Project initiation topic 2.2_project charters
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- 2. 2 • The Project Charter or project definition or project statement is • the first document that exists in the project definition phase and which lays the foundation of the project. The project charter is a single document that defines the boundaries of the project, and defines the business needs. The purpose of this document is to ensure project is delivered on time, within budget and with the right scope. Project charter
- 3. 3 • This document names the project,project objectives,project scope,briefly describes the project and informs the management why the project is taken up,and what the project is going to achieve (project justification).The project charter names the project manager,project sponsor,key stakeholders and those who will use the final product or service. Finally the project charter is signed and isuued by the project sponsor. Approval of the project charter is referred to as the “Pre-Baseline” and is equivalent of agreeing to and endorsing the project. Project charter
- 4. 4 • The project charter is not complete until it is approved by the project sponsor,project manager,senior management and key stakeholders. Simultaneouly cost account is opened to capture the cost of the project,and once these initial things have been done,work on the project commences. S Project charter
- 5. 5 • Project charter will change throughout the life cycle of the project.As more details are uncovered and outlined and as the planning process begin,more project issues will come to light.Accordingly,project execution will change to incorporate the new information or direction.A project charter includes: Project charter
- 6. 6 • Definition and details of the problem or oppurtunity or need • Project objectives and goals-are they in line with company’s strategic business plan • A list of alternate solutions available • An analysis of the business benefits,costs,risks,and other related issues • A description of solution selected out of the alternatives • Main project requirements Project charter
- 7. 7 • A summarized plan for implementation that includes time and financial analysis • Description of any special requirements that must be met,such as compliance requirements,legal requirements,government regulations,etc. Project charter
- 8. 8 • Creatively a Project Charter also enables the project manager to be more successful by satisfying four critical needs: • Project Charter authorizes Project Manager to lead the project. • Enables project manager to tie up human resources from different functional departments -Subject Matter Specialists(SMS). Project charter
- 9. 9 • It can be used as a benchmark to compare against actual results,costs and benefits in order to assess the ultimate success of the project. • Avoids *scope creep as shareholders are on the same page by signing the Project Charter Project charter
- 10. 10 • *It refers to small changes in a project that necessiate other changes which lead to still more changes--- and so on and grow into an uncontrollable monster.This project scope creep occur when the scope of the project is not properly documented. • A template of project charter document by taking an example on a refininig project is shown in Table below. Project charter
- 11. 11 Project charter Charter Item Comments Project Name 2MMTPA grass root Diesel Hydrodesulphurization Unit (DHDS) along with supporting utilities project Project Objective What is the overarching objective of your project? What is your product or service? To reduce the sulphur level in High Speed Diesel (HSD) to less than 10 parts per million(ppm) to meet BSVI standards, equivalent to EURO VI norms Project Value Proposition and Benefits What is the value of this project? What are the benefits to the business? The capital cost of the project is ₹5500 million to reduce the increased levels of pollution in major cities of India Problems or Opportunity Statement Why does this project need to be accomplished now? Who or what is driving this project? To protect the environment from toxic emissions of SO2 and meet the demand for cleaner fuel Proposed 0Purpose What is the purpose of the project? You may list various purposes? 1.To reduce the sulphur dioxide (SO2) emissions that result from using diesel in automotive vehicles, ships, residential and industrial furnaces, and other forms of fuel combustion. 2. By lowering the content of sulphur in HDS, we can reduce the poisoning of expensive catalysts used in the reaction process and thereby increase their life 3.To generate employment opportunities
- 12. 12 Project charter Project Priorities What is your priority to accomplish Time, Cost, and Scope objectives? The primary project priority is to complete the project in 27 months and within the cost approved by the top management. Financial benefits Are there financial benefits? The turnover of the company is expected to increase by minimum 16% and profit after tax (PAT) by 7% after successful commissioning of the plant, and plant in operation to 80 percent capacity. Project Schedule What are the approximate start and end dates? Start date could be within 3 months effective from today and end date would be 27 months from the start date. Will there be any byproduct delivered? Is any other product to be delivered? To obtain sulphur as a by-product by Clauss process by installing sulphur recovery unit Is anything excluded from the project? The sulphur recovery unit( SRU) is excluded from the scope at present Assumptions or Constraints Site readiness Finalization of technology (knowhow) partner and LSTK contractor
- 13. 13 Project charter Risks (Potential) What potential events could pose threats or opportunities to successful project completion? 1.Schedule Risk 2.Cost Risk 3.Market Risk Resource Required Who needs to be part of the team to succeed? May include roles, skills, positions, etc. Project Management Consultant (PMC) to prepare tender documents for potential LSTK contractors and help the owner in compilation of bids, technical negotiations and selection of the LSTK contractor. Banks and financial institutions for financial closure. Project Manager Who does the Sponsor name as the project manager? Entry provides essential authority. The person appointed is Shreerang Aras Approval Authority/ Sponsor Who in the organization must approve this project and authorize planning to begin? Director Refinery -who will be the project sponsor Completed on Accepted and Issued by Written by 18/03/2018 Ashwin Deshmukh Project Sponsor Shreerang Aras Project Manager Diagram 2.2 Project Charter Template
- 14. 14 Project charter • Notes: 1.Before the complete project planning phase begins, stakeholders approve this charter, and then timelines and budget are laid out in more detail. • 2. For major engineering projects, generally the pre- feasibility,detailed feasibility study report and preparation of LSTK/EPC bids are carried out by Project Management Consultant/s (PMC) for the customer.