I always get asked this question from trainees in my project management courses: “Why do we need a project charter or a project plan if we have a contract?”
There are many, not one reason.
First, the Need for Clarity. Contracts are made as legal binding documents for legal purposes. The project charter and plan are not developed for legal purposes, but to ensure delivery. While the two parties of the contract are set in the contract as adversaries (almost), the plan is more of a collaboration between both parties to get the work completed successfully, as a team, not adversaries.
Second, the contract might not have the necessary details to clarify the scope and other plan elements. It is an agreement between two business parties to get the project completed, but the technical people and the project manager who lead this effort need now to meet to get the work relationship defined from a work perspective, not just business perspective. While I am a big proponent of project managers and team being business savvy, but business savvy alone does not get the job done.
Third, the plan in the contract usually has key elements of the plan at a high level but not a workable plan. To organize work , the project needs a workable plan that everyone can follow. Organization and structure is needed to get the job done and what is in the contract of the plan is not enough to do that.
Fourth, the client needs to be involved in this plan and not just be a referee or a judge. Unfortunately, many clients assume that they have now a constitution (the contract) and it is time to lay judgment on the supplier based on the constitution, so to speak. In reality the worst thing the client can do to lose value from the work is become a judge. A client is a partner, who treats a supplier as a partner, to ensure mutual benefit and win-win relationship. A client is usually afraid that being a partner will make him vulnerable if the supplier does not perform. With this kind of attitude, the project cannot be heading towards creating value, even if it formally gets completed.
That’s it for now. What do you think?