Initiation of the Project

In any major projects there is involvement of many project man­agers, as there is an owner, an engineering consultant, and a con­tractor. All of them should go through the same steps that we will discuss, but each person does it based on his or her goals, target, and company system.

In general, any project starts from a creation of a formal document called the project charter. The project charter is described in the Project Management Professional (PMP) guide, but its name is different from one company to another. This document is extremely important for getting a project started in the right direction.

There are many reasons for starting a project. In general, for com­mercial and industrial companies, making money is the reason for doing a project. However, in some cases, there are many other rea­sons for doing projects, such as to follow government regulations and laws, to enhance the health, safety, and environment (HSE) for a company, or to help with oil disposal and the instant cleaning of the Gulf of Mexico due to the oil spill that happened in 2010. In some industrial and commercial companies, the projects stay current with developing technology.

A project charter is defined in Project Management Professional Book of Knowledge (PMPBOK) and is expanded in the third edition due to the importance of this paper. It also recommends that the contract with the customer will be completed before the approval of the project charter.

Noting that, the definition of the customer is wide-ranging as everyone including the project managers, are a supplier and customer at the same time.

When the contract is signed by the customer the scope of work and deliverables should be clear, because the number of changes that can be made to the scope after the contract is signed is very limited. Therefore, there will be enough information to be included in the project charter.

The definition of the project charter in PMPBOK is a document that formally authorizes a project and includes directly or by ref­erence to other documents the business needs and the product descriptions.

This document is usually made by the senior project manager, as the project manager will not be defined in this stage, so the docu­ment should be simple, precise, and accurate. To put the reference is not recommended because the top senior management does not have time to go deeply in the document. Also, I agree with Newell (2005) that this document should be small. If it is a big document you will face many questions and inquiries.

This document usually contains the following:

• The name of the project

• The purpose of the project

• The business need for this project

• The rough time schedule is defined by the project time period

• The budget of the project

• The profit from the project using the payout method (discussed further in Chapter 3)

• The project manager in any situation

After signing this document the project manager will be selected through a discussion between the project sponsor and the senior managers. In the case of a small project, the project manager has been defined, so there is no need to include his name. In addition, the project manager will prepare this document under the supervision of the project sponsor.

It is better that the project manger prepare this document, as he or she will be the most involved in the project and will closely understand the target and goals for the senior manager.

14 Construction Management for Industrial Projects