Chap 4.1- Develop Project Charter

Trainer: Anand BobadePMBOK 6th Edition, 2019, All rights reserved.
Develop Project
Charter
Chapter 5 –
Project Integration Management
PMP SIXTH EDITION

PMBOK 6 - All rights reserved; By: Anand Bobade
Process definition
Input, Tools & techniques, and outputs
What is business Case?
What is Benefits?
What is Project charter?
Review
4.1 Develop Project Charter

Formally authorizes a existence of a project, & provide
PM authority to apply organizational resources to
project activities.
Develop Project Charter
Issued & signed by Project initiator or sponsor or External
authority( Customer, Dept. head or PMO etc.)
Authorizes a
project.
Provide PM
authority.
Authority to use
organizations
resources.

Provides a direct link between the project and the strategic
objectives of the organization
PM should be assigned as early as possible, preferably, while
Charter is defined.
This process is performed once or at predefined points in the
project.
Project Charter Contains:
Business
Need
High level
requirements
Summary
Milestones
Summary
Budget
High level
risks
Project
Manager
assignment
Develop Project Charter

Develop Project Charter->ITTO
Expert Judgment
Data Gathering
Interpersonal and team
skills
Meetings
Business Documents
Agreements
Enterprise
environmental factors
Organizational process
assets
Project charter
Assumption log
Inputs Tools & Techniques Outputs

Business
Documents
Agreements EEF OPA
Develop Project Charter -> Inputs

Business
Documents
Business Documents:
Develop Project Charter -> Input-> Business Documents
Project manager needs to ensure that the project management
approach captures the intent of business documents.
Both are interdependent and iteratively developed and maintained
throughout the project life cycle.
Project Manager can not change these documents.
Business Case
Benefit Management
plan

Business
Documents
Interrelationship of Business Documents.
Develop Project Charter -> Input-> Business Documents

Business
Documents
Business Case
•A documented economic feasibility study used to establish validity of the
benefits of a selected project.
Used as a basis for authorization of further project work.
Describes information from a business standpoint to determine whether project is worth investment.
Develop Project Charter ->Input ->Business Documents->Business Case
Written by
Project
initiator
Sponsor Stakeholder

Business
Documents
Business Case contains:
Business
background
Business
Benefits
Assumption
&
Constraints
GAP
analysis,
Cost Benefit
analysis
Expected
Cost, ROI
Identify Business need Establishes feasibility
Establishes business value & importance
(Cost-benefit analysis)
Decision Making /approval by Manager or Above

Project Selection Approach:
• Murder board (a panel of people who try
to shoot down a new project idea)
• Peer review , Scoring models , &
Economic models
Benefit measurement
methods
(Comparative approach)
• Linear programming , Integer
programming: Allocating limited
resources in optimal way.
• Dynamic programming, Multi-objective
programming
• Programming – not referring to
computer programing but it means
planning.
Constrained
optimization methods
(Mathematical
approach)

Economic models for project selections:
Present value
(PV)
Future value
(FV)
Net present
value (NPV):
Internal rate of
return (IRR)
Payback period
Cost benefit
analysis
Note: Details provided in separate section

Business
Documents
Benefit Management plan:
• The documented explanation defining the processes for
creating, maximizing, and sustaining the benefits
provided by a project
Develop PC ->Input->Business Documents->Benefit Management
It contains:
Target benefits
Strategic
alignment
Timeframe Benefits owner Metrics Assumptions Risks

Agreements
Any document or communication that defines the initial intentions of a project.
This can take the form of:
Contract
Memorandum of
Understanding
(MOU’s)
Service Level
Agreements
(SLA)
Letter of
agreements
Letter of intents
Verbal
Agreement
Email
other written
agreements
Develop Project Charter -> Input -> Agreements

Enterprise
environmental factors
Below Enterprise environmental factors can provide input to Charter:
Internal EEF
Organizational culture & Political
climate
Organizational Structure
Organizational Governance framework
Infrastructure
Employee capability
Stakeholders expectation
Risk thresholds
External EEF
Marketplace conditions
Legal restrictions
Regulatory requirements
Government or Industry standards
Develop Project Charter -> Input -> EEF

Organizational
process assets
Below Organizational process assets can provide input to Charter:
Processes, Policies and
Procedures
Project, program governance
Guidelines
Project Life cycle
Change control procedures
Templates
Organizational
Knowledge Repositories
Configuration knowledge
repository
Historical information
Lessons learned
Project files
Develop Project Charter -> Input -> OPA

Develop Project Charter -> Tools & Techniques
Expert Judgment Data Gathering
Interpersonal
and team skills
Meetings

Expert Judgment
Asses inputs (Business case, agreements etc.) used to develop project charter.
Can be applied to all technical & management details during this process.
Industry expertise Technical expertise
Financial/Costing
expertise
Project Management
expertise
Organizational strategy
• Benefits management
• Technical knowledge of the project
• Duration and budget estimations
• Risk identification
Develop Project Charter -> T&T -> Expert Judgment
Experts:
SME
Other units
within
organization
Consultants
Other
Stakeholders
(including
customer)
Professional &
technical
associations
Industry
groups
PMO

Data Gathering
Following Data Gathering techniques are used:
Brainstorming Focus groups Interviews
Develop Project Charter -> T&T -> Data Gathering

Brainstorming
Data gathering and creativity technique that can be used to identify risks, ideas, or solutions to issues.
Generate & collect Multiple ideas related to project and product requirements
Problem
Identification
(Prior activity)
Idea Generation
Idea analysis
/Selection
(decision
making)
Implementation
(Post activity)
Develop Project Charter -> T&T -> Data Gathering-> Brainstorming
Idea Generation & Idea analysis/Selection are part of a brainstorming session, while
Problem Identification occurs before session & Implementation occurs after session.

Focus groups
Bring together prequalified stakeholders & SME to understand their expectations & attitudes.
Trained moderator develop a discussion by asking predefined questions.
Discussion is focused around a topic. (Project risks, Success criteria etc)
Develop Project Charter -> T&T -> Data Gathering-> Focus groups
Pros
Has fix agenda
More structured
Cons
Trained Moderator required
Less control
Sponsor
Business
SME
Process
expert
Business
Analyst
Moderator

Interviews
Approach to elicit information from stakeholders by directly talking to them.
Spontaneous questions Useful to obtain confidential information
Project participants
Sponsors
Other executives
Subject matter experts
Develop Project Charter -> T&T -> Data Gathering-> Interviews
High level
requirements
Assumptions or
Constraints
Approval criteria

Interpersonal
and team skills
Following Interpersonal and team skills are used:
Conflict
management
Facilitation
Meeting
management
Develop Project Charter -> T&T -> Interpersonal and team skills
Conflict management
• Objectives
• Success Criteria
• High level
requirements
• Project description
• Summary
milestones
Facilitation
• Guide a group to
successful decision
• Ensure effective
participation
• Achieve mutual
understanding
• Achieve agreements
Meeting
Management
• Agenda
• Representative for
each stakeholder
group
• Minutes of meeting
• Follow-up

Meetings
Project sponsor & key stakeholders will meet to discuss project charter
Board may discuss & approve project charter
Develop Project Charter -> T&T -> Meetings
Meetings

Project Charter Assumption log
Develop Project Charter -> Output

Project
Charter
Formally authorizes a project & provide PM with authority to apply
organizational resources to project.
Project Purpose or Justification.
Measurable objectives & success
criteria's.
High level requirements.
High level project description,
boundaries & key deliverables
High level risks.
Develop Project Charter->Output-> Project Charter

Project
Charter
Summary milestone schedule.
Summary budget (Pre approved financial
resources)
Initial Stakeholder list.
Project approval requirements.
Exit Criteria (Cancel or Closure)
Assignment of Project manager,
responsibility, and authority level
Project Sponsor
Develop Project Charter->Output-> Project Charter

Assumption
log
Its list of points which are believed to be true but not proven.
Strategic & operational assumptions identified in Business case will be added to Project Charter
Low level assumptions are generated throughout the project life cycle
This log is used to record all assumptions and constraints .
Develop Project Charter->Output-> Assumption log
Assumption log
Project: CRM Project Date: 11-Nov-2018
ID Project Phase Assumption Type Severity Responsible
person
Due Date Action Status
1 Planning Key resources will be available with 50%
allocation
Resource High Project
Sponsor
01-Dec-18 Get Commitment
from respective
Managers.
Closed
2 Design & Build Resource hiring will not take more than 2
months
Schedule Medium HR Manager 15-Nov-18 Initiate interviews
ASAP
Pending
3 Design & Build Project will use existing IT infrastructure Technical Medium Project
Manager
15-Dec-18 Pending

Project charter definition
What is Benefit management plan?
What is business Case?
What are project selection techniques?
T&T: Expert Judgement, Data gathering, Interpersonal &
team skills, meetings
What is Project charter & its contents.
Develop Project Charter -> Review

Chap 4.1- Develop Project Charter

Chap 4.1- Develop Project Charter

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Chap 4.1- Develop Project Charter