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Topics: Requirements Management, Stakeholder Management, Using PMI Standards
Initiation & Planning on a small project
I am part of a project that is in a initial stage. We have a verbal agreement from customer to proceed. The customer (or sponsor in this case) asking for detailed plan and cost. The initial requirements are provided by the key stakeholder and require further refinement. There is no signed or approved document yet and I am engaging business analyst to get a business case signed with fixed cost based on estimate that I have prepared in man-days based on the input from everyone on project (I don't expect man-days to change). It is considered a small project with 5-6 resources involved for 2-3 months. Do I need a separate project charter to be signed by a customer if a business case is already signed? The customer is sophisticated and may not be comfortable signing too many documents. How I must proceed in such a situation. Can I directly prepare the project management plan and get it approved from Customer?
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Assuming the business case is signed and provides a good understanding of the project's purpose and expected outcomes, it could serve as the charter. However, if you have nothing which has been formally accepted that covers this information, getting a simple one page charter produced and signed off might be advisable.

Kiron
Hello Vipin, you could also consider getting the SOW signed.
There seems to be two issues here: 1) Do you have a contract to initiate the work? Is there a concern that you may not get paid for the effort? and 2) Do you have sufficient understanding of the work required for effective delivery?

For 1) you need a signed document, by both parties
For 2) you can advise the client what your understanding is and how you are going to deliver

The naming of the documents is not all that important but a mutual understanding of the scope and delivery is critical. Some formality is recommended but understandings are possible without signatures. How well you know your client should influence your decision as to level of formality.
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1 reply by Vipin Verma
Sep 14, 2021 5:45 PM
Vipin Verma
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Thanks for your suggestion. My organization has contract with customer for supporting operations. The project is triggered as an enhancement is required in one of the Application. I am in mid of detailed requirement gathering with key stakeholders. I am working with BA to get all these requirements and estimates in the business case and get it signed from customer before project team begins the development. I have verbal commitment from sponsor/customer.
Vipin,

I would consider the verbal agreement and preliminary business case (that you mentioned) more of an “agreement to initiate planning.” In other words, it appears to me that the customer could still back out based on your presentation of the final business case, cost estimate, and other projections.

I would strongly recommend a formalized project charter. If you feel that would make the customer uncomfortable from a “signature burden perspective,” then sell the charter as your method of presenting your next set of deliverables. The signature being their receipt and agreement to the packaged content in the charter (which contains those deliverables).

Without signature accountability, you expose yourself, the team, and your product to unnecessary additional risks.
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1 reply by Vipin Verma
Sep 14, 2021 5:50 PM
Vipin Verma
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Thanks George. My organization will get the business case signed by Customer. I am working with key stakeholders to get all the requirements and time estimates to reach the cost, that will be part of Business Case. It is an functionalized structured organization.
If the Customer is New & Sophisticated they will expect a fair level of Detail and Costs to determine whether you have understood what they need in order to really 'Proceed' .

If there are open questions you should mention those as pre-requisite to Developing the Detail Plan with Deliverables and Costs which should result in the PO or Contract.
I would suggest to get atleast an email approval from the customer for us to get started. basically a high level plan & cost is ok without an email approval or a formal document but to do a detailed plan you would need to take the efforts of the TL or BA & that involves cost.
Vipin,

agreeing on charter formalizes the existence of a project - it is an governance act empowering the project manager to spend company resources. Sometimes it includes descriptions of the project, like scope, cost, timelines, risks etc. But if those are included in an agreed business case, you may just refer to that business case in the charter.

I have rarely seen a charter change, but business cases may change and should drive a project change too.

Once you have the authority (charter), by a signed document or at least an email by the sponsor on behalf of the organization, you can commence with planning. The planning in the business case is a base for your planning and you might have to change it.

Good luck.

Thomas
The key point here is the act of estimate because in this situations this is a direct impact on trust. My recommendation is taken a closer look to Barry Bohem´s work mainly the Cone of Uncertainty. Let me explain. No matter what you sign it is totally "waste" if you and all the involved team do not understand there is an inherent error that will make things happened in a range. For example, where you sign the business case the worst thing you can do is to say everybody "this will cost 100" because at this time you have to say "this will cost between 75 and 160". Why is that? Because estimation depends on two key things: information and risks. So, it does not matter what you sing off. It is a matter to put on the table that along the whole project, when more information (for example, more detailed requirements to understand better "what" for defining "how") is taken then a narrow error will happen. It is proven that, at the end of the project, you still have +- 10% of deviation. Last comment: if the provider know it and you push for a fixed cost project then she/he will put higher contingency on the final cost. And that is right.
This is all true however the first estimate of cost (based on limited information and a high degree of risk) determines if the project is financially viable. This high level estimate is typically +/- 35 to 50% allowing for estimating error and risk, thus 100 becomes 65 to 135 (using 35%). Subsequent estimates progressively validate that the project remains financially viable and provides a level of scope control.

During implementation a common project mistake is to look at sunk costs rather than project value - "we have 100 invested, we can't stop now!" Yes you can if you estimate that total project value is going to be exceed financial viability and you can't find efficiencies to bring it back on line.
Sep 12, 2021 10:24 AM
Replying to Peter Rapin
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There seems to be two issues here: 1) Do you have a contract to initiate the work? Is there a concern that you may not get paid for the effort? and 2) Do you have sufficient understanding of the work required for effective delivery?

For 1) you need a signed document, by both parties
For 2) you can advise the client what your understanding is and how you are going to deliver

The naming of the documents is not all that important but a mutual understanding of the scope and delivery is critical. Some formality is recommended but understandings are possible without signatures. How well you know your client should influence your decision as to level of formality.
Thanks for your suggestion. My organization has contract with customer for supporting operations. The project is triggered as an enhancement is required in one of the Application. I am in mid of detailed requirement gathering with key stakeholders. I am working with BA to get all these requirements and estimates in the business case and get it signed from customer before project team begins the development. I have verbal commitment from sponsor/customer.
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