Project Charter

Summary

A Project Charter is a vital document in the life of a project. It defines and forms the basis for what is to be done with the project and aligns the team to a unified vision for success.
Use this document to learn more about project charters and how to structure them. Also included are some templates for your use.

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In this Article

What is a Project Charter?

Main Components of a Project Charter

Why are Project Charters Useful?

Key Sections of a Project Charter

 

What is a Project Carter?

A project charter is a short document that explains the project in clear, concise wording for high level management. Project charters outline the entirety of projects to help teams quickly understand the goals, tasks, timelines, and stakeholders. The document provides key information about a project, and also provides approval to start the project. Therefore, it serves as a formal announcement that a new approved project is about to commence. Contained also in the project charter is the appointment of the project manager, the person who is overall responsible for the project.

When preparing the project charter, utilize the SMART method. Be Specific, ensure your goals are Measurable, Attainable, Relevant to the project, and Timely. The project charter may include:

  • Purpose and objectives of the project in clear, concise language
  • Requirements of the project at a very high level and without much detail
  • Project description in a paragraph or two that explains the project
  • Known high-level, major categories of risks for the project
  • Schedule of events with the start and end dates
  • Major events or milestones along the path.
  • Budget or summary of how much the project will cost
  • Requirements from the organization for approval, including what to approve, who will approve, and how to get the approval
  • Key players or stakeholders in charge of which parts of the project and who will approve the plans to go through
  • An introduction of the project manager, project sponsor, and their authority level

 

Main Components of a Project Charter

A project charter is a living document outlining the issues, targets and framework of a process improvement effort. A charter should have six main components that frame the document. Each of these component helps define the reasons for the project, explains how it improves the business, enumerate what steps are necessary to complete, and identifies the stakeholders responsible for the project. The project charter components are:

  1. Problem statement
  2. Business case
  3. Goal statement
  4. Timeline
  5. Scope
  6. Team members

 

Why are Project Charters Useful?

The main reason every project needs a project charter at the very start is because without it, there is no proof or official document that an authorized project manager defined and presented a project and gained its approval from stakeholders to proceed. A project charter also provides several benefits:

  • Formally authorizes the project to commence
  • Creates a common vision and shared understanding of the project
  • Empowers the project manager to lead the project
  • Identifies the high-level objectives and scope of the project
  • Defines what success will look like at the end of the project
  • Gains support for the project by announcing it to the whole organization
  • Ensures that key stakeholders are aware of the project
  • Secures budget and resources for the project
  • Serves as the point of reference for the project team

 

Key Sections of a Project Charter

Most project management methodologies and frameworks prescribe the use of a project charter but do not define the actual contents of the template. This is understandable, because projects differ in a variety of ways, such as in size, criticality, type, or approach. But the accepted principle in writing a project charter is that the document should help clarify the what, why, who, when, and what cost aspects or questions of the project. Referencing the PMBOK Guide, the inclusion of following sections in a project charter will answer these aspects and questions:

Project information

This section includes the name of the project, its ID (if organizations use one), the name of the project manager, and its sponsor(s). It can also include additional but brief project description details.

Business need, problem, or opportunity

This section tries to identify what the main driver for the project is for it to exist. It provides the context or situation why the sponsor thought about starting the project.

Project objectives and benefits

This lists the goals that the project will try to achieve. A guide for writing the objectives is to use the SMART acronym: they should be Specific, Measurable, Attainable, Realistic, and Time-bounded.

Project organization

This section identifies the people governing the project. It should clearly show the key roles for its management and direction. Using a RACI chart can be helpful.

High-level project scope

This section outlines the boundaries of the project at a high level. It is important to identify not only its scope, but also what is out of scope. Specifying key deliverables of the project should also fall in this section.

High-level project timescale

The project charter should list the key stages and estimated duration of the project at a high level, including its milestones. However, the project manager should exercise caution in writing the project schedule, assuming that the project will immediately start after the approval.

High-level project budget

This section identifies the budget requirements of the project at a high level. It should include capital and revenue expenditure forecast.

Key assumptions

This section lists the main assumptions that the project team took. It is important also to assess how these assumptions can impact the project should the team realize later that the assumptions they made were false or inaccurate.

Key project risks

This lists the main risks that may impact the project if they materialize. It assumes that the project team cannot avoid encountering the identified risks.

Success criteria

This section identifies the key metrics to help assess if the project is successful or not. The measurable terms describe an outcome that is acceptable to the end user, customer, and stakeholders.

Details

Details

Article ID: 135493
Created
Mon 11/22/21 4:19 PM
Modified
Wed 1/5/22 12:28 PM

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