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Chapter 5 – Project Charter

Part 2

What are the project's objectives?

Defining project goals: what sounds simple at first is a bit more complicated if you take a closer look. A project manager has to be familiar with methods for analysing the target setting and should know the connection between the project goals and company goals. He should be able to analyse the relationships between the project goals, and prioritise conflicting goals.

There are three main objectives which must be reconciled:

  • Quality objectives
    This includes the determination of the project deliverable and the quality requirements (design objectives, parameters...). The detailed version is later listed in the project specification.
  • Time objectives
    Here the time framework and, if necessary, specific milestones are listed. This includes either a defined date for start and finish or a given time period for achieving the project goals.
  • Cost objectives
    Every project has a funder and is somehow limited in the expenses. Therefore the budget is mostly specified prior to project planning by the client or has to be requested.

The main process objective is the satisfaction of key stakeholders.

Which rules for defining objectives should the project manager apply?

The variables should be precisely specified. Expressions such as "could" and "ought to" should be avoided. Complex terms such as "user-friendliness" should be broken down into individual components.

Project objectives have to be measurable and verifiable:

  • formulated in a precise, comprehensible and positive way
  • quantified to the greatest possible extent
  • formulated in a solution-neutral way so that they do not rule out potential solutions from the outset
  • examined to ascertain whether they are really necessary
  • formulated individually as separate statements – i.e. as requirements
  • summarised in one document
  • accepted by most significant stakeholders

Target relationships

These main objectives - time, cost and quality - can be arranged in a so-called magic triangle. Keeping the magical triangle balanced therefore is the biggest fine art of project managers.

There is no "correct" way to achieve this – project managers need an experience and they have to correct the situation on time by using the right management tools.

Sometimes, these goals are dependent on each other. It is distinguished between:

  • Competing goals and
  • Complementary goals.

After identifying the project objectives, it is mandatory to prioritise them. This eliminates unnecessary pressure in the project and provides a better focus on the main goals.

The targets that you have identified up to now help you draft a project charter with the most significant people in the project. It should include the following points:

Project performance objective

What do you have to achieve by the end of the project?

Project time objective

When will the project start and when will the performance objective be achieved? Have you remembered to allow for float time?

Project cost objective

How much money will have been spent by the end of the project? Does that include contingency funds?

Prioritising objectives

Which objective has the highest priority: quality, time or cost compliance? Which things have subordinate priority?

Project cost centre

If the project is an internal one, a project cost centre is set up as the basis for reliable cost management (cost budgeting, cost monitoring).

Project release

Now, the customer can release the project, which means that you are able to plan, implement and finalise it.

To summarise, the project charter specifies the project manager’s role in the project and in the steering committee. It consists of a short project description, (e.g. objectives, reasons for the project, problems to solve), a given time framework and key events (e.g. completion dates, milestones) and a brief elaboration of the risks and benefits of the project in its whole. Both the project manager and the customer are members of the steering committee. The steering committee should have as few members as possible and meet on a regular basis.

Deming Cycle

In order to control the project quality, continuous monitoring of the project progress and quick adjustments in project planning are important.

A simple but powerful method for project controlling is the so called "Deming Cycle".

It is an iterative method used in business for the control and continuous improvement of processes and products. For a project manager, this method can help, to constantly measure and adjust the project progress.

Plan:
Establishes objectives and processes required to deliver the desired results.
Do:
Allows the plan from the previous step to be done.
Check:
The data and results gathered from the do phase are evaluated. This means, that the results are compared to the expected outcomes and checked, if any similarities and differences occurred.
Act:
Also called "Adjust" – this phase is where a process is improved and risks are re-evaluated. After that, planning for the next cycle can proceed.

How the story ends…

John’s head is spinning. Now, he had heard every detail about a project charter and what considerations a project manager must make in this context. There is just one question left. "Why are project objectives and business objectives often linked?" he asks. "That’s a good question!" Dr. Rogers replies and continues "it's to detect the interdependencies between different projects and also the strategy underlying the individual projects. But, let's just leave it at that, you want to get some coffee?" John looks at his watch. The time had passed pretty fast, he thinks and nods. "Thank you very much for your valuable advice!"

After the course units with John and the unexpected news about David Bourges, Dr. Rogers is glad to call it a day. He packs his bags and is looking forward to the evening. He will meet his old friend Tom, whom he hasn’t seen for a while.

They meet at Carl’s favourite Italian restaurant for enjoying delicious pizza with a great glass of wine.

Tom tells Carl some stories of his work as a lawyer and Carl is listening to him interested. After a few minutes Tom asks "Carl, what about your work? Do you have a new project yet?" "Indeed" Carl answers, "it’s a new hay fever medication, but I’m not allowed to go into detail, unfortunately." "Yes, of course, I understand. But I want to give you some advice. Last week we had a big trial. A project manager was charged by his customer – he hadn’t delivered the good the customer wanted. The trial was very hard because the project manager didn’t attach great importance on contract administration, so we haven’t had a good defence base. Just be smarter as my client and don’t forget the project contract!"