Whenever I'm in a discussion with a soon-to-be
stakeholder about an upcoming project initiative, one of the first questions
out of my mouth is, "Do you have a Project Charter?" The vast
majority of the time, the answer is, "Huh?" ( translation
-- "No!" ). And, when they actually do have a project charter,
it's usually filled with useless fluff rendering the document completely
worthless.
This always alarms me. Your project charter is the most important and
useful document to have on any project. It will take some thought to
create, but it can usually be constructed in a day or two ( at least
the initial draft ). If properly done, the charter will crystallize
your project focus, thereby giving your team a much better chance of
success.
Let me walk you through each section.
Business Case
This should state how your project ties into the higher level strategy.
In Six Sigma terms, it's called the "Big Y." If your company
has a known and published executive strategy, start there and work
down. If the different management levels between you and the top also
have published strategies, be sure to include them.
In paragraph form, you want to create a "strategic path"
from your project to your company's high level strategy. This will
clearly explain why you are doing this project.
Sometimes, it can be tricky to build a business case for a compliance
project. By text, your company's strategy might not have anything
to do with "avoiding trouble with the SEC" or "ensuring
the privacy of client medical records." If
this is the case, you may have to do some thinking, but you should
eventually find an avenue where compliance fits in. For instance,
having good internal controls reduces the risk of having to restate
your financials, which is good for your company's image.
Example Business Case: The new super audit defense system ( SADS
) will demonstrate the continued diligence that Corporate Finance
is displaying, in meeting its strategic objective of fortifying internal
controls. Fortifying our internal controls supports our Company XYZ's
strategic objective of having the biggest market share, by instilling
confidence in the market that our financials are being reported accurately.
Opportunity Statement
The Opportunity Statement usually includes the "pain" that
the company is experiencing right now. It should explain what will
happen if you don't do this project, or don't do it right now. It
should highlight any costs due to inefficiencies, penalties imposed
for non-compliance, or financial and / or image related impacts due
to audit findings.
Try to make your opportunity statement as specific as possible, using
hard dollar amounts and percentages.
Example Opportunity Statement: Big Four Accounting Firm's last
attempt to audit our data failed due to the quality of our data. Their
findings of our data quality are detailed in "Company XYZ's Data
Quality Concerns - Prepared by Big Four Accounting Firm". This
effort has already cost us $1 Zillion ( USD ), and is being put on
hold until we can organize our data. The new SADS will provide auditability
of our financial data, so that Big Four Account Firm can continue
its audit of our data.
Project Objective
The Project Objective should contain, in specific terms, the goal
of the compliance project. In Six Sigma terms, it's called the "Little
Y". Use the SMART acronym when building your project objective:
Specific, Measurable,
Actionable, Relevant, Time-Bound.
As with the opportunity statement, try to make your project objective
as specific as possible.
Example Project Objective: Create a new super audit defense system
( SADS ). The SADS will consolidate our 5 current financial systems
into one data warehouse, with the intent of auditability. The new
SADS will serve a finance reporting community of 30 people, contain
25 batch reports ( average run time 15 minutes ), and have ad-hoc
capability with a response time averaging 5 seconds. The deployment
of the new system is to be achieved before December 15, 2009.
Project Scope
The Project Scope is section the simply details what is in scope
and what is out of scope. The project manager or key stakeholder can
do this individually, however it's better to do in a group setting
with all stakeholders.
Example Project Scope: In Scope - downstreaming of 5 key financial
systems, batch reports, ad-hoc reporting; Out of Scope - downstreaming
of Nobody Cares Finance System ( NCFS ), predictive analytics, early
warning of potential compliance red flags.
Project Plan
The Project Plan is the projected milestone chart for the project.
I nice touch is to do this in Gantt style, highlighting the duration
of the major phases or deliveries. It should include the project start
date, project end date, and at least 3 or 4 milestone dates. If you're
planning a Six Sigma project, be sure to include each phase ( DMADV
) separately.
Team Members
This is a list of all the team members for the project. Be sure to
include the Project Manager / Black Belt, Champion and / or Executive
Sponsor, and all the people that will be on the project team. If the
team hasn't been formed yet, you can use placeholders ( TBD ) or put
a general statement that the rest of the team will be formed at a
later date ( specify the date ).
A project charter is a simple but critical document for any compliance
project, so there's no excuse for not having one. It should fit on one
page and contain 6 sections; Business Case, Opportunity Statement, Project
Objective, Project Scope, Project Plan, and Team Members. Anyone should
know what your project is about, with a simple read of this document.
Spend today and tomorrow creating a project charter for your most critical
project. You will instantly reap the rewards of clarity and traction,
and you will dramatically increase your chances of project success.
