Development of Project Charter as the foundation for project activities

01 May 2022 Long Read

Having established the merits of project management (PM) as a science necessary to every project in the first article in this series, lets delve deeper in the subject.

The maxim goes, ‘Well Begun is Half Done’. So is the case with any project. It's a simple principle but ignored by many. There could be many reasons, all valid and genuine, for skipping this stage, such as:

  • A stiff project deadline
  • An immediate start date immediate
  • The need to show visible efforts and tangible outputs immediately to establish credibility.

  • As planning is invisible to clients, there appears to be a lull or inactivity they observe from outside. Hence, to pacify the client, the project team often engages in a flurry of activities without complete application of mind. However, if you believe in planning, commit time and engage the client in the development of the project charter, the results will be astonishing.

    There’s a method to this that takes a 360˚ view. The primary aim is to establish the WHY. Why is this project being undertaken?
    Some project objectives

  • Developing a new concept/idea
  • This would be true in the case of R&D projects.
  • This can work even in management projects in other fields like marketing, sales, etc, where newer ways of performing a function are to be designed. The innovation team would be small and different from the execution team. Implementing an ERP? All of these are projects.

  • Construction/development
  • Creating facilities in and around a project

  • Focus is often given only to the parent project and other smaller service projects are ignored or left to in adept resources, leading to bottlenecks down the line. A debris disposal system is a small case in point in one of our projects. In this project, the focus was entirely on the five-star superstructure and the excavation was left to a relatively junior resource. The project was in the city centre next to VIP structures. Truck movement would be allowed only for few hours a day and the debris disposal site was a few kilometres away. We began the project on a sour note owing to this lapse in engaging with the municipality, traffic and experienced contractor. Thankfully, we implemented PM processes immediately, much against the wishes of our experienced project manager, and then the recoup and subsequent smooth sailing was to everyone’s delight.

  • Enhancement/beautification
  • Redevelopment/overhauling
  • Adherence to rules and regulations regarding environment, etc
  • Is it statutory?
  • If not, is it of importance to the client?
  • Is the client’s global and local team aligned on this?
  • Need for the project

  • Market demand/customer requirement
  • Organisational need
  • Government/societal pressure
  • Legal requirement.
  • Knowing the purpose will help choose the correct path and assess the need for requisite resources, which would lead to a better planned HOW.

    Stakeholder identification

    In any project, there are many stakeholders, internal and external. It is really important to identify them. The obvious one is the client. But even within the client’s organisation, there are many stakeholders that will play a role affecting the project at some stage. Take, for example, the accounting and bill processing team. A simple prior engagement to understand things like billing requirements, dates, mode, attachments, person receiving, bill processing, approving and finally payment processing will go a long way in establishing relationships, understanding the process and knowing when and how to escalate, ultimately leading to a smooth fund flow system. Many projects get into a funds crunch not because the client has no funds or has no intent or because their staff is incompetent or careless. A simple stakeholder identification and engagement exercise will help tweak your processes to incorporate client needs. Don’t make the mistake of only engaging with the procurement head. There are many other stakeholders that may be invisible or seem inconsequential at the time of starting the project but can delay or derail the project at some time; this could have been addressed at the beginning itself.

    External stakeholders of the project and their influence can impact cost, quality and time, both positively and negatively. Some examples:

  • Land owners
  • Many infra projects face delays and abandonment for lack of clarity and engagement on this stakeholder.
  • Government authorities
  • Pre-empt all possible departments that could influence the project, understand their requirement and incorporate approvals and compliance in the processes.
  • Who will manage this stakeholder? The client? You? Outsourced consultants? Costs and responsibility need to be assessed and responsibility assigned to avoid future conflicts.
  • Environmentalists/society
  • Not only government, even social groups need to be engaged – Friends of Trees, environmental activists, social activists and, in a few cases, even local citizens’ groups.
  • Layers within the customer’s organisation
  • Contractors/vendors/architects
  • Investors/partners
  • Technical/legal experts.

  • Developing a good project charter

    A good project charter will always be:
  • Written
  • Formal
  • Simple.

  • The idea is to identify, engage, encapsulate and communicate.
    A project charter should include:
  • Statement of Work (SoW) provided by the sponsor (development authority/customer/investor)
  • Requirements of stakeholders and stakeholders’ influence
  • Business case for taking the project (purpose/justification and ROI, or return on investment)
  • Assumptions and constraints
  • Project success factors – infrastructure, systems, people, marketplace conditions, etc
  • Tip: Always ask clients/stakeholders to give their top 10 parameters of success of the project and rank them according to their importance.
  • You may find clients not being clear themselves. Prompt them from your experience. At times, timely completion with best quality at lowest cost does not work in congruence. The pursuit of one may lead to deviation from the other. What does the contract say? Is time of the essence? Is adherence to a tight budget sacrosanct? Is quality paramount at any cost?
  • The client may say all are top priority – discuss, debate and illustrate the pros and cons of each criterion and suggest your ranking based on the dialogue.
  • Once you have the project success criteria listed and ranked (or even better if weightage assigned), you know exactly what resources to apply and where.
  • This exercise will help aligning various stakeholders. What’s on the mind is now on paper.
  • The project success criteria would be akin to Pareto’s Principle (the 80:20 rule) – 100 per success of the top criteria will gain the whole project overall success –hence giving you a clear indication where your maximum focus should be.
  • Summary milestones
  • Summary budget
  • Assigned project manager and authority level
  • Project team structure.
  • This process will entail investment of time at the earliest stage of the project, at times even when the project is still not awarded or conceived. In my experience, I have used this tool as early as the business development stage, leading to greater engagement with the client. Sometimes, it has even ledto clients incorporating our process in their bidding process itself, working to our advantage.
    Thus, a project charter forms the foundation for all further activities.

    Related Stories