Project Charter
The project charter is one of the most important documents of the project since it authorizes the start of the project. Besides that, in it is also possible to find a summary and a preliminary understanding of the project. These 2 items can be very useful in future decisions. In the charter, the project manager is nominated. Is also on the charter that he receives the authority to manage resources. In it we can also include, restrictions, assumptions and other information directly related to the project.
Items that a project charter should have
The project charter should at least include the project purpose, main deliverables, main requirements, a high-level schedule, a high-level budget, constraints, assumptions, the project manager, the sponsor, a preliminary risk analysis, and problems.
For the project purpose, the project manager and the sponsor should document the reasons and incentives to start the project. The focus should be on the business need and the reasons to carry out the project. The charter should also include the main products and/or services that the initiative should produce to be complete. It should also include the main requirements of the project. It is also important to include a high-level schedule with an estimated date of completion, major milestones, and events.
A preliminary budget, with an idea of how much the project may cost, would also be a plus. The charter should also include the known constraints. They may limit the project decisions. The charter must also include the assumptions assumed to be true, to justify the project. The reality is that these uncertain elements can have a major impact on the project.
No charter will be complete without the nomination of the Project manager but also the sponsor who is responsible for approving and financing the project. When the project manager and the sponsor evaluated the project they probably found some individual risks. Now it’s time to document them. As well as the overall risk of the project. Finally, the PM must also document the major issues affecting the project.
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How to create a project charter
The project charter is an important document that should be carefully developed. The involvement of all main stakeholders in the charter development should be unquestionable. They will be the main support of the project. If they don’t participate they may not like and will not support the project the way they should.
Since the charter development is in the preliminary phase of the project, you should only establish a vision. Do not detail a commitment.
To structure the information you should use a template. Your organization may have one or more. If they don’t you may find some here. This way will be much easier to get the information to everyone.
Last but not least, don’t forget to share the charter with the team and other stakeholders. They should be familiar with the charter. This is a project manager‘s responsibility.
Why should we use a project charter?
The project charter can bring many benefits to the organization and the project. One of the main advantages is the delegation of authority to the project manager done in the charter. In other words, the project manager can only manage resources when the charter is approved. And let’s be realistic, some, if not all of them, would normally not respond to him.
The purpose of the project will also be clarified in the charter. It will be much clearer what is the business need that justifies the project. It will also help to explain how the project will contribute to the organization’s objectives.
Since the charter explains the projects, what is expected from it, and also what is out of the project, it will help to align expectations. Nobody can say, in the middle of the project, that were expecting something if it was not on the charter. This high-level understanding will create a common vision among stakeholders.
The charter also establishes project limitations. The sponsor can be assured that the project implementation will be within the defined limits. The sponsor can create project restrictions, and document them on the charter.
Project charter VS. other project documents
There are many documents that the team prepares during the project development. Many times we see people mistaken the documents and do not understand why they need so many different documents. Below we will talk about some of the most important documents and how they are different from the charter.
Project Management Plan
When the steering committee approves the project management plan it also approves the project baselines and the rules and procedures to manage the project. The project management plan is part of the planning phase, unlike the charter which belongs to the initiation phase. Another difference between the two is that the project management plan defines how to manage the project and the charter only establishes a mandate.
Scope statement
The project manager establishes the scope of the project on the scope statement. The scope statement also includes the deliverables, requirements, acceptance criteria as well as exclusions. Its focus is exclusively on the scope, unlike the charter which was much other information (See above what a charter should have). The scope baseline is also on the scope statement, and this is an important reference to validate deliverables and analyze deviations.
Business case
The business case looks to establish the project justification and its feasibility. In other words, it makes sure that the benefits overcome the costs, and that the project contributes to the organization’s objectives. It will also evaluate if the project is deliverable considering resources, risk, and so on. The business case is concerned with the value added by the project and that is not the case of the charter.
Who creates the project charter?
The development of the charter should be a collective effort. Several roles can contribute to the charter. If the person gets involved in the project more likely will agree with it.
Sponsor
The sponsor is the main responsible for the charter. The sponsor formally approves the charter, authorizes the organization’s resources, and delegates the authority to the project manager. He also finances the project and establishes restrictions and priorities.
Project Manager
Even if the project manager’s authority only starts when the charter is approved, he is normally already known. Along with the sponsor, they will define all the items of the charter, for example, a preliminary scope definition, a preliminary budget, and a preliminary schedule. The project manager can also call the stakeholders to align expectations. Its final role with the charter is to share it. The project manager is responsible for delivering the project charter to the stakeholders.
Main stakeholders
The sponsor and the project manager should do a high-level analysis of which stakeholders have authority and importance to the project. Those stakeholders should be involved in the creation of the charter. This will ensure expectations alignment.