Initiation phase Compiled by :

44 of 100 Project Initiation Study

PMP Exam Preparation
Notes Rupeshe Mowade

Feature Project Initiation (The Phase) Project Charter (The

Document)
Focus Strategic Alignment: Formal Authorization:
Determining if the Naming the project and
project is feasible and its leader officially.
valuable.

Main Question Should we do this What exactly are we

project? authorized to do?

Lead Role Project Sponsor or Project Manager (often

Business Analyst. drafted for the Sponsor).

Key Input Business Case, Feasibility Business Case and

Study, Market Demand. Agreements.

Primary Output The Project Charter and A 1–5-page signed

Stakeholder Register. contract/roadmap.

Authority Theoretical; based on Legal/Formal; grants the

organizational need. PM power to use
resources.
Level of Detail High-level research and High-level summary of
data gathering. agreed-upon constraints.

78-storey Uptown Dubai Located in DMCC - Jumeirah Lakes

Towers constructed
Classification: Internal by BESIX Group is perfect example.
 Project Business Documents

• Provides critical information about the project

• Establishing relationship between project objectives and the strategic

goals of the organization.

• Key input to the development of the project charter

• Interdependent & Iteratively developed

• Maintained Throughout the life cycle of the project

• Should be aligned with program documents if the project is part of

portfolio or program
Project Business Documents
Project Manager Responsibilities

• Recommendations and Oversight

• Ensure the project management approach captures the intent of

business documents.

• Should tailor the appropriate project management business

documents.

• will not update the business document's but reviewed throughout the
project.
Project Business Documents

Types of Project Business Documents prepared before initiation

• Needs Assessment Document

• Business Case

• Benefits Management Plan

Project High Level Documents

Needs Assessment
Understanding

• Business goals and objectives

• Issues / Problems

• Opportunities

• Recommendation to address them

Project Business Case

• An economic feasibility study

• Results of the needs assessment is summarized

• Project Sponsor’s Document

• Project sponsor will develop and maintain

Project Business Case : Definition

‘’ Used to establish
the validity of the benefits of a selected component
lacking sufficient definition
that is used as a basis for the
authorization of further
project management activities.’’
Project Business Case

• Captures the Business Need

• Justify Why the project was selected?

• How the selected project fit into organization business need?

• How it will bring business value to an organization ?

• Basis for further project management activities.

• Lists the objectives and reason for project initiation.

• Helps to measure the project success.

• May be used to decide go / non-go decision for the project.

Project Business Case
A business case provides

• Strategic Elements

• Expected Benefits and time scale to achieve

• Costs and ROI

• Associated risks,

• Situational analysis,

• Solution options

• Recommendations.

• Assumptions and constraints

Project Business Case
Project Business Case
PBC Business Needs

Analysis of the Situation

Business Problem or Opportunity

Recommendation

Evaluation
Project Business case

Need of the Project

Business Problems
Business Needs

Opportunity

Business Value

Identification of Stakeholders

Identification of the Scope

Project Business case

Strategies, Goals
Organization and Objectives

Problems or an
Root cause
Analysis of the Situation

Opportunity

Critical Success
Identification Required
Factors

Decision Criteria Optional

Known Risks Desired

Gap Analysis Needed Capabilities Vs Existing Capabilities

Project Business case

Identification of Options ( Problem or Opportunity)

• Do Nothing / Business As Usual / Project not authorized

• Do the minimum work possible to address the problem or

opportunity

• Do more than the minimum work possible

Options are alternative courses of action that may be taken by the
organization. Options many be described as business scenarios
Project Business case

Recommendation : A statement to pursue the project

• The statement includes
• Analysis results for the potential option
• Constraints / Assumptions / risks/ dependencies of the potential
option
• Success measures

An Implementation may include

• Milestones
• Dependencies
• Roles and Responsibilities
Project Business case
Evaluation
• A Statement

• Describing the plan for measuring benefits of the project which

deliver

• Includes operational aspects also

Project Benefit Management Plan

A document that defines

 How and when the benefits of the project will be delivered .

 How to Create, maximize and sustain the benefits provided by

the project

 Mechanisms to measure those benefits

Project Benefit Management Plan

• A project benefit is defined as a value created by the project

• Value to the sponsoring organization and the project indented

beneficiaries .

• Value is an outcome of actions , behaviors , products or services

or results
Project Benefit Management Plan

• Define the Target Benefits

• Project Business case & Needs Assessment will act as a input

• Development starts early in the project life cycle.

• Iterative activity.

• Metrics of BMP provide the verification of the business value

and validation of the project success

 Complements the business case, project charter and PMP.

Project Benefit Management Plan
Target Benefits

Strategic
Alignment

Time Frame

Benefits Benefits Owner

Metrics

Assumptions

Risks
Plan , Document and Deliverables
Project Selection
Projects are selected based on

• Organizational goals.

• Resource availability

• Capability of the organization

• Value & Benefits from project

• New area of business

• Regulatory and Compliance requirements

• Least expensive option or

• The most suitable solution to problems

Project Selection
• Not project manager job

Who is responsible

• PMO

• Steering Committee

• Sponsor

• Project Selection Committee

• Customer
Project Selection
Project Selection
Benefit Measurement : Economic Measures
Economic Present Value
Measures
Net Present Value

Internal Rate of Return

Pay Back Period

Cost Benefit Ratio

Economic Value Added

Discounted Cash flow

Project Assessment
 Project Sponsor Selects the project from the options

 Analyse the Business Case to justify the need of the project

 Analyse the Benefits Management Plan to understand the planned

benefits to be delivered.

 Conduct initial Cost benefit analysis with relevant stakeholders to

validate project alignment with organizational strategy and expected
business value.
Project Assessment

 Evaluate the feasibility of new products or services within the given

assumptions and/or constraints.

 Evaluate based upon

 Available information

 Lessons learned from previous projects,

 Meetings with relevant stakeholders

Project’s Product : Identify the Deliverable

 Identify key deliverables based on the business requirements

 Identified deliverable must meet the customer expectations and

direct the achievement of project goals.
Proof Of Concept (POC)
• A pilot Project

• Is executed to demonstrate that a product idea, business plan, or project

plan is feasible.

• Theoretical demonstration of a product / process / concept

• In drug development, clinical trials are used to gather proof of concept for
a final product.

• Address how the proposed product or service will support organizational

goals , objectives or other business requirements as a secondary goals

• Collects user feedback and insights from team members even from a end
user

• Feedback help to mitigate unforeseen risk.

Proof Of Concept (POC)
Riskiest Assumption Test (RAT)

• Validates the riskiest assumptions of a product.

• The assumptions are

– Market type
– Users
– Strategy
– Customer
– Success
– Business Model Build – Measure – Learn cycle in Reverse

• Test Before Launch the project

Riskiest Assumption Test (RAT)

• Can determine whether consumers have an interest in the product

before developing anything.

• Startups can use the RAT to address their biggest assumptions

• Startups can test their idea viability without having to develop the
whole product

• Avoiding in wasting unnecessary time, energy, and money in the

process.

• Empahises on the “learning” aspect of the process

Agile Project : Iteration 0
• Is done in preparation of the first release/quarterly planning.

• Used for project approvals, setting up the environment for the project, initial
overview and design discussions

• Carrying out tasks before the actual development work begins for technical
and architectural setup (e.g. spikes) and gathering initial requirements into
the backlog

• Done before the start of a new program, project , release or major upgrade
to an existing product line

• Is typically 1 week for a 3 month program. So, for example, if your program
is 1 year, Iteration 0 would be 1 month.
Iteration 0
• Identify the value stream for delivering product to market or to the client

• Identify Agile product roadmap with tentative release

• Discuss and setup initial infrastructure requirements .

• Assign the roles

• Design sprint and cadence

• Discuss and agree on the (Definition of Done ) DOD for the team ,
integration and release levels

• Finalize program and team agreements

Teaming Agreement

• Is a legal contractual agreement between two or more parties

• Created to form a joint venture or any other arrangement

• Defined by the parties to meet the requirements of a business opportunity.

• The parties can be internal or external to the organization executing the

project.

• When a teaming agreement is created for a project, it significantly affects

the planning processes for the project and predefines issues such as the
scope of work and competition requirements.
 Understand Performing Organization

• Understanding company’s culture and structure

• Find existing project related process , standards, formats and

templates

• Understand the organization’s business processes, procedures ,

governance and policies

• Collect Historical Information & WBS ( Work Breakdown Structure)

Understand Performing Organization

• Define Phases and project governance rule

• Knowing industry standards, market trends , legal & regulatory

requirements

• Ensure the agreements and contracts read and understood

• Determine the initial project organization

PROJECT MANAGER
• Assess opportunities to deliver value incrementally.

• Examine the business value throughout the project.

• Support the team to subdivide tasks to find the minimum viable

product (MVP)

• Measure ongoing progress based on methodology

• Collect and analyze data to make informed project decisions

What is next?
 Obtain project charter approval from the sponsor

 Inform stakeholders of the approved project charter

 Ensure common understanding of the key deliverables, milestones,

and their roles and responsibilities.

 Ensure team buy in

 Project Sponsor provide Financial Resources for the project

 Create a project organization

-
Without a Project Charter, your project is like

Statement of scope , objectives and

participants

You’ve
25-Dec-22 nothing to guide in the precise
61 direction.
 Develop Project Charter
The Project Charter
• SETS THE STAGE for the project and formal record of the project

• Typically initiated by the Project SPONSOR.

• Formal Document AUTHORISES THE EXISTENCE of a Project.

• Provides high-level information , Requirements, objectives and

Success criteria
 Develop Project Charter
The Project Charter
• Shows organizational commitment to the project

• Provides AUTHORITY to the project manager to use resources.

• Performed at once or predefined points in the project

• Provides direct link between the project and the organisational objectives.

• Provides the authority to the project manager to plan , execute and control
the project
 Develop Project Charter

The Project Charter

• Establishes a partnership between performing and requesting
organizations

• Establish internal agreements within an organization .

• Encourages understanding between project sponsor and project manager.

• Provides agreement on major deliverables and constraints

•
 Develop Project Charter
The Project Charter
• Defines the key roles and responsibilities on the project.

• Provides assumption, risks and Constraint information

• Provides Financial resources to the project

• Provides Project exit criteria

 Develop Project Charter
Who prepares the Project Charter?
• Project sponsor will develop

• But anyone can develop / Write / Create

• If the project manager involves in preparing project business documents, so

he may be involving in preparing the project charter.

• PMO , portfolio steering committee or other stakeholder group also develop

it

• Project sponsor or governing body approve the project charter

 Develop Project Charter
Project Manager Role in Project Charter
• Should be assigned as early as feasible before planning or Sometimes
before initiation

• So it will help him/ her

• To have a better understanding of the project purpose , objectives and
expected results

• It will allow for efficient resource allocation to the activities.

 Develop Project Charter
Project Charter and Contract
• Is not a contract because there is no mention of consideration or
money promised or exchanged.
• Project Charter is an internal agreements with in an organization
 Develop Project Charter

Project Charter : Document High Level Items

• Project Title & Description • Pre Assigned Resources
• Scope / Out Scope • Summary milestone schedule
• Pre Approved Financial
• Key Deliverables / Boundaries Resources
• Project purpose and justification • Key Stakeholder list
• Business Case Information • Project approval requirements
• Measurable Project Objectives • Project Exit Criteria
• High level requirement • Project Manager's
responsibility and authority
• Assumptions and constraints level
• Success Criteria • Name and authority of project
Sponsor
• High level risks
Develop Project Charter
 Develop Project Charter
Project Exit Criteria
• Also known as accomplishment criteria

• Describe the conditions to be met in order to close or to cancel the project

or phase

• Documented in project charter

• Example : Key project stakeholders will be aware of the resource

unavailability as one of the conditions to terminate the project
 Develop Project Charter
Assumption Log
• Is a project document

• Live Document

• Where the team use to capture, document, and track assumptions

throughout a project’s lifecycle.

• Assumptions are an important part of any project

• Responsibility of Project Manager and Team

 Develop Project Charter
Assumptions
• Assumption is a belief but not validated.

• Developed based on knowledge, experience and available information.

• Anticipated events or circumstances are expected to occur

• Supposed to be true but not necessarily be true

• Assumptions add risk to the projects

• Assumptions are identified in initiating , analyzed in project planning ,

reviewed for validity and managed throughout the project
 Develop Project Charter

Output : Assumption Log

74
 Develop Project Charter
Assumption Log
Each assumption should have
• An Owner or team member responsible for following up and validating the
assumption.
• An ID or reference number
• Name and description of each assumption
• Responsible person
• Due date
• Status
• Closure date, and
• Any actions which might be required as part of the follow-up or validation.
 Develop Project Charter

Assumptions
Example
– Some particular equipment / Resource will be made available to
you whenever you need it.

– However, when the time comes, the equipment is not available.

 Develop Project Charter

Assumption Log
High Level strategic and operational assumptions
– Identified during business case preparation and project charter

Lower Level activity and task assumptions

– are generated through out the project
 Develop Project Charter

Assumption Log
Record/ update all assumptions and constraints throughout the project
life cycle.

• When new assumptions identified

• Change in existing assumptions and constraints

• Closing out the existing assumption & Constraints

 Develop Project Charter
Benefit of Assumption
• Assumptions and constraints are used in many processes as an
input

• Assumption and constraints are updated as a result of process

interaction

• Assumptions and constraints Analysis takes place during project

initiation or anytime a change takes place.

• Assumption analysis is a tool & technique for Risk Management

Process
 Develop Project Charter

Project Constraint
According to PMBOK® Guide,

“A limiting factor that affects the execution of a project, program,

portfolio or a process”.
 Develop Project Charter

Project Constraint
 A constraint is a known factor

 Types of Constraints
 Business Constraints
 Technical Constraints

 Constraints are not under PM control but imposed by client ,

organization or Government

 Either internal or external to a project.

 Affects the performance of the project or a process.

 Develop Project Charter

Project Constraint
 Develop Project Charter

Project Constraint
Example
 The project budget.
 The due date.
 The scope of work.
 The quality requirements.
 Pressure Limit of a Pipeline
 Develop Project Charter

Assumption, Constraint and Risk

 Constraints are built into the project management plan.

 Scope, schedule, and cost baselines.
 The quality requirements management plan.
 Communication Requirements

 Assumptions are recorded in the assumption log and started in initiation

 Assumptions and constraints should be considered when identifying risks.

 Develop Project Charter
Assumptions and Constraints
 Risks , assumptions and constraints helps to propose a implementation
strategy

 Determines the priorities between the constraints

 Identify high-level risks, assumptions, and constraints based on

 The current environment
 Organizational factors
 Historical data and
 Expert judgment
 Develop Project Charter

Agreements EEF

Business
OPA
Documents

Input
 Develop Project Charter

Develop Project Charter : Agreements / Contracts

• Development of project charter starts with understanding between

organizations

• If the projects is for internal organization , an email confirmation or MOU

(Memorandum of understanding ) of or LOA ( Letter of Intent ) is required

• If the project is done for outsider, formal contract will be required

• Buyer- Seller Project Charter
– Buyer focus on achieving product scope while meeting project
constraints.
– Seller focus on increase revenue, enhance their reputation, or gain
additional work from buyer.
Develop Project Charter
 Develop Project Charter

Expert Judgment
Experts Subject Area
– Other units within organisation – Application Area
– Consultants – Knowledge Area
– Stakeholders including – Discipline
customers or sponsors
– Industry
– Professional /technical
• Organizational Strategy
associations
• Benefits Management
– Industry groups
• Technical Knowledge
– Subject matter experts(SME)
• Duration and Budget
– PMO
• Risk Identification
 Develop Project Charter

Data Gathering

Brain
Interviews
Storming

Focus Groups
 Develop Project Charter

Interpersonal & Team Skills

Conflict
Facilitation
Management
 Develop Project Charter

Facilitation
• A skilled facilitator conducts a group event

• Participated by stakeholders

• Helps to achieve a successful decision / solution / conclusion.

• Helps to achieve a mutual understanding

• Conclusions or results have full buy in for the project

• Action and Agreements will be achieved

Develop Project Charter

Contd. to 45 of 100