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Key takeaways

Successful project management depends on a team-wide understanding of roles and responsibilities. Using a RACI matrix to assign and define each role is a great way to keep a project on track and positioned for success.

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How Does a RACI Chart Help Project Managers?

Project managers use RACI charts to keep track of team roles and relay those responsibilities to the larger team. The matrix defines clear roles and responsibilities for individual team members across the various phases of the project, breaking each role down into four types of designation: those who are Responsible and Accountable for project deliverables, those who should be Consulted as work begins, and stakeholders who need to be Informed of ongoing progress, roadblocks, and updates. 

Read more: Project Management Phases

RACI Matrix Definitions 

Responsible.

The individual(s) with responsibility for the task or deliverable is typically responsible for developing and completing the project deliverables themselves. The responsible parties are typically hands-on team members who make direct contributions toward the completion of the project. The responsible team is comprised of the project’s “doers”, working hands-on to ensure that each deliverable is completed. 

Some examples of responsible parties are:

• Project Managers
• Business Analysts
• Graphic Designers
• Copywriters

Accountable

Accountable parties ensure accountability to project deadlines, and ultimately, accountability to project completion. This group frequently also falls under the informed category.

Some examples of accountable parties are:

• Product Owners
• Signature Authorities
• Business Owners
• Key Stakeholders

Consulted individuals’ opinions are crucial, and their feedback needs to be considered at every step of the game. These individuals provide guidance that is often a prerequisite to other project tasks, for example, providing legal guidance on a project throughout the process. If you are working on new product development or expansion, this could essentially be the entire organization.

Some examples of consulted parties are:

• Legal Experts
• Information Security and Cybersecurity Experts
• Compliance Consultants

Informed persons are those that need to stay in the loop of communication throughout the project. These individuals do not have to be consulted or be a part of the decision-making, but they should be made aware of all project updates. Typically, this party are business owners or stakeholders that are more interested in viewing the project at a 30,000-foot view.  Keep this group on your cc list for awareness of topics, decisions, and progress – that includes making them part of the initial project kickoff and project demos as optional attendees. This group often also falls under the accountable group.

Some examples of informed parties are:

• Project Committee Members
• External Stakeholders

Read more: DACI vs RACI Model Guide

Why Are RACI Roles Important?

RACI roles provide a sense of organization and clarity for teams that are looking to divide roles and keep team members accountable for their contributions. Considering that 27% of projects go over budget, for reasons like scope creep and lack of defined roles, RACI roles help position a project for success and avoid common pitfalls. 

Moreover, RACI roles help ensure that communication between all roles is ongoing. When you consider that nearly half of all project spending is at risk of being wasted due to a lack of effective team-based communication, it becomes all that more important to prioritize. Ultimately, teams who prioritize communication and well-defined roles are better off, and RACI roles help teams achieve that goal faster – while providing accountability for each team member’s unique contributions to the success of the project. 

Read More: Top 10 Main Causes of Project Failure

How to Create a RACI Matrix 

If you’re looking to implement a RACI matrix as part of your team’s project planning process, take these steps to create a RACI matrix.

Ensure that you have a thorough understanding of the project and its demands before outlining any further steps by communicating with key stakeholders and decision-makers.

Determine the list of key activities and deliverables from the director of program management or other leadership. 

Determine who is needed to be a part of the project or initiative.

Determine the project roles and responsible job titles and persons for each activity and deliverable.

Hold review sessions with key members of the team for alignment, and if you haven’t already, host a kickoff meeting with the entirety of the team and key stakeholders to unveil the matrix, address questions, and more. 

If the project has already started, it’s not too late to implement a RACI matrix.

• Outline the story. Using research from multiple sources, do a, b, c, and d.
• Utilize steps 2 and 3 (shown above). Ensure the right groups are assigned and engaged. 
• Hold a review session. Ensure that the team acknowledges and discusses the plan and the roles assigned.

Read more: 8 Factors That Lead to Successful Projec ts

Examples of a RACI Matrix

As shown above, a RACI matrix helps break down what roles individuals will play as work is carried out and to what extent they will be involved in the project overall. The horizontal axis represents each person on the project team and the vertical axis represents each task.

Each square of the matrix represents an individual, a task, and that individual’s role within the project, either responsible, accountable, consulted, or informed. In this situation, for example, the project manager is accountable for accessing risk, defining performance requirements, creating designs, executing construction, and approving construction work. However, they are only informed about approving construction work and defining functional and aesthetic needs.

Read more: Understanding Different Types of Stakeholders and Their Roles

Our FREE Downloadable RACI Matrix Template

Who creates the raci matrix.

The RACI matrix — sometimes called RACI model, RACI diagram, or simply just RAC — is created by the project manager at the start of the project as a key part of establishing the initial human resources planning for the project. Because miscommunication is a common threat to any project, RACI charts are a great asset to teams dealing with any type of project, from very simple projects to extremely complex ones. 

Common Mistakes When Creating a RACI Matrix

• Failure to plan ahead: Utilizing a RACI matrix should not be your first step in project planning. Having a fully assembled project team and at least a general idea of a task list and project plans is a better place to start before preparing a matrix.
• Working with too large a team: A RACI matrix is likely not the best bet for a large team, as it will make the matrix hard to understand and overly complex.
• Not communicating with the project team: A RACI matrix should help organize tasks and responsibilities that have already been introduced to the project team – no one likes to be blindsided. Be sure to host a kickoff meeting with the team first before creating a RACI matrix.

Frequently Asked Questions

Implementing a RACI matrix takes more than just a few emails and sporadic conversations – it takes consistent communication and planning. You should host a kickoff meeting to introduce the matrix to the team and make a plan to continue meeting at predetermined times throughout the project lifecycle. 

Here are a few more tips to keep in mind as you implement your RACI matrix within the team dynamic:

• Get everyone prepared. Send the document around to the meeting distribution as read-ahead material, requesting feedback if there are any major concerns. 
• Roll out each role for the team . During the meeting, conduct a review of the tasks and responsible parties. Do not rush through this review, but rather ensure enough time in your project kickoff for this important aspect. (Be certain to clarify the definitions of RACI to avoid ambiguity.)
• Consider changes and update accordingly. After the meeting, send out the notes documenting acceptance or updates to the RACI. In addition to sending out the notes, request any corrections within a reasonable yet defined timeframe. Clarify that if no changes are requested, each person is acknowledging their role and committing to the project tasks as outlined.
• Stay in touch. Consider a quick review with the entire team each quarter or every six months for longer projects to ensure it remains up-to-date and not simply another document in the repository but a relied-upon artifact.

As you implement the RACI matrix…

• Encourage teamwork and foster collaboration whenever possible.
• Don’t fear updates – make changes and adjustments as needed (but be sure to communicate those changes clearly to all parties).
• Earlier is better. Roll out your matrix plan to the team BEFORE you plan to implement it for the best results. 
• Have a clear-cut understanding of the project scope and how each role connects to the overall project goal.

For “Responsible” Parties:

• Make sure your project’s definition of Responsible is clear on who holds the “decider” role for the project or project phase’s completion, and what the dimensions of that responsibility will be.
• Ensure that all parties are aware of their role and responsibilities within the matrix.

For “Accountable” Parties: 

• When multiple Accountable team members must exist, use your definitions to make clear which individual is accountable for a given project element, and how that individual needs to interact with other Accountable team members.
• Ensure that there is only one “Accountable” party assigned per task.
• Be sure that the Accountable party has the authority and power to oversee the task as the accountable party.

For Consulted and Informed Parties: 

• Consulted parties are often high-level decision-makers with heavy schedules. Make sure you’re clear on their availability ahead of time.
• Similar to Consulted parties, Informed parties are often less hands-on and have less understanding of day-to-day project operations. As the project goes on, make sure to keep detailed notes to keep the Informed party up-to-date on key information. 
• Understand the ways that these parties like to communicate and create a plan to reach them early – whether that’s over phone calls, emails, video calls, or from within your project management system’s collaboration tools.
• Knowing the difference between who needs to be consulted versus informed can be a challenge if there is ambiguity about project roles. Consider what aspects of the project different team members need to know to do their jobs, and then bake those into your definitions.

RACI Matrix Pros & Cons

• Increased Engagement: RACI helps engage project participants in the project lifecycle. 
• Enhanced Project Planning: Project managers make project planning more organized, efficient, and detailed.
• Identifiable Improvement Opportunities: Areas of improvement are more easily identified.
• Easier Collaboration: Use of a RACI matrix creates a clear path for leadership to sign off on project steps, as project documentation in the RACI model is heavily emphasized.
• Better Communication: Improves overall group communication as a whole.
• Group Accountability: Assists groups, especially larger project teams, stay connected and accountable to their roles and project goals
• Limitations on Role Scope: The RACI model does not provide details on role scope, especially for responsible parties. These gaps in detail also affect other team roles, for example, another gap in a RACI is the determination of who is responsible for verifier and signatory.
• Limits on Task Details and Scope: While a RACI matrix can provide an overview of who is responsible for different tasks, it will not state what needs to be done.
• Not Aligned to the Agile Methodology: Project managers using an agile methodology like scrum may find it redundant since accountability, ownership, and ongoing communication is built into the scrum framework (i.e., product owner, scrum master, and daily standups with the team). Additionally, agile focuses on team-based delivery and accountability, while the RACI framework and alternatives focus on individual responsibility and autonomous accountability.

Read more: Top 10 Causes of Project Failure

Free RACI Matrix Templates

A number of project management software solutions include a native RACI matrix template. Here are just a few we’ve found:

Colorful RACI Chart Template

We love this template from Smartsheet because it’s colorful, thorough, and includes room for every party involved in the project. 

Pastel Colored RACI Matrix Template

This template from the Academy to Innovate HR is a great choice for project managers who want to organize their team roles with an easy-on-the-eyes chart that evolves beyond the simple spreadsheet. 

Simple RACI Chart from Clickup

These RACI templates from Clickup have enough variety to fit any of your project needs, but are simple enough for even beginner PMs to use.

Detailed RACI Matrix Template

This template is a great starter template for anyone looking to explore RACI charts in their project management strategy . As an added bonus – it comes with the RACI definitions already built in!

Excel-Based RACI Chart Template

Are you an Excel or Google Sheets user looking to take advantage of the RACI matrix? An Excel-formatted template from Project Management Docs can be just the solution for you. This template is a great template for users who want a chart that comes in a pre-formatted structure.

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What Is a RACI Chart? How to Use RACI to Assign Project Roles

It’s a fact: Complex projects make it easy for teams to lose track of tasks.

You might have an air-tight project plan and a stellar team to back it up. But if you’re not crystal clear about assignments—or even involvement—on a task level, confusion, crankiness, and even demotivation will creep into your project team.

Lucky for you, avoiding those issues is as simple as creating a RACI chart. 

In this article, we’ll explain what RACI stands for and how it’s used in project management. We’ll also share a few practical examples so you can see how to apply the RACI model to different types of projects.

What is a RACI chart?

Raci definitions explained, benefits of the raci model in project management, how to make a raci chart, raci rules and best practices.

• RACI chart examples

When to use or skip a RACI chart for your project

Common raci pitfalls and how to avoid them.

A RACI chart—also known as a responsibility assignment matrix —is a diagram used in project management to define team roles across 4 categories: Responsible , Accountable , Consulted , and Informed . It helps clarify who does the work, who calls the shots, whose opinion matters, and who needs to stay in the loop for each task, milestone, or decision.

A RACI chart enables you to visualize roles and responsibilities at a more granular level than simple resource assignments. That way team members and stakeholders know what’s expected of them so confusion doesn’t get in the way of project success.

RACI stands for Responsible , Accountable , Consulted , and Informed . Each letter in the acronym represents the level of ownership each person involved in a project will have on an individual deliverable. 

This simple chart gives you an at-a-glance view of RACI meanings and how many people to assign to each role in your RACI matrix .

R = Responsible

This team member does the work to complete the task. Every task needs at least one Responsible party, but it’s okay to assign more.

Examples of people you might assign to the Responsible role:

• Content writer
• Graphic designer
• UI/UX designer
• Software developer
• Business analyst
• QA specialist

A = Accountable

This person delegates work and is the last one to review the task or deliverable before it’s deemed complete. On some tasks, the Responsible party may also serve as the Accountable one. Just be sure you only have one Accountable person assigned to each task or deliverable. (Note: It might not be your project manager!)

Examples of people you might assign to the Accountable role:

• Project manager
• Product manager
• Department head

C = Consulted

Every deliverable is strengthened by review and consultation from more than one team member. Consulted parties are typically the people who provide input based on either how it will impact their future project work or their domain of expertise on the deliverable itself.‍

Examples of people you might assign to the Consulted role:

• Software architect
• Content editor
• Creative director
• Compliance officer
• Security specialist
• Legal counsel

I = Informed

Informed stakeholders simply need to be kept in the loop on project progress, rather than roped into the details of every deliverable.

Examples of people you might assign to the Informed role:

• Executive leadership
• External clients
• Team members assigned to dependent tasks
• Customer support team
• Administrative staff

Responsible vs Accountable meanings in RACI

The same person can be both Responsible and Accountable for a task in RACI—including a project manager. But they’re not one and the same. So what’s the difference?

• Responsible is a task-oriented designation that applies to the person (or people) actually completing the work. A whole team can be responsible for the execution of one task. ‍
• Accountable is an outcome-oriented designation that applies to a single person who reports on the work, whether in status updates or upon delivery. Being Accountable means you must answer for and/or sign off on the deliverable and deal with the consequences if it falls short of goals.

At its core, the RACI model helps you set clear expectations about project roles and responsibilities. That way you don’t have multiple people working on the same task or against one another because tasks weren’t clearly defined on the front end.

A RACI chart also encourages team members to take responsibility for their work—or defer to someone else when needed. Essentially, you’ll remove personal judgment and politics from your process and focus on your team’s ability to act responsibly within a framework you’ve created. Sounds pretty sweet, huh?

Building a RACI chart for your project is a relatively simple task. The hardest part is thinking through all the people involved in your project and what role makes the most sense for individuals at each stage of work.

You’ll want to map out a RACI chart for your project during the planning stage. This ensures responsibilities are clearly defined before work begins and gives you time to adjust to avoid any gaps or overlaps in assignments.

Here are the basic steps for making a RACI chart:

• List key project phases, tasks, and/or milestones in a column down the left side of your chart. You can get as detailed as you want, depending on the complexity of your project (and attention-span of your project team and stakeholders). 
• Enter the people involved in your project across the top row of your chart. Each individual should serve as the header of a single column. You can use names or job roles—whatever makes sense for your team and project.
• Go line by line down the chart, and assign each person across the row an R, A, C, or I to indicate the role they’ll play on that particular task.

Once your RACI chart is good to go, you can create a communication plan that aligns with the roles you’ve outlined for project teams and stakeholders.

Want to save time? Download our free RACI Excel template , or see how TeamGantt's built-in RACI feature works.

Using a RACI chart is a whole lot easier when you follow a few simple rules. Once your RACI chart is complete, review it to be sure it meets these criteria:

• Every task has at least one Responsible person.
• There’s one (and only one!) Accountable party assigned to each task to allow for clear decision-making.
• No team members are overloaded with too many Responsible tasks. You can use TeamGantt’s Workloads report to check availability across all your active projects.
• Every team member has a role on each task. (It’s not uncommon for some folks to be Informed on most tasks.)

These best practices can help you get the most out of RACI:

• Focus on project tasks, milestones, and decisions in the RACI chart. Avoid generic or administrative to-dos like team meetings or status reports .
• Align the tasks in your RACI chart with your project plan so there’s no confusion about details and due dates. (TeamGantt does this work for you by tying your RACI chart directly to your plan!)
• Keep RACI definitions close by because they can be tough to remember sometimes! ‍
• Assign the Responsible team members to tasks in TeamGantt .

Lay a clear path to success with a visual plan that’s easy to understand, and keep everyone in sync with flexible workflows and team collaboration.

RACI chart examples: Practical application in the real world

Let’s take a closer look at how you might put the RACI model to work on real-life projects. 

Producing a marketing handout

We’ll start with a simple example. Imagine you’re creating a RACI chart for a handout your marketing manager will distribute at an industry conference. 

Basic tasks for this project might include:

• Write project brief
• Create content
• Design handout
• Review first draft
• Update handout
• Approve final
• Send to printer

In this project example, we’ve assigned RACI roles to 7 key team members:

• Marketing manager
• Editorial director

Let’s zoom in on the RACI roles we mapped out for the Create content task example so you understand the why behind these assignments. 

• Responsible : The content writer is listed as Responsible for this task, so that’s who will actively work on content creation.
• Accountable : The editorial director is listed as Accountable for this task because that’s who is ultimately on the line for content quality and accuracy. Once the content is written, she’s the one who will review it to ensure it meets their company’s editorial standards.
• Consulted : The marketing manager is listed as Consulted . Since the marketing manager is the subject matter expert for the presentation, the writer can go to them for input or help filling in content gaps along the way.
• Informed : Several people have been assigned to the Informed role, though for different reasons. Since the Design handout task depends on this one, we want to make sure the writer keeps the creative director and designer informed on the status of content creation. The project manager and CMO are listed as Informed simply because they want to be kept in the loop about how work is progressing.

Developing a new software product

Now let’s look at a more complex project example. 

Developers who use an Agile workflow to tackle the job likely know what they need to do because there’s a constant stream of communication. But cross-functional departments and senior leaders might need more clarity. 

Here’s how you might map RACI roles to major tasks in a software development project , broken down by key tasks and RACI roles. (For the Informed assignments, we only listed people who need detailed progress updates to keep our example easier to read.)

Market Research

• Responsible : Business Analyst, Marketing Manager
• Accountable : Product Manager
• Consulted : Sales Representative, Customer Support
• Informed : Project Manager, Software Developers

Requirement Gathering

• Responsible : Business analyst
• Accountable : Product manager
• Consulted : UI/UX Designer, Software Architect
• Informed : Project manager, QA analysts

Design and Prototyping

• Responsible : UI/UX Designer
• Consulted : Business analyst, software developers
• Informed : Marketing manager, QA analysts

Software Development

• Responsible : Software Developers/Engineers
• Accountable : Software Architect
• Consulted : Product Manager, QA Analysts
• Informed : Project Manager, Technical Writer
• Responsible : QA Analysts/Engineers
• Accountable : Project manager
• Consulted : Software Developers, DevOps Engineer
• Informed : Product Manager, Technical Writer
• Responsible : DevOps Engineer
• Accountable : Project Manager
• Consulted : Software Developers, QA Analysts
• Informed : Product Manager, Customer Support

Maintenance

• Responsible : DevOps Engineer, Software Developers
• Consulted : QA Analysts, Technical Writer
• Responsible : DevOps Engineer, QA Analysts
• Consulted : Software Developers, Technical Writer

Marketing and Sales

• Responsible : Marketing Manager, Sales Representative
• Accountable : Marketing Manager
• Consulted : Product Manager, Customer Support

User Training

• Responsible : Customer Support Specialist
• Consulted : Technical Writer, UI/UX Designer
• Informed : All project team members

A RACI chart serves just about every project well. But it’s especially helpful when tasks require multiple resources, run concurrently, or depend on other tasks.

Here are a few scenarios when the RACI model is useful:

• The decision-making or approval process could hold up the project.
• There’s conflict about task ownership or decision-making.
• The project workload feels like it’s not distributed evenly.
• You experience turnover on a team and need to onboard someone quickly to a new role.

Of course, not all teams and projects are created equally. You might work with a team who just happens to communicate really well and stays on top of their own work. (Lucky you!) Or maybe your project is small enough that it would be silly to take the time to go through this exercise. 

In cases like these, don’t worry about taking the extra step of creating a RACI chart. Just be sure you have a clear plan in place to guide your team and project.

Further reading : How to Create a Realistic Project Plan: Templates & Examples

Now let’s walk through a few common mistakes that could hinder your RACI chart’s effectiveness.

Failing to get buy-in from your team and stakeholders

Creating a RACI chart in a vacuum is never a good idea. In a best-case scenario, you’d sit down with your team and stakeholders to walk through the role assignments on each task. But let’s be real: That’s not always possible.

Just be sure everyone represented has acknowledged and agreed to the roles and responsibilities you’ve laid out. More importantly, you want to check that your chart eliminates any further project confusion.

Setting it and forgetting it

It’s easy to build a RACI chart at the start of a project, then let it collect dust once the real work begins. But remember: This chart will defend you against mishaps that arise when you have too many cooks in the kitchen or a team member who thinks someone else is handling the work.

That’s why it’s important to keep these roles top of mind throughout a project’s life cycle. You can do this by reviewing RACI assignments for upcoming tasks in weekly status update meetings and making sure everyone involved in a project has easy access to the RACI chart. 

In TeamGantt, you can assign RACI roles directly in your project plan so they’re clearly visible as team members work their way to the finish line.

Overcomplicating stakeholder communication

If you have a lot of Consulted and Informed roles on your chart, make sure you have an easy and lightweight way to keep them informed. It could be as simple as making sure department heads and senior leaders have access to your project plan so they can follow progress along the way. 

Managing a project with external clients or stakeholders? Sharing a view-only link to your project in TeamGantt is a great option for looping in folks outside your organization.

Further reading: A Project Manager’s Guide to Effective Stakeholder Management

Keep teams in sync—and accountable—with TeamGantt

A RACI chart is a simple tool that makes projects easier to manage by creating less confusion and more accountability. But you’ve got more than roles and responsibilities to keep straight.

TeamGantt makes it easy to build a project plan your whole team can contribute to and collaborate on. Everything happens online, so you can stay on top of deadlines and monitor progress in real time.

Use our built-in RACI chart to assign roles and keep them visible from project start to finish, so everyone knows how they contribute to success.

Try TeamGantt’s Pro Manager plan free for 30 days!

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• Product Management
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What is a RACI chart and how to use it (with template)

Product work is complex. While there are frameworks and best practices, due to its nature, you can only apply the same process in some places.

One can take the best practices, analyze your context, and then define a way of working and responsibilities based on your specific situation. It depends on your company, the kind of products you are working on, and the overall philosophy and mindset you are dealing with.

There are no two situations where teams perform product work similarly.

The most overlaps I have come across are between the product manager and the UX role, and research performed by NN Group also holds evidence of this fact.

In this article, we’ll discuss where a responsibility assignment matrix, aka a RACI chart, can be helpful. RACI charts can help you align with your team and stakeholders on roles and responsibilities, while also improving communication and decision-making.

What is a RACI chart?

The RACI chart, or responsibility assignment matrix, is a tool that helps to communicate and clarify the roles and responsibilities of people working together. In product management, it adds support for alignment and communication in the product development process:

Responsible

This team member is the one responsible for performing the task. Each task needs at least one responsible person, but can also have more.

Accountable

This team member is the one who is ultimately accountable for the outcome and success of the task or deliverable. They may either perform the task themselves (in which case they are also responsible), or they may delegate the work to someone else.

You should only have one accountable team member per task.

You can have as many consulted stakeholders as you want. These team members and stakeholders are the ones whose input is required to complete the task. They provide information from their expertise or how the task result may impact their work.

These team members should stay in the loop. If you were to think of the power/interest grid for stakeholder management , you would consider stakeholders with low power and low interest in this category.

Applying the RACI chart to the product development process

You can apply the RACI chart to the different stages of the product development process. We will use the 4D methodology (discover, design, develop, and deliver) to showcase how the responsibilities can be split between product management, ux design, development team, and product marketing.

Depending on your context, you may also include a delivery manager, who will take over some of the responsibilities of the product manager:

Let’s break down the graphic above by defining the 4D methodology.

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The product manager is responsible for researching and understanding the target market’s needs and stakeholders. They are accountable for defining the project’s scope, allocating the right resources, and ensuring the research is done correctly.

The UX designer and development team are consulted for input and feedback on the user experience and technical feasibility.

Product marketing will be informed of the findings.

The UX designer is responsible for the user experience, while the architect/technical lead is responsible for the technical design.

The product manager is accountable for ensuring that the design meets the requirements defined in the discovery stage, that the design is feasible, and that resources are allocated appropriately.

The development team will be consulted for input and feedback on the technical feasibility.

Product marketing is merely informed at this stage as well.

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The development team is responsible for implementing the design and creating the product.

The product manager is accountable for ensuring that the product is developed on time and within budget and for managing any issues that arise during development.

The UX designer should be consulted for input and feedback on the user experience and any issues identified.

Product marketing is informed of the progress and status.

Product marketing is responsible for promoting and launching the product and informs of the product’s readiness for launch.

The product manager is responsible for product delivery to the end user or client. They are accountable for ensuring the product meets the requirements defined in the discovery stage, that the product is ready to be delivered, and that any final issues get solved.

The development team is consulted for input and feedback on the technical feasibility and any issues identified.

UX design is informed about the progress and status.

Generally, the person accountable for a given stage will be responsible for leading it and making the final decisions, while others are consulted and informed as appropriate.

Benefits of using a RACI Chart

A RACI chart is a great tool to help product teams organize and work together. Here are a few benefits:

RACI helps clearly define roles and responsibilities for different tasks and decisions, reducing confusion and ensuring that everyone knows what is expected of them. This applies both within the team and outside of it towards the organization.

Accountability

By clearly defining who is accountable for different tasks and decisions, RACI can help to ensure that everyone takes ownership of their responsibilities and is accountable for their actions.

Additionally, defining clear roles and responsibilities helps avoid double work and waste.

Consistency

RACI can ensure that tasks and decisions are handled consistently across the product management process, which can improve the overall quality and effectiveness of the process.

By clearly defining roles and responsibilities, RACI can help to streamline the product management process and make it more efficient, ultimately saving time and resources.

Improved communication

RACI can ensure that all stakeholders are kept informed about the progress of the product management process and any changes made, which can help improve communication and reduce misunderstandings.

Common pitfalls to avoid

Here are a few pitfalls to look after when considering working with the RACI Chart:

Forgetting about it and not updating it regularly

The RACI Chart is a living document — it evolves with your team or product. It is important to revisit it every time you experience a change. Even if no changes occur, you should review it once a quarter.

You should revisit the RACI chart anytime a change happens:

• A new member is joining the team
• A member is leaving the team
• There’s a new stakeholder for the product
• Change in the way of working
• The product enters a new stage in the life cycle

Not utilizing its potential for transparency

The RACI chart is a handy communication tool. Creating a RACI chart and shoving it into a folder or a drawer will not help you in any way.

Since it is a tool meant to increase alignment and transparency, you should ensure that every involved party is aware of it and has easy access. It is also beneficial when onboarding new team members or stakeholders.

Overlapping roles

When creating or maintaining your RACI chart, pay attention to how the responsibilities are split and that there are no overlapping roles. You should, as a team, clearly define who holds the responsibility and avoid having it split between too many team members, as this may cause unnecessary overhead.

Unbalanced responsibilities

Delivering successful products is a marathon, not a sprint. It is also vital to maintain a sustainable pace within the team, which also applies to the workload.

You should ensure that no team members are overloaded with too many responsible tasks. Discuss within your team and decide on a reasonable workload together, considering all their daily responsibilities. Should certain team members or roles have too many responsibilities, you must consider increasing your team or re-assign responsibilities.

For example, you may have a product manager who needs to keep an eye on the market, drive product-market fit , perform discovery activities, and support sales and marketing while also acting as the product owner for the development team.

This will lead the team to increased frustration in the development team’s lack of availability of the product manager, so it might be a good idea to consider bringing a dedicated product owner on board. This way, they will dedicate their full attention to the team, while the product manager can focus on the more strategic aspects of the product.

RACI template

Lastly, here is a template that you can use to define your product team’s own RACI chart. Make a copy of the Google Sheet, add your tasks, and define your roles and responsibilities.

While the RACI chart is a tool originating from traditional project management practices, it is as valuable for product management. It is lightweight, but holds a lot of relevant information. It also increases transparency around roles and responsibilities and eases the onboarding process of new team members.

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Your guide to RACI charts, with examples

Can you identify exactly who’s doing what by when for each task, milestone, and deliverable in your project? If not, you might need a RACI chart.

RACI is an acronym to help teams clarify project roles and figure out who the responsible party is for any given task. Whether you've never heard of RACI before or you’re considering creating a RACI chart for your next project, here’s everything you need to know about how to create and use these charts.

What is a RACI chart?

Responsible.  This person is directly in charge of the work. There should only ever be one Responsible role per task so you know who to go to with questions or updates. If a task has more than one Responsible person, you can lose clarity and cause confusion. Instead, aim to add additional collaborators as some of the other RACI roles, which can have more than one person.

Accountable.  The Accountable person is responsible for overseeing overall task completion, though they may not be the person actually doing the work. There are two ways to assign an Accountable role. Sometimes, the Accountable is the project manager (or even the Responsible, though in that case the person is taking on two different roles during the task workflow). In these cases, the Accountable is responsible for making sure all of the work gets done. In other cases, the Accountable is a senior leader or executive who is responsible for approving the work before it’s considered complete. Like the Responsible role, there should only ever be one Accountable.

Consulted.  This will be the person or people who should review and sign off on the work before it’s delivered. There may be multiple Consulted roles for each task,  project milestone , or deliverable.

Informed.  This is the person or group of people who are informed about the progress and completion of work. They probably are not involved in any other aspect of the deliverable.

When should I create RACI charts?

RACI charts are a helpful way to track each stakeholder’s role for a task, milestone, or deliverable—especially if you’re managing a complex project with many decision makers and subject matter experts. With a RACI chart, you can prevent poor decision making and avoid roadblocks in the approvals process that could impact overall project success.

These charts, while different from PERT charts , are especially useful if your stakeholders may be taking on different roles throughout the project. For example, there could be a stakeholder who is Responsible on one deliverable but Informed on another. With a RACI chart, you can clearly outline these details and make sure everyone knows who’s responsible for what.

Example of a RACI chart

To build a RACI chart, list every task, milestone, or deliverable for your project. Then, identify who the Responsible, Accountable, Consulted, and Informed team members are for each one.

Let’s say you’re updating the homepage on your website.  Project stakeholders  include:

Head of website

Web developer

You want to create a RACI chart for five tasks and deliverables:

Update homepage CTAs

Update customer story on homepage

Revamp website design

Improve homepage loading speed

Update homepage design

The RACI chart would look like:

Responsible: Copywriter

Accountable: Web developer

Consulted: Head of website

Informed: Designer

Revamp video on homepage

Responsible: Designer

Informed: Copywriter

Responsible: Web developer

Informed: Copywriter & Designer

Pros and cons of RACI charts

Ultimately, the question is: should you create a RACI chart? While RACI charts are a useful tool to identify project responsibilities, they can get a little cumbersome over the lifecycle of a project. Here are the pros and cons of creating a RACI chart for your team’s work:

The benefits of RACI charts

Clear project roles and responsibilities can help your team move fast and reduce confusion about who’s working on what. With a RACI chart, you can ensure you don’t have two team members working on the same thing. As a result, you’ll have an easier time  collaborating  with your team.

RACI charts are also particularly helpful when the decision-making process is split between tasks. There might be scenarios where the Informed on one task or milestone is the Responsible or Consulted on another—in order to have that clearly defined, it’s helpful to track this work in a RACI chart.

RACI chart pitfalls (and how to avoid them)

RACI models focus on the granular, instead of capturing work at the project level. You might know who the Consulted is on a particular task—which is helpful—but knowing that doesn’t help you understand how various stakeholders interact with the broader project work.

Additionally, if you attempt to write out each task and each role, your RACI chart can get bulky. Worse, if your project changes in some way, your RACI chart would immediately become outdated. That can make it hard for you to gain real-time clarity about where each task is in your project workflow.

RACI charts are limited because they aren’t able to adapt to your project needs in real time. In order to establish clear expectations and eliminate confusion on the project level, you need a  project management tool .

Take your RACI chart to the next level

With project management software, every task has an assignee—that’s the Responsible. You can see work on the project level, so the Accountable and Informed don’t have to check in via email or status meetings. And, for any approvals you need from your Consulted, you can track reviews and approvals in one place. That way, your entire RACI team has a central source of truth for all of the work being done.

Instead of having your RACI chart separate from where the work is happening, project management tools capture the topic, assignee, and other important information like the task due date or relative importance. That way, your entire project team has visibility into who’s doing what by when—and you’re not relying on a single person to manage and update your RACI chart. Project management tools update in real time, so you can see exactly where you are in the approval process.

Track who’s doing what by when

Clear team roles and responsibilities help you hit your deliverables on time. Tracking different and complex stakeholder responsibilities in a RACI chart can help you do that—but RACI charts are just the beginning. Learn more about  work management , and how your team can benefit.

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How to Streamline Roles and Promote Team Collaboration with an Effective RACI Chart

Last Updated November 7, 2019

Imagine for a moment a homeowner’s association is tasked with a project of throwing a summer barbeque bash for the neighborhood. Everyone shows up at the same time, mills around trying to find a task and chaos ensues as homeowners arrive before food has been cooked. Now imagine that same team of people tasked with the same project, but in this team, each individual is assigned a specific task, from grilling to game planning. Now, this team can immediately get to work, and it’s much more likely the neighborhood bash will be an enjoyable event.

In any project, whether the task at hand is throwing a summer party or helping an organization with a technology transformation, when roles and responsibilities for everyone involved are clear, the project is more likely to be executed smoothly. In addition, project managers are often beholden to multiple stakeholders, and keeping those key players informed and involved throughout the lifecycle of the project is critical to project success.

What is a RACI Chart?

One method for streamlining accountability on a project is the use of a responsibility assignment matrix, specifically, a RACI chart. The RACI chart describes how the matrix assigns each task or deliverable, assigns an owner, and denotes who else is involved, ultimately classifying involved parties into four categories: responsible, accountable, consulted and informed. This approach is widespread among project managers, according to “ A Guide to the Project Management Body of Knowledge ( PMBOK® Guide), Seventh Edition,” as it can eliminate confusion on who is in charge of, or accountable for, a specific project task.

The first step to developing an effective RACI chart is understanding what the various categories represent:

Responsible: This is the active party, the person who executes the task or completes the deliverable. This includes doing the work as well as making decisions. In some cases, a task or deliverable may have more than one responsible party; for best results, this role should be limited to as few people as possible for each task.

Accountable: This individual is responsible for ensuring the task is completed correctly and meets all specifications. While this person is not in charge of doing the work, they do delegate it and are responsible for approving the job that is completed. Like the previous category, the number of people assigned to this role should be limited for each task to ensure clarity in ownership.

Consulted: This group, typically comprising of subject matter experts, help provide supporting information for the person(s) responsible for working on the task. Communication with this group is two-way and is required before the task can be completed.

Informed: This group of people must be kept updated on the progress of the task or deliverable, as these individuals may be impacted by the outcomes. They typically are not involved in the feedback or review cycle but should be contacted after a decision or action is made.  

How RACI Charts Influence Project Outcomes

Planning is a critical component of project management and project success, and establishing roles and responsibilities is a key component of the planning stage. Implementing a RACI chart offers several advantages for project participants, including:

• Streamlined communication – All parties know precisely who to ask questions to, who to consult and who to inform.
• A controlled set of stakeholders – By pre-defining these responsibilities, project managers are less likely to be left juggling an unnecessary amount of opinions. Distinguishing consulters from informers can also help avoid a bulk amount of stakeholder feedback .
• Manages fatigue and overwhelm – Although project managers may hold many responsibilities, a RACI chart helps outline other owners, knowledgeable parties and accountable players to help lift some of the burden and ensure everyone stays informed.
• Establishes expectations up front – Creating a RACI chart can also help manage conflict later in the project lifecycle, as everyone should visually understand their roles and responsibilities on a project from the beginning.

Using a RACI Chart

RACI charts don’t have to be complex; they can be as simple as listing the work to be done, the resources assigned and the responsibility they hold. Follow these steps to create your own RACI chart:

Step 1: List the names of the people involved in the project – You’ll need to determine if roles or specific names are appropriate. For example, if a single person holds multiple roles, you could specify by role, whereas if multiple people hold similar titles, you might need to specify by name.

Step 2: Break down specific tasks or deliverables – Although this should be a breakdown of the project, it’s important to balance this to ensure the chart doesn’t become cumbersome or impossible to manage.

Step 3: Assign a role to teach task or deliverable, using RACI – Each task must have someone assigned to be responsible and someone assigned to be accountable.

Step 4: Seek buy in from the team – Gather your team, ensure everyone agrees with their assigned roles and responsibilities and allow for questions.

Step 5: Communicate with project stakeholders – Once you have team buy in, meet with stakeholders and get their buy in to establish expectations up front and avoid conflict down the road. The process of collecting buy in from the team and stakeholders is critical to achieving an effective project.

Step 6: Refer to the RACI – This step may seem obvious, but it doesn’t do any good to plan for the project and then not follow the chart as intended. Ensure everyone continues to adhere to the roles outlined in the RACI chart – remember, they approved them in the planning stage.

RACI Chart Example

Let’s go back to that neighborhood (NBHD) barbecue party and create a RACI chart for the homeowner association (HOA).

Keep in mind that RACI charts are useful in many cases but may not be needed in every case.  For example, rapid projects with small teams likely don’t need introduced complexity. Some Agile projects (depending on scope and timeline) may also have an implied role matrix as some roles are pre-defined, such as the Scrum team .

In implementing a RACI chart, a project manager should immediately set expectations for everyone involved. This includes ensuring team members understand when and what they must do, experts knowing when their opinion will be solicited, and stakeholders understanding where they will be informed, and where they will be consulted for input. Following the method can help establish a foundation for a streamlined project and pave the way to stronger relationships that can make a meaningful difference in the success of the project.

PMBOK is a registered mark of the Project Management Institute, Inc.

Interested in expanding your project management expertise? Learn more about Villanova’s Applied Project Management Certificate program and course offerings.

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A Project Manager's Comprehensive Guide to the RACI Model

Boost project success with a RACI matrix. Learn how RACI charts help clarify responsibility and accountability on projects and how best to present the RACI model.

Introduction

Most successful projects start with a planning phase before making any measurable progress toward the desired outcome.

To excel in  project management  means first stating the desired outcome or results, and then defining what is to be delivered (deliverables). Deliverables are then broken down even further into tasks and subtasks.

The next major part of planning ensures that everyone knows who is doing what and by when.

This is where the RACI model truly shines.

In this post, you'll learn:

• What is a RACI matrix in project management?
• What are the RACI rules?
• What are the 4 roles of the RACI model?
• When should you use a RACI matrix?

What is the best way to present a RACI chart?

• How Motion can help take RACI models to the next level

Let's start with a simple definition.

What is a RACI model in project management?

A RACI model (or RACI chart or RACI matrix) describes team members' level of responsibility for tasks, deliverables, and decisions in a project. RACI stands for responsible, accountable, consulted, and informed.

Poor resource management  has been flagged as a top challenge in several studies conducted in the last 20 years. With a RACI chart, every stakeholder understands what is expected of them. Understanding the project manager's and sponsor’s expectations and assignments is especially important for cross-functional teams.

RACI is one type of responsibility assignment matrix (RAM) tool used to define and assign responsibilities. Other examples of responsibility matrix include:

• RASCI stands for the same responsibilities as RACI, with the addition of one letter for Support or Supportive. Supportive people assist the Responsible people with their tasks. For example, one person could lead the task while other team members could support the lead person on the task.
• CARS stands for Communicate, Approve, Responsible, Support. Some  project managers  prefer this model to RACI. This model shows that the person responsible for a task often needs other team members’ support.
• RAS is a simple version of CARS or Responsible, Approve, Support. It ignores communication outside the team, which must be covered in another way.
• CLAM, a parallel to the RACI model, or Contribute, Lead, Approve, Monitor.
• PACSI, which means Perform, Accountable, Control, Suggest, Inform. In PACSI, the performer has a quality control partner who makes final decisions. A person in the Suggest role has experience in the task but has no final say on the work.
• DACI stands for Driver, Approver, Contributor, Informed. Like the RACI model, it represents those who do the work, those who approve it, those who give advice, and those who receive updates.
• RAPID is a decision-making model that stands for Recommend, Agree, Perform, Input, Decide

‎Now that you’ve seen some of the different approaches to responsibility assignment matrices, let's look at how a RACI matrix works and how it can help you.

Why do you need a RACI chart?

A successful project wraps up on time, within budget, and delivers expected value to the organization. Success rests on the quality of the deliverables and the quality of the project communication. A RACI chart can provide that CSF or critical success factor for effective communication.

Without RACI or another similar model, your project is susceptible to decision bottlenecks and even poor decision-making. A RACI matrix clarifies task responsibilities. It also ensures that no one is confused about their roles, so everyone knows what the project team expects of them.

A RACI matrix also lets people do their work without having to answer to many people with diverse opinions. Only a designated few consult, or offer their insight, and only one person has the final say over how work is done. A RACI model also helps teams quickly reallocate resources when staff members leave. Moreover, RACI charts cover communications with both internal and external stakeholders. Therefore, partners, vendors, and third parties can know their roles on the project, too.

What are the 4 RACI roles?

The RACI model approach to RAM employs four roles that indicate how involved a person is in a task or project.

Responsible

The responsible role represents the performer, the person (or group) that performs and completes the work. In the RACI approach, every task, deliverable, or decision needs at least one person assigned to it to ensure that no essential requirements or efforts fall between the cracks.

Accountable

The accountable role reviews and decides whether or not to approve the task results or output. The accountable person must ensure that the responsible people understand their task's scope, requirements, and timeline. Often accountable parties have leadership or management positions, such as the project sponsor. They also have the background and authority to make key decisions.

Each task should have one, and only one, accountable person. It's crucial to project success that someone is accountable to establish an approval process, monitor progress, and motivate the responsible parties to keep the tasks or project on track. .

The consulted role provides advice, insight, and suggestions for completing a task. They may be on the same team or from a different department, but they are typically subject matter experts. They’re also usually vested in giving good advice because it influences their current and future credibility. These stakeholders offer input before work starts and during the task lifecycle. The consulted role follows up when work concludes to provide feedback on the finished project. A consulted role isn't mandatory, but is often assigned when subject matter experts are needed.

The informed role has limited involvement in the project activities but is still vested in its success. They may include senior leadership, clients, or workers in other departments. Sometimes they are external parties who will be affected by the results of the project. These stakeholders are in the information loop to receive updates on work progress, but they only require information relevant to their interests.

What are the RACI rules of thumb?

The RACI model has a few rules of thumb that make it more effective:

• The only essential roles in a RACI matrix are accountable and responsible. Teams need to understand who will perform the work, and someone has to be accountable for ensuring the work is complete, accurate, and fits the requirements. Consulted and informed are secondary to ensuring work, and are not mandatory for every task.
• The RACI chart should be kept up to date and notifications provided when changes are made to it
• Assign only one accountable person per task. Restricting the accountable role to one person makes it clear who must approve the work. It reduces confusion about decisions for the responsible workers. This is sometimes called the “Golden Rule” of RACI.
• Some would say that only one person should be Responsible. However, that depends on how granular the matrix assignments are. For some tasks, only one person does the work, but for most, multiple people do the work.

There are rules to using a RACI chart. But there are also guidelines for when to use or not to use a RACI chart.

When Should You Use a RACI Matrix?

The RACI model is helpful for a variety of situations. Most projects can benefit from the role clarity provided by a RACI matrix. After you have determined what the project is expected to deliver, you can begin to determine the resources needed, and develop your RACI matrix.

Having it developed before project kick-off can help everyone understand both team and other stakeholder roles right from the start. It provides a good foundation for everyone on the team to understand who does what.

Later, the RACI matrix can help new team members understand their roles quickly.

‎If a RACI model has not been implemented at project start, the most obvious indicator of the need for RACI is when project processes stall because of role confusion. And it happens! RACI analysis also works in situations where role authority isn't clearly defined.

RACI can also help when people feel overwhelmed because roles aren't clearly defined. The model offers clarity, especially when a project includes a range of stakeholders and spans multiple departments or organizations.

Projects that require frequent decisions can benefit from RACI by clearly indicating who can make these decisions, and who should be consulted. Making good business decisions fast is critical to business success. Yet only 20% of organizations in a  recent study  felt comfortable with their ability to make them. RACI done right can clarify who decides, and whom should be consulted.

The RACI approach also supports complex projects, especially those with many dependencies. Looking at the RACI makes it instantly clear who can provide information about those tasks you depend on, and those that depend on you..

RACI matrices with well thought out delegation for decision-making can instill a sense of empowerment in teams, and grow good decision-making skills among rising stars.

What is the upside of the RACI model?

Perhaps the biggest advantage of RACI charts is that they are simple and easy to understand at a glance.

RACI obviously provides clarity about roles and responsibilities for projects. Making it clear who does what can avoid "too many cooks in the kitchen" and other project illnesses that can befall teams with ambiguous roles.

The RACI model can prevent your team members from being overwhelmed with too many tasks, especially when color-coded by responsibility. On smaller, less complex projects, the project manager can often tell at a glance who might be overloaded.

A RACI model helps you think through the information needs of internal and external stakeholders. Informing key stakeholders outside the team about work progress helps them prepare for the project's outcome.

For stable organizations performing similar kinds of projects over and over, the types of stakeholders will remain similar, so consideration of stakeholder needs can be carried over from project to project.

What is the downside of the RACI model?

For simple projects, it doesn't always make sense to create a formal RACI model and roll it out to the team. The role defining and implementation can prove cumbersome. Sometimes a "less is more" strategy works better if you seek immediate results. .

As with any tool, misapplying or misusing RACI can confuse the issue: for example, can that accountable person really approve a scope change? Making sure that the most important decisions have accountable assigned to someone with the authority to actually decide is crucial.

Misuse of RACI also often leads to misuse of meetings. Failing to declare and stick to the purpose of the meeting can be a major waste of time. It’s important for meeting participants to know why they are there – is it to make a decision, to solve a problem, or just to be briefed?

Also, for organizations relying on support resources, another RAM model may be more applicable, such as CARS, which recognizes support roles. And some frameworks in the  Agile project management methodology  have responsibility and accountability built in, and thus may not need a separate model.

There are multiple ways to present and share a RACI chart. .Whatever format is chosen, it should be understandable and readily available to team members.

Some useful features of a RACI presentation tool include the ability to customize and color-code cells to highlight priority items. Color-coding team member cells can help the project manager see whether anyone is responsible or accountable for too many items. If using an electronic tool, real-time editing capability helps teams see updates as you enter them.

Some matrices include columns for each role, with rows for each task. Others label columns for each team member and rows for each task, then label the role type using its first letter. Here are some popular presentation options:

• Spreadsheet:  Spreadsheets are easy to customize and update. Their rows and columns are perfect for RACI chart purposes and they are easy to update and share.
• PowerPoint:  PowerPoint slides are a popular format for engaging and informing team members about project details. However, regularly updating and sharing changes with everyone can be cumbersome. People could accidentally view an outdated deck.
• Images:  Images may provide information at-a-glance, but they are difficult to update.
• Software tools and templates:  Some project management platforms provide RACI matrix templates. A template makes it easy to assign items, track updates, and share the chart with everyone.

Frequently asked questions (FAQs)

Do you still have questions about RACI diagrams? Here are answers to some frequently asked questions about RACI.

Can you have more than one responsible in a RACI matrix?

• Yes, you can. Each task must have at least one responsible person. But it is OK to have more than one responsible person, as long as the responsible members are clear about what each is supposed to contribute.

Can someone be both R and A in a RACI chart?

• Yes, they can. Assigning accountability and responsibility to one person for simple tasks can streamline work and approval. However, the accountable person carries the consequences if something goes wrong or the task finishes late. For this reason, managers or senior leaders usually hold the accountable role.

What kinds of projects can benefit from RACI

• Nearly all projects can benefit from RACI, or a similar RAM model. But it is especially useful for projects that require significant cross-functional involvement, such as marketing, product development and finance on a new product development project. It’s also especially important for complex projects with lots of task dependencies. A RACI tells those who owns the dependent tasks, or the tasks you depend on.

How do you create a RACI matrix?

• Creating a RACI matrix is easy, especially with one of the many free, customizable spreadsheet or slide presentation matrix templates. Embed your RACI chart as a document into Motion so everyone can easily access the chart anytime, anywhere.

Motion can help take RACI assignments to the next level

Are you ready to take tracking roles and assignments in RACI to the next level? You have lots of projects. They all might have multiple tasks, with changing priorities. You have people assigned. Motion can help you get a handle on all your projects, tasks, people and changing priorities.

Using AI, it can plan and replan your and your team’s schedules, automatically prioritizing work so you don’t have to. You can block off time for deep work and personal commitments. Motion automatically builds and rebuilds your schedule based on changing priorities. It automatically finds time for a meeting that works for all your selected participants.

‎Add tasks, subtasks, and team members. Then, watch as Motion uses the power of AI to build a schedule for each team member automatically, and prioritizes tasks according to importance. What happens if someone's schedule changes? Motion reorganizes the schedule and re-creates each team member's daily schedule without a single mouse-click.

More than  30,000 users  around the world already use Motion.  Try Motion  now to help you harness its power to manage your projects and schedules.

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Creating a RACI matrix: define your team’s roles and responsibilities

How to create and use a RACI Matrix

Working on a complex project can be rewarding, stimulating, and, if we’re honest, frustrating. There are numerous elements that could grind a project manager’s gears, from delays to cost overruns . But there is little more frustrating than realizing too late that a member of the team had no idea they were accountable for a key component of the project.

No matter how talented and experienced your people are or how in-depth your project plan is, mistakes will happen if your team aren’t clear about their responsibilities. Being transparent about who needs to be involved and to what extent on every project task may feel overwhelming. Luckily, there’s a simple way to lay out this information and avoid mistakes due to unclear assignments.

Let’s discuss the RACI matrix and how you can create one to define your team’s roles and responsibilities.

What is a RACI matrix?

A RACI matrix, or RACI chart , is a type of responsibility assignment matrix that’s about making responsibilities clear. In simple terms, it’s a diagram that lists the tasks that make up a project and who is responsible for each task.

RACI stands for the four different levels of involvement someone may have in a task, Responsible, Accountable, Consulted, and Informed. The ‘tasks’ listed can cover anything from a major milestone to a decision.

The function of a RACI matrix is to limit confusion about who should be responsible for what. That means less finger-pointing, avoidance tactics, and miscommunication when a difficult call needs to be made or an error needs addressing.

Is using a RACI matrix right for my project?

Using a RACI matrix will benefit most projects. However, there are specific scenarios where it’ll work best, such as for projects with a huge number of moving parts. If your project requires the team to work on multiple larger tasks at the same time or involves more than one external team, a RACI matrix will help keep you keep on top of everything.

Equally, that means there are certain projects where a RACI matrix may not be suitable. For example, if a project is relatively simple and responsibilities can be communicated clearly through the team using traditional methods, setting up a RACI matrix might not be worth it. Weigh up the effort of creating a RACI matrix against the benefits it could offer your team and project to see if it’s worthwhile.

RACI matrixes are popular in project management but can also be used for software development, business analytics, construction, and website development, among other disciplines.

A RACI matrix can be useful if:

• The team are known to forget their responsibilities
• There is a culture of finger-pointing
• Workload ends up being unevenly distributed throughout the team
• There is high turnover in the team
• Approvals need to be made quickly and efficiently

A RACI matrix may not be helpful if:

• The project is small
• The same team members retain the same level of responsibility across all tasks
• The team is known for its effective communication and healthy approach to collaboration

How to create a RACI matrix for project management

Now that we know what a RACI matrix is and what it is helpful for (and not helpful for) let’s delve into how to create one. This will help you better manage your team as a project manager.

Understand the definitions

The first step is to understand what RACI means. As mentioned, this stands for Responsible, Accountable, Consulted, and Informed. Let’s go over what each means.

• Responsible : This team member is responsible for doing the work needed to complete the task. This assignment is task-oriented and can relate to a whole team. There has to be at least one responsible person assigned to each task.
• Accountable : This team member takes charge of delegating work and has the final say over whether a task has been completed successfully or not. This assignment is focused on the outcome. There should only be one Accountable person for each task.
• Consulted : There may be multiple Consulted individuals assigned to a task, depending on its complexity. These people offer unique insights based on expertise and provide feedback on the task based on this and how it’ll impact their future work.
• Informed : Informed team members need to be kept up-to-date on progress relating to the specific task, but they aren’t directly involved. They may be a client or executive.

As you may have realized, some assignments will overlap. For example, the person Responsible for completing the task may also be Accountable.

List the deliverables

Now, let's go over how to set your RACI chart up. The easiest way to do this is using an Excel spreadsheet or similar. 

Start by writing ‘Task’ in cell A1. Then, input the list of tasks that need to be completed in your project below the title in column A. This can include individual tasks, deliverables, milestones, and decisions.

If you like to organize your tasks by category or project phase, you can add headers for each section to divide these up. How you approach this will be dependent on your style of organization and existing project plan.

Add your team members

Starting from cell B1, list the project roles that make up your team in the cells along row 1. You can include your team members’ names if this is going to be helpful. You may also need to include external stakeholders or suppliers if they will be involved, including those who will be assigned as Informed.

Assign the RACI values

The final step is to assign a RACI value to each person against each task. Go through the sheet line by line and populate your matrix based on the definitions above. 

You can even create a separate tab that details the definitions of each role. This can then be used to create a simple drop-down using ‘ data validation ’ if you find this easier than typing in each letter. It can also help avoid errors or typos.

Here’s an example of what your RACI matrix could look like:

Now that you can see it laid out, it becomes clear why a RACI matrix is helpful in keeping track of responsibilities and tasks.

Inform your team

RACI matrixes work best when they’re created collaboratively. Instead of simply assigning responsibilities and expecting your team to fall into line, inform them of your decisions and give them an opportunity to give feedback before finalizing your chart.

Remember the rules and best practices

When you begin using a new, unfamiliar tool, it's best to start out by abiding by its rules and best practices.

Best practices:

• Make sure everyone has been made aware of the decisions you’ve made about their responsibilities before the RACI matrix is approved.
• Don’t add meetings, reports, or repetitive to-dos to the matrix; instead, focus on tasks, milestones, and important decisions that drive the project forward.
• Make sure the task names are recognizable when compared with your project plan. This will help you track progress and pull up details quickly.

RACI rules:

• Don’t forget to assign at least one Responsible person to each task
• Don’t be tempted to assign more than one Accountable person. Doing so will confuse matters further!
• Dole out Responsible assignments carefully so no one person is overwhelmed by tasks.
• Involve every member of your team in every task, even if that means a few individuals are informed on multiple tasks.

The benefits of using a RACI matrix

If you’re not already convinced of the merits of creating a RACI matrix for your current project, let’s review some of the top benefits.

Clarified roles

Clearly delegating roles is fundamental to running a successful project. Even the tightest-knit teams can have slips in communication, and even the most organized individuals can forget a task on their to-do list. 

A RACI matrix makes it clear in no uncertain terms what needs to be done and the role that each person plays in each of those tasks. WIth inflexible definitions supplied for the four assigned roles, there is little room for misinterpretation.

Smooth handovers

When a key team member leaves and a new starter needs to be onboarded, mistakes can occur. With a RACI chart in place, it’s clear what responsibilities a leaver’s replacement needs to be picked up — including what is urgent — even if they’ve forgotten to add it to their handover. A RACI chart can even come in handy when workload needs to be reassigned during paid time off.

Ensures all eventualities are covered

As a project commences, it can be easy to get caught in the weeds. By setting your RACI chart up early, you protect yourself from tasks or decisions being forgotten along the way.

Optimized communication

Having a RACI chart available for all team members to refer to makes it clear when stakeholders need to be informed of updates so they aren’t left out of the loop unintentionally.

Alternatives to RACI charts

There are several alternative ways to approach responsibility assignments. If a RACI chart isn’t the right fit for you, you may be interested in trying out one of these alternatives.

• DACI chart: Standing for Driver, Approver, Contributor, and Informed, a DACI chart seeks to make decision-making roles clear.
• RAPID: Standing for Recommend, Agree, Perform, Input, Decide, a RAPID responsibility matrix is useful in clarifying authority versus accountability, with the Recommend role taking charge of driving the project forward and the Decide role having ultimate responsibility for decision-making.
• RASCI matrix: This final alternative adds a fifth role to the RACI mix. The Supportive role isn’t responsible for any outcomes, instead acting as a support to the Responsible individual.

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A Comprehensive Project Management Guide for Everything RACI

By Kate Eby | July 15, 2016 (updated September 5, 2023)

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To ensure collaboration and project success, it is crucial for all project stakeholders to understand their roles and responsibilities and those of other project members. This is especially important when project teams are more complex due to their large size, involvement of distributed team members, or reliance on staff from multiple departments. 

RACI stands for Responsible Accountable Consulted Informed. While its origins are murky, the RACI matrix has been adopted by many organizations to associate roles with project deliverables. One Six Sigma tutorial describes RACI this way:

“Typically a task is associated with at least one role or in some cases multiple roles. This ‘Association’ of the role with a task can be divided into the following four association types:

• R esponsible
• A ccountable

The above four types of association of a role to a task represented in a simple task vs. role diagram or matrix is called RACI (pronounced ‘racey’) matrix. So basically the RACI matrix is a responsibility assignment matrix (RAM), designed to assign tasks, activities, responsibilities, accountability, decision making, support to team members of a process/project, and clarify expectations on the level of their participation.” Here is an example of a RACI matrix:

This guide will explain when to use RACI, why it works, guidelines to use it effectively, and the role it can play in effective project management in all industries from construction to healthcare. Lastly, we'll show you that once you've created your own matrix, you'll need a collaborative, real-time tool, like Smartsheet, to manage the rest of the project details — from start to finish.

The Four Association Types

RACI has four association types: responsible, accountable, consulted, and informed. Responsible roles produce deliverables; accountable roles check the deliverables; consulted roles advise on tasks; and informed roles are kept informed throughout these processes.

• Responsible: These roles are responsible for completing the task or deliverable. For example, if the responsibility role is a technical writer, this person may be responsible for writing online help files. A software developer wouldn’t write the help files, but might incorporate those files into the product, which would be defined as a different task.
• Accountable: This type of role has the final authority on (or is accountable for) the task’s completion. To take the previous example of a technical writer developing online help and a software developer incorporating the help files, a product manager might be responsible for ensuring that the files make it into the product.
• Consulted: This role functions as an adviser to a task. For example, a team may consult with a Scrum Master as a subject matter expert (SME). Consider advisers carefully, as having too many people in this role can stretch the task time and raise the risk of poor performance.
• Informed: Informed team members are kept up to date on task completion. Charting this role helps to illustrate dependencies among tasks and also ensures transparency into task status. It can be difficult to identify those who need to be informed, so consult various roles to determine who needs status updates. For example, the sales manager may require status updates because a customer has a special interest in feature development.

When to Use RACI

A RACI model is a useful tool for general project management. Use a RACI matrix when processes are stalled due to role confusion, or when role authority is not clearly outlined. We’ve outlined some common use cases for RACI below:  

• If the approval process is bogged down, it may be due to role confusion.
• If decisions are being overruled often and seemingly arbitrarily, this is also a situation that can benefit from clarifying roles.
• Another situation that frequently occurs is that many people perform the same analysis tasks. When tasks are not getting done, it may be that nobody knows who should be doing them.
• When the authority to perform tasks is not understood, it may be time to define roles and tasks, responsibilities, and authority.

Eliminating this sort of confusion and clarifying roles and tasks is the chief function of a RACI Matrix.

RACI is among the most popular models, but there are several alternatives, including:

• PACSI – Used in situations where multiple stakeholders can review and veto the work of a single accountable person. The roles include Performed, Accountable, Control, Suggested, and Informed.
• RAPID – Created by Bain & Company to clarify decision accountability through clear role and responsibility delineation. The roles include Recommend, Agree, Perform, Input, and Decide.

The Value of RACI

Implementing a RACI model helps you to involve the most qualified people in your projects. Project managers can use RACI to quickly develop charts that provide clarity to the team. Some major benefits of the RACI model are as follows:

• Eliminating role confusion.
• Preventing over-allocation of resources to one project and under-allocation to another.
• Clearly defining roles to all the people who fill them (clear understanding of expectations is key to a smooth project and reduces the need for conflict resolution later).
• Ensuring no task is overlooked when resources are allocated.
• Providing a fast and efficient way to re-allocate resources when there is turnover. New people can quickly identify their roles in a project and the roles of those with whom they must interact.

Finally, because the Informed category is given equal weight, the RACI Matrix encourages communication between roles. Communication is the key to clearly understanding expectations, which results in a smooth project.

RACI Matrices

A RACI matrix is a collection of all project activities associated with the people or roles responsible for each. Your matrix should include all project elements, including planning, testing, design, and support.

To create a RACI matrix, consider the following steps: 

• Decide How to Chart the Matrix: You can use any number of tools or templates, including a spreadsheet, whiteboard, or software solution.
• Identify the Project Tasks or Deliverables: Meet with key stakeholders to develop a list of project tasks. For this discussion, tasks include necessary activities, like meetings or events, as well as tangible deliverables, like features or products. Plot tasks across the X or Y axis of the matrix. For example, if you are charting a software project developed under Agile, the sprint demo meeting may be a required activity and should be included in the matrix as a task. Don’t forget to add maintenance of the RACI Matrix as its own task. The project manager usually maintains the RACI Matrix.
• Identify the Project Roles: Project roles are labeled across the other axis of the matrix. The project roles make the matrix more understandable and can be useful for adding any data you may have forgotten. As you identify roles, add any tasks that apply to those roles on the task axis. The task axis is also useful for identifying roles and clarifying resource allocation. This is a good time to assign names to roles as well — one name per role is optimal.
• Label the Intersections of the Axes: Where the X and Y axes intersect, label the intersection with an R, A, C , or I to finalize the matrix with who should be responsible, accountable, consulted, or informed on each task.

RACI Guidelines

While RACI matrices will differ by project, there are some broad guidelines that you should always follow. Above all, your matrix should encourage teamwork and inform all people of their roles and assignments. We’ve laid out additional best practices below: 

• Avoid multiple levels of oversight – one level is enough 
• Encourage teamwork
• Maintain chart fluidity – make changes as needed and let people know when things change
• Assign only one Accountable per task
• Ensure Accountable assignees have authority to ensure the task is complete
• Avoid too many consultants as they can take up too much time (waiting for answers, gathering input, etc.) while too few can damage performance, so try to find the "sweet spot”  
• Inform everyone with a role of their assignment

Finding the Right RACI Template

RACI templates save time and provide a starting point for building your chart. Choose a simple, customizable template to ensure that it is as useful as possible for all team and project types.

Some templates use the X axis for the tasks and Y for roles, and others do the opposite. If tasks exceed roles, as they generally do, it is easier to use the X axis for tasks and the Y for roles as you will be able to see the greatest number of roles per task at a glance on most computer monitors. On the other hand, you may find it easier to filter a chart based on role (for instance, filtering to show only the “I” roles for a given task) with the tasks on the X axis. In addition, most templates use some form of color-coding.

Regardless of which template you select, using one will eliminate a lot of basic work in constructing the chart and will free your time to define roles and tasks.

RACI Project Management

RACI project management focuses on creating and managing a RACI matrix to identify and resolve conflicts in roles and revise role categorization. You should approach analysis as a team and encourage all roles to provide feedback.

A RACI Matrix is analyzed vertically and horizontally. Here are some things to look for when reviewing the role axis (whether this is horizontal or vertical):

• If one role has too many responsibilities, should some responsibilities be reallocated or should more people be assigned to the role?
• If only one person is Accountable, is it reasonable to expect that person to make all decisions and could it threaten the project by creating a bottleneck?
• Here are some things to look for when reviewing the Task axis (whether this is horizontal or vertical):
• If there is a task with no one Responsible, should someone be assigned or should the task be eliminated?
• If there is a task where no one is Accountable, who has decision-making authority?
• If there are multiple people Accountable for a task, avoid conflicts by making a single person accountable. 
• If too many people must be consulted, evaluate whether one person can be assigned who talks with others involved.

It is common, during the life of a project, to have team members experience role confusion. A RACI matrix is useful for clearly identifying roles associated with a project and improving productivity, especially when you’re suffering from role confusion. Some signs of role confusion are:

• Concern over who makes decisions —Decision-makers are usually labeled as Accountable, but it may be that decisions are being made by the Responsible party. If that’s the case, the team should know who makes decisions in each situation.
• Finger pointing —If work is not completed on time, finger pointing may result. The key to avoiding this is knowing who is Responsible. 
• Poor resource allocation —The RACI Matrix should make resource allocation very clear, but sometimes a single task can be extremely taxing, leading to some issues concerning who should be doing what and when.
• Lack of action because of ineffective communications —If someone is not Informed, they may not know to perform a task.
• Too many consultations because the wrong people are consulted —The Consulted should be clearly labeled to avoid jeopardizing the project schedule.

It is the duty of a project manager to step in if role confusion is suspected and clarify roles to ensure that everyone is aware of expectations.

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How to Make a Responsibility Assignment Matrix for a Project (Template Included)

The most important resource you’ll employ to deliver the project is people. They have to fit into the schedule and maintain the project budget. Defining what their roles and responsibilities are when executing tasks and delivering on the project goals is an important part of controlling the project.

How can you coordinate all the people who are involved in a project so they know what they’re doing and don’t block others from doing what they are assigned? Using a responsibility assignment matrix can help. An assignment matrix gives your project a team that gets things done.

What is a Responsibility Assignment Matrix in Project Management?

A responsibility assignment matrix (RAM) is a project management chart used to identify and define the various people and organizations and outline each of their roles in working on tasks or delivering a part of the project.

Project managers use an assignment matrix to clarify what cross-functional teams do within the boundaries of the project and its numerous processes. Sometimes a responsibility assignment matrix is required when responding to a request for proposal (RFP).

The responsibility assignment matrix can also be called a RACI matrix, which stands for responsible, accountable, consulted and informed.

• Responsible: Notes who is responsible for executing the task, which is then assigned to them.
• Accountable: Notes who has decision-making authority and how that power is delegated throughout the project team.
• Consulted: Notes who is able to offer insight into the task, from team members to stakeholders.
• Informed: Notes who is updated on what in terms of progress and performance, as well as when and how this information is disseminated.

This creates a map of connections between activities and project team members. Depending on the size of the project, there can be several assignment matrices used for various project levels.

Why Create a Responsibility Assignment Matrix?

The assignment matrix identifies what everyone on the team is responsible for, which means not only what their duties are, but how they participate in the project. Some will have defined tasks, others will offer help with work, while there are some who are designated as decision-makers. These groups all have an identity and function within the project to help guide it towards a successful end.

Clear communication leads to more efficient projects. An assignment matrix facilitates better communication between team members and provides transparency by creating a system to make sure everyone is updated and always on the same page. Belaboring communications can bog down a project with too many pointless meetings and confusing interactions in which people try to understand what they’re supposed to be doing. Using the responsibility assignment matrix helps, but having project management software that connects teams in real-time is ideal.

ProjectManager manages project information by allowing teams to attach files directly to tasks, and our unlimited file storage keeps important project documents at your fingertips anywhere, anytime. Commenting on tasks can save time and tagging others in the project team creates a communication process that avoids the pitfalls of redundancies or unnecessary meetings.

When Should a Responsibility Assignment Matrix Be Created?

The responsibility assignment matrix would be created at the start of the project. You’d want to have everyone on the project team aware of where they stand in terms of their involvement before they start executing tasks.

As much as its use is a preventative measure, it can be used prescriptively. If you’re deep into the project and things are not moving as planned, there could be communication gridlock. If team members are not in the loop, or misconstrue what they’re supposed to be doing, using a responsibility assignment matrix might untie up those knots in the communication channel.

If there’s a problem with leadership overruling suggestions on how to advance the project and this is seen as a problem, it’s likely that the roles and responsibilities of the project team need refining. The responsibility assignment matrix defines who has authority to make decisions and using it or revisiting can determine if the right people are in that position.

In fact, any of the definitions might need reexamining at any phase in the project. Perhaps tasks are falling behind schedule. This could be because team members aren’t aware of what tasks they own. Anytime a delay occurs, returning to the assignment matrix is a good first step, even if you went through the process as you should during the planning stage of the project.

How to Create a Responsibility Assignment Matrix

The actual making of a responsibility assignment matrix is not as difficult as getting everyone on board with what their roles and responsibilities are.

Therefore, you want to include your team in the process, get their input and eventually buy-in without spending too much time and energy on the process. Follow these steps to make sure everyone is in agreement and you’ll have a successful responsibility assignment.

• Identify all the participants involved in the project, from team members to stakeholders and everyone in between.
• List all deliverables associated with the project. Use a work breakdown structure to make sure you don’t miss any.
• Meet with team members on how to execute the tasks to create the deliverables. Every task needs to be discussed in terms of the team’s responsibility and authority.
• Draft the responsibility assignment matrix using a table with the project tasks listed on the left-hand column. Across the top add the name of everyone in the project.
• Where the tasks meet the project team member, assign whether they’re responsible, accountable, consulted or informed.
• When completed, share the responsibility assignment matrix with the project team and stakeholders and hold a meeting if necessary to make sure everyone understands their part in the project. If you’re working in a shared space, print out a copy and post it.

Free Responsibility Assignment Matrix Template

Using a RACI template is a shortcut that sets up your team and the project for success. ProjectManager is more than an award-winning software that organizes tasks, teams and projects to streamline work and boost productivity, it’s also the online hub for all things project management.

Among the hundreds of blog posts, guidebooks and tutorial videos are dozens of free templates that can help you through every phase of your project’s life cycle. Using our free RACI template will help you guide all the project teams better, allowing them to know where they stand in relation to the project and what their level of responsibility and accountability is.

Use it at the start of the project to avoid delays and untangle any communicative knots that are preventing the project from progressing as planned. To keep your project on track, download our free RACI template and get a head start on building a workable responsibility assignment matrix.

Best Practices

Using our free RACI template is a good start, but you have to make sure you fill it in correctly. A responsibility assignment matrix is only as good as the effort put into creating it. Here are some best practices to apply when you’re in the process of building your assignment matrix.

• Involve the team: They’re the ones who will be executing the work. You want their input and buy-in to avoid any costly mistakes or time-consuming questions about what wasn’t made clear at the beginning of the project.
• Identify every single task: Identify all the tasks required to reach your final deliverable. Once you have that thorough list make sure that there is only one person on the team who is accountable.
• Update your RACI regularly: Make sure that each new one is clearly marked as the most current version and is distributed to everyone on the team. There will be times when you’ll want to revisit the responsibility assignment matrix or changes in personnel will require an edit.
• Share responsibility viably: One person shouldn’t have to shoulder the bulk of the responsibilities for the project and you want to give authority throughout the project team and not just among the very top management team.
• Optimize tasks: Managers can use the RACI matrix to see if too many team members have been assigned to a task. Maybe these workers could be spread out for greater productivity. There could be too many people listed as consulted, which slows down the process. The assignment matrix is endlessly useful.

How ProjectManager Helps You Manage Projects Better

ProjectManager is a cloud-based tool that connects everyone in real-time to facilitate planning, monitoring and reporting on the project. It works to give everyone on the project team a job and the knowledge as to where they have authority and when to consult others, as well as defining the reporting process.

Let’s look at the people who are responsible, for example, the team who execute the project. Once invited into the software, you can share the project plan, assign them tasks, add detailed direction, add a deadline and tag for priority and more. The teams can then collaborate by attaching files and images to the tasks and commenting in real-time to work better together.

Those who need to stay informed of the project can do so by also getting invited into the project and sharing plans and schedules with them. Stakeholders can stay updated with reporting features that can generate reports on project variance, cost, time and more with one click. Then share them as a PDF. Reports can even be quickly filtered to zero in on the data stakeholders are interested in.

The responsibility assignment matrix can help you reallocate your resources when things aren’t progressing as planned. Use our software to get further insight. The resource management features include a workload chart that’s color-coded so it’s easy to see who has too many tasks and who can take on more work. Then you can simply reallocate those resources from the workload page to help your team work more productively.

ProjectManager gets you organized, keeps your team focused on their tasks and stakeholders in the loop. Gain efficiencies throughout every aspect of your project’s life cycle with an online Gantt chart to schedule work and kanban boards, a visual workflow feature that provides transparency into production. All that and it’s on a collaborative platform to keep everyone connected. Try ProjectManager today for free.

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Responsibility Assignment Matrix: A Complete Overview

Dive into the world of Responsibility Assignment Matrix (RAMs), which helps assign roles and responsibilities and how they streamline Project Management. This comprehensive blog explains their purpose, benefits, and practical use, enabling effective role definition and accountability in project teams. Continue reading!

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This comprehensive blog aims to provide you with a complete overview of the Responsibility Assignment Matrix and its pivotal role in Project Management and organisational structure. 

Table of Content 

1) What is a Responsibility Assignment Matrix in Project Management? 

2)  Responsibility Assignment Matrix (RAM) goal in Project Management 

3) How to create a Responsibility Assignment Matrix? 

4) Benefits of Responsibility Assignment Matrix 

5) Developing Responsibility Assignment Matrix (RAM) best practices 

6) Conclusion  

What is a Responsibility Assignment Matrix in Project Management? 

A Responsibility Assignment Matrix (RAM) in project management is a tool that outlines and defines the roles and responsibilities of individuals or groups involved in a project. Its purpose is to ensure that everyone understands their specific duties and tasks. The primary purpose of a RAM is to bring clarity to the project structure, helping to prevent confusion, overlap, and accountability issues throughout the project lifecycle.

RAM in Project Management is also known as Responsible, Accountable, Consulted and Informed (RACI). RACI represents different levels of roles and responsibilities for individuals or teams:

a) Responsible: The individual or group in responsible for finishing a certain job or project. They are the ones who perform the work.

b) Accountable: The individuals who have complete responsibility and decision-making authority over the job or result. They ensure that the task is completed and of satisfactory quality.

c) Consulted: Individuals or stakeholders are consulted for their views or skills before to making a decision or taking actions. They contribute essential insights but may not be directly responsible for the task.

d) Informed: Individuals or stakeholders who need regular updates on the task’s progress or result. They are not actively involved in its conclusion, but they must be notified of any advancements.  

Responsibility Assignment Matrix goal in Project Management 

The primary goal of a Responsibility Assignment Matrix in Project Management is to clearly define and communicate the roles and responsibilities of individuals or teams involved in a project. Here are the key goals of using a RAM in Project Management: 

a) Clear roles and responsibilities: The RAM establishes clear roles and responsibilities for each team member, minimising confusion and conflicts.

b) Enhanced communication: Documenting roles and responsibilities concisely in the RAM facilitates effective communication within the project team. Also, enabling quick identification of contacts for specific issues or inquires.

c) Conflict resolution: BY operating a reference point, the RAM helps to resolve conflicts or misunderstandings about responsibilities, providing a foundation for conversation and conflict resolution.

d) Improved project control: With the RAM in place, Project Managers and stakeholders can more easily monitor project progress, identifying task accountability and monitoring work package status.

e) Efficiency and accountability: By allocating responsibility to each project aspect, the RAM promotes accountability among team members, resulting in increased efficiency as everyone understands their duties and expectations.

f) Risk Management: The clear roles of RAM help detect potential hazards associated with functional gaps or overlaps, enabling proactive risk mitigation strategies.  

g) Optimal Resource Allocation: Project managers can optimise resource allocation by understanding task ownership and workload distribution as described in the RAM.

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How to create a Responsibility Assignment Matrix? 

Identify the project scope 

Start by recognising the project's scope or the exact purpose for which you are building RAM. This includes establishing project objectives, outcomes, and critical milestones.

Define roles and responsibilities 

a) Identify the key roles involved in the project. Common roles may include Project Manager, Team Leader, Team Member, Stakeholders, and other relevant positions. 

b) Clearly define the responsibilities associated with each role. These responsibilities should be specific and measurable so there is no ambiguity. 

Choose a framework - RACI, RASCI, or DACI 

a) Select a framework for your RAM. The most commonly used frameworks are RACI, RASCI, and DACI: 

b) RACI: RACI   Stands for Responsible, Accountable, Consulted, and Informed. It defines who is responsible for a task, who is accountable for its completion, who needs to be consulted, and who needs to be informed. 

c) RASCI: RASCI Similar to RACI, but with an additional role, the "S" for Support. This framework further clarifies who provides support for a task. 

d) DACI: This framework is similar to RASCI but adds the role of Driver. The Driver is responsible for ensuring that a task is completed. 

Assign roles using the framework 

a) For each task or work package within the project, assign the relevant roles using the chosen framework. Each task should have a Responsible person, an Accountable person, and, if necessary, people who need to be Consulted, Informed, or Supported. 

b) Be specific and ensure that there is only one person designated as "Accountable" for each task to avoid confusion. 

Document the RAM 

a) Create a table or chart that lists all the tasks or work packages on one axis and the identified roles on the other. 

b) Fill in the matrix with the appropriate role designations (R, A, C, I, S, D) for each task and role. 

Review and validate 

Share the RAM with the project team and stakeholders for evaluation and approval. Confirm that everyone agrees on the roles and responsibilities.

Implement and communicate 

Once the RAM has been completed and approved, communicate it to the project team and other stakeholders. Ensure that everyone understands their jobs and responsibilities. 

Regularly update the RAM 

As the project evolves, it is critical to improve the RAM as necessary. Roles and duties might shift, and new tasks may develop. Keep the RAM current to reflect the project's evolving needs.

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Benefits of Responsibility Assignment Matrix

a) Clarify roles and responsibilities: A RAM clearly defines who is responsible for each task, which helps prevent confusion and ensures that team members understand their roles.

b) Improved communication: The RAM serves as a central reference point for roles and responsibilities, promoting effective communication within the project team. Team members can quickly identify who to contact for specific issues or questions.

c) Conflict resolution: When there is a dispute or ambiguity regarding responsibilities, the RAM provides a basis for discussion and conflict resolution. It helps identify where accountability lies and facilitates problem-solving.

d) Enhanced project control: The RAM allows Project Managers and stakeholders to monitor and manage the project's development.  It helps you to track the status of assignments and ensure that tasks are getting done as planned.

e) Efficiency and accountability: Clearly defined roles and responsibilities create a sense of responsibility among team members, maybe resulting in improved productivity. When people understand what is required of them, and they are more likely to fulfil it.

f) Resource allocation: The RAM helps Project Managers optimise resource allocation by understanding who is responsible for specific tasks. This ensures that workloads are distributed evenly and that resources are used efficiently. 

Developing Responsibility Assignment Matrix (RAM) best practices 

Developing a Responsibility Assignment Matrix (RAM) is a critical aspect of project management. To create an effective RAM, consider the following best practices: 

a) Involve key stakeholders: Define roles and responsibilities after consulting with project stakeholders, team members, and subject matter experts. Their participation can provide useful information about the project's objectives. 

b) Keep it simple: Use a simple framework (e.g., RACI, RASCI, or DACI) that team members are able to quickly understand and use.

c) Use clear and specific language: In order to prevent confusion, write tasks clearly and precisely. Avoid using confusing or unclear terms that may lead to confusion.

d) Designate a single "accountable" person: Assign only one person as "Accountable" for each task. This individual is ultimately responsible for the task's completion. Multiple accountable persons can lead to confusion and accountability issues. 

e) Consult and inform appropriately:   It is important to carefully consider the individuals who need to be consulted and informed for each task. Avoid unnecessary involvement, which can lead to inefficiency. Ensure that the right people are included in these roles. 

f) Review and validate with the team: Share the RAM with the project team and stakeholders for feedback and validation. Ensure that all parties agree with the assigned roles and responsibilities. 

g) Document assumptions and clarifications: If certain roles and responsibilities are based on assumptions or require clarification, document these notes alongside the RAM. This can help avoid misunderstandings in the future. 

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Conclusion  

A Responsibility Assignment Matrix is an important tool in Project Management and organisational systems. Its importance comes from its capacity to define, assign, and explain the roles and responsibilities, resulting in improved project effectiveness and performance.

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Frequently Asked Questions

Creating a Responsibility Matrix is appropriate for the project's initiation stage. It outlines roles, duties, and communication channels to promote responsibility throughout the project's lifecycle. 

The Responsibility Assignment Matrix or RACI model divides tasks as Responsible, Accountable, Consulted, or Informed. It promotes transparency and accountability among the project group.

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Understanding the Responsibility Assignment Matrix (RACI Matrix)

The Responsibility Assignment Matrix also referred to as RACI Matrix or Responsibility Accountability Matrix is a key tool an organization can use to ensure successful completion of projects. The matrix helps managers know who plays what role or performs which duties during a project.

If this isn’t clearly defined it can lead to a common problem when carrying out projects, where conflicts arise over who is to do what, some team members having more workload, understaffing of the project and so on. That is why the RACI matrix comes in handy in project management . By developing the matrix a manager can ensure everybody knows what is expected of them and team members stick to specific roles assigned to them, therefore avoiding confusion and problems in the project.

The Four Roles in RACI Matrix

RACI is an acronym for Responsible, Accountable, Consulted and Informed  the four roles team members can be assigned in a project. In the matrix, tasks are listed in the first column and project members in the top row of the table.

The Acronym RACI Stands For:

Responsible (r).

This refers to the individual who will perform a task. Each task has to have at least one person who completes it. If an R is missing in any of the matrix rows that task has not been assigned to anyone creating a gap that needs to be filled immediately. For tasks, they can be several people expected to perform it who then report to the person accountable.

Accountable (A)

This is the individual who is ultimately answerable for the decisions to be made for a task. They most likely are the project manager or a senior official who have final say over the tasks. To be efficient the number of people accountable for each task should not be many. For most projects one listed accountable person is ideal.

Consulted (C)

This is the go-to person for advice on the project.  They should be an expert on matters relating to the project whose opinion is sort before making final decisions or taking certain action. For example, if you are working on technical tasks consultations with the IT administrator for expert advice will be necessary. The number of consultants per task, however, should be minimum. Too many C’s may prolong a task because of a lot of unnecessary deliberations and they might be a risk of poor plan execution.

Informed (I)

These are people in the team who have to be updated on the project progress or decisions. These individuals are in most cases informed once a task is completed and then take the necessary next step i.e. to mark that project as done, once update. Communication with the informed is usually one-way and they don’t contribute directly to the task.

Creating a RACI Matrix (Step-By-Step)

• Identify all project tasks and activities and put this on the left-hand side of the matrix according to how they will be completed.
• Identify all the individuals and groups involved in the project and list them at the top of the chart.
• Figure out who does what-This is a very crucial part of the formation of the matrix. Here the project manager identifies the people to be assigned to each task. While doing this ensure you match skill sets to tasks.
• Develop the matrix- At this stage, you assign team members their association . They will either be Responsible, Accountable, Consulted or Informed for each task. Best practice dictates that you start with the “R’s”- because they are the people performing the tasks necessary to complete the project. Then move on to the “A’s” who are ultimately answerable for the process. Finally, assign the “C’s” and ‘I’s” individuals who have no direct responsibility in the project but are needed for it to succeed.
• Share and discuss the RACI Matrix- when done constructing the matrix send it out to the team members involved and ask for feedback. From their feedback make any necessary changes. By doing this you will be ensuring you haven’t left anything important out and all involved are clear about what is required of them. The final matrix should be one that all stakeholders agree on before starting work on the process.

RACI Example

A company is working on developing an App that will boost its online sales. David is developing this App that will run on software developed by Mark. Simon is overseeing the project as manager and Irene is in marketing. David has the task of coming up with the App so in the matrix, he is the Responsible person. Simon is Accountable and Mark needs to be consulted because his software will run the App. Finally, Irene needs to be informed when the App is ready so that she can take the next step and promote it.

Questions to Ask Before Finalizing Your RACI Matrix

To be certain assignments are reasonable to ask these questions

• Are too many responsibilities given to one person? If so should they be given to someone else?
• Does every task have an appropriate number of consulted and informed?
• Does every role have a responsible and accountable person?
• In the case of complex tasks can smooth decision making be done by one accountable person or should there be more than one to ease decision making?

Once you answer these questions positively you can begin working with your matrix. That, however, doesn’t mean that the matrix should remain the same to the conclusion of the project. You have to constantly re-evaluate it and make changes when the need arises due to work changes over time.

Variations of RACI Matrix

They are other Responsibility Assignment models that add on to this matrix. Examples include :

RASIC – This has the RACI Matrix associations Responsible, Accountable, Consulted and Informed but adds a 5 th association which is Supportive. These are individuals tasked with assisting the responsible party to perform the task.

RACIO – Also has a Responsible, Accountable, Consulted, Informed person but also includes Omitted. This is employees not involved in a task. This helps give clarity and ownership of roles.

RACI-VS – Here two more associations are also included. The two are “Verify” and “Sign off”. Verify, this means reviewing a task at the end to ensure it has been done and completed properly. Sign Off mostly happens at the very end and gives a seal of approval that a task has concluded successfully. These two steps should not be done for all project tasks, it should only be for tasks that absolutely require it.

As a project manager having a RACI Matrix will make you confident that roles and responsibilities are clearly defined for the team. Every task has a person doing it and duplication of work is unlikely to happen.

One of the best things the RACI Matrix helps get rid of is the passing of blame amongst team members because if work is not done it is very clear where the buck stops and who is letting the others down. The RACI Matrix is a good project management tool but it should be noted that it cannot address issues such as poor teamwork or low morale among employees for that you would have to figure out how to motivate the group, maybe by giving rewards for a successful project.

About Sonia Kukreja

I am a mother of a lovely kid, and an avid fan technology, computing and management related topics. I hold a degree in MBA from well known management college in India. After completing my post graduation I thought to start a website where I can share management related concepts with rest of the people.

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What is a Responsibility Assignment Matrix (RAM) in Project Management?

Fahad Usmani, PMP

March 30, 2024

A responsibility assignment matrix (RAM) in project management is a key document that distinguishes stakeholders’ roles and responsibilities. The RACI chart is the most popular example of a RAM that clarifies stakeholders’ roles and defines their involvement.

RACI stands for Responsible, Accountable, Consulted, and Informed. Each team member in the RACI chart has at least one role.

All stakeholders refer to RAM in case of conflict regarding the roles and responsibilities in assignments or duties. RAM helps reduce conflict in projects to a great extent. Using this document, every team member will know their roles and the responsibilities of other team members.

The roles in the RACI matrix are as follows:

• Responsible: This stakeholder is responsible for completing the task.
• Accountable: This stakeholder is accountable for the task. They will make decisions and delegate work to the stakeholders who are responsible for completing the task.
• Consulted: These stakeholders will be consulted on any decisions made about the task.
• Informed: These stakeholders only require an updated status report on the progress of the task.

Responsibility Assignment Matrix Example

As I said, the RACI chart is the most popular example of RAM.

The table below shows the RAM example using the RACI chart:

Some other less-popular responsibility assignment matrix examples are as follows:

• RASCI Chart: This chart is also known as the “RASCI matrix,” as the letter S is added, which means “supportive.” 
• DACI Chart: DACI stands for “Driver, Approver, Contributor, and Informed.” 
• RAPID Chart: RAPID stands for “Recommend, Agree, Perform, Input, and Decide.” 
• CARS: CARS stands for “Communicate, Approval, Responsible, and Support.” 
• CLAM: CLAM stands for “Contribute, Lead, Approve, and Monitor.” 

Responsibility Assignment Matrix Template

The table below shows the basic template for the responsibility assignment matrix.

RAM is a key tool in project management . It helps the project manager assign roles and responsibilities. Additionally, it ensures that the team stays on its path and that no one interferes with each other’s roles. Finally, RAM ensures that every task has responsible and accountable stakeholders assigned to it.

This topic is important from a PMP exam point of view.

I am Mohammad Fahad Usmani, B.E. PMP, PMI-RMP. I have been blogging on project management topics since 2011. To date, thousands of professionals have passed the PMP exam using my resources.

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1.2 Responsibility assignment matrix

The work of a project needs to be divided and allocated to people, and there needs to be a comprehensive and unambiguous understanding by everyone concerned of their own roles and responsibilities and of the roles and responsibilities of the others. One tool that can be used to first arrive at and then document roles and responsibilities is a responsibility assignment matrix (RAM), of which there are different types. The RAM is a grid, where the work that has to be done is listed in the left-hand column, with participant roles (performed by team members or groups) listed in the first row.

The cells of the grid that are intersections of the first column and first row are used, at different levels of detail, to show a connection between the work and the team member or team group. This connection is a type of participation by the person or organisational unit for an element of work in the project. In this way, all the people connected to each element of work and all the work connected to each person are displayed in one place.

For larger projects, the elements of work can be considered at different levels of detail, in different matrices for the same project. These different matrices would show the responsibilities at different levels of decomposition of the project tasks, from deliverables to specific sub-tasks.

One popular type of RAM is a RACI (responsible, accountable, consulted and informed) chart. Here the participation types are subdivided to show the following for each task:

• Who is responsible (R): the people who carry out the task
• Who is accountable (A): the single person who is answerable for the correct completion of the task
• Who is consulted (C): the people who need to be consulted in the carrying out of the task, who have a say in how it is carried out or who are expert in the subject area
• Who is informed (I): the people who need to be informed about the task and its progress.

The RACI matrix is useful in different respects, for example:

• It is a tool that can be used in team selection where the participant roles are known but not the specific people who will perform them. It can be used to fit skills to tasks and balance workload.
• It can be used as a basis for gap analysis to highlight project needs that are not met by the skill sets of existing team members and so to identify recruitment or training requirements.
• It encourages and assists the delegation of work.
• It shows all the interested parties the division of labour within tasks and projects as a whole and the unambiguous ownership of tasks.
• It encourages communication between those with the different participant roles by setting up the expectations of the nature of communication and who is to be involved in communications.
• It can be used as a starting point to consider the lines of communication and suitable methods of communication, including reporting.
• It can be used by the project manager as a tool for monitoring project work.
• It can feed into other formats for documenting team members’ roles and responsibilities, such as detailed textual role descriptions.

There are many variants to the RACI matrix that use the same acronym with different participation functions or introduce additional types of participation beyond the four characters of RACI. For example, in a RASCI matrix the participation function ‘Support’ is added. Those designated as ‘S’ assist the ‘R’s in their work. The different participant functions imply different aspects of the person management role of the project manager. As well as identifying which role is required to meet the needs of each element of the WBS, and thereby playing a part in team selection, the project manager needs to ensure that the ‘I’s are informed, the ‘C’s consulted and so on.

Why is it important that all participants know which type of RACI matrix is being used?

The RACI is part of the shared language of communication of the project. If there is not a common understanding of its meaning, responsibilities and divisions of labour will also not be understood and any ambiguity can easily lead to serious problems. For example, if team colleagues are not doing what other team members think they are meant to be doing the atmosphere of trust that is needed in an effective team can be lost.

Office Technology | What is

What Is a RACI Chart? A Guide for Small Businesses

Published February 27, 2024

Published Feb 27, 2024

REVIEWED BY: Corey McCraw

WRITTEN BY: Sam Dadofalza

This article is part of a larger series on Project Management .

• 1 RACI Definition
• 2 Advantages
• 3 Disadvantages
• 4 How to Create One
• 7 Best Practices
• 8 Alternatives
• 10 Bottom Line

A RACI chart, a type of responsibility assignment matrix (RAM), is a visual tool for defining team members’ responsibilities on specific tasks or outputs. To understand better what a RACI chart is, picture a diagram in a table format. The first column enumerates the project assignments, and the rest of the columns reflect the different stakeholders’ names or roles.

For each task or output under a specific stakeholder, a letter is assigned signifying the team member’s level of ownership or involvement on the deliverable: R is for Responsible, A for Accountable, C for Consulted, and I for Informed. In this article, we’ll explore the benefits and drawbacks of using this visual tool and the best practices for applying it in project management.

The RACI chart defines the responsibility of each stakeholder on every task. (Source: ClickUp )

A Breakdown of the RACI Definition

To explain further what is a RACI chart, let’s drill down into the meaning of the acronym: Responsible, Accountable, Consulted, and Informed, which represents each team member’s role for each assignment. Find out what the labels mean below:

• R – esponsible: This stakeholder executes the work assigned. It’s possible to have multiple team members labeled R in a matrix. For example, in a software development project, this will be the programmers, user interface/user experience designers, and content writers.
• A – ccountable: This stakeholder delegates the tasks and evaluates the output. In some cases, the person “Responsible” may also be the team member “Accountable.” In most software development projects, the “Accountables” are the team leads and product managers.
• C – onsulted: This stakeholder also reviews the finished tasks, but unlike the “Accountable,” they’re required to sign off on the output before delivery. It’s possible to have multiple stakeholders needing to be consulted in a project. In a software development project, these are the project managers and product owners.
• I – nformed: This is the individual or group of individuals who need to be updated on the progress and completion of the project. They’re often not included in the actual production process. In a software development project, these are the executive leadership or external clients.

Advantages of Using the RACI Chart

Now that you have a rough idea of what is a RACI chart, let’s explore the different advantages of using the matrix in your projects. In a nutshell, the RACI model is an excellent tool for delineating roles and responsibilities, providing a good structure for managing tasks and team members in a project.

When done right, it will increase ownership and accountability among stakeholders, improve communication, and facilitate a more efficient decision-making process in project management . These are the specific ways a RACI chart benefits project teams:

Distributes Roles & Responsibilities Clearly

Most people ask, “What is a RACI chart, and why is it useful?” The RACI chart’s primary function is to illustrate the participation of each stakeholder in project activities. As it identifies who’s responsible, accountable, consulted, and informed for each task, it removes any confusion or potential misunderstanding as the project progresses.

On a stakeholder level, this is beneficial as each one understands well what they must do and what’s expected of them. On a team level, knowing who to ask for updates on task progress or approval and sign-off for outputs makes the collaboration process smoother.

Improves Accountability

Since the RACI chart for project management increases visibility on the responsibilities of each stakeholder, team members have a higher level of task ownership. They are more conscious of the fact that their performance affects others’ work. This increased sense of accountability drives productivity, which contributes to project success.

Facilitates an Efficient Decision-making Process

Another answer to the question “What is a RACI chart used for?” is it’s valuable for speeding up the decision-making process. The diagram outlines the people who need to be consulted for approval, making it easier to identify whom to submit outputs to.

The RACI chart eliminates the frustrating back-and-forth discussion on who gets the final say on deliverables, thus reducing potential delays in project completion. In addition, it allows team members to work on other tasks immediately and gives managers ample time to assess outputs and decide if they’re ready to be delivered.

Reduces Conflicts & Workload Issues

Most misunderstandings in projects come from confusion about roles and responsibilities. Team members are confused about which managers need a sign-off on specific outputs. Meanwhile, leaders overseeing too many project details sometimes don’t know who exactly in the team needs to be followed up on for updates once the project is rolling.

Using a RACI chart template prompts you to define who’s in charge of what. It guides you on stakeholders’ roles and responsibilities as the project progresses. Moreover, it helps you avoid overloading or underloading team members with tasks. Since responsibilities are laid out, you’ll be able to strike a balance in assigning work to specific stakeholders.

Disadvantages of Using the RACI Chart

Although the RACI chart is great for defining roles and responsibilities, it’s not a foolproof tool. It comes with disadvantages that you should be aware of to know whether it’s worth adopting in your organization and project. Below are some disadvantages of using the RACI chart:

Takes a Lot of Time to Set Up

Creating a RACI matrix is tedious as it requires plotting every activity in the project, conducting meetings and negotiations with stakeholders, and finalizing who’s in charge of specific tasks. It’s part of the project planning stage and may cause you to delay project execution if you haven’t completed the matrix yet. In the case of urgent projects, the intricateness of creating a RACI chart may compromise timely delivery.

Adopts a Hierarchical, Rigid Structure

Since the RACI chart highlights a hierarchical structure in project teams, it’s not for all. Organizations that aim to practice innovation might not see team members introducing new ideas as their roles are restricted. They may be reluctant to share new ways of doing things for fear of overstepping their assigned responsibilities.

At the same time, the RACI chart fails to recognize the informal roles that develop in team relationships. While there are official project managers and product owners who would need to be consulted about work quality, there are team members, particularly the senior ones, who don’t have formal titles but are referred to because of their expertise. They’re usually not acknowledged in the RACI matrix.

Easily Becomes Complicated for Large Projects

As mentioned in our answer to the question, “What is a RACI chart in project management?” the tool requires assigning letters indicating the role of each stakeholder. This shouldn’t be a problem for simple projects. However, for large initiatives with various stakeholders, the diagram quickly becomes tedious and intricate, making it harder to keep track.

Moreover, complex projects often see frequent changes. This requires you to update the matrix every now and then to ensure that it accurately reflects each person’s responsibilities. This administrative task may be overwhelming in the long run.

How to Create a RACI Chart

While there are plenty of RACI chart templates you can use to get started quickly, the process of creating a matrix from scratch is rather simple. Follow these easy steps on how to create a RACI chart:

• List the tasks and activities the project requires. This task column is your first column.
• Plot the names or roles of team members as the next column headers.
• Populate the table with R, A, C, and I labels, according to the responsibilities of each team member. Start with the people “Responsible” for the tasks, as this helps determine what roles other team members will play.
• Discuss the chart with team members.
• Sign off on the document.

Examples of a RACI Chart

Now that you understand well what is RACI matrix, let’s delve into the actual diagrams to help you better visualize how it’s created. Various project management solutions provide templates to make the plotting of tasks and team member roles and responsibilities easier. Here are some RACI chart examples from different project management systems that you may consider in project planning:

Smartsheet’s RACI matrix follows a spreadsheet format. (Source: Smartsheet )

If you’re used to managing projects in a spreadsheet, you’ll find Smartsheet’s RACI chart template easy to navigate. The important elements of the matrix are displayed in cells. The columns indicate the level of priority, task status, project deliverables, and different stakeholders’ roles. The rows bear the RACI classification for each team leader or member.

If you’re interested in this project management solution, its entry-level pricing starts at $9 per user, monthly. If you want to try it first without being locked into a subscription, take advantage of its free version, which allows you to create a maximum of two sheets.

Visit Smartsheet

ClickUp features color-coded RACI labels. (Source: ClickUp )

ClickUp’s RACI example is in a list format, with the tasks itemized in the first column. The second column bears the priority level of each assignment, and the rest of the column headers show the team members’ names. The RACI labels for each stakeholder are color-coded, making it easier for the users to know which tasks they need to work on, check, or get updates on.

The software solution’s free plan allows you to key in unlimited tasks and create up to five workspaces. If you need unlimited workspaces to accommodate multiple projects, subscribe to its base-level plan for only $10 per user, monthly.

Visit ClickUp

monday.com’s chart has the RACI labels as columns. (Source: monday.com )

monday.com’s RACI template is slightly different from other examples. It’s laid out in a table format, wherein the first column outlines the tasks. The rest of the column headers indicate the RACI roles, instead of the names or positions of the stakeholders. You’ll be able to identify team members in charge of the tasks by clicking the person icon in the table’s blank input fields. The last column of the table bears the status of each deliverable or assignment.

This project management platform’s free version offers access to three boards and over 200 project templates. It’s one of the top task management software solutions , accommodating different types of workflows across various industries. If you’re keen on using advanced features, upgrade to the paid plan, which starts at $12 per user, monthly, for a minimum of three seats.

Visit monday.com

Rules for Using the RACI Chart

To make the most of the tool, users are encouraged to follow a few general guidelines when using the RACI chart. These are the rules to remember:

• There should only be one “Responsible” and “Accountable” person per task: Having multiple people assigned to the responsible and accountable duties will create confusion. One team member might disregard the task, assuming that the others designated will work on it. On the flip side, this could also result in duplicate work, wasting team members’ efforts and time.
• “Responsible” and “Accountable” roles are mandatory: The “Responsible” and “Accountable” roles must be explicitly specified. Even in tasks that can be automated, there should be someone responsible or accountable for ensuring that the work is completed successfully.
• Communication with the consultant must be a priority. The “Responsible” and “Accountable” team members must coordinate closely with the “Consulted” to ensure that deliverables comply with quality standards.
• All stakeholders must be informed: Everyone must be aware of the progress and developments made on the project.

Best Practices for Using the RACI Chart

Now that you know the basics of what a RACI matrix is, the next step is to understand the best practices to help you maximize the chart’s effectiveness. Below are some strategies you may incorporate in your project management process:

Analyze Task Distribution

No stakeholder should have too many “Responsible” tasks designated to them. Being overworked will lead to burnout, compromising the quality and timely delivery of outputs. On the flip side, ensure that team members have enough assignments. You’ll waste your manpower’s skills and potential if they are underworked.

Moreover, the project stalls when there are not enough resources dedicated to completing the tasks. Thus, when you develop a RACI chart, always double-check if there are too many or too few “Responsible” tasks assigned to individuals.

Secure Each Stakeholder's Buy-in

The stakeholders must own the role that they’ve been assigned to. Before coming up with a matrix, conduct discussions with team members. Brief them on what their role entails for the assignments and ask if they’re willing to participate in such a manner.

Ideally, when you get their buy-in, it should be put in writing and included in the project charter, the document that outlines the project’s purpose, objectives, scope, and stakeholders. This should make the team members’ acceptance of the role official.

List Key Tasks & Milestones Only

Avoid listing administrative to-dos, such as booking meetings or creating reports, as these could overwhelm the matrix. Instead, concentrate on the most important project activities and deliverables. This should help your team be focused on critical tasks that move the project along to completion. Refer to your project plan that clearly states your project goals to properly filter through tasks.

Match Responsibilities With People’s Skills

To ensure that you have the right people on the job, review the roles you entrusted to team members, ensuring they are skilled and experienced to handle what’s assigned to them. This reduces the likelihood of outputs being repeatedly revised and passed around the team, which considerably delays project completion.

Update the Matrix Regularly

As the project progresses, you’re bound to see changes in some roles and responsibilities. These should be reflected in the chart to guide team members accordingly. Before making any changes, though, ensure that the involved parties are informed.

Alternatives to the RACI Chart

Given the disadvantages of the RACI chart, you may find it useful to explore alternatives to this responsibility assignment matrix. These alternatives are in table formats as well, but they’re structured to be simpler, focus less on tasks, or provide other role options outside the traditional.

Below are the RACI chart alternatives you may explore:

Frequently Asked Questions (FAQs)

Can you have blanks in a raci chart.

No, there should be no blank spaces in a RACI chart. Every team member must have a role, even if it’s only to be informed of the developments in the project. Remember, the RACI chart is designed to facilitate effective and maximum participation among team members. In most organizations, when there’s no person identified under the “Responsible” role, it’s assumed that the “Accountable” person will work on the task.

Can the same person be 'Responsible' & 'Accountable' in a RACI chart?

Yes. Simple tasks may entail having one person only for both the “Responsible” and “Accountable” roles.

What's the minimum & maximum number of people 'Consulted?'

There’s no strict rule as to how many team members or leaders must be consulted, but the golden rule is to limit the number, as too many parties may complicate the decision-making process and hold up the approval or sign-off, resulting in a project delay.

Bottom Line

A RACI chart is an effective responsibility assignment matrix that defines whether a project stakeholder is “Responsible,” “Accountable,” “Consulted,” or “Informed” for specific tasks. It’s beneficial to businesses as it clarifies roles and responsibilities, makes team members more accountable, speeds up decision-making, and helps resolve conflicts faster.

Now that you know the basics of what a RACI chart is in project management, remember that the key to maximizing this visual tool is to adopt best practices, including ensuring tasks are assigned to different roles equitably and focusing on key assignments only. Adopt project management software solutions and use their RACI chart templates to get started on this tool easily.

About the Author

Sam Dadofalza

Sam is an office tech writer at Fit Small Business, covering various topics including virtual phone systems, contact center platforms, and unified communications tools. She produced content for the digital marketing campaigns of small businesses from different industries and countries, including the United States, United Kingdom, Singapore, and the Philippines.

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9.3: Describe the Types of Responsibility Centers

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You’ve learned how segments are established within a business to increase decision-making and operational effectiveness and efficiency. In other words, segments allow management to establish a structure of operational accountability.

The terminology changes slightly when we think about accountability relating to the financial performance of the segment. In a decentralized organization, the system of financial accountability for the various segments is administered through what is called responsibility accounting.

Responsibility accounting is a basic component of accounting systems for many companies as their performance measurement process becomes more complex. The process involves assigning the responsibility of accounting for particular segments of the company to a specific individual or group. These segments are often structured as responsibility centers in which designated supervisors or managers will have both the responsibility for the performance of the center and the authority to make decisions that affect the center.

Often, businesses will use the segment structure to establish the responsibility accounting framework. You might think of segments and responsibility centers as two sides of the same coin: segments establish the structure for operational accountability whereas responsibility centers establish the structure for financial accountability. Both segments and responsibility centers (which will likely be the same) attempt to accomplish the same goal: ensure all sectors of the business achieve the organization’s strategic goals.

Before learning about the five types of responsibility centers in detail, it is important to understand the essence of responsibility accounting and responsibility centers.

Fundamentals of Responsibility Accounting and Responsibility Centers

Recall the discussion of management control systems. These systems allow management to establish, implement, monitor, and adjust the activities of the organization toward attainment of strategic goals. Responsibility accounting and the responsibility centers framework focuses on monitoring and adjusting activities, based on financial performance. This framework allows management to gain valuable feedback relating to the financial performance of the organization and to identify any segment activity where adjustments are necessary.

Types of Responsibility Centers

Organizations must exercise care when establishing responsibility centers. In a responsibility accounting framework, decision-making authority is delegated to a specific manager or director of each segment. The manager or director will, in turn, be evaluated based on the financial performance of that segment or responsibility center. It is important, therefore, to establish a responsibility accounting framework that allows for an adequate and equitable evaluation of the financial performance of the responsibility center (and, by default, the manager of the responsibility center) as well as the attainment of the organization’s strategic goals.

This is not an easy task. There are several factors that organizations must consider when developing and using a responsibility accounting framework. Before discussing those factors, let’s explore the five types of responsibility centers: cost centers, discretionary cost centers, revenue centers, profit centers, and investment centers.

Cost Centers

A cost center is an organizational segment in which a manager is held responsible only for costs. In these types of responsibility centers, there is a direct link between the costs incurred and the product or services produced. This link must be recognized by managers and properly structured within the responsibility accounting framework.

An example of a cost center is the custodial department of a department store called Apparel World. On one hand, since the custodial department is structured as a cost center, the goal of the custodial department manager is to keep costs as low as possible, since this is the basis by which the manager will be evaluated by upper-level management. On the other hand, the custodial department manager, who is responsible for cleaning the store entrances, also wants to keep the store as clean as possible for the store’s customers. If the store appears unclean and disorganized, customers will not continue to shop at the store. Therefore, the custodial department manager and upper-level management must work together to establish goals of the cost center (the custodial department, in this example) that satisfy the strategic goals of the business—maintaining a clean and organized store while minimizing the costs of managing the custodial department.

Figure \(\PageIndex{1}\) shows an example of what the cost center report might look like for the Apparel World custodial department.

Let’s use this report to explore how the department manager and upper-level management might review and use this information. In total, in December, the custodial department incurred \(\$980\) more of actual expenses than budgeted (or expected) expenses. This represents a \(5.2\%\) increase in expenses than was expected.

Notice the terminology used to describe the financial information of the custodial department: the department “ incurred \(\$980\) more of actual expenses,” rather than the department “ spent \(\$980\) more of actual expenses.” Recall from Introduction to Financial Statements that financial statements are typically prepared using accrual accounting rather than cash accounting. Under accrual accounting, certain transactions are recorded regardless of when the cash is exchanged. Therefore, to say the custodial department “ spent \(\$19,725\)” or “ spent \(\$980\) more for expenses” would technically be incorrect, since the cash may not have been spent.

The managers would then review each line item to determine what caused the \(\$980\) increase in expenses over what was expected. Keep in mind, the \(\$980\) represents the total overage from the budget, so it is possible that some expense accounts could have actually been below expectations. Unfortunately, that is not the case in the month of December because every line item, with the exception of department manager wages, exceeded the budgeted amount. It was no surprise to management that the department manager’s wages were exactly as expected. Even though the custodial department manager worked more hours in the month of December, the manager is a salaried employee, so the wages are the same regardless of the number of hours worked.

Upon further investigation, it was determined that in December, the town where the Apparel World store is located received an unusually high amount of snow. This had an impact on each of the expense amounts in the custodial department. Because of the need to shovel snow more often, some of the custodial staff had to work overtime to ensure customers could easily and safely enter the store. This led to an increase in custodial wages of \(\$500\) compared to the budgeted or expected amount, which was established based on the previous year, when snowfall in the area was closer to average.

The research conducted by management also identified that additional cleaning equipment (mop buckets, mops, and “wet floor” signs) were purchased. The increased snowfall also led to the purchase of more salt than usual for the sidewalks outside the store. Because it was important to promptly clean the snow as well as the salt that was brought into the store on customers’ shoes, additional equipment was purchased so that each entrance would have a mop and bucket. The custodial department manager decided this was the best course of action. Normally, the store uses a single mop and bucket to clean all entrances. This would have taken more time and increased the risk of an accident.

The increased application of salt partially explains the \(129.2\%\) (or \(\$155\)) overage in the cleaning supplies expense account. Management has learned that the overage in this account was also caused by an increase in purchases of mop head replacements, floor cleaner, and paper towels.

After reviewing the December information and learning the causes of the increased expenses, the company determined that no corrective action was necessary going forward. The area received an unusually high level of snowfall that year, which was not something the custodial department manager could control. In fact, the upper-level managers praised the custodial department manager for taking action that was in the best interest of the store and its customers. The managers commented that they had received numerous compliments from customers regarding how easy and safe it was to enter the store compared to other local stores. The manager noted that, despite the increased snowfall, store sales were higher than expected and attributed much of the success to the work of the custodial department.

Discretionary Cost Centers

A discretionary cost center is similar to a cost center, with one distinguishing factor. A discretionary cost center is an organizational segment in which a manager is held responsible for controllable costs when there is not a well-defined relationship between the center’s costs and its services or products. Examples include human resources and accounting departments. Human resources departments often establish policies that affect the entire organization. For instance, while a policy requiring all workers to have annual safety training for fires, injuries, and tornadoes is beneficial to the entire company, it is difficult to evaluate the human resources department manager’s performance in relation to impacting the products or services the company provides. As you might expect, reviewing the financial performance of a discretionary cost center is similar to that of the review of a cost center.

Revenue Centers

A revenue center is an organizational segment in which a manager is held accountable only for revenues. As the name implies, the goal of a revenue center is to generate revenues for the business. In order to accomplish the goal of increasing revenues, the manager of a revenue center would focus on developing specific skillsets of the revenue center’s employees. The reservations group of Southwest Airlines is an example of a segment that may be structured as a revenue center. The employees should be well-trained in providing excellent customer service, handling customer complaints, and converting customer interactions into actual sales. As the financial performance of cost centers and discretionary cost centers is similar, so is the financial performance of a revenue center and a cost center.

Profit Centers

A profit center is an organizational segment in which a manager is responsible for both revenues and costs (such as a Starbucks store location). Of the responsibility centers explored so far, a profit center structure is the most complex because a manager must be well-versed in techniques to increase revenues, decrease expenses, and thereby increase profits while also meeting the strategic goals of the organization.

Let’s return to the Apparel World department store. Figure \(\PageIndex{2}\) shows an example of what the profit center report might look like for the Apparel World children’s clothing department.

Just as with the cost center, let’s walk through an analysis of the December children’s clothing department profit center report. Overall, the department’s actual profit exceeded budgeted profit by \(\$3,891\), or \(13.5\%\), compared to budgeted (or expected) profit. This increase was driven by a total revenue increase over budget by \(\$29,200\) or \(19.8\%\). Recall from Building Blocks of Managerial Accounting that variable costs, unlike fixed costs, change in proportion to the level of activity in a business. Therefore, it should be no surprise that the expenses in the children’s clothing department also increased. In fact, the expenses increased \(\$25,309\) (or \(21.4\%\)) versus the budgeted amount. The revenues of the department increased \(\$29,200\), while expenses increased \(\$25,309\), yielding an increase in profit of \(\$3,891\) over expectations.

The increase in revenue could be further analyzed. Because the store also sells accessories such as belts and socks, the children’s clothing department tracks two revenue sources (also called streams)—clothing and accessories. Management was pleased to learn that clothing revenue exceeded expectations by \(\$30,000\), or \(20.7\%\). Given the higher-than-usual level of snowfall in the area, this is an impressive increase, and the company can attribute a portion of the successful month to the employees of the custodial department, who worked extra hard to ensure customers could easily and safely enter the store.

The overall revenue of the department increased by \(\$29,200\). Since the clothing department revenue increased by \(\$30,000\), the clothing accessories revenue stream must have experienced a decline in revenue. In fact, the accessories revenue dropped by \(36.4\%\). While this is a large percentage, consider the fact that the actual value of revenue decline was relatively minor—only \(\$800\) lower (as indicated by the negative amount) than expected. This indicates the employees may not have encouraged customers to also get belts or socks with their clothing purchase. This is an opportunity for the department manager to remind employees to encourage customers to purchase accessories to complement the clothing purchases. Overall, the increase in revenue attained by the children’s clothing department is a highlight for the store.

A review of the department’s expenses shows increases in all expenses, except department manager wages and cost of accessories sold. When reviewing the profit center report, pay special attention to how the differences between the actual and budgeted expenses are calculated in this analysis. In the revenue section, a positive number indicates the revenue exceeded the budgeted amount, which means a favorable financial performance. In the expense section, a positive number indicates the expense exceeded the budgeted amount, which means an unfavorable financial performance.

As with the custodial department manager, the manager of the children’s clothing department is also a salaried employee, so the wages do not change each month—the wages are a fixed cost for the department. Since the clothing accessories revenue declined, the cost of accessories also declined. The accessories expenses were \(\$576\) lower than expected. While this appears to be good news for the department, recall that clothing accessories revenue dropped by \(\$800\). Therefore, the department profit margin decreased by a net amount of \(\$224\) versus expectations (\(\$800\) revenue decline and a corresponding expense decrease of \(\$576\)).

All other actual expenses were over budget, as indicated by the positive numbers. Remember, these are expenses, and in this analysis, they indicate unfavorable financial performance. It probably comes as no surprise that all of the expense overages are a result of the increased sales. Because of the increased sales, more associates were needed to cover each shift, and they worked more hours to cover the longer store hours, which caused wages to go over budget. The substantial increase in clothing revenue also caused the cost of clothing sold to increase proportionately. Similarly, the increased sales drove an increase in equipment/fixture repairs of \(\$735\) (or \(253.4\%\)) over budget due to repairs to cash registers and clothing racks. Because the store was open longer hours during the holiday season, the utilities expenses also exceeded budget by \(\$275\), or \(44.4\%\).

Overall, the Apparel World department store management was pleased with the December financial performance of the children’s clothing department. The department exceeded budgeted sales, which resulted in an increase in department profitability. The review also highlighted an area for improvement in the department—increasing accessory sales—which is easily corrected through additional training.

Notice that the review of the children’s clothing department profit center report discussed differences measured in both dollars and percentages. When analyzing financial information, looking only at dollar values can be misleading. Displaying information as percentages—percentage of an entire amount or percentage change—standardizes the information and facilitates an easier and more accurate comparison, especially when dealing with segments (or companies) with vastly different sizes.

Let’s look at another scenario using Apparel World. The example so far has explored the financial performance review processes for a cost center and a profit center. Now assume that store management wants to compare two different profit centers—children’s clothing and women’s clothing. Figure \(\PageIndex{3}\) shows the December financial information for the children’s clothing department, and Figure \(\PageIndex{4}\) shows the financial information for the women’s clothing department.

Comparing the dollar differences in the two departments, notice that the children’s clothing department is a smaller department, as measured by total revenue, than the women’s clothing department.

Now, let’s compare the differences in the two departments by looking at the percentages. The children’s clothing department financial information is shown in Figure \(\PageIndex{5}\), and the women’s clothing department financial information is shown in Figure \(\PageIndex{6}\).

Does the comparison change when the dollar differences are shown as percentages? Which department was more effective at strengthening the store’s financial position? Which department was more efficient with the December revenue? What other factors might the Apparel World management consider?

Adding the percentages to the financial analysis allows managers to more directly make comparisons, to separate departments in this case. Simply reviewing the dollar differences can be misleading because of size differences between the departments being compared. The Women’s Department added more value (\(\$61,113\)) to the store’s financial position, while the Children’s Department was more efficient, converting \(13.5\%\) (or \(\$0.135\)) of every dollar of revenue to profit.

Investment Centers

It is important for managers to continually invest in the business. Managers must choose investments that improve the value of the business by improving the customer experience, increasing customer loyalty, and, ultimately, increasing the value of the organization. A limitation of the centers explored so far—cost center, discretionary cost center, revenue center, and profit center—is that these structures do not account for the investments made by the various responsibility center managers. The final responsibility center—investment centers—takes into account and evaluates the investments made by the responsibility center managers. The goal of the investment center structure is to ensure that segment managers choose investments that add value and help the organization achieve its strategic goals.

An investment center is an organizational segment (such as the northern region of Best Buy or the food trucks used in the Prelude to the chapter opening case) in which a manager is accountable for profits (revenues minus expenses) and the invested capital used by the segment.

CONCEPTS IN PRACTICE: Research and Development at Hershey’s

As you know by now, financial statements tell users what has occurred in the past—the statements provide feedback value. Responsibility accounting is no exception—it is a system that measures the financial performance of what has already occurred and provides management with a measure of past events.

Have you ever considered how companies measure the outcome of activities that have not yet occurred? As you’ve learned, many companies invest in research and development activities to determine how to improve existing products and to create entirely new products or processes.

The Hershey Chocolate Company is one company that invests heavily in research and development. Hershey’s has created an Advanced Technology & Foresight Lab, which looks for innovative ways to bring chocolate to the market.

Here are some of the innovative things that Hershey’s has developed:

• Sourcemap—an interactive, web-based tool to show consumers where the ingredients in their favorite Hershey’ssnack, such as Hershey’s Milk Chocolate with Almonds Bar comes from. There is also a video and short story for each point on the interactive map for more information.
• SmartLabel—a scanable label on each Hershey’s product that gives the user up-to-date ingredient, allergen, and other information.
• Chocolate made inside the package—Hershey’s developed this process to form a piece of chocolate inside the package.
• 3D Chocolate Printing—using a 3D printer, Hershey’s has developed an innovative way to create customized chocolate candies. 1

Measuring the financial success of innovations such as these is nearly impossible in the short-run. However, in the long-run, investments in product development help companies like Hershey’s increase sales, reduce costs, gain market share, and remain competitive in the marketplace.

There are numerous methods used to evaluate the financial performance of investment centers. When discussing profit centers, we used the segment’s profit/loss stated in dollars. Another method to evaluate segment financial performance involves using the profit margin percentage.

The profit margin percentage is calculated by taking the net profit (or loss) divided by the net sales. This is a useful calculation to measure the organization’s (or segment’s) efficiency at converting revenue into profit (net income). While the dollar value of a segment’s profit/loss is important, the advantage of using a percentage is that percentages allow for more direct comparisons of different-sized segments.

Let’s return to the Apparel World example and look at the profit margin percentage for the children’s and women’s clothing departments. Figure \(\PageIndex{7}\) shows the December financial information for the children’s clothing department, including the profit margin percentage.

The actual profit margin percentage achieved by the children’s clothing department was \(18.5\%\), calculated by taking the department profit of \(\$32,647\) divided by the total revenue of \(\$176,400\) (\(\$32,647 /\ $176,400\)). The actual profit margin percentage was slightly lower than the expected percentage of \(19.5\%\) (\(\$28,756 / \$147,200\)). To determine why the profit margin percentage slipped slightly compared to expectations, management could compare the actual revenue and expenses with the budgeted revenue and expenses using a vertical analysis, as shown in Financial Statement Analysis . Doing so would highlight the fact that the cost of clothing sold as a percentage of clothing revenue increased significantly compared to what was expected. Management would want to explore this further, looking at factors influencing both clothing revenue (sales prices and quantity) and the cost of the clothing (which may have increased).

Figure \(\PageIndex{8}\) shows the December financial information for the women’s clothing department, including the profit margin percentage.

The actual profit margin percentage of the women’s clothing department was \(14.6\%\), calculated by taking the department profit of \(\$61,113\) divided by the total revenue of \(\$417,280\) (\(\$61,113 / \$417,280\)). The actual profit margin percentage was significantly lower than the expected percentage of \(18.2\%\) (\(\$58,580 / \$322,300\)). As with the children’s clothing department, a vertical analysis indicates the significant decrease from budgeted profit margin percentage was a result of the cost of clothing sold. This would lead management to investigate possible causes that would have influenced the clothing revenue (sales prices and quantity), the cost of the clothing, or both.

Another method used to evaluate investment centers is called return on investment. Return on investment (ROI) is the department or segment’s profit (or loss) divided by the investment base (Net Income / Base). It is a measure of how effective the segment was at generating profit with a given level of investment. Another way to think about ROI is its use as a measure of leverage. That is, the return on investment calculation measures how much profit the segment can realize per dollar invested.

Several points are in order regarding the definition of return on investment. In practice, the numerator (segment profit or loss) may have different names, depending upon the terms used by the organization. Some organizations may call this value net income (or loss) or operating income (or loss). These terms relate to the financial performance of the segment, and each organization decides how best to identify and quantify financial performance.

Another significant point in the definition of return on investment relates to the denominator (investment base). There is no uniform definition of “investment base” within the accounting/finance profession. Some organizations define investment base as operating assets, while others define the investment base as average operating assets. Other organizations use the book value of assets, and still others use the historical or even replacement cost of assets. There are valid arguments for all of these definitions for investment base. It is important not to be confused by these variations but instead to know the definition in a particular context and to use it consistently. For our purposes, the denominator in the return on investment formula will be “investment base,” and the value will be provided.

Finally, you may recall from Long-Term Assets that accountants carefully consider where to place certain costs (either on the balance sheet as assets or on the income statement as expenses). While ROI typically deals with long-lived assets such as buildings and equipment that are charged to the balance sheet, the ROI approach also applies to certain “investments” that are expensed. For instance, advertising costs are expensed. If a segment is considering an advertising campaign, management would assess the effectiveness of the advertising campaign in a similar manner as the traditional ROI analysis using large, capitalized investments. That is, management would want to assess the additional revenue (or profit) derived from the advertising campaign (which would be the numerator in the ROI calculation) compared to the investment or cost of the advertising campaign (which would be the denominator in the ROI calculation). To illustrate, let’s say management was able to identify that an advertising campaign costing \(\$2,500\) brought in an additional \(\$500\) of profit. This would be a \(20\%\) return on investment (\(\$500 / \$2,500\)).

A return on investment analysis of an investment center begins with the same information as an analysis of a profit center. To explore return on investment, let’s return to the December Apparel World profit center information analyzing the children’s and women’s clothing departments. Assume that a smaller store in another location had the following profit for December:

• Children’s clothing department: \(\$3,891\)
• Women’s clothing department: \(\$2,533\)

Now assume that each department had an investment base of the following amounts:

• Children’s clothing department: \(\$15,000\)
• Women’s clothing department: \(\$65,000\)

To calculate the return on investment (ROI) for each department, divide the segment profit by the segment investment base. The ROI for each department is:

• Children’s clothing department: \(25.9\%\) (\(\$3,891 / \$15,000\))
• Women’s clothing department: \(3.9\%\) (\(\$2,533 / \$65,000\))

The children’s clothing department contributed the most to the financial position of this Apparel World location (\(\$3,891\) vs. \(\$2,533\)). In addition, the children’s clothing department was able to better leverage every dollar invested into profit. Stated differently, for every dollar invested, the children’s clothing department was able to realize \(\$0.259\) of profit while the women’s clothing department realized only \(\$0.039\) of profit for every dollar invested.

It is also significant that the children’s clothing department requires a smaller dollar value of investment. This conserves store resources (financial capital) and helps store management prioritize and efficiently allocate future resources. By investing in the children’s clothing department, store management is able to invest a smaller dollar amount while achieving a higher rate of return (profitability) on that investment.

One of the criticisms of the ROI approach is that each segment evaluates potential investments only in relation to the individual segment’s ROI. This may cause the individual segment manager to select only projects or activities that improve the individual segment’s ROI and decline projects that improve the financial position of the overall company. Most often, segment managers are primarily evaluated based on the performance of the segment they manage with only a small portion, if any, of their evaluation based on overall corporate performance. This means that the bonuses of a segment manager are largely dependent on how the segment performs, or in other words, based on the decisions made by that segment manager. A manager may choose to forgo a project or activity because it will lower the segment’s ROI even though the project would benefit the entire company. ROI and the many implications of its use are explained further and demonstrated in Balanced Scorecard and Other Performance Measures .

The final investment center evaluation method, residual income (RI), structures the investment selection process to incentivize segment managers to select projects that benefit the entire company, rather than only the specific segment.

Example \(\PageIndex{1}\): Analyzing Historical Success

Companies want to be sure the investments they make are generating an acceptable return. Additonally, individual investors want to ensure they are receiving the highest financial return for the money they are investing.

This article published in the New York Times on best investments listed Microsoft as having one of the best investments since 1926 (based on a study by Hendrik Bessembinder). Based on stock market returns to investors, Microsoft ranked third, behind ExxonMobil and Apple. According to the article, “since 1986, it has had an annualized return of \(25\) percent.”

Other companies in the ranking included familiar company names such as General Electric (ranked #4), Walmart(ranked #10), McDonald’s (#31), and Coca-Cola (#15).

But does historical success ensure future success? General Electric is listed in the article as the 4th highest-ranking company for creating wealth for investors. Conduct internet research to find out the condition of General Electric today. What do you think the future holds for General Electric?

As the world-wide economy changes, General Electric seems to be struggling to evolve, and this issue potentially leaves them with an uncertain future.

Residual income (RI) establishes a minimum level that all investments must attain in order to be accepted by management. This minimum acceptable level is defined as a dollar value and is applicable to all departments or segments of the business. Residual income is calculated by taking the segment income less the product of the investment value and cost of capital percentage. The formula is:

\[\text {Residual Income} = \text {Income} - (\text {Investment} \times \text {Cost of Capital Percentage})\]

As with the return on investment calculation, income can be defined as segment operating income (or loss) or segment profit (or loss). Some organizations may use different terms. In RI scenarios, the investment refers to a specific project the segment is considering. Investment, in RI calculations, should not be confused with the total investment base, which was used in the ROI calculation. Finally, the cost of capital, which is covered in Short-Term Decision-Making , refers to the rate at which the company raises (or earns) capital. Essentially, the cost of capital can be considered the same as the interest rate at which the company can borrow funds through a bank loan. By establishing a standard cost of capital rate used by all segments of the company, the company is establishing a minimum investment level that all investment opportunities must achieve. For example, assume a company can borrow funds from a local bank at an interest rate of \(10\%\). The company, then, does not want a segment accepting an investment opportunity that earns anything less than \(10\%\). Therefore, the company will establish a threshold—the cost of capital percentage—that will be used to screen potential investments. At the same time, under the residual income structure, managers of the individual segments (also called responsibility centers) will be incentivized to undertake investments that benefit not only the segment but also the entire company. Recall that the ROI of the children’s clothing department was \(25.9\%\) (\(\$3,891\) profit / \(\$15,000\) investment). Under an ROI analysis, the manager of the children’s clothing department would not accept an investment that earns less than \(25.9\%\) because the rate of return would be negatively impacted, even though the company may benefit. Under a residual income structure, managers would accept all investments with a positive value because the investment would exceeded the investment threshold established by the company.

Let’s look at an example. Recall that the children’s clothing department of Apparel World had an investment base of \(\$15,000\). Assuming the cost of capital (understood as the rate of a bank loan) to Apparel World is \(10\%\). This is the rate that Apparel World will also set as the rate it expects all responsibility centers to earn. Therefore, in the example, the expected amount of residual value—the profit goal, in a sense—for the children’s clothing department is \(\$1,500\) (\(\$15,000 \text {investment base} × 10\% \text {cost of capital}\)). Management is pleased with the December performance of the children’s clothing department because it earned a profit of \(\$3,891\), well in excess of the \(\$1,500\) goal.

Now let’s examine how the manager of the children’s clothing department would evaluate a potential investment opportunity. Assume in December the manager had an opportunity to invest to upgrade the store by adding a supervised children’s play area for children to use while parents shopped. The manager believes this enhancement might increase sales because parents could take their time shopping, while knowing their children are safe and having fun. The upgrade would make the customer shopping experience more enjoyable for everyone.

The children’s play area requires an investment of \(\$50,000\) and the expected increase in income as a result of the children’s play area is \(\$5,001\). Because the Apparel World store has a cost of capital requirement of \(10\%\), the manager would invest in the children’s play area because the residual income on this investment would be positive. To be precise, the residual income is \(\$1\). Using the residual income formula, the residual income is \(\$5,001 – (\$50,000 × 10\%) = \$1\).

While this is an exaggerated and oversimplified example, it is intended to highlight the fact that, as long as resources (funds) are available to invest, a responsibility manager will (or should) accept projects that have a positive residual value. In this example, the children’s clothing department would be in a better financial position by undertaking this project than if they rejected this project. The department earned \(\$3,891\) of profit in December but would have earned, based on the estimates, \(\$3,892\) if the department added the children’s play area.

The benefit of a residual income approach is that all investments in all segments of the organization are evaluated using the same approach. Instead of having each segment select only investments that benefit only the segment, the residual income approach guides managers to select investments that benefit the entire organization.

• Sue Gleiter. “Hershey Company Goes Futuristic with 3-D Printed Chocolates.” PennLive. https://www.pennlive.com/food/index....chocolate.html

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Explain the different types of Responsibility Centres

Responsibility centers are organizational units or subunits within a company to which management delegates authority and assigns responsibility for specific tasks or functions.

Get the full solved assignment PDF of MMPF-003 of 2023-24 session now.

The concept of responsibility centers is crucial for decentralized organizations, as it helps in better management control and accountability. There are several types of responsibility centers, each with its own set of responsibilities and characteristics. The major types include:

• Cost Center:
• A cost center is responsible for controlling and managing costs within a specified budget. The primary focus is on cost containment and efficiency. Examples of cost centers include production departments, maintenance departments, or administrative units. Managers of cost centers are typically held accountable for maintaining costs at or below budgeted levels while delivering the expected level of output or service.
• Revenue Center:
• A revenue center is accountable for generating revenue. These units are evaluated based on their ability to generate sales or other forms of income. Examples of revenue centers include sales departments, business development teams, or retail outlets. The success of a revenue center is measured by its contribution to overall revenue targets.
• Profit Center:
• A profit center is responsible for both revenues and costs, ultimately aiming to generate a profit. Managers of profit centers have the authority to make decisions that impact both revenue generation and cost control. Business units or product lines are often designated as profit centers. The performance of profit centers is assessed based on their ability to contribute to the organization’s overall profitability.
• Investment Center:
• An investment center is a more comprehensive responsibility center that considers not only revenues and costs but also the return on invested capital. Managers of investment centers have control over both operating activities and investment decisions, such as capital expenditures. Return on Investment (ROI) or other financial metrics is used to evaluate the performance of investment centers. Business units, divisions, or subsidiaries may function as investment centers.
• Composite or Hybrid Center:
• Some organizational units may have characteristics of multiple responsibility centers. For example, a business unit could be responsible for generating revenue (revenue center), managing costs (cost center), and delivering a profit (profit center). These composite or hybrid centers are structured to align with the specific needs and objectives of the organization.
• In the context of performance measurement, a segment is a unit of the organization for which separate performance data is available and evaluated. A segment could be based on geographical regions, product lines, customer groups, or other criteria. Segment reporting helps management assess the performance of different parts of the organization and make informed strategic decisions.

Responsibility centers help organizations clarify objectives, allocate resources, and establish accountability. The type of responsibility center chosen depends on the nature of the business, its goals, and the desired level of decentralization in decision-making.

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5 Different Types of Life Insurance — and Which One Is Right for You

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Many financial advisors assert that anyone with any fiscal responsibility for loved ones must get life insurance. This is because, should you die, life insurance will be a safety net for those left behind. If loved ones are relying on your income, they may get into some financial trouble if you pass away. Perhaps they’ll be unable to tackle mortgage payments, support their kids, or even cover the costs of your funeral. 

Even if you know you need life insurance, navigating options can be tricky. There are numerous types of life insurance. Which one is right for you? Let’s explore.

Term Life Insurance

If you want the simplest, most affordable life insurance policy on the market, term life insurance should be your go to option. 

“It provides coverage for a specified period, typically 10, 20 or 30 years,” said Daniel J. Adams, MBA, CFP, CLU and expert contributor at Annuity.org . “The main benefit of a term life insurance policy is its affordability: premiums are lower to start than those paid for permanent insurance and, as such, it allows the owner to buy the most life insurance for the lowest cost for a limited amount of time.” 

Tim Hoolihan, licensed life insurance agent at Assurance IQ , points out that term life insurance can be “a useful financial tool for budget-conscious consumers when it comes to protecting income and debt.” 

Whole Life Insurance

And then there’s whole life insurance. This type of plan is best for people who can comfortably pay higher upfront premiums.

“Additionally, the premiums you pay will go towards building cash value that can be withdrawn via policy loans on a tax-free basis to supplement retirement income, pay for college expenses, fund a long-term care insurance plan and provide a guaranteed inheritance,” Adams said. “However, whole life insurance requires higher initial premiums to offset the initial policy expenses.”

Universal Life Insurance 

Universal life insurance is best suited for those who want to have some control over their life insurance investment returns. 

“Universal life insurance offers the benefits of whole life insurance while providing flexibility in when you pay premiums and how much you pay,” Adams said. “A universal life insurance policy can provide guaranteed lifelong financial protection along with cash value, or it can be used for limited coverage time at a lower premium amount.” 

Indexed Universal Life Insurance

“Indexed universal life insurance is a type of universal life insurance, but it has become very popular in recent years and deserves its own explanation,” Adams said. “It includes all the features of universal life insurance but bases its cash value accumulation on the performance of a stock market index, such as the S&P 500.” 

This type of life insurance is appropriate for those who want the benefits of stock market returns — with protection from the risk of losses. 

Final Expense Life Insurance

If you do not currently have life insurance, it’s time to make end-of-life plans. It will cover your final medical expenses and funeral. 

“A final expense life insurance policy is typically a type of whole life insurance policy with a very minimal benefit that will payout whenever the insured dies,” Adam says. “However, a defining feature of final expense life insurance is that it typically involves limited to no underwriting. This allows people who have health problems that would normally disqualify them for life insurance coverage to purchase a small policy to cover their final expenses. As a result, these policies generally have high premiums compared to the amount of coverage offered and without other benefits that other whole life insurance policies provide.” 

Though everyone’s situation is unique, all of us can find a life insurance policy that works for us and our families. But shopping around is important; it can save you money.  

“[Use] a licensed agent to receive quotes from different insurance companies can help you find the best rate,” Hoolihan said.

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