What Is A Project Charter In Six Sigma? Here Are Some Vital Elements Of A Project Charter
The most crucial document in the “Define” step of Six Sigma’s DMAIC methodology is called a Project Charter. DMAIC means “Define, Measure, Analyze, Improve & Control,” as defined by Lean Six Sigma Green Belt training. There is another structure called DMADV, meaning “Define, Measure, Analyze, Design & Verify” that is included in Six Sigma free online courses.
A document called a project charter is created during the Define phase of Six Sigma Define. The project’s team members will utilize this document as a compass to steer the Six Sigma project and make sure they don’t get off track. Several components make up the document. There are 4 elements in addition to the core ones (business case, goals, problem statement, project plan, goal statement, team structure, and project scope). Let’s take a look at them.
4 Important Components Of A Project Charter
These are the four extra components of the project charter document, in case you’re wondering what’s the best way to start drafting one. The first one is Project Constraints & Assumptions, the second is Project Charter Approval, the third one is Cost/Benefit Analysis, and lastly, RACI Matrix. Now we’re gonna get into each of them individually.
Project Constraints & Assumptions
When there are limitations applied to the resources that may be allocated to the project, those are typically called constraints. This is the 1st element of a project charter.
The amount of time the members of the team agree to commit to the project is one of the typical constraints. Examples of constraints that might be mentioned in the project charter document can include a predetermined budget, the required completion of the project, and any other external impacts.
From one stakeholder to another, assumptions may be formed that are different in kind. It may be assumed that the project champion will meet with the team members and leader on a regular basis, that the project champion will assist the team if it encounters any obstacles, and that the team is going to be allowed to adopt solutions without getting the project champion’s consent. These presumptions are essentially a list of what the project champion expects from the project team, as one of the team’s customers.
Project Charter Approval
Project approvals or sign-offs of the project charter are the subjects of the 2nd element that makes up a project charter. Consequently, the project’s team can’t move on with working on the project until the sponsors and project champions have properly approved the project charter doc. Don’t forget that the project charter’s main goal is to outline, in broad terms, what exactly will be produced by the project team, as well as what resources will be required, and why it’s justified.
You can also look at a project charter as a document that serves as a promise to devote the required amount of time and money to the project. This important factor necessitates the sharing of the project charter with all important stakeholders in order to obtain their approval when necessary.
A cost/benefit analysis makes up the 3rd component of a project charter doc. So, what exactly is a cost/benefit analysis? Fundamentally, it’s a crucial tool used in management that aids in determining when and whether the net cash benefits of Six Sigma projects start to equal and/or surpass their net expenditures or outflows. The analysis determines whether to move on with an investment or not and whether the project will be beneficial.
This method needs to be used at the beginning of a project, during the planning stage and is meant to be reassessed all throughout the life cycle of all Six Sigma projects, right until the very end, in order to track the financial performance of the project and determine its soundness, and also to verify assumptions.
RACI matrix is the final and fourth 4th component of a project charter. The acronym “RACI” means “Responsible, Accountable, Consulted & Informed,”. As for the matrix part, this is included in every project charter and it refers to the responsibilities and roles chart. In other words, it is a simple matrix tool that shows who should take part in a job or activity or who should create an output or deliverable. Take note that the importance of a RACI matrix applies to all DMAIC framework stages, and not just the “define” phase in all Six Sigma projects.
There are many benefits to using a RACI Matrix. With the use of this tool, you can clarify roles and responsibilities for each party engaged in a task or deliverable, as well as find any gaps and overlaps in those roles.
The process participants and project team are 2 scenarios to which the RACI is applicable. The RACI identifies a person by their name when used within a team of a Six Sigma project. The RACI, when used to describe a process, identifies a role, job title, or function related to the process.
Although the RACI matrix employs everyday language, each word has a particular definition. Keep reading to learn the specific definitions.
The “R” stands for Responsible, which denotes that this individual or job serves as a “Ground-level operator.” There may be more than one person appointed to be in charge of any particular job or deliverable. Those are the persons who must perform the labor in order to deliver the result or finish the mission.
The “A” stands for Accountable, and it denotes the one individual that every responsible person must answer. The person designated as “Accountable” within the RACI matrix will be the sole person who assumes responsibility for any and all critical and non-critical activities if they are not performed at all, or do not adhere to the specifications provided in the project charter doc. There can only be one individual allocated as Accountable to any particular job or deliverable. The individual with the Accountable role could also have additional roles (R, C, or I).
The “C” in RACI stands for Consulted. The individual with this role will be the subject-matter professional and expert. The individual who was consulted has special knowledge or skills that are required to do the task. This individual contributes all pertinent information. There may be a task or deliverable unique to this job.
The “I” stands for Informed, which means that this individual should be informed of the outcomes and infrequently consulted. This person frequently serves as the direct or indirect representative of the client for a task or outcome. A significant stakeholder who has to be notified of the job completion could also play the role of the informed individual. Any particular job or deliverable could or could not need this role.
A project charter document also includes the following parts in conjunction with all of the previously mentioned four elements: business case, goal statement, problem statement, project scope, goals, team structure, and project plan. Determining the team’s structure can easily be done with the help of the RACI model.
As you can see, a project charter can take many different forms and there are plenty of variations being made from business to business, but these essential components are always included. When it comes to the DMAIC structure of Six Sigma, the “Define” phase revolves around creating your project charter document.
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