The project charter is an essential part of any project. This article explains its importance and goes into further instruction on what makes good charters and how to make one yourself. A well-written project plan, with all its key elements, is a way to ensure a project's success.
The project charter is one of the first tasks of a project manager ahead of the new project. It is a document that serves to formally announce the selection and approval of the project. Also, it grants the project manager authority to meet project objectives while using organisational resources. It also contains the main project goals and the designation of roles and responsibilities.
Its purpose is to help the involved project managers & the stakeholders understand what the given project is supposed to accomplish. It defines the project's success, offers deadlines, and provides information on identified risks and the budget. Serves as the basis for the project planning. It maps out each step of the way so that any changes can be implemented easily and smoothly.
Sometimes, there is confusion about what a project charter really is. Many times it goes by synonyms e.g. project plan or project brief or even by the name of the business case. However, the differences are not just in names but in their purposes as well.
A project plan is a formally approved document that is supposed to guide through project execution. It also controls by detailedly explaining how and when to fulfil the project objectives by showing the major products, milestones, activities, and resources required for the project.
A project charter, on the other hand, is an unapproved proposal and the first deliverable of the project. It is used to secure stakeholder approval of project goals. It establishes the authority of the project manager. Once the top management approves it, the project manager prepares the project plan. The project plan shows how to achieve the approved project goals. So essentially, it is a draft that is later used for developing a formal document (project plan).
A project brief is created after the project has officially been approved. The project brief is a shorter, simpler version of the project plan. It is used by the project team and stakeholders for reference. This short document contains background information, project objectives and criteria for success as well as project timeline and target audience - each brief depends on the project scope and the project's complexity. The similarity is, that they both explain why the project is a good idea and what everyone's tasks during it are.
A business case is about understanding what the project's impact on the business will be. Essentially it's imagining a scenario where we evaluate if the completed project's goals are worth pursuing. But it is important to note that it is only about setting the financial parameters, not about making a decision whether to invest in it. So a project manager might create many business cases but only make a project charter for some of them. It draws from the business case for the financial parameters in which the project needs to operate. It is also the key assumption from the business case as well, most likely about the scope and timeline.
So the whole project process usually contains all three of these documents: the business case is a document that is created first; then, following it, a project charter gets drafted. According to a project charter, a simple and short document used for reference is made - a project brief. And lastly, a project plan is created. The project plan is the most important part as it contains all the guidelines the project team and project manager should follow.
Using a project charter has many benefits. It is helpful to not only project managers and project team members but to stakeholders and clients as well. Firstly, a project charter is helpful for determining project value - if is it worth carrying out the project. The most obvious benefit is that it helps in avoiding future problems because everything is already planned out. By addressing everything before starting the project, you are avoiding future conflicts and saving time that would have been spent on negotiation. It also ensures that there is enough available funding and sets the project budget outline. Most importantly, it helps the team have clear guidelines and confidence that by following them and hitting those milestones, they are reaching the needed criteria for the project's success. This also boosts team morale because they are working under effective and well-organised management, avoiding confusion and frustrations.
As for the project charter's benefits for stakeholders and clients - it helps them understand what to expect. This way they know exactly what they are approving and this makes it easier to avoid conflict and alternations to the project later on (also avoiding problems regarding cost and resources).
The main reason for creating a project plan is to have a formal authorisation of the project & proof of agreement. Otherwise, without it, a project could be cancelled or audited anytime for any reason. It serves as a contract for the project team by containing information about everyone's roles in a way everyone can understand and agree on. The importance of this "contract" does not only benefit the project manager. It is also used to ensure that the project manager understands stakeholders' needs and requirements. It also provides them with vital information about the project's process. Because of these reasons, we can say the importance of a project plan is reflected in its three main benefits:
A project charter has a huge role in the formulation of the project plan. It is especially helpful when it comes to project stakeholder relations. While creating the project charter, a project manager should think about what roles stakeholders need to play or what is needed from them. For this, it is important to do a stakeholder analysis. Once the stakeholder analysis is complete, utilize the gathered knowledge to identify key stakeholders involved in the project. Ensure their active involvement in creating the project plan.
Keeping too much meddling of stakeholders in the project can sometimes be difficult. Some of the key project stakeholders might try to persuade project management to alter projects towards something that benefits them more. But having this "contract" to refer back to, to show them what they originally agreed on keeps project managers in charge. Officially having authority assigned to the project managers is why the project charter has that much importance for them. By planning and controlling the project, the importance of their role and the power they hold is established to the team members and main stakeholders.
The project charter is "an essence" of the project- it is used for referencing the plan and making sure everything is going according to it. Most of the time this is the reason people confuse it with the project plan itself but a proper project plan is much more complicated and contains a lot more information than the charter does. When you just want to make sure everything is going in the right direction, a project charter is more useful as you don't need to see the whole project life cycle. This is useful for comparing whether doing a certain task is actually doing something that will impact the overall business objectives.
Writing the project charter may be a challenge, especially for the less-experienced project managers. The following tips can help create a backbone structure for the document:
A clear vision is an absolute must when it comes to the initial charter. Determining what the project aims to accomplish is as important as writing it out in the form of an easy-to-understand, all-encompassing vision statement. It should include measurable and realistic objectives and all relevant information about the project. Likewise, it should focus on the outcome and list the tangible ways that the project will influence the company or organization.
It is essential to identify and include information on all the roles in the project. This includes the list of stakeholders and their connection to the project and the customers or end-users. All the other persons involved should be identified the project manager, the board, and the sponsors. What are their relationships, and how do they interact? Outlining everyone’s responsibility will help with troubleshooting in the future.
Once the vision and roles are established, it is time to describe the project unfolding. This includes a plan with all the activities and individual phases of the project. A detailed outline of the project development serves to provide clarity at any time of the process and helps gain the confidence of the stakeholders and customers in the project. This part of the project charter document can include individual milestones, and due dates and list all necessary equipment and resources used.
Risk assessment is an important part of any project planning. The project charter should list any possible constraints and challenges the project may face in different phases of its development. The risk assessment should also include problems and issues that have already occurred and are related to the project. Such information will prove useful once the project runs and encounters any difficulties.
The project charter's elements are more or less dependent on the nature of the project and its requirements. Usually, every project consists of the following elements:
The project name should be something that contains the very purpose of the project. Keep it simple and relevant.
Project objectives are the key element of the project charter. It explains why the project was proposed, what solution it brings to a problem and how it will impact the organisation and help bring it closer to achieving goals.
This element of a project management charter describes what the result of the project will be delivered - what is the finished product or service? This part, other than key deliverables, can also include success criteria - what metrics are used to measure the project's success and has the end product really accomplished everything that was planned.
The scope provides boundaries that help maintain focus and avoid scope creep. Scope management is helpful for following the planned timeline and achieving goals set out for each phase. Simply put, the scope statement in a project charter is a reference point for project managers to allow or reject a request during the process of a project.
Another very important thing for reaching the planned due dates is avoiding as many risks as possible. That is the reason why a project charter should also state all the potential risks and constraints as well as plans for analysing and solving them through the project.
Timeframes and milestones in the project charter should also be considered as a part of the project scope's timeline. They are used to show when each phase of the project should be completed. If not stated next to deliverables, this element of the project charter can also include measures.
This section of a charter borrows from the business case. It should explain all of the project's costs, and where the money will come from and it should also contain a list of any additional resources (such as, for example, project management software) needed to execute the project.
During the project, there will probably be a need for reporting to external stakeholders such as clients or project sponsors. Knowing which project sponsor or end user should be notified of the key information related to the charter project is why it is important to keep a list of those individuals. Completing stakeholders analysis allows you to know who are the main stakeholders that play key roles in the project's purpose and keep them updated regularly.
List out everyone who is involved in the project as well as their roles and responsibilities. Usually, this list contains everyone - end user, key stakeholder, project sponsor and development team. It outlines the role, the person assigned to it, and the responsibilities of that role. The breakdown of each team member's responsibilities will eliminate the confusion about who is responsible for which aspect of the project. It will also allow for an easier communication process. This brings us to another important element to keep in mind when creating the project charter - the communication plan.
The communication plan outlines the way the development team will contact the customers or key stakeholders and the way they will communicate between themselves as well as how often that will be -daily updates, weekly, optional or mandatory meetings... Every preference depends on the project manager's style of management, the project team's preference as well as the type of project they are working on.
Sometimes having resources, objectives, stakeholders, deliverables and everything else overlapping in your thoughts may become confusing. Hence it is easier to think about three influential factors and then divide them into these elements. The three most important questions to answer while making a project charter are who, what and why?
The project charter is an important part of any project planning and knowing how to make one is a necessity in the project management field. If you wish to learn more about project charters and other project management aspects, take a look at the Institute's PMP course. This course is designed to help you understand the role of a project manager and just how important a project charter really is.
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