What Is The Role of the Project Charter?

Defining a proper project charter is crucial. There are many tools available to a Six Sigma practitioner to ensure their work process is done within established standards and to expectation of the practice. We uses qualitative and quantitative techniques to drive process improvement. When we are defining a problem, improvement opportunity, or requirements, one of the first considerations is a properly defined charter for the project.

Building a Solid Project Charter

The purpose of a project charter is to define the focus, scope, direction, and motivation for a team. It is a crucial step that cannot be ignored. It sets the tempo, character and defines the scope of the project. With that in mind, it can be sculpted or molded during the analyze phase of the project to ensure clarity and definition. Once the analyze phase is complete, the charter should remain fixed. Some of the benefits of a well defined charter is that it builds the vision and case for change, provides a clear target for the team and clearly aligns the focus of team members.

Implementing Your Project Charter

A strong charter will also prioritize the project with the overall work flow and helps maintain a solid reference to keep the project on track. There are 7 steps to creating a solid charter for your project. By no means does this limit creativity — these steps will help clearly define it:

1. Define the business case to ensure clarity.
2. Quantify the problem and its impact.
3. Define the boundaries and scope of the project.
4. Understand the tangibles of the improvements.
5. Identify all available resources.
6. Specify the deliverables and milestones.
7. Allow team input before publication.

A properly developed and well thought out project charter is the key to a successful Six Sigma project. It will allow the team to launch a project without loss of focus or clarity. The project will be well defined, understood and defendable during the entire duration of the project. Remaining focused and loyal to a well thought out project charter brings credible results to your project and your program.

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The Six Sigma methodology is a process improvement tactic that was originally introduced within the manufacturing space, but has quickly found adoption into higher education. With the concepts of the methodology spreading widely and offering a template for the improvement of efficiency and enhancement of the performance of educational institutions, Six Sigma and its associated tools have proven highly effective in process improvement. We have outlined three effective Six Sigma tools for higher education process improvement.

1. The Project Charter

The project charter, which is also referred to as a business case, project statement or project definition, is a summarization of the objectives, participants and scope of a Six Sigma implementation. The project charter exists for the purpose of communicating the essential details of the project in order to ensure that project sponsors, team members and key stakeholders all understand what the project aims to achieve. Generally, it is drafted before the commencement of the Six Sigma project and helps the stakeholders in the higher education institution in the following ways:

• Providing a high-level understanding of the project, why it is being carried out and the justification for putting it in place
• Establishing the general scope early in the project cycle
• Establishing who the project manager is and their level of authority

The best way to kick off the process of drafting the document is by gathering all the people involved in a project charter development session. These may include client representatives, team leaders, team members and the project sponsors’ representatives.

2. Voice of the Customer

Gaining an understanding of the Voice of the Customer is critical for Six Sigma within higher education. This is a concept that is essential when looking to identify which activities add value and which ones do not.

In the higher education sphere, it is clear that the student is the customer since they are the ones who receive the outcomes of the processes carried out within the institution. Still, it is important to note that the term Voice of the Customer’ has an entirely different meaning with regard to education when compared to the general consumer sphere.

It is important for higher education institutions to deliver quality education that allows the student to function within the wider society. If an individual is able to graduate from the institution of learning but is unable to secure a job or be able to function productively within their capacity, then it does not matter the grades they earned or what they learned quality was not delivered.

3. SIPOC Diagram

SIPOC is an acronym for supplier, input, process, output and customer, and is an invaluable tool that helps to change the thinking and approach educational institutions and their staff take toward process improvement, project management and Six Sigma implementation in general. The tool allows the team to define the problem, outline the process to be improved and provides a method of refining the problem statement before the project is started. Without this definition of the project or process, it is easy for individuals to stumble along aimlessly without achieving the output that is desired.

Process mapping and even process management are impossible to achieve without first having a SIPOC diagram in place as a guide. Any process management effort that does not start with a SIPOC diagram will always have questionable accuracy and unclear scope. The processes within the field of higher education are especially difficult to define, so the use of the SIPOC model ensures that the processes are structured and have a higher chance of providing successful outcomes.

Conclusion

The tools outlined above are among the most important that are used when trying to determine value in the implementation of Six Sigma. In many cases where they have been utilized within the context of higher education process improvement, they have been vital in bringing people in both academic and non-academic functions to pull in one direction toward a common objective.

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A project charter is an important tool in defining the exact scope of a project, and the resources it’s supposed to utilize during its run. While some managers see it as just another step to complete before commencing the real work on the project, the reality is that defining a good project charter is part of the true work itself, and it’s critical that you approach it with an educated mindset, knowing exactly what the project is going to require to complete.

There are some common mistakes that you should always be striving to avoid if you want to ensure that your project charters work well, and that will lay down the foundation of a successful project implementation every single time.

1. Misunderstanding the problem you’re trying to solve

It’s hard to go about defining a solution to a problem if you’re not clear about the essence of that problem in the first place. In many cases, leaders make incorrect assumptions about the issue they are trying to address, leading to the creation of a completely incorrect solution. This kind of problem is hard to identify too, because you are still developing a correct project charter, just based on wrong assumptions.

2. Poor overview of available resources

If you don’t know exactly what resources you have at your disposal, it can be difficult to put them to good use through your project charter. You must always maintain a proper list of your current resources, and update it when anything happens that affects the current state.

3. Underestimating the risks

A project charter is supposed to allow you to balance risks with the appropriate outcomes adequately, and it can be very useful when you want to take calculated risks. However, it will not protect you from mistakes stemming from an incorrect idea about the nature of the risks involved. If you do not calculate the situation correctly, you may still end up with unsatisfying results.

4. Insufficient detail

It’s important to keep your attention focused on the small details involved in the current project, while also maintaining good overview of the big picture. This kind of balance is difficult to attain in some cases, but as a good rule of thumb, you should address issues related to the smaller details with a priority. Take care of those, and the overall situation should adjust itself to a more favorable state without much intervention from your side.

5. Relying on data too much

You must have a good intuition about the way your projects are supposed to be driven, and you should not rely on data exclusively in your decision-making process. Sometimes, you must go against the flow and make decisions that might seem counterintuitive, but as long as you are basing those actions on past experience and other knowledge you’ve attained over time, you should know what you are doing.

6. Not involving everyone equally

An important part of project charters is to involve every member of the organization in an equal capacity, at least as much as the situation allows for that. Don’t just rely on the input of high-level management, and try to get the opinion of people on all levels of the ladder. You will often get some surprising insights from those who work more directly with the processes you are optimizing.

7. Not learning from previous mistakes

This is somewhat similar to point 5, but more directly related to your use of project charters. They are not a perfect tool, and sometimes using a project charter will not go as you expected. That’s fine, but it’s important to learn from those mistakes so they can be avoided in the future. As long as you ensure that this is in order, you will find yourself working more and more efficiently with each new project charter you have to develop.

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A project charter is an integral part of setting up and starting a major new project in any serious organization, and you will need to familiarize yourself with the basic concepts behind it if you want to be an able and well-informed leader. A project charter can basically be described as a combination between a contract and a project roadmap, and it gives everyone reassurance that the project will be executed according to certain criteria, while on the other hand the responsible people will be compensated accordingly.

It’s also important to have a well-developed project charter when there is a need to justify the existence of a project in the first place, and it serves as a legal reassurance about things like the planned timeline and other factors related to the execution.

What Should a Project Charter Contain?

Like regular contracts, project charters don’t have a rigidly defined structure and they tend to be drawn up on an individual basis for each new case. There are, however, pre-made templates out there that can serve as a solid foundation for the development of a good project charter, and they tend to share a few common elements:

• Goal perhaps the most important point in a project charter, everyone must be able to see clearly what the company is going to attempt to achieve in the first place. The goal has to be given in concrete, actionable terms, instead of something vague like satisfying most of our customers.
• Participants if the project does not require the involvement of the whole organization, this is the part where you will list everyone that’s going to be involved, and what their exact role is. In some cases you may also need to provide justification for each person on board the project; for example when this results in an increased fee for the client contracting the company.
• Requirements if there are any prerequisites for the completion of the project, this is where they should be outlined. This can be a flexible entry in the document, as a project’s requirements can sometimes be specified in a more abstract manner. Still, it’s a good idea to ensure that the client understands exactly what your company will need from them (and from third parties, or the environment in general) in order to make the project’s completion a viable task.
• Milestones the best way to measure ongoing progress on a large project is by setting concrete milestones and ensuring that they’re followed and reported on accurately. This gives the client some reassurance that they will be kept in the loop more frequently, while on the other hand it also helps your company identify the critical points in the project, allowing your employees to focus on them.

As we said above, a project charter is a flexible document, and it can include many other details, such as listing the relevant stakeholders, specifying how communication should be carried out, and assigning other responsibilities to the company, the client, or both.

Modifying a Project Charter for Your Own Needs

With that in mind, you don’t always have to follow the above template and its four points for every project in your organization. In fact, if you’re able to minimize the project charter in a meaningful way, definitely do so, as fewer complications translate to fewer opportunities for misunderstanding between you and the client.

It may also be important to specify certain constraints on the relationship between the company and client in the long term, even after the project has been completed. This is relevant in certain cases where you’ll be expected to provide post-release support, so make sure that the expectations in this regard are outlined clearly and there is no room for misunderstanding.

Conclusion

Writing up a proper project charter and adapting it to each new venture your company goes through is a critical task that will allow you to focus on the important parts of that project as closely as possible. Remove all opportunity for miscommunication and ensure that everyone is on the same page, and the rest will pretty much flow on its own without the need for complex control procedures that drive the project. And once you’ve set up a project charter for your own company a few times, you’ll realize that it’s not really all that complicated, even compared to something like a corporate contract.

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Ask yourself, do you want to deliver faster Six Sigma projects that don’t overstep your budgeting parameters? Then it’s essential for you to outline a detailed plan in your project charter. Your plan will act as your guide through the rough waters of process improvement.

Key performance indicators are highly useful tools here, enabling you to identify precisely which actions benefit you as a company. As such, there are numerous KPIs to help you on your Six Sigma journey, one of which we look at today: Project Cost Variance (PCV). Join us and learn how you can use PCV to deliver Six Sigma projects on time and on budget.

Stay Focused with Project Cost Variance

It’s important to know that Six Sigma relies on the measurement and analysis of process issues. Controlling problems allows you to create solutions that prevent them from recurring, benefitting the business in the long- and short-term. Without a strong plan to follow, you’re likely to lose sight of your goals and business needs. Losing track of your priorities will only send you veering off budget towards slow delivery times. Moreover, this doesn’t just impact you, but also your customers, who depend on you for quality products and services. If customers don’t see any value in your services, or if they see you as unreliable, they’ll take their business elsewhere. For you, this is detrimental, but Six Sigma can help. First, however, we must define cost variance.

What is Does Cost Variance Mean?

A cost variance is the amount by which your project exceeds or falls under your maximum budget. Cost variance is one of two key areas that you should monitor throughout your project, the other being schedule variance, i.e., how early or late you are to meet project deadlines. You can use the following equations to calculate both cost and schedule variance:

• Cost Variance = BCWP (budgeted cost of work performed) – ACWP (actual cost of work performed)
• Schedule Variance = BCWP – BCWS (budgeted cost of work scheduled)

What is Project Cost Variance?

PCV is the process of evaluating your project’s financial performance. You should compare the budget you agreed before starting the project with the actual amount you spend. You can calculate PCV by finding the difference between BCWP and ACWP. Your ideal project cost variance should be when your BCWP equals the same as your ACWP. Your project cost variance provides otherwise unavailable insight into your finances throughout the scope of your project. Using it to your advantage allows you to monitor when and where you breach your budget. When you use PCV together with DMAIC, you can actively control your finances, targeting areas for improvement, like overspending. The result is a more focused, efficient, and successful project.

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