The project charter is an essential part of any project. This article explains the importance of a project charter, whilst going into further detail of what makes one successful and how to make one yourself. A well-written project charter, with all of the key elements, is a good way of ensuring a project's success.
The project charter is one of the first tasks of a project manager, ahead of a new project. It is a document that serves to formally announce the selection and approval of the project, as well as grant the project manager the authority to meet project objectives whilst using organisational resources. It also includes the main goals of the project, and the designation of roles and responsibilities.
The purpose of the project charter is to provide support for the project managers involved, as well as helping the stakeholders to understand what the given project is hoping to accomplish. It defines the project's success, offers deadlines, provides information on identified risks, and outlines the budget. The project charter serves as the basis for the project planning, and it maps out each step of the way so that any changes can be implemented easily and smoothly.
There can occasionally be some confusion around what a project charter actually is. It can often be referred to using other names such as ‘project plan’, ‘project brief’, or even by ‘business case’. However, the differences are not just in the names, but in their purposes as well.
A project plan is a formally approved document that guides and controls the project execution by explaining in great detail how and when to fulfil the project objectives. The project plan highlights the major products, milestones, activities, and resources required.
A project charter, on the other hand, is an unapproved proposal and the first deliverable of the project. It is used to secure stakeholder approval of project goals, as well as establishing the authority of the project manager. Once senior management approves the project charter, the project manager prepares the project plan which outlines how to achieve the approved project goals. To put it simply, a project charter is a draft that is later used for developing a formal document, otherwise known as a project plan.
A project brief is created after the project has officially been approved. The project brief is a shorter, simpler version of the project plan that is used by the project team and stakeholders for reference. This short document contains background information, project objectives and criteria for success, as well as project timeline and target audience – each brief depends on the project scope and the ’complexity . One similarity between the brief and the project charter is that they both explain why the project is a good idea, and details the tasks of everyone involved.
A business case helps us to understand the potential impact the project may have on the business.. Essentially, it's imagining a scenario where we evaluate if the completed project's goals are worth pursuing. It is important to note that it is only about setting the financial parameters, not about deciding whether to invest in it. So, a project manager may create many business cases, but only make a project charter for a select few. The project charter draws from the business case for the financial parameters in which the project needs to operate, as well asthe key assumptions from the business case - most likely involving the scope and timeline.
To summarise, the entire process of the project will usually contain all three of these documents: the business case is created first; followed by the drafting of the project charter. According to the project charter, a simpler and shorter document to be used for reference is then made - a project brief. Finally, a project plan is created. The project plan is the most important part as it contains all the guidelines the project team and project manager should follow.
There are many benefits to using a project charter. It is helpful to not only the project managers and project team members, but to stakeholders and clients as well. Firstly, a project charter is helpful for determining the value of the project - and decided whether it is worth carrying out the project. The most obvious benefit is that it helps to avoid problems in the future due to everything being planned out previously. By addressing everything before starting the project, you are avoiding future conflicts and saving time that would have been spent on negotiation. It also ensures that there is enough funding available and sets the project budget outline. Most importantly, the clear guidelines build confidence within the team, ensuring that by following them and hitting the milestones, they are reaching the needed criteria for the project's success. This will ultimately boost the team’s morale because they are working under effective and well-organised management, avoiding confusion and frustrations.
As for the project charter's benefits for stakeholders and clients - it helps them to understand what is to be expected. This way they know exactly what they are approving, making it easier to avoid conflict and making alterations to the project later on. It also helps to avoid problems regarding cost and resources.
The main reason for creating a project charter is to have a formal authorisation of the project, and proof of an agreement. Without a project charter, a project could be cancelled or audited at any time, for any reason. It serves as a contract for the project team by containing information on each person’s role in a way that everyone can understand and agree on. The importance of this "contract" does not only benefit the project manager; it is also used to ensure that the project manager understands the stakeholders' needs and requirements, providing them with vital information about the project's process. Because of these reasons, we can say the importance of a project charter is reflected in its three main benefits:
A project charter has a huge role in the formulation of the project plan. It is especially helpful when it comes to building a relationship with the stakeholders. Whilst creating the project charter, a project manager should think about what roles the stakeholders need to play, or what is required of them. For this, it is important to do a stakeholder analysis. Once complete, all the knowledge gathered should be used to discover who are the key stakeholders in this project, so that they can be involved in the process of creating the project plan.
Allowing too much interference of stakeholders during the project can sometimes prove to be difficult. Some of the key project stakeholders may try to persuade project management into altering projects in a way that benefits them more. By having this "contract" to refer back to, it clearly shows them the original agreement and keeps project managers in control. Having authority assigned to the project managers is why the project charter is so important for them. By planning and controlling the project, the importance of their role and the power they hold is established amongst the team members and main stakeholders.
The project charter is the very essence of the project - used for referencing the plan and making sure that everything is running smoothly. This is one reason why people confuse it with the project plan, however, a properly defined project plan is much more complicated, and contains a lot more information than the charter does. The project charter is much more useful if you’re simply wanting to check that everything is moving in the right direction, without having to see the whole project life cycle. This is beneficial when deciphering whether a certain task will impact the overall business objectives.
Writing the project charter may be a challenge, especially for the less-experienced project managers. The following tips can help to create a backbone structure of the document:
A clear vision is an absolute must when it comes to the initial charter. Determining what the project aims to accomplish, is as important as writing it out in the form of an easy-to-understand, all-encompassing, vision statement. It should include measurable and realistic objectives, and all relevant information regarding the project. Likewise, it should focus on the outcome, and list the tangible ways that the project will influence the company or organisation.
It is essential to identify and include information on all the roles allocated within the project. This includes the list of stakeholders and their connection to the project, and the customers or end-users. All other persons involved should be identified, including the project manager, the board, and the sponsors. What are their relationships, and how do they interact? Outlining everyone’s responsibility will help with troubleshooting in the future.
Once the vision and roles are established, it is time to describe the project unfolding. This includes a plan with all the activities and individual phases of the project. A detailed outline of the project development serves to provide clarity at any time of the process, and helps gain the confidence of the stakeholders and customers in the project. This part of the project charter document can include individual milestones and deadlines listing all necessary equipment and resources used.
Risk assessment is an important part of any project planning. The project charter should list any possible constraints and challenges the project may face in different phases of its development. The risk assessment should also include problems and issues that have already occurred and are related to the project. Such information will prove to be useful once the project gets underway and encounters any difficulties.
To a certain degree, the elements of the project charter are somewhat dependent on the nature of the project and its requirements. Usually, every project consists of the following elements:
The project name should be something that contains the very purpose of the project. Keep it simple and relevant.
Project objectives are the key element of the project charter. It explains why the project has been proposed, what solution it brings to a problem, and how it will impact the organisation and help bring it closer to achieving its goals.
This element of a project management charter describesthe result of the project once delivered - what is the finished product or service? This part, other than key deliverables, can also include success criteria - what metrics are used to measure the project success, and has the end product really accomplished everything that was planned.
The scope provides boundaries that help maintain focus and avoid scope creep. Scope management is helpful for following the planned timeline and achieving goals set out for each phase. Simply put, the scope statement is a reference point for project managers to allow or reject a request during the process of a project.
Another important element for reaching a deadline is avoiding as many risks as possible. This is the reason a project charter should also state all the potential risks and constraints, as well as the plan to analyse and solve them throughout the project.
Timeframes and milestones should also be considered as a part of the project scope's timeline. They are used to show when each phase of the project should be completed. If not stated next to deliverables, this element of the project charter can also include measures.
This section of a charter borrows from the business case. It should explain all of the project's costs, where the money will come from, and it should also contain a list of any additional resources (project management software, for example) needed to execute the project.
During the project, there will probably undoubtedly be a need for reporting to external stakeholders, such as clients or project sponsors. Knowing which project sponsor or end user who should be notified of the any key information related to the charter project is why it is important to keep a list of those individuals such as project sponsors or end users. Completing a stakeholders analysis allows you to know identify who are the main stakeholders are, and the key role they that play key roles in the project's purpose and whilst keeping them updated regularly.
Make a list of everyone involved in the project, as well as their roles and responsibilities. Usually, this list contains the end user, key stakeholder, project sponsor, and development team. It outlines the role, the person assigned to it, and the responsibilities of that role. The breakdown of each team members' responsibilities will eliminate the confusion of who is responsible for which aspect of the project. It will also allow for an easier communication process. This brings us to another important element worth keeping in mind when creating the project charter - the communication plan.
The communication plan outlines the way the development team will contact the customers or key stakeholders, including the way they will communicate between themselves and how often - daily updates, weekly, optional, or mandatory meetings... Every preference depends on the project manager's style of managing, the project team’s preference, and the type of project they are working on.
Sometimes, having resources, objectives, stakeholders, deliverables, and everything else overlapping in your thoughts may become confusing and seem overwhelming. Hence it is easier to think about three influential factors, and then divide them into these elements. Three most important questions to answer while making a project charter are who, what and why?
The project charter is an important part of any project planning, and knowing how to make one is a necessity in the project management field. If you wish to learn more about project charters and other project management aspects, take a look at the Institute’s PMP course. This course is designed to help you to understand the role of a project manager, and just how important the project charter really is.