Project Charter: An Ultimate Guide to Showcase Your Project

A Project Charter is a versatile document that formally authorizes a project or a phase. It defines the reason of establishing the project and assigns it to whoever is worthy of doing it.

A project needs descriptive assistance through which others can understand its technicalities. Many would ask what this is. Who does it? Who signs it? Can a project manager write it? Is it a simple project document? Why is it important? The list goes on.

Why it is needed?

Similar to how a movie without a script can be a disaster, a project without its charter can end up like a flop movie. The sole purpose of a project charter is to document and acknowledge the existence of the project. This document will be proof to commit organizational resources to the project. Project managers need to create a project charter in order to analyse the following aspects:

• Reasons for undertaking the project
• Objectives and constraints
• Directions concerning the solution
• Identities of the main stakeholders
• In-scope and out-of-scope items
• Risks identified early on
• Target benefits
• High-level budget and spending authority

Certainly, the success of the project can never be measured if a charter is not present to do so.

Uses

Projects are usually initiated by sponsors, project managers or the chairperson of an organization. A charter is needed to establish a roles and responsibilities among the members. If the project is a shared collaboration between two organisations, it creates a smooth partnership between them. The Project Management Office (PMO) deals with formal contracts to ensure that the external organization is trustworthy or not.

A clear and concise charter can be used to:

• To initiate the project
• Serves as the primary sales document for the project
• Serves as a focal point throughout the project
• Serves as a source to understand how the project will work.
• To align with other organizational strategies
• To show stakeholders and executives the business value of the project
• For comparing Project Performance and Progress during Phase gate.

This high-level document demands attention and strategic changes which shall be given under much needed circumstances. For better project management planning, a periodic review is essential.

Uses of Project Charter

Projects are usually initiated by sponsors, project managers or chairperson of an organization. A charter is needed to establish a roles and responsibilities among the members. If the project is a shared collaboration between two organisation, it creates a smooth partnership between them. Project Management Office (PMO) deals with formal contracts to ensure if the external organization is trustworthy or not.

A clear and concise charter can be used to:

• To initiate the project
• Serves as the primary sales document for the project
• Serves as a focal point throughout the project
• Serves as a source to understand how the project will work.
• To align with other organizational strategies
• To show stakeholders and executives the business value of the project
• For comparing Project Performance and Progress during Phase gate.

This high-level document demands attention and strategic changes which shall be given under much needed circumstances. For better project management planning, a periodic review is essential.

Project Charter for Client Company

Project charter acts as a central document that works as a key component to client companies. This document contains short explanations or detailed specifications about the scope of work. A general project charter is incomplete without the authorized signature at the end. It is usually a signature of the customer at the bottom that conveys authority to bind the agreement. The counter signature is from an officer from the consultancy.

Who is Responsible for Project Charter?

Clearly a project manager. He is assigned to initiate the project as soon as possible. To make it more feasible, the charter is the first thing to be developed. It is done even prior to the planning and development stage.

Although, sponsor are eligible to sign the project charter, the one who is additionally responsible for the document is the project manager. Until the end of the project, it is the duty of a project manager to provide recommendations and oversight.

Is Project Charter the Only Important Business Document?

The clear answer is no. The Project Charter is an important business document but it is not the only one. Business Case and Benefits Management Plan are Project Phase documents, which act as an input to the Project. Chartering a project validates alignment of the project to the strategy and ongoing work of the organization.

Project Charter VS Contract

Contract

• It’s a procurement document which defines the legal relationship between supplier and customer
• The contract may include SOW, where all deliverables needed by customers, are listed
• Contracts are approved by the customer and given to executing organizations to get things done.

Project Charter

• It’s an internal document, which the organization is giving to the internal team to communicate what is expected from them
• For a given contract, the executing organization may execute more than one project and divide the deliverables; the sponsor of the executing organization may also add some goals or deliverables which are not mentioned in the Contract like the sponsor may ask to build a capability of doing such projects as part of this project.
• The executing organization (sponsor) approves the project charter and sends across to project manager to get things done

Project Charter VS Business Case

Business Case:

• The business case is a sales pitch or a funding request for the project to the management or investment board.
• It is developed after confirming the opportunity and evaluating the options open to the entrepreneurs.

Project Charter:

• A project charter, on the other hand, is formal documentation of how a project will be managed, list of initial assumptions, risk, issues, scope, high-level timeline etc.
• Developing a project charter involves assessing the project feasibility basis the given constraints and planning the project at a high level

Who Signs this important document?

You are mistaken if you thought that a project manager can sign the Project Charter. Project Manager DOES NOT sign it but Project Sponsor does.

The sponsor must authorize it, not write it. Project Manager is the one who develops the document. The authorization may be delivered by a formal signature by the sponsor, a formal chartering ceremony, or simply a reply e-mail saying, “I agree. Proceed.”

Essential Contents of Project Charter

A Project Charter depends upon the project type and the organization but a general outline comprises of:

• Project Objectives
• Purpose and Justification
• Project description
• Project Limits
• Key Ingredients
• Key stakeholders
• High-level requirements and high level Project Scope
• Project Risk
• Measurable success criteria
• Summary of Milestone schedules
• Financial Resources
• Constraints
• Project exit criteria
• Duties of project manager including responsibility, and authority level
• Name and authority of the sponsor or other people (s) authorizing the document

5 Step Process for Publishing and Effective Project Charter

1. Initiate

• Identify Stakeholders
• Identify the Project Scope
• Work on the identification of Risk
• Understand the assumptions and Constraints
• Identify the high level of Requirements and Scope
• Most importantly what is project Success Criteria

2. Develop

• Goal
• Scope
• Timeline
• Business Case

3. Get Agreement

• Sending Agreement to Sponsors and Stakeholders
• Confidentiality agreement from team members

4. Sign off by the Authority

• Signature of proceeding by Sponsors

5. Publish

• Project Charter is ready to Publish

I have witnessed that many managers initiate a project without having a clear Project Charter and it doesn’t end well. The document is an integral part of Project Management as it gives a purpose to planning, meetings, discussion and objectives of the project. Personal Advice? Always initiate with a Project Charter, whether it’s 1 pager or 15, but make it and get it approved before proceeding further.

Visual Project Charter

Usually, a project charter spans 5-6 pages. This is one of the major reasons why they get overlooked in the project management process. An easier way to write a project charter that everyone can quickly read and understand, with minimal effort is through visualization

Fully Customizable Project Charter

A fully customizable Template from Rocket lane would be a great addition to your library. It would help you in crafting your Project Charter document effectively.

References

• PMBOK 6
• Grey Campus.
• Simplilearn
• A Project Manager’s Book of Forms by Cynthia Snyder Dionisio
• Project Management Professional Exam Review Guide by Kim Heldman
• Project Management Professional Exam Study Guide by Kim Heldman
• PMP Certification Study Guide by Joseph Philips
• Rita Mulcahy
• Specialities at BAYT
• Brown, A. S. (2005). The charter: selling your project. Paper presented at PMI® Global Congress 2005—North America, Toronto, Ontario, Canada. Newtown Square, PA: Project Management Institute.