every aspect and challenges from the start.
• A Project charter must allow for an open collaboration between different members of a project team by documenting details of requirements, expectations from them and commitments required from them for the project progress.
• The requirements of the customers of the project or product that is being created should be clearly stated along with priorities for different requirements on the project. This would help a project manager make a plan in a sequence that provides deliverables as expected by the customers(CDC, 2006).

As per PMBOK guide, a project charter is a document that formally authorizes a project. The charter is prepared by Project manager and approved by the Sponsor of project such that when it gets approved, the project manager can obtain required resources and begin working on the project. A Project charter typically includes information on business need for project, stakeholder requirements, key success factors or criteria, project scope, project assumptions and constraints. When a project charter is prepared, it not only marks the beginning of a project but also assures certain level of commitment and support from project sponsors and team members. Moreover, with project charter, there would be clarity on what the needs of stakeholders are and what specific outcomes can be expected from the project. The charter also keeps a control over project scope that does not exceed beyond the project viability and thus, prevent scope creep. Besides objectives and scope, a project charter would also brief the benefits that would be achieved through the project ( Bentley Systems, Incorporated, 2013).

There are a number of benefits that a Project Charter brings with itself and the same is important for the organization.

• The Project Charter clearly specifies the objectives that are associated with the project. The answers to the questions such as what is going and what has to be achieved are given in this document.
• One of the major risks that are associated with almost every project is in terms of the scope. There are often scenarios wherein the scope of the project is not clearly understood by the team and the same causes schedule or budget overrun during the project phase. Project Charter document provides a solution to this issue by clearly defining the in scope and out of scope items.
• Project timeline highlights are also included in the Project Charter. It includes the activities that will be covered in the project and the resources that will execute the same. It acts as a guideline for the project and the adherence to the schedule defined in the timeline is maintained.
• Roles and responsibilities are defined in the Project Charter document. It provides clarity to the resources in terms of the tasks that they must complete to ensure the success of the project.
• There are a number of project development and management methodologies that are present. The Project Charter document covers the project approach by defining the functional as well as the technical approach to be followed. It is therefore essential for the project to have the Project Charter document prepared with utmost attention and perfection.
• A project goes through a number of changes during its timeline. These changes may be insignificant to extremely significant for the project and the same must be managed well. A change control process is briefly included in the Project Charter document by the creators to make sure that the changes are controlled and managed in an organized manner.

A Project Charter document thus covers some of the basic and very essential details that are associated with the project in formation of a strong base. It is very important for the projects to have this documented created with attention to ensure that there are no loopholes and faults present in the same.

The importance that the Project Charter brings with itself for the project is that all of the stakeholders associated with the project formally come to a consensus in terms of the project definition. The same is recorded in the documents to refer in the future scenarios which minimize the problem of scope creeps and inflation in the requirements at a later stage. The project charter document also involves the customer in the project right from the initiation phase. The best practice for the Project Manager is to involve the customer directly. However, direct or indirect involvement of the customer during the creation of this document, the acceptance and commitment is shown with the help of the same. It helps in achieving a basic bond of trust between the project team, project management and the customer associated with the project. There may be two broad scenarios associated with the Project Charter preparation. In the scenario one, the customer may be directly involves with the preparation procedure by giving his/her comments and feedback all throughout. In the second scenario, the customer may not be directly involved and the project charter may entirely be developed by the project team. The charter provides a mechanism of formal revision process in the later stage to involve the customer as it remains open for modification and negotiation unless the same is finally approved by the Project Owner and Sponsor.

Earlier, this methodology was adopted in a few categories of projects only such as the one related to the Construction industry. It helped such projects to maintain an accurate level of authorization and contributed in the success factors of the project. Negotiations in such projects were made through formal process between the contractors and customers. The same approach is now being applied in all the sectors which have helped to streamline the processes and the required changes right from the beginning. It has been recorded that the projects that do not follow the chartering procedure and maintain a discipline right from the initiation phase often lead to failure of the entire system or the management processes. Thus, it is essential for the organizations to bring about a change and follow a defined principle and methodology in the project through Project Charter and the associated activities.

Another importance of the Project Charter lies in the fact that the projects get started on or before the scheduled time which aids in the successful completion of the project as per the deadlines. The customers get involved in the scope definition processes and are bound to put forward their list of changes in the same. The changes are timely incorporated in the charter document and the related activities are kicked off in time to make sure that the timeline is followed at all times.

The project charter has two other critical purposes, also. To begin with, the way toward building up the charter is as essential as the archive itself. The charter advancement procedure is an amazing open door coming as it does at the most punctual phase of a project to include the new group in cooperation, which prompts the improvement of a genuine group. What’s more, due to their immediate association in the chartering procedure, the colleagues start to take responsibility for project. So the chartering procedure manufactures a genuine group and to fabricate responsibility to the project. There are different approaches that are followed to develop the charter document and the best practice is to start from the scratch with the involvement of all stakeholders together. It helps in brainstorming activities and also helps in making the choice of the best idea out of all. The collaboration and cooperation between the stakeholders also increases and the overall team spirit is improved.

There are projects that run for months or even many-many years. The workforce that starts the project may not stay till the project completion. New resources join the team and the project charter document serves as an excellent way to make these resources understand the basics of the project in terms of objectives, purpose and scope. It results in better understanding along with reduced time and effort to train the new resources.

Project Sponsor and Project Owner also achieve a sense of assurance with the charter document as they get to see the on-paper presentation of their project requirements. The scopes as well as the objectives are clearly defined in the charter document and the changes or modifications are suggested by the party that has to approve the same. The final charter document is then created and approved by the Project Sponsor.

A project charter adds a lot of value to the project and for the organization as whole. First and foremost is that it adds to the project repository that is maintained by an organization. Every organization deals with a specific domain or category of projects and there are chances that two projects are very similar in terms of approach and methodology to be followed. The project charter documents of the projects completed by the organization in the past act as a referral for the new ones to be completed by the organization. The project teams may look through the repository to find out the best practices to be followed in the project and also to understand the preferred template for the document.

Another point of value that the Project Charter document add is in terms of the customer involvement, commitment and trust that is developed with the help of this phase of the project. Project team and the customers interact with each other a lot many times during the creation of the charter document. The process helps in understanding of the requirements of each other and also develops a healthy association between the two parties. It contributes in the healthier work environment and also helps in the success of the project as a whole.

Resource satisfaction is also necessary for the project and for an organization as well. If the resources remain unhappy or dissatisfied, the same is reflected in the productivity and efficiency rendered by them. Project charter document clearly highlights the roles and responsibilities of the resources after analysis of their skills. It helps in the assignment of the duties as per the skill set of the employees and also aids in attaining the employee satisfaction.

Accurate chartering also helps in start of the project on the scheduled time. The same leads to completion of the project as per the deadlines that are decided in the beginning. The reputation of the project team within the organization and the reputation of the organization in the market thus improve through the process. The success rate of any organization is calculated by the number of projects that are successfully completed by the same and the base of it begins with the chartering procedure.

The value that the project charter adds is also significant in terms of the guidelines as defined by the project management methodology such as PMBOK and PRINCE2. It aids in the achievement of the best practices as defined by the principles.

This report explained the importance of using project management practice including    specific processes and documentation that may be used by the intended management to improve their project management practices. The project covered four important elements of project management when incorporated in practice on the project. These included project charter, sections of the project charter, importance of project charter to the success and the value added by the same. This project report explained the importance of each and how the same may be prepared and be used by management for gaining strategic and business benefits for the project.

It was found that project charter was beneficial mainly for the project sponsor for taking decisions on funding and for stakeholders to understand what they can expect from the project in terms of deliverables, benefits, timelines for completion and approach to project management. A project charter marks the beginning of the project officially. Certain benefits of preparing project charter include commitment and support from sponsors for provision of resources as and when required, clarification of needs of the project stakeholders, understanding of the potential benefits to be received from the project and capability to establish a control over project scope such that problems like scope creep are not faced.

Following are the recommendations that include the points and guidelines for writing a detailed and ac accurate Project Charter.

• The Project Charter must begin with the Authorization that must specify the name of the project, authorizing body and an extremely brief description of the project.
• The next section should involve a detailed overview of the project along with its goals and scope. The goals of the project must be SMART that is Specific, Measurable, Achievable, Realistic and Time bound. The scope statement must clearly list the activities that will be covered during the project and the ones that will not be covered during the project timeline.
• A concise description of the deliverables, milestones and their due details must be included as a next step.
• Business need of the project and the opportunity that the project brings must also be covered in a well written Project Charter.
• Roles and responsibilities of the resources along with their description is an important part of the charter document. All of the resources that will be involved from top level managers to the bottom level workers and their allocated activities and responsibilities must be stated in the charter document.
• Time and budget summary covering the project start date, project end date, allocated budget and the highlights of the same must also be covered in the charter document.

Project charter aligns and streamlines the expectations of one and all that lies on the scope, methodology, defining, budget, timeline, risk estimation and likewise. There are more elaborated versions of the charters that also include the mitigation strategy that must be followed in the occurrence of a risk during the project timeline. Such charters aid in the resolution of the problems that may arise and contribute a lot in the project success.

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