Missing documents in Project Management part 1: Project charter

PM project charter is one of the most overlooked documents in the IT management process, and it’s a pity. Although its creation is a real challenge for every Project Manager, its benefits can be invaluable.

Documents in Project Management: PM Project Charter

The need for documentation is the challenge of every Project Manager

Understanding the issues between business and project teams is one of the classic challenges facing a Project Manager. The multitude of requirements, interpretations and processes embedded in the technological layer constitute a kind of communication minefield.

How to go through them avoiding most of the traps on the way? The answer comes straight from the PM methodology and is unequivocal:

Documenting each (necessary) step.

Creating project management documentation for a project process is in fact the PM’s task. The need to verify the received project data and to structure them as part of documentation allow creation of products that truly meet the customer’s needs.

In this series of articles, we will refer to the key documents in the management process in terms of Project Management (PM) methodology. We will describe the various types of necessary documents, showing what functions they fulfill and what threats they mitigate. The documents that will be described are:

  1. Project charter
  2. Initial project declaration
  3. Project management plan

Today, let’s focus on the first of the PM documents: a project charter.

Project charter in Project Management — what it is and what role it plays

A project charter (also known as a PM charter) is a document that formally approves a project. It is on this basis that the decision to continue or abandon the project is made. Consequently, only when the project charter has been officially approved by the stakeholders does the Project Manager become legally valid to start the proper work — to plan individual activities and engage the development resources needed to implement the project. Stakeholders can be representatives of the client (if it is an external software project) or our own management board (if it is an internal project).

Importantly, PM charter contains not only an initial budget and milestones, but also a description of business goals, as well as possible risks and much more. We will describe all this in more detail later in the article, because it is worth noting that depending on a specific project, each project card will be different from the others. No two cards are the same, and no two are the same nights (supposedly!).

Of course, if our project management is close to a fairly repetitive environment, it is worth preparing one template (PM charter template) that we will adapt and modify, but the process of creating a project charter should really start with tabula rasa each time. Simple copy-paste doesn’t work here.

Why? The answer is quite intuitive: the better (i.e. more precisely) PM does its work on the project charter, the easier it will be to manage this project later, and the organization with which it cooperates will receive much more transparent information, on which it is able to realistically define its expectations. Values of specifically defined customer expectations, which are realistic, we don’t have to explain — everyone knows how important it is.

A content of PM project charter

A PM project charter can contain a variety of elements, including:

  • basic information about the project
  • motivations and business needs for which the organization wants to implement the project
  • identification of roles and their dependencies in the project
  • goals of product and project with a description
  • qualitative issues
  • conditions for closing the project
  • procedure for exiting the project
  • the resources you need
  • initial budget
  • milestones of the project
  • compliance and security issues
  • the decision to start the project
  • organizational, environmental and external constraints
  • if possible — the expected rate of return on the project
  • project boundaries including scope exclusions
  • initial risk determination
  • initial work breakdown structure
  • deliverables of the project

What is very important, each time the Project Manager should adjust the content of the project charter card to the goals that the clients want to achieve as a result of the project, not the opposite. The above list of possible components should therefore be treated as an attempt to define the full scope of the document, which will not necessarily be the same as the actual content of a given PM charter.

PM project charter template

A sample PM project charter might look like this:

PM project charter template

In this project charter template, we have marked the most important sections in the project charter, i.e. justification of the project (What are we doing this for? Are we able to do it?), as well as our goals, i.e. the effects of a new product or service. It is worth remembering that the goals should be SMART, i.e. they are specific, measurable, attainable, relevant and time-based.

Equally important is a solid description of the scope of the project with all the measures and indicators that will help us in the future assess whether the goals have been achieved. The necessity to set out the planned resources and work schedule does not need to be explained to any PM.

How to create your own project charter? Process description

From the previous paragraph, you now know more or less what might be in your document. So let’s move on to developing a specific project charter. How do you know which elements should be included in a given case?

The PMP methodology indicates 4 documents on the basis of which the project manager can build a project charter. These are:

  1. A contract, i.e. an agreement with the client

2. The scope of the project’s work (Statement of work), most often including:

  • scope of work
  • business requirements
  • business need
  • description of the product scope — its properties and functionality
  • embedding in the strategic plan of the organization

3. Environmental factors of the conducted activity, such as:

  • company culture and structure
  • statutory or industry standards
  • infrastructure
  • human resources
  • approach to issues related to security and authorization
  • stakeholder approach to risk management
  • defining the tools and technologies used to implement the project

4. Assets of organizational processes, ie the full range of standards, processes, guidelines and policies developed by the organization that must be taken into account when the project card is created. This collection includes, among others:

  • labor norms and standards
  • project management policies
  • work instructions
  • evaluation criteria
  • methods of measuring performance
  • document templates
  • information flow requirements and standards
  • financial control procedures
  • project closure procedures
  • procedures related to the management and resolution of conflicts
  • the way of managing changes
  • risk control procedures
  • work approval procedures
  • approach to knowledge management
  • archival information and a repository of historical projects
  • configuration management knowledge base
  • financial database

At first glance, it seems like a lot of work, but as we mentioned above, this work simply pays off in the world.

Once PM has done his homework and read the above-mentioned batch documents, the next steps are:

  1. Determining the way in which they will assess the value of his project
  2. Embedding it in the methodology of project management
  3. Selecting appropriate tools that will support their further project management
  4. Verifying the main issues with experts (i.e., inter alia, layers related to compliance, etc.).

After completing all these activities, as long as we are dealing with a large, introducing changes, it is worth entering into the analysis of identifiable contexts in which the project will be implemented, something that most of us know as the so-called “opportunities, threats, risks and challenges”. How does a given project settle in the socio-economic and technological layers? How can suppliers, stakeholders and the organization itself perceive it? To sum up, the point is that our analysis should give the organization a broad and reliable description of the project together with the surrounding environment. In this way, PM project charter facilitates making a business decision to start a project or not.

It seems that the project card is a significant time cost, but …

The benefits of the project card are huge:

  • we receive a document containing comprehensive information about the project,
  • thanks to its form, we conduct an in-depth analysis of the issue,
  • we get the basis for making the right management decisions,
  • we avoid conflict situations on the supplier-client line.

So it’s time to try to start using it in Project Management.

About the author of the article:

Paweł Żurawka | Project Manager at Transparent Data

He says about himself that he is a PM with eclectic work experience. Before he started his career in Project Management, he played many roles: from managing the back office team, through gastronomy audits, to working in trade. Thanks to this, he perfectly understands not only projects, but also people.

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