Back to basics: What is a project charter?

As the ancient Greek philosopher Plato once said, “The beginning is the most important part of the work.” . How you start a project is just as important as how you execute the project, if not more. Seasoned project managers embarking on a new project know the importance of Plato’s wisdom. Therefor when a new project is assigned to them, the first document they would ask for is a project charter document.

Every project manager when starting a project should understand “why” part of a project. Why the project is undertaken? What is its purpose?

Project charter answers these questions. It documents the purpose of a new project and outlines the objectives of the project.

Let’s understand about project charter in detail.

What is a Project Charter?

As per the PMBOK guide, the charter definition is:

A?project charter?is a document issued by the project initiator or sponsor that formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to the project activities.

The key word in this definition is “authority.” It authorizes both the project and the project manager.

Generally, A charter is small document, mostly one to two pages long. It describes essential elements of a new project that are known at the beginning.

A content of Project Charter

The content of a?project charter?may change with industry and organization, but a?project charter?typically contains all of the following:

• Why project is undertaken? What is a Purpose of the project– What problem will the project solve, and what are the expected benefits? Is it going to create a new product and launch it in the market? Will it improve the quality of an existing product or service? Will it improve the efficiency of an existing process? Is it aimed at increasing the profitability of a business, or is it done for a social cause? Is it new order received from a customer, and should be executed as any other projects in a particular portfolio?
• Small description– A brief overview of the project, including how it will solve the problem
• Project objectives– Specific and measurable goals that the project needs to achieve. These goals should be realistic and aligned with the project’s purpose.
• Main deliverables– Deliverables are outputs that customers and other stakeholders require as part of the project.
• High-level scope and requirements– what are the project’s boundaries, and what work will be done to meet the project objectives?
• Assumptions and Constraints – Are there any assumptions project team should be aware of? What are major constraints of a project? (such as local government norms, geographical locations of project team members etc.)
• High-level schedule– A high-level schedule contains major milestones and a timeline for major deliverables.
• Overall budget– Money required for all types of resources required to complete the project, which includes people, facilities, equipment, and materials. Overall budget can be broken into milestone budgets such as procurement budget, design budget etc.
• Initial risks– A list of all the risks that are known at the time of beginning a project. A risk is an uncertain event or condition that may impact the project.
• Key stakeholders and their respective roles– Stakeholders are those people who are either interested in or impacted by the project. Some of them are decision-makers and can influence the direction of the project. They include sponsors, customers, team members, and other relevant parties.
• Project Manager’s name
• Project Sponsor’s name and signature

The?project charter?is signed and authorized by the project sponsor. It has no significance without the sponsor’s signature.

How to create Project Charter?

Some project managers may be misled by the word “document” in the definition pf project charter. They fear that they do not have a project charter unless they have a specific document formatted with certain headings.PMBOK?Guidedoes not mandate the use of any specific document format, and project charters can take many forms. Often the charter appears in the form of a free-form e-mail or memo.

A charter is often created in any text editor like MS Word. Or, it can be created as a slide show in PowerPoint.

The project sponsor is primarily responsible for creating a?project charter, but she can delegate the responsibility to the project manager.

Here are few steps to help you create a project charter

• Use your organization’s?project charter?template. If your organization does not have a template, you should create one containing the main?components described in the previous section.
• Have a discussion with the senior stakeholders and core team members. The discussion notes will help you to fill in important details in project charter such as Risks, constraints, assumptions and high level requirements.
• After creating the initial version of the?charter, ask key stakeholders and core project team members to review it for correctness and completeness.
• Get approval from the project sponsor. After the charter is created, it has to be authorized and signed by the project sponsor and issued to the project manager.

Best Practices for the Creation of a Project Charter

The charter?should be simple, short, and unambiguous. It should be clear, concise, straightforward, and well-organized, leaving no room for any interpretations.

It should provide a high-level overview of the project and not drill down into details. The?charter?should be succinct and concise, as the project’s finer details will change with time.

Project managers should create a consensus with?the stakeholdersand seek their approval while creating and presenting the?charter. It will serve no purpose if?the stakeholders?are not aligned with it.

The purpose of project charter

The first and most obvious purpose of a?charter?is that it ensures that all the project stakeholders formally agree on the project definition and have recorded that definition in writing.?The charter protects the project team against uncontrolled scope addition.

Ideally, the project sponsor will participate directly in developing the?project charter. Whether the sponsor participates directly or not, you as a project manager should ask the sponsor to sign the charter to show his/her personal acceptance and commitment to the project definition.

The second purpose of having a charter is that it allows project manager to communicate the project definition to people who were not involved in the charter development meetings, such as people who join the project team later, contractors and other resources who will work on the project, or managers of the functional departments from which the team members are drawn.

The third purpose of having a project charter is to get buy-in and commitment from project team. Since key stakeholders get directly involved in the chartering process, the team members begin to take ownership of the project; that is, they begin to think of the project as our project, rather than as someone else’s project that I would like to have as little involvement in as possible.

Common misconceptions about project charter

A project charter is legal document

The word “charter” is used in English to describe executed contracts or deeds. Traditionally a charter is a formal, legal document.

A project charter is quite different. Typically it is not prepared by lawyers and a project charter might not carry any legal weight. It is just another project document which gives authority to the project manager to start a project.

A charter is always a single document

A project charter must be single document. A project charter does not need to be a single document. Ideally, one document will authorize the project and include references to other documents that show business need, milestone schedule, and other key information.

A charter is always written by project sponsor

A charter must be written by project sponsor. Charters are not frequently written by sponsors. Sponsors are often senior executives with little time. Expecting them to write and deliver a complete project charter may be impossible for even a project-oriented organization. Senior executives often employ speech writers and ghost authors when crafting important messages. The project manager should be prepared to serve in a similar role, drafting or even writing the final copy for the charter.

A charter is detail scope document

A charter must outline detail project scope and requirement. In order to issue a charter at the very start of a project, the charter’s author must create it based on only partial information.?At the very start of a project, it is impossible to give detail requirement, scope, schedule and budget information of a project.

Summary

The project charter is an essential document that sets the foundation for a project by defining its purpose, scope, and participants. It ensures that all stakeholders have a common understanding of the project’s objectives and the authority granted to the project manager.