Project Management
Chapter 3. Project Initiation
,3.0 Learning Objectives and Overview
Learning Objectives
1. Explain the process of developing a project charter to authorize the project, and
describe the roles of the project sponsor and project manager.
2. Describe the project environment, and outline the internal and external factors that
may affect a project.
3. Explain the formal and informal organizational structure, and compare three main
organizational structure types based on the project manager’s authority level.
4. Describe the responsibilities of a Project Management Office (PMO).
All projects are undertaken for a reason. Some projects can be initiated for business reasons (i.e.,
strategic objectives) such as increasing profits, decreasing customer wait time, and improving employee
working conditions. Other projects exist for social reasons such as a municipal recycling system or
installing clean energy solutions. Often, the pressure to produce results encourages people to identify
possible solutions without fully understanding the needs and purposes of the project. This approach can
create a lot of immediate activity, but it also creates the likelihood that the change initiative will fail to
deliver the proposed organizational value.
As detailed in Chapter 2, one of the best ways to gain approval for a project is to clearly communicate
the project’s objectives and describe how the project provides a solution for an organizational need or
how it capitalizes on a business opportunity. A needs analysis that accompanies a business case is often
conducted to better understand the underlying organizational needs and how meeting these needs
would help the organization achieve strategic objectives (e.g., increase profits, improve customer
experience, develop new products). Once alternative solutions are identified, each solution is assessed
to determine if it supports the organization’s vision and strategies. Issues of justification (“should we do
the project?”) and feasibility (“can we do the project?”) are addressed for each solution. Finally, some
projects are selected to initiate. It is important to note that project justification is a key part of the
project initiation phase: a project must have a reason to exist and, if no such justification can be
determined, then it’s best to stop the project before too much time, money, and resources are invested
in it. If issues of justification are not adequately addressed, the project will lack the required
organizational support and, therefore, will ultimately be unsuccessful.
63
, Project Management
3.1 Project Charter
Project justification starts when a business case is prepared which addresses the needs, and feasibility
of solutions. Project managers may be involved during this phase though it is also common not to have a
project manager in this pre-project work. In organizations having a Project Management Office (PMO)
or a program department, project managers, or a team of project managers and their assistants, could
participate in developing the business case with business analysts, subject matter experts, and
representatives from relevant departments. A business case could be prepared during the initiation if it
wasn’t made in the pre-project phase.
When a project selection committee decides to go with some of the projects proposed, the sponsor,
business analysis team, relevant departments, or selection committee members can start the
preparation of a project charter which will allow the formal authorization of the existence of a project. A
project charter provides the project manager with the authority to apply organizational resources to
project activities. Developing a project charter requires inputs such as business documents (business
case, needs analysis, and benefits management plan), agreements, enterprise environmental factors
(discussed in Project Environment below), and organizational process assets. A project charter is
necessary to initiate both internal projects at which a client is a unit in our organization and external
projects at which the client is outside our organization. If we are conducting a project with an external
client, the two parties (i.e., our organization and the external client) will also need a formal and legally
binding contract to establish an agreement.
Figure 3.1: Pre-Project Work, Project Life Cycle, and Post-Project Work
Source: PMBOK Guide 6th Edition
In the initiation stage (Figure 3.1), there are two main processes according to the PMBOK Guide 6th
64
Chapter 3. Project Initiation
,3.0 Learning Objectives and Overview
Learning Objectives
1. Explain the process of developing a project charter to authorize the project, and
describe the roles of the project sponsor and project manager.
2. Describe the project environment, and outline the internal and external factors that
may affect a project.
3. Explain the formal and informal organizational structure, and compare three main
organizational structure types based on the project manager’s authority level.
4. Describe the responsibilities of a Project Management Office (PMO).
All projects are undertaken for a reason. Some projects can be initiated for business reasons (i.e.,
strategic objectives) such as increasing profits, decreasing customer wait time, and improving employee
working conditions. Other projects exist for social reasons such as a municipal recycling system or
installing clean energy solutions. Often, the pressure to produce results encourages people to identify
possible solutions without fully understanding the needs and purposes of the project. This approach can
create a lot of immediate activity, but it also creates the likelihood that the change initiative will fail to
deliver the proposed organizational value.
As detailed in Chapter 2, one of the best ways to gain approval for a project is to clearly communicate
the project’s objectives and describe how the project provides a solution for an organizational need or
how it capitalizes on a business opportunity. A needs analysis that accompanies a business case is often
conducted to better understand the underlying organizational needs and how meeting these needs
would help the organization achieve strategic objectives (e.g., increase profits, improve customer
experience, develop new products). Once alternative solutions are identified, each solution is assessed
to determine if it supports the organization’s vision and strategies. Issues of justification (“should we do
the project?”) and feasibility (“can we do the project?”) are addressed for each solution. Finally, some
projects are selected to initiate. It is important to note that project justification is a key part of the
project initiation phase: a project must have a reason to exist and, if no such justification can be
determined, then it’s best to stop the project before too much time, money, and resources are invested
in it. If issues of justification are not adequately addressed, the project will lack the required
organizational support and, therefore, will ultimately be unsuccessful.
63
, Project Management
3.1 Project Charter
Project justification starts when a business case is prepared which addresses the needs, and feasibility
of solutions. Project managers may be involved during this phase though it is also common not to have a
project manager in this pre-project work. In organizations having a Project Management Office (PMO)
or a program department, project managers, or a team of project managers and their assistants, could
participate in developing the business case with business analysts, subject matter experts, and
representatives from relevant departments. A business case could be prepared during the initiation if it
wasn’t made in the pre-project phase.
When a project selection committee decides to go with some of the projects proposed, the sponsor,
business analysis team, relevant departments, or selection committee members can start the
preparation of a project charter which will allow the formal authorization of the existence of a project. A
project charter provides the project manager with the authority to apply organizational resources to
project activities. Developing a project charter requires inputs such as business documents (business
case, needs analysis, and benefits management plan), agreements, enterprise environmental factors
(discussed in Project Environment below), and organizational process assets. A project charter is
necessary to initiate both internal projects at which a client is a unit in our organization and external
projects at which the client is outside our organization. If we are conducting a project with an external
client, the two parties (i.e., our organization and the external client) will also need a formal and legally
binding contract to establish an agreement.
Figure 3.1: Pre-Project Work, Project Life Cycle, and Post-Project Work
Source: PMBOK Guide 6th Edition
In the initiation stage (Figure 3.1), there are two main processes according to the PMBOK Guide 6th
64
