The Initiation Phase
As explained in part 1 of this case study (see related posts below), this case study is about constructing an industrial building
This project started out when the 30+ year old equipment housed in a building the same age, became obsolete. A new building was required.
The first thing I did was contacted the customer (end user) who was to use the new building.
It is crucial for every project that you involve the customer from day one.
As a project manager I manage several projects at the same time, so in order to meet my schedules, I hire a project management consultancy to assist me with my projects.
The third stakeholder was the sponsor of the project, in this case the upper management of the company needing the building.
During this first project management process (Identify Stakeholders) we have identified three stakeholders: the customer, the consultant and the sponsor. Later on (during the execution phase) we will identify the contractor as the fourth stakeholder.
Note that I have given the headings for the project management processes a distinct color. That should make it easier for us to identify the processes as we go along. At the end of the case study, we will count all the processes used for this case study.
Develop Project Charter
The objective of a project charter is to get an authorization to go ahead and spend money to develop a project plan. It can be seen as a preliminary go/no go decision from the sponsor in an early stage of the project. The project charter should contain at least the following information:
- a description of the project
- why the project is needed
- a rough (+/- 50%) estimate of what the project will cost
In this case the project was needed because the existing building was 30+ years old and needed to be replaced.
A rough order of magnitude estimate of the cost was made based on the size of the building we were looking at in this early stage of the project, which was about 436 square feet. A similar building had cost us about $50 per square feet in the past, so our preliminary estimate for this building was about $22,000 (436 square feet x $50 per square feet), +/- 50%. This method of estimating is called parametric estimating based on historic data.
The accuracy of the estimate is not better that +/- 50% because the information in this stage of the project is not accurate. Later during the planning phase of the project, we will have to produce a better estimate.
The project charter was then prepared including the following information
- a description of the project: construct a building of 436 square feet.
- An explanation of the need for the project: the existing building was 30+ years old and needed to be replaced
- A rough order of magnitude estimate of the cost of $22,000
Because the building was needed for the day to day operations of the company and the cost estimate was straight forward, the project charter was approved without any delay.
Also because of the urgency of the project, we quickly moved to the planning phase of the project, which we will discuss in the next blog post.
As you can see from the above, we have used two of the forty two processes during the initiation phase of this project.