A project is officially approved to start during the initial and critical phase in project management where the foundation for the project is established. The formal approval comes through the creation and authorization of the Project Charter, a key document that outlines the purpose, scope, and high-level details of the project. This approval signifies the transition from an idea or proposal to an officially recognized project.
Let’s break this down into simple terms, elaborate on its components, and provide practical examples to help you understand when and how a project is approved to start.
What Is the Project Charter?
The Project Charter is a formal document that:
- Authorizes the Project: It acts as the official approval to begin the project.
- Defines Objectives: It outlines the project’s purpose, scope, and high-level goals.
- Assigns Responsibility: It identifies the project manager and authorizes them to use organizational resources.
The project sponsor (a key stakeholder) typically works with the project manager to develop and approve the Project Charter.
Key Elements of a Project Charter
The Project Charter usually includes the following:
- Project Purpose:
- Why is the project being undertaken?
- Example: “To create a new e-commerce platform to increase online sales by 20% within the next year.”
- High-Level Scope:
- What will the project deliver?
- Example: “Develop a fully functional website with integrated payment gateways and a user-friendly interface.”
- Key Stakeholders:
- Identify individuals or groups involved in or affected by the project.
- Example: Customers, IT department, marketing team, and senior management.
- High-Level Risks:
- What are the potential challenges or uncertainties?
- Example: “Delays in vendor deliveries or unforeseen technical issues.”
- Project Assumptions:
- What assumptions are being made?
- Example: “Assumes the availability of IT staff and timely approval of budgets.”
- Constraints:
- Limitations or restrictions affecting the project.
- Example: “The project must be completed within six months and with a budget of $500,000.”
- High-Level Budget and Timeline:
- An approximate estimate of costs and the overall schedule.
- Example: “$500,000 budget and a completion date by June 2025.”
- Approval Requirements:
- What criteria must be met for the project to be considered successful?
- Example: “The platform must pass usability testing and achieve at least 10,000 user registrations within three months of launch.”
- Assigned Project Manager:
- Name of the project manager who is officially authorized to lead the project.
- Example: “John Smith is designated as the project manager.”
When Is a Project Officially Approved?
A project is officially approved to start when:
- The Project Charter is Signed:
- The sponsor and relevant stakeholders formally approve the Project Charter.
- Resources Are Allocated:
- The organization commits the necessary resources (time, budget, people) to the project.
- Project Manager Receives Authority:
- The project manager is empowered to lead the project and make decisions.
This approval process ensures that the project is aligned with organizational goals and that there is clear accountability from the outset.
Practical Examples of Project Approval
1. Construction
- Scenario: A company wants to build a new office complex.
- Project Charter Includes:
- Purpose: “Provide a modern workspace for 500 employees.”
- High-Level Scope: “Construct a 10,000-square-meter office building.”
- Constraints: “Budget capped at $10 million; completion within 18 months.”
- Approval: Once the project sponsor signs the charter, the project manager is authorized to begin planning.
2. Software Development
- Scenario: A tech startup wants to develop a mobile app.
- Project Charter Includes:
- Purpose: “Develop a fitness app to capture 10% of the market within 1 year.”
- High-Level Budget: “$250,000.”
- Risks: “Delayed app store approval or technical bugs.”
- Approval: The CEO (sponsor) signs the charter, and the project team begins work.
3. Event Management
- Scenario: A university plans an annual conference.
- Project Charter Includes:
- Purpose: “Host a conference with 500 attendees to showcase academic research.”
- High-Level Timeline: “Event to be held on March 15, 2025.”
- Constraints: “Venue capacity limits to 500 attendees.”
- Approval: Once the administration signs the charter, the event planning team can proceed.
4. Product Development
- Scenario: A car manufacturer wants to launch a new electric vehicle.
- Project Charter Includes:
- Purpose: “Develop a compact electric vehicle to compete in the urban market.”
- Budget: “$2 billion.”
- Risks: “Supply chain disruptions for lithium-ion batteries.”
- Approval: After the charter is approved, engineering and marketing teams begin planning.
Why Is the Project Charter Important?
- Defines Project Boundaries:
- Clearly outlines what is included and excluded in the project.
- Establishes Authority:
- Gives the project manager the official authority to lead.
- Aligns Stakeholders:
- Ensures everyone understands the project’s goals and expectations.
- Reduces Risks:
- By identifying assumptions, constraints, and risks early, it helps prepare for challenges.
Final Thoughts
A project is officially approved to start during the initial phase with the creation and formal approval of the Project Charter. This document acts as a contract between the sponsor, stakeholders, and project manager, ensuring everyone is aligned and committed to the project’s success. By carefully crafting and gaining approval for the Project Charter, organizations set a solid foundation for achieving project goals effectively and efficiently.