Project Charter D Tool: Project Charter Purpose: Formalizes purpose, goal, and scope of the project for tracking and accountability. It builds on the information you brainstormed for the A3 Problem Statement, Current Situation and Target Goals. The Lean Office uses it to submit projects to the Board of Trustees. The Project Charter needs to be updated every three months, especially the deliverables.

D Project Charter Project Charter Form Resources Lean Progress Status   Project Name Strategy Linkage Nature of Benefit College/Division Supports vision to become a top 20 public university. Cost Savings Department Provide every student opportunities for engagement and leadership. Re-allocation of Resources Champion/Sponsor Recruit, retain and reward faculty and staff quality, performance and productivity. Risk Avoidance Process Owner Build competitive technology and information infrastructure. Soft Savings Mentor Maintain an environment that is healthy, safe and attractive. Revenue Generating Team Leader Increase the reputation of the University: state, national, and international. Business Issue/ Opportunity Project Metrics Metric Baseline Target Target Date Project Goals & Objectives Resources Employees Involved Resource Demand Scope Project Team Lean Progress Status Deliverables DMAIC phase Date Started/ Completed Red, Yellow, Green. Stakeholders Key Subject Matter Experts Project Notes/ Comments

Procurement: Leverage Industry Norm Payment Terms Project Charter Use the format: Department: Descriptive Title Provide a Project Name for reference Filling in the Charter Project Name Procurement: Leverage Industry Norm Payment Terms Name the College/Division that is responsible for this project. College/Division Finance Filling in the charter

Filling in the Charter D Project Charter List the Department responsible. Department Procurement Department A project Champion/Sponsor is most likely the head of your division. This is usually the person who gives approval for the project to go forward. Champion/Sponsor Procurement- Mike Nebesky The Process Owner is the individual who is ultimately responsible for the process being improved. Filling in the charter Process Owner Mike Nebesky

Filling in the Charter D Project Charter Identify the assigned project Mentor and the contact information. Mentor Lisa Knox- G06 Sikes; (864) 123-4567 The Lean Office will designate the Team Leader. Team Leader Lisa Knox- REPI Filling in the charter

Business Issue / Opportunity D Project Charter Draw on your initial A3 answers to explain the problem. Filling in the Charter What do I want to fix? Business Issue / Opportunity What is the problem’s background? Business Issue

Filling in the Charter D Project Charter Be sure to include briefly: Who is being impacted? (This is your customer.) What is the issue that is impacting the customer? Where and when do the customers encounter the problem with the process? What is the impact to the customer when the problem occurs? Filling in the Charter Business Issue

Business Issue / Opportunity D Project Charter Now we can begin to define the situation. Drawing again on the A3… Filling in the Charter What do I want to fix? Business Issue / Opportunity What is the problem’s background? Business Issue

Business Issue, example D Project Charter In this example, then: Who: Clemson University What: Paying vendors upon approval Where/When: Delays past discount windows Impact: Foregone savings Filling in the Charter Business Issue / Opportunity Clemson University currently pays vendors upon approval. CU does not leverage early payment discounts. Industry standard discounts are generally 2% for payment in 10 days and 1% for payment in 30 days. Business Issue, example

Project Goals/Objectives D Project Charter Filling in the Charter How far would I like to get? Project Goals & Objectives Drawing on the ideas we generated in the A3 brainstorming… When would I like to get there? Project Goals/Objectives

Tool: Benchmarking D Benchmarking Purpose: provide realistic goals and direction; monitor performance; improve processes to match the best in Higher Education. Benchmarking is the technique of comparing practices and processes to the best in the industry. Remember: Some processes should be compared to norms outside of Higher Education!

Benchmarking Establishing benchmarks D Benchmarking Call similar departments at other universities or businesses. Consult other departments within Clemson University. Contact individuals who have experience with or ties to other organizations. Benchmarking

Goal/Objective considerations Project Charter As appropriate, include, What are my measures of success that are aligned to the project objective? OR What are the goals for primary and secondary metrics? OR What change in performance level will be considered a success? OR How much does the primary metric need to change for your project to be considered a success? Be sure to include, How long will it take you to complete this project? Filling in the Charter Goal/Objective considerations

Goal/Objective example D Project Charter Filling in the Charter Project Goals & Objectives Develop and implement vendor payment terms that yield $1M annually by 7/1/2011. Goal: Save $1MM annually Deadline: 7/1/2011 Goal/Objective example

How does this process run? Project Charter Filling in the Charter What do I want to fix? How does this process run? Scope What areas can I target? Scope questions

Filling in the Charter D Project Charter Be sure to consider, What authority do we have? What processes are we addressing? What is not within scope? What are the starting and ending points of the process? What components of the business are/are not included? What, if anything, is outside of the project boundaries? What constraints must the team work under? Filling in the Charter Scope considerations

Filling in the Charter BEWARE Scope Creep D Project Charter Not your job! Upstream Process Stick with beginning /end points. Process Downstream Process Create boundaries and maintain them! Scope Creep

Filling in the Charter D Project Charter Note the limitations: Scope The scope of this project is limited to the current payment process and vendor base. Focus is on the vendors that have already agreed to accept industry standard payment terms. current payment process current vendor base vendors accepting industry standards The project is NOT to get more vendors to develop early payment discounts. Scope example

Filling in the Charter D Project Charter List your Project Team. Lisa Knox, Taylor Vick, Mike Nebesky, Angie Wiggins List Stakeholders -- individual consumers, employees, etc. who could gain or lose from this project. Be specific! Stakeholders Employees involved in the current AP process, Vendors Filling in the Charter

Stakeholders and Experts Project Charter Identify Subject Matter Experts, people with technical skills or experience that could help complete this project. Filling in the Charter Key Subject Matter Experts Mike Nebesky - Procurement Add any additional (or quarterly updated) Comments you may have about the project, stakeholders, team, etc. Project Notes/ Comments  Use this section to update each quarter savings to date, revenue, etc. Stakeholders and Experts

Filling in the Charter D Project Charter Place an “X” in each box in which you believe the project will align with our current University Strategy. Filling in the Charter Strategy Linkage Supports vision to become a top 20 public university.   Provide every student opportunities for engagement and leadership. Recruit, retain and reward faculty and staff quality, performance and productivity. Build competitive technology and information infrastructure. Maintain an environment that is healthy, safe and attractive. Increase the reputation of the University: state, national, and international. Strategy Linkage

Filling in the Charter D Project Charter Place an “X” in each box that you believe will be a benefit from completing this project. Filling in the Charter Nature of Benefit Cost Savings   Re-allocation of Resources Risk Avoidance Soft Savings Revenue Generating Nature of Benefit

Kinds of financial benefits Project Charter Various Financial Benefits Filling in the Charter Some benefits like new revenue, higher profitability, or faster growth result in tangible dollar amounts and are easy to measure. Others, like cost avoidance, reduced labor, or reduced process time are harder to measure but can be calculated. Customer satisfaction, employee morale, risk avoidance and image are hardest to quantify. Hard dollars Calculated dollars Intangible Before we tackle this box, lets think generally about different kinds of financial benefits. Some are obvious, some we have to translate from one thing to another (often time to dollars), and others are things we know are good, but don’t automatically have a dollar value attached to them. Kinds of financial benefits

Nature of Benefit, explained Project Charter “Nature of Benefit,” explained Filling in the Charter Cost Savings Direct expense reduction Yield improved bottom line Resource Re-allocation Reduction of non-value-added work Typically employee time Risk Avoidance Calculated value of removing the threat of financial culpability or penalty Cost savings could include reduced supply, transaction, overhead, contract and/or transportation costs. By removing non-value-added work, employee time can be saved, and the value of that time can be calculated. Risk avoidance could be in securing waivers for risky student activities, protecting identities, or preventing workplace hazards. Nature of Benefit, explained

Nature of Benefit, explained Project Charter “Nature of Benefit,” explained Filling in the Charter Soft Savings Financial benefits that are difficult to quantify but still mission-critical For example: satisfaction, image, ranking Revenue Generating Development of new income streams or expansion of existing ones Recorded in income statements Nature of Benefit, explained

Filling in the Charter D Project Charter Establish metrics, baseline, targets and target dates. Filling in the Charter How far would I like to go? What are some ways to measure this? Project Metrics Metric Baseline Target Target Date   When would I like to get there? Where do we stand? Project metrics

Understanding Metrics Project Charter What is a metric? A measured variable that can be tracked and used to detect errors, inefficiency, or improvement. It can be a process metric or and organizational metric. Process metrics apply to specific processes or programs like time, cost, or quality. Organizational metrics address organization-wide issues like employee satisfaction and turnover. Understanding Metrics Choose one or more to describe accurately your process’ efficiency. Defining metrics

Understanding Metrics Project Charter Kinds of Metrics Time Metrics Value-added time Quality Metrics Customer satisfaction Non-value-added time Percent complete and accurate Processing time Cycle time Output Metrics Cost Metrics Backlog Cost savings Work in process Opportunity cost Decreased waste Understanding Metrics Kinds of metrics

You must have a baseline to measure improvement. D Project Charter You must have a baseline to measure improvement. Understanding Metrics The Lean Office will help establish your baseline metrics. Baseline

Project metrics, example D Project Charter Enter your metrics and goals. Filling in the Charter Project Metrics Metric Baseline Target Target Date  $ Saved   $400K  5/15/2011  Vendors discounting Current All 7/1/2012   Be sure to document your inputs, assumptions and reasoning in setting your baseline, target and timeline in the electronic version of your project charter. We must be able to replicate your baseline and savings! This is your methodology! Be sure to include the following: source of data (i.e., reporting system, customer service survey, etc.), parameters for your data collection (i.e., query criteria), and time period of your data. Project metrics, example

Considering resources Project Charter Now that you have your metrics, targets and deadlines established... Filling in the Charter What offices will be involved? Which people in those offices do I need? How much of their time? Considering resources

Filling in the Charter D Project Charter Under Department, list the offices involved. Under Employees Involved, list the specific individuals. Filling in the Charter Resources Department   Employees Involved Time Commitment Procurement Mike Nebesky 50% REPI Lisa Knox 5% Angie Wiggins 30% Admin Support many as needed Vendors Estimate how much time (per day/week/month) will be necessary for successful project completion. This is the Time Commitment. Resources, example

Filling in the Charter D Project Charter Note that this is where you create your team. The Lean Office will immediately enroll your team members in Purple Belt training. Creating the team

Filling in the Charter D Project Charter Now, from a high level, apply DMAIC to the project to define the activities and plan to complete them. Filling in the Charter Deliverables Define the issues and metrics involved in the procurement process Measure the current cost of not leveraging payment terms. Conduct analysis of the procurement process. Improve the process by publishing revenue and receivables plan. Control the process by implementing performance measures. Deliverables

Filling in the Charter D Project Charter Next make a thorough list of everything necessary to achieve each of those high level goals. These are your Deliverables. This list will include steps like: make a plan define what the customer wants identify those involved establish a process for communication define the ideal system or norm understand the current process determine what data to collect and how analyze the current process for improvement opportunities evaluate the options for the most benefit prepare the ground for selected changes prepare the solution train in the new format implement changes and monitor Filling in the Charter Deliverables plan

Deliverables and DMAIC Project Charter make a plan define what the customer wants identify those involved establish a process for communication define the ideal system or norm understand the current process determine what data to collect and how analyze the current process for improvement opportunities evaluate the options for the most benefit prepare the ground for selected changes prepare the solution train in the new format implement changes and monitor Filling in the Charter Define Measure Analyze These deliverables will follow the DMAIC steps as you can see here. Implement Control Deliverables and DMAIC

Deliverables and DMAIC Define Deliverables and DMAIC Step Tool Phase Define Project Charter Make a plan Voice of Customer Define what customer wants Stakeholder Analysis ID those involved Benchmark Establish ideal Define phase

Deliverables and DMAIC Define Deliverables and DMAIC Step Tool Phase Measure Current State Map Draft the current process Metrics ID data to collect and how Measure phase

Deliverables and DMAIC Define Deliverables and DMAIC Step Tool Phase Analyze 5 Whys Find main causes for problems Fishbone Find all contributors to problems Pareto Chart ID primary contributor Analyze phase

Deliverables and DMAIC Define Deliverables and DMAIC Step Tool Phase Improve Implementation Plan Define how the solution will happen Future State Map Draft the end-goal for the process Improve phase

Ongoing Deliverables D Define Leadership Change Management Plan Help stakeholders accept and embrace change Communication Plan Define what stakeholders need to know Set up ways to inform and engage stakeholders Project Charter Revise and update quarterly

Good planning is critical! Project Charter Good planning is critical! Filling in the Charter You need a thorough list to make a reasonable timeline. You need a reasonable timeline to achieve your target date. Timeline formulation

Date Started/ Completed Project Charter Fill in the Deliverables, Phase and relevant Date under Status. Filling in the Charter Lean Progress Status Deliberables DMAIC phase Date Started/ Completed   Red, Yellow, Green Define 3/7/2011 Complete Identify current university deliverables Measure Develop a detailed data collection tool Create a high level SIPOC diagram Collect revenue and receivables data Collect internal customer data Create a value stream map Analyze Conduct value-added/non-value-added analysis Create prioritization and cost benefit matrix Implement Develop comprehensive communication strategy Publish revenue and receivables strategic plan Develop change management plan RFP written for procurement website development upgrade 2/12/2011 Started Website complete 2/24/2011 Develop training plan Plot future state Implement performance measures Control Implementation complete Lean Progress

Filling in the Charter D Project Charter Keep in mind that the Project Charter template is just a template; it may need modifications to fit your project. Consult the Lean Office to determine how best to adjust the template for your project needs. Charter as template