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Dec 28

What Is a Project Charter? – All You Need to Know

An image with a document called "Project Charter". A hand writing on the document with a feather.

No initiative can start without the approval of stakeholders. Before greenlighting the project, they must understand its general vision and purpose. One of the steps in formalizing the agreement process is creating a project charter.

But what is it exactly? What needs to be included in the charter? How to create a project charter that supports a mutual understanding between managers and stakeholders? Read on to get the answers to these questions and more.

What is a project charter?

It’s best to start by defining a project charter and explaining it in more detail. The PMBOK defines it as “a document issued by the project initiator or sponsor that formally authorizes the existence of a project, and provides the project manager with the authority to apply organizational resources to project activities.

In simple terms, a project charter is a document that outlines the main aspects of a project. Think of it as a justification for the existence of the initiative. It’s the basis of the agreement between the project manager and the stakeholders. A charter also serves as an introduction to the project. After all, it’s drafted before the initiative has even started.

What should a project charter include?

The first thing to note is that a project charter doesn’t have to be extensive. No one expects a 50-page document before a project gets agreed upon. That’s because most of the details haven’t been specified yet. But there are a few essential elements of every project charter. Think of them as answers to key questions regarding the initiative you’re trying to authorize.

Vision

What is the project about? A charter should briefly answer that question. A short and general description will suffice. There’s no need to delve into the specifics. Setting a clear project purpose might eliminate stakeholder confusion from the get-go. Conversely, stakeholders are less likely to authorize a project they know nothing about.

Objectives

What are the high-level goals of the project? Even before the launch of a new initiative, managers tend to know that. Stakeholders should, too. Therefore, including the list of objectives a project aims to deliver is an invaluable part of the project charter. Additionally, a brief description of the objectives will help stakeholders see how they align with the organization’s strategic goals.

When thinking of the project goals, be sure to use the SMART approach. It’s an acronym that contains five features of a well-crafted project objective.

A list of characteristics of smart goals: Specific, Measurable, Achievable, Realistic, Time-bound

Aside from the goals, a project charter should contain success and failure criteria. As a result, the stakeholders have an agreed–upon basis for evaluation if the project gets underway.

Scope

What work is required to complete the project? Naturally, it’s not about creating a detailed work breakdown structure and including it in the charter. However, listing some of the most important elements of the scope should be enough.

Obviously, the extent of the scope varies between projects and organizations. You can draw the line at the elements you would report to the key stakeholders.

People involved

Who is going to take part in the initiative? The list should contain the project manager, the project team roles, and the stakeholders. As for that last group, specify who will finance the initiative and who will receive the deliverables. Often, the two groups don’t overlap.

Timeline

How long is the project going to take? As a manager, you probably have a rough idea of the project’s duration. The timeline will serve as a point of reference in the initiative’s early stages. Furthermore, you can use it as a basis for the planning phase.

When creating a timeline, it’s a sound idea to provide a list of milestones. They might refer to the ends of certain phases or symbolize the completion of deliverables.

Resources

How much is the project going to cost? Are there any tools or software that need to be purchased? On top of that, are there any maintenance costs associated with the initiative? Make sure to lay out general answers to these questions.

Just like in the previous elements, both the costs and the list of equipment are estimates. During the planning phase, managers create a more detailed list. At this point, listing the resources and costs helps stakeholders understand the potential expenditure. It helps set appropriate expectations and base a decision on data. Even if the numbers aren’t set in stone.

Dependencies

In this case, it’s not about the dependencies between specific tasks. It’s more of a high-level overview of connections between the deliverables, cross-project dependencies, and external factors.

In other words, how would the main elements of the project connect with each other? Is there any impact in that regard?

Risks and constraints

Is there anything that could delay or derail the project? Are you aware of any risks upfront? If so, including them in the charter might help circumvent potential bottlenecks.

A project charter also lays out the boundaries of the project. Usually, each initiative is constrained by various internal and external factors. Adding a short list of possible restrictions helps place a project in a realistic context. That, in turn, improves its chances of authorization.

A list of key elements of the project charter

Useful project charter tips

After explaining what the project charter is and what elements it should contain, there is still one vital question left unanswered. How to do it right? Fortunately, there are some tips you can employ to make sure your charter gets the points across and increases the chances of the project getting the go-ahead.

Keep the document short and clear

As mentioned previously, a charter is an outline of the main aspects of the potential project. Therefore, all of the key points should be concise. Once a group of stakeholders get ahold of the project charter, they must be able to get the gist of it quickly.

As such, the information contained in the charter ought to be clear. The less room for interpretation from the stakeholders, the better.

Set the right detail level

A project charter’s primary goal is to allow stakeholders to authorize the project. Thus, they need to know enough about the initiative. On the other hand, flooding them with details at that point is counterproductive.

That’s why it’s so vital to establish a level of detail that your project charter will cover. It should present the main aspects of the project without going into too much detail.

Include the project team

More often than not, it’s the project managers who create the project charter. But they don’t have to do it themselves. Including project team members might help craft a realistic charter. Set up a brainstorming session to outline the necessary elements of the project together.

Create a project plan

It’s not a necessary part of the project charter, but it’s wise to have it ready. A project plan, or project implementation plan, is a document that outlines the steps necessary to get the ball rolling. It is a more detailed counterpart to the project charter.

What’s the point of having a project plan before the initiative is approved? Simply put, it streamlines the preparation process after the official authorization.

That’s all you need to know about understanding and creating a project charter. Hopefully, it will allow you to draft easy-to-read and, most importantly, convincing charters. Remember, the stakes are high. A charter is a prelude to every project, one that decides its initial fate. Hence, it needs to be done right.

About The Author

Content Specialist at BigPicture. Passionate about new technologies, both in hardware and software form, as well as creating educational content that makes complex ideas more understandable.