Project initiation is the first phase in the project management lifecycle where the project is formally authorized, defined, and its objectives are established. This phase sets the foundation for the entire project and involves identifying stakeholders, clarifying the project’s purpose, and conducting initial planning activities.
Key steps in Initiation
- Develop project charter
- Identify stakeholders
- Prioritize stakeholders
Key steps involved during the Initiation phase (elaborated)
Step#1
- A project charter is created. A project charter is a four to five page document
- Contains;
- High level desciption of the project
- Alternatives analysed before finalizing the project
- Major milestones with dates
- Major risks and constraints
- Assumprions and dependencies
- Key stakeholders name, contact details, roles&responsibilities
- Project’s success criteria
- Project manager’s names, roles and responsibilities
- The project charter is approved by the sponsor or the senior management representatives
- All major changes to the charter must be re-approved by the sponsor / senior management representatives
Step#2
- A stakeholder register is prepared
- Stakeholder prioritization is done
Who is a project stakeholder?
Anyone, who is affected positively or negatively, by doing a project, by delaying a project or by not doing a project is a stakeholder. All those who have a vested interest in the project is a stakeholder. Interest can be both positive and negative.
Stakeholder examples
- Sponsors
- Project manager
- Project owner
- Contractor
- Sub-contractors
- Suppliers
- Statutory bodies
- Consultants
- Architects etc
More about Project Charter
A project charter is a formal document that authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activities. It serves as a critical foundation for the project by outlining its objectives, scope, constraints, stakeholders, and high-level deliverables. The project charter is typically created during the initiation phase of the project management lifecycle and is approved by key stakeholders, such as project sponsors or senior management.
Here’s what a typical project charter includes:
- Project Title and Description: A concise, descriptive title for the project along with a brief overview of its purpose and objectives.
- Project Objectives: Clear and measurable statements that describe what the project aims to achieve. Objectives should be aligned with the organization’s strategic goals.
- Project Scope: Defines the boundaries of the project by specifying what is included and excluded from the project. It helps prevent scope creep and ensures a common understanding among stakeholders.
- Key Deliverables: Identifies the major products, services, or results that the project will produce. These deliverables should support the achievement of project objectives.
- Stakeholders: Lists the individuals or groups with an interest in the project, including their roles and responsibilities. This ensures that all relevant parties are identified and engaged throughout the project lifecycle.
- Project Manager: Designates the individual responsible for leading the project and provides them with the authority to manage project resources and make decisions.
- Project Constraints and Assumptions: Describes any limitations or constraints that may impact the project, such as budget, time, or resource constraints. Assumptions are factors that are considered to be true but have not been verified.
- High-Level Timeline: Provides an overview of the project schedule, including key milestones and major phases or activities.
- Approval Signatures: Confirms that the project charter has been reviewed and approved by relevant stakeholders, such as the project sponsor or steering committee.
The project charter serves as a reference point throughout the project, guiding decision-making and providing a basis for project planning and execution. It helps ensure that everyone involved in the project is aligned with its objectives and understands their roles and responsibilities. Additionally, the project charter can be used to resolve conflicts, manage changes, and evaluate the success of the project upon completion.
Let’s illustrate the concept of a project charter with examples from both Engineering, Procurement, and Construction (EPC) projects and Information Technology (IT) projects:
Example 1: EPC Project – Construction of a New Power Plant
Project Title: Construction of XYZ Power Plant
Project Description: The project involves the design, procurement, and construction of a 100 MW natural gas-fired power plant to meet increasing energy demand in the region.
Project Objectives:
- Increase regional energy capacity by 100 MW within two years.
- Ensure compliance with environmental regulations and safety standards.
- Complete construction within the allocated budget of $150 million.
Project Scope: The project includes site preparation, engineering design, equipment procurement, construction of power plant infrastructure, installation of equipment, and commissioning.
Key Deliverables:
- Site preparation completed
- Engineering design approved
- Equipment procured and delivered
- Power plant construction completed
- Plant commissioned and operational
Stakeholders:
- Project Sponsor: ABC Energy Corporation
- Project Manager: [Name]
- Engineering Firm: XYZ Engineering
- Construction Contractor: ABC Construction
- Regulatory Agencies: Environmental Protection Agency (EPA), Occupational Safety and Health Administration (OSHA)
Project Manager: [Name] is appointed as the project manager with the authority to lead the project team and manage project resources.
Project Constraints and Assumptions:
- Budget: $150 million
- Timeline: Two years
- Assumption: Availability of natural gas supply for power generation.
High-Level Timeline:
- Site preparation: 3 months
- Engineering design: 6 months
- Equipment procurement: 9 months
- Construction: 18 months
- Commissioning: 2 months
Approval Signatures: [Signature of Project Sponsor]
Example 2: IT Project – Implementation of an Enterprise Resource Planning (ERP) System
Project Title: Implementation of ABC ERP System
Project Description: The project involves the selection, customization, and implementation of a comprehensive ERP system to streamline business processes and improve operational efficiency.
Project Objectives:
- Improve data accuracy and accessibility across departments.
- Increase operational efficiency by automating manual processes.
- Enhance decision-making through real-time reporting and analytics.
Project Scope: The project includes requirements gathering, software selection, system customization, data migration, user training, and post-implementation support.
Key Deliverables:
- Requirements documentation
- ERP software selected
- Customization and configuration completed
- Data migrated to the new system
- User training conducted
- System launched and operational
Stakeholders:
- Project Sponsor: CEO, ABC Corporation
- Project Manager: [Name]
- IT Department: IT Director, Business Analysts, System Administrators
- Department Heads: Finance, HR, Operations, Sales, etc.
- ERP Vendor: XYZ Solutions
Project Manager: [Name] is assigned as the project manager responsible for overseeing the implementation of the ERP system and ensuring its alignment with business objectives.
Project Constraints and Assumptions:
- Budget: $500,000
- Timeline: 12 months
- Assumption: Availability of key stakeholders for requirements gathering and user training sessions.
High-Level Timeline:
- Requirements gathering: 2 months
- Software selection: 1 month
- Customization and configuration: 4 months
- Data migration: 2 months
- User training: 2 months
- System launch: 1 month
Approval Signatures: [Signature of CEO]
In both examples, the project charter serves as a formal document that defines the project’s purpose, objectives, scope, stakeholders, constraints, assumptions, and high-level timeline. It provides a clear framework for project planning, execution, and control, ensuring that all stakeholders are aligned and informed throughout the project lifecycle.
- Project charter formally authorises the project
- Project charter is the document which formally appoint a project manager, hence we say that project charter gives authority to the project manager
- Project charter is formally approved by the sponsor / owner / senior management representative