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Project Initiation Process - PM World Library-project initiation steps

PM World Journal Project Initiation Process
Vol. IV, Issue II - February 2015 by Dan Epstein
www.pmworldjournal.net Advisory Article
Project Initiation Process
Dan Epstein
1.0 Part 1: Initial Project Request and Cost-Benefit
Note: This article is based on the book Project Workflow Management: A Business Process
Approach by Dan Epstein and Rich Maltzman, published by J Ross Publishing in 2014. The
book describes PM Workflow? framework, the step-by-step workflow guiding approach
using project management methods, practical techniques, examples, tools, templates,
checklists and tips, teaching readers the detailed and necessary knowledge required to
manage project "hands-on" from scratch, instructing what to do, when to do and how to do
it up to delivering the completed and tested product or service to your client. While PM
Workflow? is the continuous multi-threaded process, where all PM processes are integrated
together, this article will attempt to describe the initiation set of processes as a stand-alone
group of processes that can be used independently outside of PM Workflow? framework. It
will be difficult in this article not to venture into processes outside of project initiation, such
as planning, quality, risk, communications and other management processes, so they will be
just mentioned. For more information, please visit www.pm-workflow.com.
The main objective of the project initiation activities is to ensure that the project scope is
agreed on and documented and the requirements baseline is produced. The project initiation
includes the following steps:
1. Receive Initial Project Request and Benefit Statement --This process will provide the
delivery team with a general idea about the project and will outline expected benefits
from the project.
2. Perform/Update Cost-Benefit Analysis --Cost-benefit analysis calculates whether
benefits from the project justify expenses.
3. Create Project Control Book (PCB) --This process will create a tool for keeping all
project documentation in one place. One of the first records in PCB must be
identification of project stakeholders and the established communication channels
with them.
4. Business Requirements Analysis --This process will elicit detailed project
requirements and analyze them.
5. Create/Update Traceability Matrix --The requirements traceability matrix is a tool for
documenting, updating and tracking all requirements and changes to the project scope
throughout the life of the project.
6. Create Business Requirements Document --This process will create a document
outlining the baseline for all project requirements.
7. Conduct Requirements Review --This process will ensure the quality of business
requirements and verify correctness of the business requirements document.
8. Approve Requirements --This process will approve requirements and authorize funds
for the next project activity, such as project planning.
? 2015 Dan Epstein www.pmworldlibrary.net Page 1 of 12
PM World Journal Project Initiation Process
Vol. IV, Issue II - February 2015 by Dan Epstein
www.pmworldjournal.net Advisory Article
9. Review project planning milestones with client -- This process will review the
planning/high-level design and the overall project plan or milestones with the client
before requesting project authorization. Plans may be updated as a result of the
10. Update the Project Planning Plan -- This process will update plans or milestones with
changes requested at the review before the detailed project planning started.
11. Request Project Authorization -- This process will request project approval and
receiving the project charter from the project sponsor. Receiving a signed project
charter confirms that the sponsor agrees with the project scope, including the cost and
schedule of at least the planning/high-level design activities for the remaining of the
12. Conduct Kickoff Meeting -- The kickoff meeting is the official project initiation.
1.1 Receive Initial Project Request and Benefit Statements
Consider the following project initiation scenarios:
1. A project delivery organization wins a bid from an outside company to develop a new
product or service. This means that the organization's proposal was selected due to its
past experience in that type of project, proven quality or the most cost effective
solution. Sometimes an outside company may award a project to an organization
without a bid due to its proven reputation for great results.
2. A project starts due to the specific need of an organization, such as a business need for
a new manufacturing line or a new software program which supports the expanded
business. In this case the requesting department should outline benefits to justify
project expenses.
3. Market research may have determined that there is a market demand for a specific
service, system or product, which is predicted to be profitable to the company's
Undertaking any project is a business risk for the organization. The bigger the project and the
less experienced the team, the larger the risk. The risk may reach such an extent that the
company may jeopardize large financial assets, reputation and its very future existence.
Project risks are outside of this article's scope (chapter 6 of the book includes detailed
description of Risk Management and provide tools and examples), but it is reasonable to
expect that a company will not assign an inexperienced project manager to a multimillion-
dollar project.
It is also unlikely that a new, untested project manager will be assigned to manage a project
for an important business client or for development of a brand new marketable product. If
such a project turned out to be unsuccessful, the company finances and reputation may suffer
beyond repair. In the worst-case scenario, the company may be liable for damages and fines
and may even be forced into bankruptcy. In internal noncritical projects, financial losses may
still occur due to an unsuccessful project, but it is less likely that the company reputation will
be damaged and fines and lawsuits are not a threat.
? 2015 Dan Epstein www.pmworldlibrary.net Page 2 of 12
PM World Journal Project Initiation Process
Vol. IV, Issue II - February 2015 by Dan Epstein
www.pmworldjournal.net Advisory Article
There are small differences between the above three types of projects at the initial and closing
parts of a project, but the benefit of PM Workflow? is that generally the project processes
will not change.
The project manager receives the initial project request and the benefit statement from the
client. The resource manager documents them in sufficient detail to ensure their unambiguous
understanding. A unique identifier is assigned, which consists of three parts separated by
1. Project identifier-- Assigned to the project when the project is initiated, this can be in
a format chosen as appropriate for the particular enterprise.
2. Requirement identifier-- Consists of three digits from 001 through 999, usually
sequential within the project, which identify the requirement number.
3. Revision identifier-- Consists of two digits which identify the requirement revision
number. At the time when a requirement is approved and baselined, those two digits
are always 00. Each subsequent approved change request will increase this number by
Examples of a unique identifier are CLI00253-001-02 and RET00229-011-00. This identifier
will be used throughout the life of the project to ensure that all project scope changes are
identified. Documentation concerning each requirement includes its unique identifier, a
description of the functionality to be provided for a functional requirement, the rationale for
the requirement which states why the requirement exists (from a business perspective),
priority and an impact analysis of the requirement on the business, the other requirements and
existing products.
The requirements will be documented in accordance with the established requirements
template. Additionally, a traceability matrix will be used to document and manage
requirements in order to assist in traceability. The requirements document and traceability
matrix must be stored in the project control book.
The Requirements template is available in the book.
After receiving the initial project request and benefit statement from client, the next task is to
provide the ballpark estimates of the project cost, assuming that sufficient project information
is available from past experience to do this sort of estimation. It is necessary to establish
whether it is possible to perform the ballpark cost estimates without having detailed project
requirements beyond the initial project request. This may not be possible unless (or until) the
delivery team has significant experience in the same type of projects. Since costs of similar
past projects are known, it is possible to establish the approximate cost of new projects which
are similar in project context. If the project is in an unfamiliar business or a different or brand
new technology, then the detailed project requirements must be established first. It is also
critical to know whether or not the delivery team has significant experience in delivering
similar projects. Even if they do, the cost may only be roughly estimated, consistent with
other completed similar projects, making corrections as appropriate. The lowest estimating
accuracy allowed for the ballpark project estimates is -25% to +75%. If this accuracy is not
achievable, no estimates will be made at this point and the next process in the process flow,
Create Project Control Book, will be executed.
? 2015 Dan Epstein www.pmworldlibrary.net Page 3 of 12

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