Guide: Project Charter
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Daniel Croft
A Project Charter is a key document, that forms the basis of the contract between the project team and higher management or a project sponsor. It lays the groundwork for the project, offering the initial understanding and framework necessary for its management and assessment.
By outlining the project’s scope, objectives, and the key players involved, the charter serves as both a blueprint and a guiding compass throughout the project’s life cycle. The scope defines the project’s boundaries and deliverables, while the objectives outline its aims. Crucially, the charter identifies all participants, from sponsors to team members, each vested with specific roles, ensuring a clear understanding and alignment of responsibilities.
Table of Contents
What is a Project Charter?
A Project charter is an important document that forms the basis of a contract between the project team and higher management, or a project sponsor. It creates the initial understanding of the project and sets the stage for its management and assessment. By outlining the scope, objectives, and individuals or groups involved, it creates the project blueprint. This blueprint is not just a plan but also a guide for navigating the project through its life cycle.
The scope refers to the boundaries of the project, highlighting what will be accomplished. The objectives are the goals the project aims to achieve. The participants include everyone from the project sponsor to the team members, each with a defined role.
Why is a Project Charter Important?
The creation of a project charter is important as is plays an important role in ensuring the success of the project. First and foremost, it provides clarity. By clearly defining what the project is about, what it aims to achieve, and who is involved, it leaves little room for misunderstandings or misalignments among stakeholders.
Additionally, it sets the tone and direction for the project. This initial framing helps in managing expectations and aligns everyone’s focus on the common goals. The charter also serves as a reference document, consulted throughout the project for guidance and to ensure that the project remains on track with its initial objectives.
Key Elements of a Project Charter
Project Purpose and Justification
The purpose and justification section is where you articulate the raison d’être of the project. It answers the “why” behind the project. Here, you need to describe the problem being solved or the opportunity being capitalized upon. This section is crucial for securing buy-in from stakeholders, as it demonstrates the value and necessity of the project.
Objectives and Scope
Objectives are the heart of the project charter. They need to be SMART – Specific, Measurable, Achievable, Relevant, and Time-bound. This ensures that the project has clear, attainable goals within a specific timeframe. The scope, on the other hand, clearly delineates what is included in the project and, just as importantly, what is not. This is essential to prevent scope creep, which can derail projects.
Project Requirements
This area details the specific requirements that must be met for the project to be considered successful. These can include technical specifications, compliance standards, or other conditions that the project output must satisfy. By outlining these requirements upfront, the project team has a clear understanding of what needs to be accomplished.
Budget and Resource Allocation
The budget and resource allocation section provides an overview of the financial and physical resources that the project will need. This includes an estimation of the costs and a plan for how resources will be allocated. Transparency in this section is key to maintaining trust among stakeholders and for future accountability.
Roles and Responsibilities
Defining roles and responsibilities is fundamental to the smooth operation of the project. This clarity ensures that each team member knows what is expected of them, and who is accountable for each aspect of the project. This section should align with the project’s needs and include all key stakeholders.
Risk Management
Identifying potential risks and developing strategies to mitigate them prepares the project for uncertainties. Risks can range from budget overruns to delays in delivery, and having a plan in place for these contingencies is vital for the project’s resilience.
Timeline and Milestones
The timeline sets out the project’s lifespan with key milestones marked. This gives everyone a clear idea of the project’s progress and helps keep the team on track. Each milestone should represent a significant achievement in the project, acting as a checkpoint for evaluating progress.
Approval and Sign-off
This final section is where key stakeholders give their formal approval for the project to proceed. It’s a critical step, as it signifies that the project has been reviewed and is supported by the necessary authorities within the organization. This endorsement is essential for the project manager to have the mandate to allocate resources and direct the project’s course.
Project Charter Templates
Feel free to download one of our premade project charter templates. The first one is an Excel version, and the second one is a PowerPoint version. Pick the one suited to your needs.
How to Create a Project Charter
Creating a project charter is a meticulous process that requires attention to detail, strong communication skills, and a comprehensive understanding of the project’s environment. Let’s delve deeper into each step of this process:
Step 1: Gather Information
The first step in creating a project charter is to collect all necessary information. This task involves a series of activities:
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Engage with Stakeholders: These are individuals or groups with a vested interest in the project. They could be internal to the organization, like senior management and department heads, or external, like clients or partners. Understanding their needs, expectations, and concerns is crucial for defining the project’s scope and objectives. -
Consult Subject Matter Experts (SMEs): These professionals possess specialized knowledge in areas relevant to the project. They can provide insights into technical aspects, industry trends, potential risks, and best practices. Their expertise ensures that the project plan is realistic and feasible.
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Interact with Potential Team Members: The individuals who will be working on the project can offer valuable perspectives on what can be achieved, how long tasks may take, and what resources will be required. Their input is essential for setting realistic timelines and understanding the practical aspects of the project execution.
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Review Organizational Documentation: This may include strategic plans, previous project reports, policy documents, and other relevant material that can provide context and background information.
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Gather Data from External Sources: This includes market research, industry standards, regulatory requirements, and other external factors that could impact the project.
Engage with Stakeholders: These are individuals or groups with a vested interest in the project. They could be internal to the organization, like senior management and department heads, or external, like clients or partners. Understanding their needs, expectations, and concerns is crucial for defining the project’s scope and objectives.Step 2: Write Clearly and Concisely
Once the information is gathered, the next step is to draft the project charter. The key here is clarity and conciseness. Drafting a project charter requires a focused approach, emphasizing clarity and succinctness. The language used should be simple and devoid of technical jargon, ensuring it is comprehensible to all stakeholders, regardless of their expertise.
Example Project Charter
For example, a complete project charter might look something like the one below.
It’s vital to precisely articulate the project’s objectives, scope, and deliverables, as clarity in these areas helps avoid misunderstandings and keeps everyone aligned on the project’s goals.
Step 3: Review and Revise
Once you have drafted the project charter, the charter should be reviewed. Initially, you should review this yourself to check the clarity, coherence and completeness of the document. Ensure that all the key elements of the charter are suitably covered.
Once you have reviewed it and are happy, you should then get someone who was not involved with drafting the charter to review it. This could be a colleague or a professional with expertise in project management. They can provide an objective perspective and catch issues that you might have missed.
Use the insights gained from the review process to refine and improve the charter. This might involve clarifying certain sections, adding missing information, or removing unnecessary details.
It is important to do this to ensure that the charter is clear, complete, and understandable when going for project charter approval.
Step 4: Seek Approval
The final step is to get formal approval. Arrange meetings or discussions with key stakeholders to go through the charter. This is an opportunity to explain the rationale behind the project and the proposed approach. It is important to take this step to ensure your stakeholders understand what the project is (the change) and why it needs to be done, and to answer any questions to reduce potential resistance.
Stakeholders might have questions or concerns. Be prepared to discuss these and make adjustments to the charter if necessary.
Once all parties are satisfied, the key stakeholders should formally endorse the charter. This might be through a signature, an email approval, or a formal sign-off in a meeting.
Share the approved charter with all relevant parties. This ensures that everyone involved in the project has a clear understanding of its scope and objectives.
Conclusion
The Project Charter is not just a document; it’s a foundational tool necessary for the success of any project. It brings clarity and direction, setting the tone and defining the path the project should follow. As a reference point, it helps manage expectations and keeps the team’s focus aligned with the project’s goals. The charter’s thoroughness in outlining the project’s purpose, scope, and requirements makes it an indispensable resource in guiding the team through uncertainties and challenges.
By establishing clear roles, responsibilities, and a strategic approach to risk management, the charter ensures everyone involved understands their part in steering the project towards its objectives. Ultimately, obtaining formal approval on the charter is a critical step, solidifying stakeholder support and empowering the project manager to lead the project confidently towards its successful completion.
References
- Mucchetti, M. and Mucchetti, M., 2020. Sample Project Charter. BigQuery for Data Warehousing: Managed Data Analysis in the Google Cloud, pp.509-513.
- HSE NIMS Team, NIMS Sample Project Charter. National Incident Management System (NIMS).
- Hayes, D.S., 2000. 1999 International Student Paper Award Winner: Evaluation and Application of a Project Charter Template to Improve the Project Planning Process. Project Management Journal, 31(1), pp.14-23.
A: A project charter is a formal document that provides an overview of a project’s objectives, scope, deliverables, stakeholders, and key constraints. It serves as a foundation for the project and defines its authority and boundaries.
A: The project charter plays a crucial role in project management as it establishes the project’s purpose, clarifies expectations, and defines the project’s high-level requirements. It helps align stakeholders, secure resources, and serves as a reference point throughout the project’s lifecycle.
A: The key components of a project charter typically include the project’s title and description, objectives and success criteria, scope statement, deliverables, stakeholders and their roles, project risks and constraints, high-level schedule, and approval requirements.
A: The project charter is typically created by the project sponsor or initiator, in collaboration with the project manager and other key stakeholders. The charter should be reviewed and approved by relevant parties before the project commences.
A: A project charter and a project plan serve different purposes. A project charter outlines the project’s high-level objectives, scope, and stakeholders, while a project plan is a detailed document that includes specific tasks, timelines, resources, and dependencies needed to accomplish those objectives.
A: Yes, a project charter can be changed if there is a valid reason to do so. However, any changes to the project charter should follow a formal change management process and be approved by the relevant stakeholders to ensure transparency and alignment.
A: While the level of formality may vary, it is generally recommended to have a project charter for most projects, particularly those that are complex, have a significant impact on the organization, involve multiple stakeholders, or require considerable resources. However, the size and complexity of the project should dictate the level of detail in the charter.
A: Ideally, a project should not start without a project charter. The charter helps establish the project’s direction, define its goals and scope, and gain the necessary support and commitment from stakeholders. Starting a project without a charter can lead to ambiguity, misalignment, and increased risk.
A: The length of a project charter can vary depending on the project’s complexity and organizational requirements. In general, a project charter is a concise document that ranges from a few pages to a maximum of 10-15 pages. It should provide enough information to communicate the project’s essential elements without overwhelming readers with unnecessary details.
A: While the project charter is typically created at the beginning of a project, it can still be referenced and updated throughout the project’s lifecycle. The charter serves as a reference point for decision-making, provides context to stakeholders, and helps maintain project alignment as circumstances may change.
Author
Daniel Croft
Daniel Croft is a seasoned continuous improvement manager with a Black Belt in Lean Six Sigma. With over 10 years of real-world application experience across diverse sectors, Daniel has a passion for optimizing processes and fostering a culture of efficiency. He's not just a practitioner but also an avid learner, constantly seeking to expand his knowledge. Outside of his professional life, Daniel has a keen Investing, statistics and knowledge-sharing, which led him to create the website learnleansigma.com, a platform dedicated to Lean Six Sigma and process improvement insights.
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