2018-05-03 12:19:32 Running a Business English Learn what a project charter is, the purpose of a project charter, what information is found in the various sections, and how this document... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/04/Small-Business-Owners-Creating-Project-Charter.jpg https://quickbooks.intuit.com/ca/resources/business/project-charters/ What Is a Project Charter?

Project Management: Key Terms to Know

5 min read

What are the key terms that every project manager should know? If you’re a project manager, it’s important that you understand key terms in project management to get tips for success and ensure effective communication between you and other project stakeholders. Project charter, gold plating, and roll wave planning are examples of top project management terms you need to know. But what do they mean and why are they important?

Project Charter

If you’re a project manager, one of your most important documents is the project charter.

What Is a Project Charter and Why Is It Important?

A project charter is a formal document that describes your project in its entirety. It describes your product or business objectives, who the stakeholders are, your team members, and how you carry out the project. Perhaps the most important role of the project charter is to serve as evidence of authorization for the work and for you to lead it as the project manager. That position makes you responsible for coordinating the efforts of many people and keeping the project moving forward. The project charter makes it clear that it’s you, as the project manager, who ultimately bears responsibility for the project’s success or failure.

Sections of the Project Charter

The first section of the project charter serves as an introduction and identifies the project by name and you as the manager, along with the date you create the charter. You may also include team members and sponsors in this section.

The next section is the main section of your document and breaks down into several parts that contain more details, including:

  1. A project purpose that states why you started the project. You may also give details about the contract as the foundation of the project and the need it meets.
  2. A project description that details how the project meets the needs above. In this part, you describe in detail the structures you build and the services you provide.
  3. A budget that states the maximum cost of the project. It may include specifics such as labour you need to hire and the cost of labour, materials, and other expenses.
  4. Potential risks that inform sponsors of possible causes of delays and problems.
  5. Major milestones that represent significant points in your work as completion nears.
  6. Objectives that state what you want to accomplish and the target date for each objective.
  7. Authority levels that let everyone know you’re in charge and establish reporting chains of authority.
  8. Authorizations that contain the signatures of the project sponsors with the applicable date.

Gold Plating

Are you involved in a project where you need to continually add extra work to the original scope? In projects like this, you might encounter gold plating, which loosely relates to scope creep.

What Is Gold Plating?

Gold plating refers to the process where you keep adding plans to a project even though the extras aren’t included in the scope statement. But what are the causes of gold plating? This process occurs when you include additional plans to a project to impress the client. Gold plating may also occur when one of your team members adds extra functions to earn credit from you or you add extra to divert your client’s attention.

What’s the Difference Between Gold Plating and Scope Creep?

In gold plating, you intentionally add features to the project. In scope creep, the changes to the product or project are uncontrolled.

Cons of Gold Plating

Gold plating sounds innocent, and if you’re completing a job for a client, it may actually seem like a good way to get bonus points. However, be wary of some downsides to gold plating, which include:

  • Redoing the Project -For starters, if you add things the client didn’t agree to, they may come back and ask you to redo the project. Even if the extra things you added are helpful to your client, it wasn’t what they ordered, and they have the right to decline your final product.
  • Extra Costs -Once you add extras, your client may come to expect extras. So stick to your original plan as you agreed with the client. If extra work doesn’t reap tons of benefits, you’re better off delivering on the original agreement and actively avoiding gold plating.
  • Time Wasting -Each project has its own timeline. Including additional plans requires that you set aside some extra time to complete the project.

How to Avoid Gold Plating

When you start a project, keep the end goal in mind. Although it’s reasonable to make changes along the way, your project plan should stay fairly close to the original plan you made. Once you have met your project’s requirements, work should stop. If you decide to include additional plans or want to sneak in some bonus features, you’ve begun gold plating.

Rolling Wave Planning

Are you a project manager who wants to adopt a strategic approach in your project and break work into chunks that are easier to manage? Consider using rolling wave planning to streamline your project management process.

What Is Rolling Wave Planning?

Rolling wave planning is a process that breaks up big projects into small components that are easier to control and manage. In essence, the rolling wave method breaks up your assignment into waves to ensure you focus on information that’s only relevant to your project.

Benefits of Rolling Wave Planning

You use rolling wave technique when you have a tight schedule. Some of the reasons for adopting this technique include:

  • Added flexibility – You build better plans as the project advances.
  • Less confusion – Removing excessive information from your plan makes your project objectives clearer.
  • Less speculation – This process prioritizes short-term plans over long-term goals to reduce uncertainty.

Project Terms at a Glance

You use project charter documents to show that a project exists and you have the formal authority to begin work. Be sure to avoid adding extras to the original scope plan given that it requires additional costs, documentation, timeline, and testing. Rolling wave planning makes it possible for you to begin productive activities without necessarily waiting for every plan of your project to be determined in advance. It eliminates downtime for additional planning in the middle of your project since you plan continuously.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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