Introduction: Project Initiation Document Template: Definition, Importance, and Step-by-Step Guide

As a digital project manager, creating a Project Initiation Document (PID) is essential to ensure that your new project is set up for success. The PID is a living document that outlines the context of the project, the project objectives, the project scope, the project brief, and other key project details.

It is a critical document that helps establish the project plan and project controls, including the project board, RACI chart, and project deliverables. I have another article about the philosophy of project management, In that blog, I emphasise the importance of having a clear vision and mission statement for your project which can be easily communicated. The PID is at the heart of the vision for the project and is possibly one of the most important documents you will produce if you want to ensure a successful outcome for your project.

In this blog post, we’ll provide a detailed explanation of the Project Initiation Document and its importance, along with best practices for creating one.

As part of our ongoing mission at ITManagement101 to provide a full set of project management templates In this article, I provide a free downloadable project initiation document template for Microsoft Word. This is free to use for your own purposes but is not to be resold.

Also see our Project Folder structure template, for details of how to store your PID.

What is a Project Initiation Document?

What is the definition of a Project Initiation Document (PID)

A Project Initiation Document (PID) is a comprehensive and detailed document that provides a roadmap for a successful project. The PID is created after the Project Charter and serves as a living document throughout the project’s lifecycle. It outlines the project’s scope, budget, schedule, risks, and other key details, and serves as a guide for the project team and stakeholders.

One best practice for creating a PID is to collaborate with all stakeholders to ensure that the document accurately reflects the needs and goals of the project. This is best achieved by using modern technology such as a Microsoft Word or Google Docs shared document where many people can edit and comment at the same time, and changes can be tracked. By working collaboratively, stakeholders can provide input and feedback, and the document can be revised to reflect any changes or updates.

Collaborating on the PID is especially important for establishing clear project parameters and success criteria. By involving all stakeholders in the process, the project team can gain a more comprehensive understanding of the project’s objectives, and stakeholders can agree on what the project will deliver. This collaborative approach can also help to identify and manage risks, establish project governance, and ensure that the project is aligned with the organization’s goals and objectives.

In summary, a Project Initiation Document is a detailed document that is created after the Project Charter and serves as a living document throughout the project’s lifecycle. It is essential for identifying clear project parameters and success criteria, and for ensuring that the project is set up for success from the outset. Collaborating on the PID using modern technology can help to ensure that all stakeholders are involved in the process and that the document accurately reflects the needs and goals of the project.

Here is an example of a very simple PID:

What is the main purpose of the Project Initiation Document?

The Project Initiation Document is a crucial document that serves several purposes, and additional inputs from a corporate PMO (Project Management Office) might include standards and guidelines for project management, risk management, and governance, as well as project management tools and templates. The inclusion of PMO inputs can help ensure that the project is aligned with the organization’s standards and best practices, and can help the project team more efficiently manage the project.

Keep in mind that your company auditors and future investors may ask to review your project initiation documentation. In my experience, this will also be the only documentation board members or senior management read.

What is the difference between a Project Initiation Document and a Project Charter?

A Project Charter is a high-level document typically created at the beginning of a project, before the Project Initiation Document. It is the first stage of a project, turning it from an idea into a formal proposal. It is used to formally authorize the project and establish its objectives, scope, timelines, and resources. The Project Charter is a summary document that outlines the project’s key features and is used to gain support and buy-in from key stakeholders. If the charter is approved then a Project Manager will be appointed and they will be responsible for using it as the basis for the creation of the PID.

On the other hand, a Project Initiation Document (PID) is a more detailed document that is created after the Project Charter. It provides a more comprehensive overview of the project and contains more specific information about the project’s scope, budget, schedule, risks, and other key details. The PID is a living document that is used to guide the project throughout its lifecycle, from initiation to closure.

Both documents are important for setting the direction and establishing the framework for a successful project.

Why is a Project Initiation Document Important?

What are the benefits of having a Project Initiation Document?

A Project Initiation Document (PID) is important because it helps ensure that a project is set up for success from the beginning. It is a comprehensive document that outlines the project’s objectives, scope, timelines, budget, and risks and serves as a roadmap for the project team and stakeholders. By defining clear project parameters and success criteria, the PID helps to align the project with the organization’s goals and objectives and helps stakeholders agree on what the project will deliver. The PID also helps to identify and manage risks, establish project governance, and provide a guide for the project team. Ultimately, the Project Initiation Document is essential for managing a project effectively and achieving its goals.

This is my list of the top 10 business benefits of creating a Project Initiation Document (PID):

Best Practices for Creating a Project Initiation Document

What is considered the best practice when creating a PID?

Here is my list of 20 best practices for creating an excellent Project Initiation Document (PID), Do keep in mind that you may not need all of these in a small or medium-sized project, but it is worth asking yourself and your business the question.

1. Involve all stakeholders in the process of creating the PID to ensure that it accurately reflects the needs and goals of the project.
2. Clearly define the project objectives and goals and ensure that they are aligned with the organization’s strategic priorities.
3. Develop a comprehensive project scope statement that clearly defines the project’s boundaries and deliverables.
4. Define clear project parameters and success criteria to ensure that the project is set up for success from the outset.
5. Identify and analyze project risks and develop risk management strategies to mitigate them.
6. Establish project governance and define the roles and responsibilities of the project team and stakeholders.
7. Develop a comprehensive project plan that outlines the key milestones, deliverables, and timelines.
8. Establish project controls to monitor and control the project’s performance, including cost, schedule, and scope.
9. Develop a resource plan that identifies the resources needed to complete the project and ensures that they are available when needed.
10. Define the project’s communication plan and establish effective communication channels among stakeholders.
11. Develop a quality plan that outlines the project’s quality objectives and the steps needed to achieve them.
12. Define the project’s organizational structure and ensure that it supports the project’s objectives.
13. Identify and engage the project’s sponsors and stakeholders to ensure their support and involvement throughout the project’s lifecycle.
14. Develop a change management plan to manage changes to the project’s scope, schedule, and budget.
15. Establish a project baseline to track the project’s progress and performance.
16. Use a Project Management Information System (PMIS) or other project management tool to manage the project’s data and documents.
17. Using a RACI chart in your Project Initiation Document: Use a RACI chart to define and communicate the roles and responsibilities of project team members. If you do this I also recommend you append a summary of role descriptions.
18. Develop a stakeholder engagement plan to ensure that stakeholders are involved and informed throughout the project’s lifecycle.
19. Ensure that the PID is a living document that is updated and revised throughout the project’s lifecycle.
20. Use a standard PID template to ensure that all necessary information is included and the document is consistent and easy to understand.

Within the PID these individual items may not be fully formed but just the summary to help lay the foundation for the project.

How to create a Project Initiation Document for a new project

To create a PID for your new project, review the information given above, then download the free Project Initiation Document template and work through each section. Below we take you through each section of the PID and explain what it means and give examples of what you should include.

Project Initiation Document Template Step by Step Overview

In this section, we will walk you through all the PID template details to make sure you understand the important information that needs to be included to ensure a successful initiation phase. If you are lucky enough to have received a Project Charter document you will have a head start on many of the necessary details to create a comprehensive project initiation document.

While you will find that our template is suitable for most companies it is just a guide and you may want to review this and adapt it to the specific needs of your organisation.

Project information

The Project Information block is stored in the Word template page header. In most versions of Word you can access this by double clicking in the header. This will put the header into edit mode.

If your project is not part of a wider programme then you should remove the references to programme or put ‘N/A’ for not applicable in these fields.

If your company has a PMO or you are running several projects you may way to include a project code in this header section.

While Word will track all the changes and the date last updated, I think it is best practice to include a formal Date Last Updated. This is the date of the last change you publish / circulate.

Version Control / Change Log

Version Control / Change control log – The PID is a living product and it is important to version control changes.

While Word can track changes for you, these documents will often be printed or distributed as PDF’s to project stakeholders, maybe as part of a project board meeting. They will want to be able to quickly see a summary of what has changed.

Project Financial Information

1. Project Capex Value
   • Most non-trvial projects will be funded by a capital expense (CapEx) which is funded by the companies shareholder(s)/owner or through the use of retained profit. The result of a CapEx project should be an asset which can be shown on the companies balance sheet and then written down or depreciated over a number of years.
   • It is possible to fund a project out of OpEx (Operating Expense). This is more likely a project such as restructuring a department, organising an event or retraining a team. If you find lots of your projects are OpEx in nature then I would add more fields to the template to capture this.
2. Cashflow forecast
   • The finance people are going to want to know the cost and when they are likely to need to pay suppliers, ie part with cash, as this will affect their cashflow planning.
   • In our example the project is going to cost £500K and we expect the business to need the cash for this in February, April, May, June and July.
3. Return on Investment (ROI) / Reveune Forecast
   • The project sponsors will be focused on the return on their investment (ROI) in the form of a revenue forecast for the first 3 or 4 years of the life of the service that is being delivered. The revenue less the cost becomes the gross margin returned by the project.

Project Objectives

In this section you should list the high-level objectives of the project. That’s not to be confused with the deliverables, although sometimes they are the same. This is a higher level list that addresses why we are doing this project. For example, if we are creating a shopping app, the why might be ‘Adapt to shifting consumer demands for mobile online shopping rather than browser based’. But it could also be ‘To provide our shoppers with a hybrid click and collect experience and loyalty points to encourage brand loyalty and customer retention.’

Here are some examples of project objectives that you could use in the Project Objectives section of the Project Initiation Document:

• To develop a new iPhone App that meets the needs of the customer and provides a user-friendly interface.
• To upgrade the company’s IT infrastructure by migrating on-prem servers to the cloud to increase efficiency and reduce downtime.
• To design and construct a new office building that meets the needs of the company post-pandemic now that there is much more hybrid working and adheres to local building codes.
• To improve customer satisfaction by reducing response times to customer inquiries and complaints.
• To implement a new marketing strategy that increases sales and revenue for the company.
• To develop and launch a new product that meets the needs of the market and provides a competitive advantage for the company.
• To streamline the production process and reduce waste, thereby increasing efficiency and reducing costs.
• To expand the company’s operations into a new market, thereby increasing revenue and market share.
• To implement a new employee training program that increases productivity and job satisfaction.
• To improve the company’s online presence and increase brand awareness by developing a new website and social media strategy.

Project Objective(s): These should be specific, measurable, achievable, relevant, and time-bound (SMART) goals that the project aims to achieve. Objectives should align with the overall strategic objectives of the organization and should be defined at a high level to ensure that the project stays focused on its primary goals. Objectives provide a clear statement of what the project is trying to achieve, and they are used to measure the success of the project. Please see the examples below

Project Scope

This section could also be renamed ‘Project Constraints’, but I think ‘Project Scope’ is a little more positive. The key here is to document the boundaries so that expectations are properly set. For example with a shopping app we might wish to limit its scope initially to consumers in the UK and US with payments being made via Stripe and Apple Pay. This makes it clear than European countries such as France are not included, which significantly simplifies some aspects of delivering a shopping app.

Think of the scope as trying to draw a box around what you are delivering so that people don’t assume you are delivering something bigger. The Deliverables sections also help with this.

The scope define the boundaries of the project and outline what will be included and excluded from the project deliverables. The scope statement should be specific and detailed to ensure that all stakeholders have a common understanding of the project’s boundaries and that the project team knows what to deliver. The scope statement also helps to manage expectations by clarifying what is and isn’t included in the project.

I sometimes like to include a line at the end of the scope to the effect, “And anything else not explicitly listed within the deliverables section.”

Project Deliverables

Project Deliverables: It is important to define both functional and non-functional deliverables in the Project Initiation Document to ensure that all stakeholders have a clear understanding of what will be delivered by the project.

Functional Requirements: Functional deliverables are those that directly contribute to the functionality of the product or service being delivered, such as a software application or a building. 

Examples of functional requirements:

• A new software application with specific features and functionalities, as well as user manuals and training materials.
• A construction project with a completed building, including all architectural drawings, permits, and certificates of occupancy.
• A new website with specific pages, features, and functionality, as well as user manuals and training materials.
• A new employee training program with specific courses, materials, and assessments, as well as a training plan.
• A new database with specific fields, tables, and queries, as well as user manuals and training materials.

Non-Functional Requirements: Non-functional deliverables are those that support the functional deliverables but do not directly contribute to the functionality of the product or service, such as a report or a training program.

Examples of non-functional requirements:

• A report detailing the results of a research study, including data, analysis, and recommendations.
• A new business process with detailed procedures, job aids, and training materials.
• A new marketing campaign with specific messages, channels, and metrics, as well as a marketing plan and budget.
• A new organizational structure with specific roles, responsibilities, and reporting relationships, as well as a communication plan and training materials.
• The service will be compliant with PCI DSS and GDPR.
• All data will be encrypted using industry-standard 256-bit encryption technology.
• All documentation is to be produced using MS Office applications.

Project Schedule / Key Milestones

The project sponsors usually like to see a high-level plan or schedule for the project. At this stage it doesn’t need to be a formal Gantt chart, just an timeline with when you expect key milestones to be achieved.

The template has columns for 14 month. You can easily insert more if required or convert the headings to weeks or quarters if this is a shorter or longer project.

To make best use of the space we us vertical text boxes for each of the milestones.

You can make this section taller by pressing enter within one of the columns a few times.

Project Risks

Obviously at the start of a project you are unlikely to we aware of all the risk. At this stage within the PID you need to identify the major risks to the project that could be expected to be known at this stage. For example, if we want to build an extension to the car park we may find that planning permission is not granted or it comes with significant additional planning requirements and cost. This would be a high risk but could be mitigated by consulting with planning in advance.

Once the project is up and running the project manager will need to create a standalone Risk Register which is reviewed at each Project Board meeting.

Key Project Stakeholders

In this case our key project stakeholders is just a simple list of names, position, organisation and the persons role in the project. You could change this into a RACI matrix if you prefer, although that could happen after PID has been produced.

Project Governance and Controls

In this section we state how the project will be managed, the administrations and controlling principles.

1. Project Management Methodology – is this to be an Agile project or a more traditional waterfall approach.
2. Project Board – who are the members of the project board and how frequently will they meet? You can also talk about any reporting that the board will require within this section.
3. Project Team – this is the team that will be managing the project on a daily basis. You don’t need to name every person working on some aspect of the project. This is more the team responsible for delivering the project, they may well have other people and teams and sub contractors reporting into them.
4. Project Documentation – in medium to large organisations projects will likely be audited. If the project is spending Capex and producing an asset that will go onto the balance sheet this is far more likely. Good documentation to support audit and any post project closure questions is essential.
   See our project documentation folder structure for more information.
5. Project Closure – It is best practice to detail what will be required when the project is formally closed. In this example the scrum master is to prepare a project closure report which is to be signed off by the project board. A project closure report usually details the budget versus the actuals, what was delivered, anything that could not be delivered, recommendations for further projects and lessons learnt.

Project initiation downloadable templates:

Download our free Project Initiation Document Template for non-software projects

Download our free Project Initiation Document Template for software projects

How to collaborate on your Project Initiation Document with stakeholders

I have found that placing the PID on One Drive, Sharepoint or Google Docs and then sharing a link to the PID with all the stakeholders works well. You can use collaborative editing tools so that you can all edit and comment at the same time. You can also switch on track changes so that you can see who is changing what, and review or reject these changes. This modern way of working is much better than emailing the PID as an attachment and then having to collate changes and reapply them to a master version. I do recommend that you complete as much of the document as possible before giving others access. Senior stakeholders are busy people, they will want to look at this once, give their feedback and be done, in an ideal world.

Project Initiation Document template for software projects

You can successfully use our generic Project Initiation Document (PID) regardless of the type of project but there are some differences to consider when creating a PID for software projects. Here are some key differences to keep in mind:

• Technical Requirements: Software projects typically have specific technical requirements that must be included in the PID. This may include software architecture, programming languages, and data structures.
• User Interface: User interface (UI) and user experience (UX) design are critical components of software projects, and should be clearly defined in the PID. This includes wireframes, mockups, and other design elements.
• Development Methodology: Agile development methodologies are often used in software projects, and the PID should reflect this. The PID should outline the project’s sprints, releases, and backlog items.
• Testing: Software testing is an important part of the development process, and the PID should include a testing plan. This includes unit testing, integration testing, and user acceptance testing.
• Risks: Software projects often involve significant technical risks, such as security breaches and data loss. The PID should identify and address these risks.

Conclusion:

In summary, the Project Initiation Document is a critical document for any new project, including software projects. It outlines the context of the project, the project objectives, the project scope, and other key project details, and helps establish project controls, including the project board, RACI chart, and project deliverables. By following best practices for creating a PID and using a Project Initiation Document Template, digital project managers can ensure their projects are set up for success.