Project Management Essentials: Project Charter

What is a Project Charter?

When starting a project, few documents are as important as a project charter, especially if you plan on running a project with defined objectives, identified stakeholders, and agreed resources.

Think of the project charter as the blueprint for the project and anyone reading the project charter should understand what your project is about and what a successful implementation of your project looks like.

For a more formal description, a project charter is a document used during project initiation to outline the key aims, drivers, and benefits of a project.

Your project charter should communicate what your project is going to accomplish, how much money is budgeted for the project, who will be working on the project, and who is in charge of the project among other details.

The project charter is also a useful tool for getting buy-in from stakeholders at the initiation phase of a project as it clearly shows the benefits of the projects to stakeholders, and might be pivotal in getting those reluctant stakeholders onboard. In addition, a good project charter also acts as a reference point to keep the project on track down the line of implementation.

Why do you need a project charter?

Clear documentation is always a great addition to project management activities. Especially in a business environment where you might have competing interests about what a project should accomplish or who should be involved in your project.

For example, the CTO might think your project only involves implementing basic services in readiness for application migration to your cloud provider, while the CEO thinks your project migrates all applications in addition to creating the landing zone. One way this difference in objectives can be highlighted and resolved ahead of starting the project is by having a signed project charter that all stakeholders are aware of.

Even if you inherit a project halfway and find out there is no project charter, it is certainly a good use of your time to create one before you dive into managing the project. This is because you might be working on a project with no set objective and no common understanding of when the project is completed.

To summarize you need a project charter for the following reasons

1. Highlight the agreed goals for the project
2. Highlight what resources are at your disposal for the project
3. Serves as authorization empowering the Project manager to run the project and deploy resources
4. Helps you guard against scope creep and budget overruns that might come as a result of unclear definitions.

What information is in the project charter?

At a minimum, your project charter should cover all the relevant information for your stakeholders. As I mentioned earlier, it is a blueprint for your project, therefore you should keep as much information to guide the project while leaving out the full details of execution that would otherwise be contained in other project documents such as a project plan.

The main components a project charter should include are

1. Project name: Make the name as clear as possible
2. Project Description: Short description of the project and what it aims to achieve.
3. Project Objectives: A small number of objectives that are Specific, Measurable, Achievable, Realistic, and Time-Bound. (SMART objectives)
4. Project Scope: Define the boundaries of the project, and what is in and out of the scope of the project. Highlighting what is within scope is just as important as what is outside the scope.
5. Stakeholders: Persons or entities who have an interest in the project or can be affected by the project
6. Team and responsibility: List of the different team members and their roles within the project such as Project Manager, Technical Lead, Procurement officer, etc
7. Project Timeline: High-level project schedule showing the project milestones, and start and end dates of the work required to deliver the project objectives.
8. Project Budget: Initial estimate of the cost of the project that will give an idea to stakeholders, sponsors, and team members.
9. Project Risks: A list of circumstances or events that can affect the project and its outcomes, and the potential mitigation steps against these risks.
10. Key assumptions: Any assumptions made during the creation of the project charter that may affect the project such as availability of suppliers, working logistics, etc.

How do you create a project charter?

Now that we understand what a project charter is, here are a few tips on creating an effective project charter.

1. Discuss with your sponsor and document the aims of the project, the drivers of the project, the budget, and any timeline constraints.
2. Discuss with stakeholders and document their high-level goals for the project
3. Consolidate the requirements of the sponsor and project stakeholders. Identify areas of conflict and compromise on deliverables.
4. Identify any potential risks for the project and discuss them with the project team or stakeholders.
5. Sign off the project charter by the relevant authority which might be the project sponsor or another authority depending on the organization
6. Publish the project charter and make it available to all relevant stakeholders.