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Understanding the Project Charter

Only 33% of projects have a chance of meeting the initial goals and objectives. Others fail to do so because of numerous reasons, one of which is not developing a project charter.

A project charter is a formal document that marks the beginning of the project. A charter is brief and concise and summarizes what the project is about. It states the goals, execution plan, stakeholders, constraints and other information.

PMI states that this document must be developed before work begins on the project, preferably even before a project manager has been assigned. The document is then used until the project closes officially. 

What Information Does a Typical Project Charter Contain?

A project charter includes the following information:

• Reasons for initiating the particular project
• Project goals and objectives
• Time, scope and budgets constraints
• An estimate of project costs, usually a ballpark figure
• Key stakeholders
• Identified risks
• Project scope and what’s not included in the scope
• Project benefits

What’s the Purpose?

• Stating the goals and objectives  and what should be done to meet them
• Explaining the scope and the reasons for launching the project
• Serving as a contract between the sponsor, key stakeholders and the project team
• Identifying and naming the person responsible and accountable for project success, i.e., the project manager

How Can a Project Charter be Developed?

A project charter can be developed through the following steps. Generally, online project management software and tools offer a template, which can be used as a reference.

Developing a Vision

Come up with a vision and then elaborate it based on the following points.

• List down three to five goals of the project based on the SMART approach.  Each goal must be specific, measurable, achievable, realistic, and time bound.
• Define the project scope or the official boundaries, explaining all that’s relevant and irrelevant. Also, state the impact that completing the project would bring.
• Describe the key deliverables to be produced as part of the project

Identifying Customers, Users and Stakeholders

Identify the following subsets:

• Customers or end users – Sometimes customers and users may both refer to the same group of people. State whether an individual or an entity would accept the project deliverables.
• Stakeholders – In formal terms, a stakeholder is any person who would be affected by the project whether positively or negatively. They may be internal or external to the organization, but in any case, they are crucial for project success.
• Roles – Though the project team is identified and built as part of the planning phase, the charter still assigns certain key roles such as the project sponsor, the project manager and the project board. The responsibilities and authorities of each are also mentioned.
• Structure – Define the reporting lines between various roles by using online project management software

A charter comes when it has been signed by all concerned, marking the initiation of the project. Though created before the project is officially initiated, it can be modified as more information becomes available.