CONTEMPORARY PROJECT MANAGEMENT, 4E

Timothy J. Kloppenborg
Vittal Anantatmula
Kathryn N. Wells

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1
Chapter 3

Chartering Projects

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Chapter 3 Core Objectives:

• Describe what a project charter is and why it is critical to project success

• List elements of a charter and why each is used

• Create each section of a charter

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Chapter 3 Technical Objectives:

• Initialize a project in Microsoft Project

• Set up a milestone schedule

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Chapter 3 Behavioral Objectives:

• As a team, create a complete charter for a real project and present it to a

sponsor for ratification

• Negotiate with a sponsor to make your project realistic and achievable

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Ball Aerospace & Technologies Corp. Systems Engineering Solutions

“At Ball, we increase stakeholder buy-in by addressing and

thinking about things up front; with an agreed-upon charter,
this gives the project team some guidance to effectively plan
and execute the effort.”

Lydia Lavigne, Ball Aerospace

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What is a Project Charter?

• An informal contract between the project team and the sponsor

• A contract
• is entered into freely by two or more parties.
• cannot arbitrarily be changed
• offers something of value for each party
• is a living document that can evolve with changing conditions

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What is a Project Charter?
• Signing a charter represents transition

Project initiating stage Project planning stage

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Why is a Project Charter used?

1. Authorize the project manager to proceed

2. Help to develop a common understanding

3. Create commitment

4. Screen out poor projects

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Authorize the project manager to proceed

• Project charter authorizes commitment of resources to a project

• Project charter provides official status within the parent organization.

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Common understanding

• Teamwork develops.
• Agreement, trust, communication, and commitment develop.
• Project team does not worry if management will accept a decision.
• Sponsor is less likely to change the original agreement.

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 When is a charter needed?

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Typical Elements in a Project Charter

Title
Scope overview
Business case
Background
Milestone schedule
Risks/assumptions/constraints
Spending approvals/budget estimates
Communication plan requirements
Team operating principles
Lessons learned
Signatures and commitment

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Typical Elements in a Project Charter

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Scope Overview

• High-level description of “what” and “how”

• The project in a nutshell

Product scope – characteristic features and functions of what is being created

Requirements—characteristic or condition needed to satisfy either a contract or a

stakeholder’s expectations

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Scope Overview

• Used to help prevent scope creep

• Considered to be the project boundaries
• Quantifying the scope helps with understanding of project size

Scope creep – uncontrolled expansion to what was agreed upon

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Business Case

• Project purpose or justification statement

• Answers the question “why?”
• Used to justify the necessity of the project

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Business Case

• Ties project to the organization’s strategy

• Provides rationale or high-level cost/benefit estimates
• Persuades and inspires decision makers and team members

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Background

• Used to provide more detail to support the scope statement and

business case statements
• Background statement is optional

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Milestone Schedule with Acceptance Criteria

• Divides the project into intermediate steps whose completion can be

verified
• Lists major milestones and deliverables

Milestone schedule – summary-level project schedule composed of major

milestones and/or completion of deliverables

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 Milestone Schedule with Acceptance Criteria

• Who will judge the quality of the deliverable and by what criteria?
• Acceptance criteria represent the project’s vital signs
• Never turn in a deliverable without knowing how it will be judged
• Something of value will be delivered at each iteration

Acceptance criteria – markers against which deliverables can be evaluated for completeness
and correctness.
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Risks, Assumptions, and Constraints

Risk – an uncertain situation which could have a negative or positive effect

on the project if it occurs

Assumptions – suppositions made during project planning that are

treated as factual, though they’ve not been proven

Constraint – anything that limits project implementation

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Risks, Assumptions, and Constraints

• Reminders of what could prevent successful completion of a project

• Forethought and planning increases the likelihood of discovering
problems before they occur
• A false assumption becomes a risk
• A constraint that limits money, time, or resources is a risk

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Risks

• Identify negative risk and a plan to overcome it.

• A positive risk can be considered an opportunity  plan to capitalize
on it
• Consider the risk of NOT undertaking the project
• Assign an “owner” responsibility for each negative risk

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Resource Estimates

• A preliminary budget with level of confidence in the estimate

• Identify expenses the project manager can authorize
• Identify expenses the sponsor needs to control

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Stakeholder List

• Identify stakeholders
• What does each stakeholder care about?
• Who are the key stakeholders?

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Team Operating Principles

• Enhance team functioning

• Increase team effectiveness
• Ensure all parties are aware of what is expected

How to conduct meetings How to accomplish work

How to treat each other How to make

with respect decisions
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 Lessons Learned

• Successes and failures of previous projects become practical advice

• Avoid the risk of repeating mistakes from previous projects

Lessons learned – knowledge gained from one project which may be applicable to similar
future projects

Lessons learned register – accumulation of knowledge learned, which can be easily referenced and
cataloged.

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Signatures and Commitment

• Who is involved
• Extent to which each person can make decisions
• Expected time commitment for each person
• The project sponsor, project manager, and core team members show
commitment by signing the charter

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Constructing a Project Charter

• Sponsor creates first draft of scope overview and business case

• Leadership team may contribute additional information
• Scope overview and business case should be one to four sentences
each

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Scope Overview
and Business Case
Example

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Breakout session!

Create an “elevator pitch” for your project

• 30 second summary
• What your project is (scope overview) &
• Why it is necessary (business case)

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Background Instructions (Optional)

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Milestone Schedule
with Acceptance Criteria

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Six Steps in Constructing a Milestone Schedule

1. Describe the current situation that requires the project

(1st row of the milestone column)
2. Describe the project at its successful completion
(Last row of the milestone column)
3. Describe the acceptance criteria for the final project deliverables
(Bottom row of 3rd and 4th columns)
4. Determine the few key points in the milestone column where quality
needs to be verified
5. For each milestone, determine who the primary stakeholder(s)
is(are) and how the resulting deliverable will be judged
6. Determine expected completion dates for each milestone

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Breakout session!

Create a Milestone schedule, using a chart with these four columns:

1. Milestones
2. Dates
3. Stakeholders
4. Acceptance criteria

Follow the six steps on the previous slide (section 3-5c in textbook) to
complete the milestone schedule

1st iteration follows steps; all other iterations just-in-time

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Six Sigma Milestone Schedule and Acceptance Criteria Template

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Risks, Assumptions, and Constraints Instructions

• Brainstorm all risks to

Schedule Budget Usefulness Satisfaction

• Identify and document assumptions

• Quantify risks based on:
• probability of occurring
• impact if realized
• Which risks should be considered “major?”
• Major risks require formal response plan

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 Risk Assessment Example

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Risk Response Planning Example

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Breakout session!

As a group, identify as many risks as possible

1. Write each risk on a post-it note
2. Create a graph, such as that in Exhibit 3.9
3. As a team, decide where on the chart each risk goes (based on
probability and impact)
4. Create risk response plans for each “major” risk and assign an owner to
each risk

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Resources Needed Instructions

• Use crude estimates for people, equipment, space, and money needs
• Describe how estimates were developed & level of confidence
• Develop limit of spending authority for project manager

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Breakout session!

Estimate resources, following the example of Exhibit 3.11:

1. Money, people, space, equipment, etc.
2. Include level of confidence in your estimates

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Stakeholder List Instructions

Identify all stakeholders

Determine most important stakeholders
Ask each stakeholder what interest they have in the project

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Breakout session!

Create a list of project stakeholders

1. Individuals and/or groups
2. What is their interest in the project?
3. Who are the key stakeholders?

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Team Operating Principles Instructions

Establish how:
• meetings will be conducted
• decisions will be made
• work gets done
• everyone will treat each other with respect

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Team Operating Principles Example

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Breakout session!

Create a short list of team operating instructions

Establish how:
• meetings will be conducted
• decisions will be made
• work gets done
• everyone will treat each other with respect

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Lessons Learned Instructions

• Consider what has worked/not worked

• Copy or tailor what has worked
• Avoid what has not worked
• Report lessons learned more than once over life of project
• Before undertaking project
• At key reviews
• Upon project completion
• Make lessons available in a knowledge base

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Project Lessons Learned Example

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Signatures and Commitment Instructions

• Project sponsor, manager, team members

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Ratifying the Project Charter

• Present the project charter to the sponsor for approval

• Sponsor asks questions for clarification and agreement
• Sponsor, project manager, and core team sign the project charter

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Starting a Project using Microsoft Project

• MS Project 2016 Introduction

• Setting up your first project
• Define your project
• Create a Milestone Schedule

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MS Project 2016 Introduction

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MS Project 2016 Introduction

• Ribbon – set of 7 tabs used to construct, resource, baseline, status,

communicate information about a schedule
• File
• Task
• Resource
• Project
• Report
• View
• Format

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MS Project 2016 Introduction

• Project Schedule Details View Pane(s)– displays info about project:

• Timeline view– “big picture” of project schedule
• Gantt chart view—displays tasks on a calendar
• Zoom Slider – change timescale by sliding left or right
• View Shortcuts– quick switch from active view to: Gantt chart, Task usage, Team
planner, Resource sheet, and Report
• Schedule Mode selector – manual or automatic

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Initialize MS Project 2016 for General Use

• Auto Scheduled mode (use this one!)

• MS Project automatically calculates a schedule using schedule drivers
• Manually Scheduled mode (default)
• Ignores schedule drivers and uses manually entered data

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Setting up your first project

1. File, Options, Schedule

2. Scheduling options – All New
Projects
3. New tasks created – Auto
Scheduled
4. OK

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Define your Project

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Define your Project

Enter identifying information:

1. Click File tab
2. Project Info>>Advanced Properties
3. Summary tab—enter title
4. OK

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Define your Project

Generate “Project Summary”

task row:
1. File>>Options>>Advanced
2. “Display options for
project”
3. Check “show project
summary task”
4. OK

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Create a Milestone Schedule*

1. Task Name cells, enter milestone names

2. Duration cells, enter 0 for each milestone
3. For each milestone row:
 Double click milestone name to activate “Task Information” dialog box
 Advanced tab, change Constraint type to “Must Finish On”
 Constraint date, enter milestone date
 OK
*More details provided in textbook

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Create a Milestone Schedule

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Create a Milestone Schedule
(Complete instructions found in textbook)

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Summary

• A project charter enables the project sponsor, project manager,

and core team to agree on the project at a high level.
• Charters include scope overview, business case, milestone
schedule, acceptance criteria, risks, and signatures (other sections
optional).
• A rough draft of the business case and scope overview are written.
• Sponsor goes over the charter with the project manager and core
team.
• The charter is the document that completes the project initiating
stage and begins the planning stage.

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 PMBOK Exams

• Many questions regarding order of processes and deliverables

• Remember that all parts of a charter are composed in the Initiating stage and
expanded on in detail during Planning stage of project
• Signing charter transitions project from Initiating to Planning

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 PM IN ACTION
Information Systems Enhancement Project Charter

• Used when a nonprofit agency formed a project team to upgrade its

information systems
• Design principles – how to write a project charter
• Content principles – suggestions regarding the content of each section

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Casa de Paz Development Project

• Create the scope overview and business case for further website development

• What expertise would you like from various stakeholders to create the milestone
schedule with acceptance criteria?

• What are key risks for this project?

• Who are key stakeholders?

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