Creating a Project Charter
Projects are most successful when there is written and approved authority for the project manager to plan and organize work. A project charter should be created by the project manager from input gathered from the sponsor(s) and the key stakeholders.
The project charter includes documentation of the project’s goals and the definition of the high-level project and product descriptions. The project manager uses the project charter throughout the project to make certain the business case and the project objectives can be met. Therefore, the charter becomes the mandate allowing you to gain “buy in” on the project and its goals. Given its purpose, the charter should have minimum jargon and be easy to read. There are additional benefits of the project charter.
The project charter should be broad enough that it does not need to change as the project progresses. Any change to the project charter should call in to question whether the project should continue.
Elements a Project Charter
As we walk through the elements you will need to create a project charter, these sections are not exact as a charter should be tailored to meet the needs of the business and project. Use these components to get you started.
Project Title and Description: The project title and description define What is the Project.
Project Manager Assigned and Authority Level: Includes the name and title of the project manager. It answers the question, “To what extent can the assigned PM make decisions?” For example, can the project manager approve budget changes, change the schedule, and approve staffing assignments? Keep in mind that when the project is underway is not a good time to find answers and make such decisions!
Business Case: The business case should answer why was this particular project undertaken. How does it fit into the organization’s strategic plan? How will the project bring value to the business? On what financial or other basis can we justify doing this project? Understanding the business case will impact the way the project is managed. Outlining the business case in the project charter is essential.
Resources Preassigned: Have team members or other resources been assigned by management? How many or which resources will be provided? These preassigned resources must be taken into account when estimating and planning.
Stakeholders: Stakeholders are any people or organizations whose interests may be positively or negatively impacted by the project or the product of the project. To help identify stakeholders, for the project charter, ask “Who will affect or be affected by this project, as known to date?” It includes all employees by department as well as outside representatives. Identifying all stakeholders early in planning may avoid costly changes later in the project.
Stakeholder Requirements as Known: What high-level requirements were used to justify the project? These are the requirements related to both the project and product scope. Further work to clarify and finalize requirements will come later.
High-Level Product Description/Key Deliverables: The project charter defines what specific product deliverables are wanted, and what will be the end result of the project? A measure of project success is that all the deliverables are met.
High-Level Assumptions: What do stakeholders believe to be true and reliable for the project, which may not be true? What do we believe to be the case but do not have proof or data for? Assumptions need to be reviewed throughout the project, since an assumption that is proven not to be true may cause changes in scope and other parts of the project management plan.
High-Level Constraints: What factors may limit the team’s ability to deliver the needed result of the project? What boundaries or parameters will the project have to function within?
Measurable Project Objective(s): How does the project tie into the organization’s strategic goals? What project objectives support these goals? Objectives must be measurable to prove project success. And these objectives will depend on the defined priority of the project constraints.
Project Approval Requirements: What items need to be approved for the project, and who will have sign-off authority? What designates success?
Overall Project Risks: A project charter defines the overall opportunities and potential threats that could impact the project? Additional risks, as well as strategies to deal with them, will be documented later in planning.
Project Exit Criteria: What needs must be met so that the project manager will be able to close or terminate the project or phase?
Project Sponsor Authorizing This Project: The project charter requires a signature in order to give authority and make the project official. Depending on the environment in which your project will be completed, there could be more than one signature on the project charter.
More Project Charter Help
The project charter should contain all the elements described above. They can be abbreviated or elaborated upon depending on the organization’s culture, environment, level of planning, project management maturity, and best practices. It can also depend on the size of the project.
Overall, a successful project begins with a well written project charter that can be used to sell your project, measure progress, is a reference point for avoiding and settling disputes and a guide to keep the projects end solution as the focal point.
If you are looking for additional support, download RMC’s FREE project charter template to use with your next project. If you are looking for further project management resources, consider Rita Mulcahy’s Exam Prep book. It’s a great resource for project managers, even if you are not preparing for the PMP exam.