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D Tool: Project Charter Purpose: Formalizes purpose, goal, and scope of the project for tracking and accountability. It builds on the information you brainstormed.

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Presentation on theme: "D Tool: Project Charter Purpose: Formalizes purpose, goal, and scope of the project for tracking and accountability. It builds on the information you brainstormed."— Presentation transcript:

1 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. Project Charter

2 Project Name Strategy LinkageNature 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 MetricBaselineTargetTarget Date Project Goals & Objectives Resources DepartmentEmployees InvolvedResource Demand Scope Project Team Lean Progress Status Deliverables DMAIC phaseDate Started/ CompletedRed, Yellow, Green. Stakeholders Key Subject Matter Experts Project Notes/ Comments Project Charter D Project Charter Form

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

4 D Project Charter List the Department responsible. 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. Department Procurement Department Champion/Sponsor Procurement- Mike Nebesky Process Owner Mike Nebesky The Process Owner is the individual who is ultimately responsible for the process being improved.

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

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

7 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? D Project Charter

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

9 D Project Charter In this example, then: Who: Clemson University What: Paying vendors upon approval Where/When: Delays past discount windows Impact: Foregone savings 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.

10 How far would I like to get? D Project Charter When would I like to get there? Project Goals & Objectives

11 Tool: 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! D Benchmarking

12 Establishing benchmarks 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. D Benchmarking

13 D 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?

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

15 What do I want to fix? D Project Charter How does this process run? What areas can I target? Scope

16 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?

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

18 current payment process current vendor base vendors accepting industry standards 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.

19 D Project Charter List your Project Team. 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

20 D Project Charter Identify Subject Matter Experts, people with technical skills or experience that could help complete this project. 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.

21 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. Place an “X” in each box in which you believe the project will align with our current University Strategy. D Project Charter

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

23 Various Financial Benefits Project 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 D

24 “Nature of Benefit,” explained D Project Charter Direct expense reduction Yield improved bottom line Cost Savings Reduction of non-value-added work Typically employee time Resource Re- allocation Calculated value of removing the threat of financial culpability or penalty Risk Avoidance

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

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

27 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. D Project Charter Choose one or more to describe accurately your process’ efficiency.

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

29 D You must have a baseline to measure improvement. The Lean Office will help establish your baseline metrics.

30 Enter your metrics and goals. D Project Charter Project Metrics MetricBaselineTargetTarget Date $ Saved 0 $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! 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!

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

32 D Project Charter Resources Department Employees InvolvedTime Commitment ProcurementMike Nebesky50% REPILisa Knox5% ProcurementAngie Wiggins30% Admin Support many as needed Vendors many as needed Under Department, list the offices involved. Under Employees Involved, list the specific individuals. Estimate how much time (per day/week/month) will be necessary for successful project completion. This is the Time Commitment.

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

34 Now, from a high level, apply DMAIC to the project to define the activities and plan to complete them. D Project 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.

35 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 D Project Charter

36 –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 D Project Charter Define Measure Analyze Implement Control

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

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

39 Step Tool Phase Analyze5 Whys Find main causes for problems Fishbone Find all contributors to problems Pareto Chart ID primary contributor D Define Deliverables and DMAIC

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

41 D Define Ongoing Deliverables 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

42 Good planning is critical! D Project Charter You need a thorough list to make a reasonable timeline. You need a reasonable timeline to achieve your target date.

43 Fill in the Deliverables, Phase and relevant Date under Status. D Project Charter Lean Progress Status Deliberables DMAIC phase Date Started/ Completed Red, Yellow, Green Define3/7/2011CompleteIdentify current university deliverables Measure3/7/2011CompleteDevelop a detailed data collection tool Measure3/7/2011CompleteCreate a high level SIPOC diagram Measure3/7/2011CompleteCollect revenue and receivables data Measure3/7/2011CompleteCollect internal customer data Measure3/7/2011CompleteCreate a value stream map Analyze3/7/2011Complete Conduct value-added/non-value-added analysis Analyze3/7/2011CompleteCreate prioritization and cost benefit matrix Implement3/7/2011Complete Develop comprehensive communication strategy Implement3/7/2011Complete Publish revenue and receivables strategic plan Implement3/7/2011CompleteDevelop change management plan Implement3/7/2011Complete RFP written for procurement website development upgrade Implement2/12/2011StartedWebsite complete Implement2/24/2011StartedDevelop training plan Implement Plot future state Implement Implement performance measures Control Implementation complete

44 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. D Project Charter


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