The project charter is a term commonly found in project management. It describes a document that summarizes a prospective project. However, if you are new to the role or to the field, the purpose and form of this document may be confusing. To help you out, we covered all the basics, so keep on reading to find out what a project charter is and how to write one.
This document is written before the project begins and has the purpose of introducing the main goals and objectives as well as helping to decide whether to take the project on or not.
The project charter is usually composed of 2-3 pages and outlines the project goals, resources, timelines, and risks. The purpose of a project charter is not to describe how the project is going to be completed but rather to relay why it should be done. Following this idea, the charter serves 3 main goals:
1 – Sets estimations and risks for the outcome.
2 – Helps decide if the project should be taken on.
3 – Defines the responsibilities of each stakeholder.
Here is how we define a project charter – a short document outlining the main goal and purpose of a project as well as how it would be executed.
In most cases, the project charter is written by the project manager. However, there is one more key player in preparing this document- the sponsor.
The sponsor is the main initiator and supporter of the project. This is usually a high-role executive who sees real value and purpose for the project to go through. Due to their lack of time, the sponsor usually picks a project manager for the project and asks them to prepare the project charter.
Both the project manager and the sponsor collaborate on the document. The sponsor has to relay all the key information about the importance of the project, and the project manager is responsible for preparing the final draft. The final approval belongs to the sponsor.
Also, if at any time, even after the project charter is completed, the sponsor feels like the project manager is not right for the job, they have full authority to choose a different person.
In some cases, the sponsor can be more than one person or even a whole team. In such situations, it is usually this group that prepares the project charter themselves.
Each project manager has their own way of writing the project charter. Some have predesigned forms that only need to be filled out. Others write each charter from scratch. No matter which way you go, the structure of all charters is similar. It has to outline the main goals, risks, requirements, timeline, and resources.
By including all of these elements, the project manager can create a complete view of what is being planned and allow the shareholders to decide if the project should be taken on.
So, where should you begin? Here are the 5 main components of a project charter in detail.
The first thing you will want to include in the project charter is the name of the project, when the charter was prepared, and by whom. Consider this as the title for the document that the shareholders will review quickly when looking for the right file. Adding in the date will help evaluate the need for the project, and if there are any questions, the shareholders can refer to the person who has written the charter.
Next up, you will have to define the project charter with a goal. When writing the project goal, keep it short and easily understandable. You do not need to go into long explanations, but simply give your project a clear objective to aim for. If you are unsure of the goal being clear enough, ask yourself – ‘Can a person outside of my team understand this goal?’ The answer should be ‘Yes’.
For example – ‘Open a new customer service center in London’.
Once the goal is laid out, consider adding in the issues your company or customers are facing right now and how completing this project would help them. Highlight the pain points and solutions your project is going to bring.
Lastly, define the project scope. Decide what will be included in project execution and what won’t. This step is important to control the project length and budget, as well as make sure there is no scope creep once the team gets going.
For example, if you are opening a customer support center, list out details like its location, size, number of employees, the support functions it has to carry, etc.
Review the project scope once again after writing about the risks. Depending on the limitations, the scope could be lessened or expanded.
The second thing to discuss in project charters is the risks. This allows us to consider the validity and execution of the project, as well as evaluate its overall value.
In this section of your document, you will want to write about 3 things – risks, dependencies, and limitations.
First, consider the possible risks. Are your competitors doing something similar and can beat you to market? Can the market change, and the outcome of the project become irrelevant? Is the market stable? Think about what risks you run with the specific project, and make sure to list them in this section.
Second, focus on the dependencies that can affect your project delivery. Are you waiting for another project to be finished? Are you dependent on particular suppliers? Or maybe we have to wait for certain contracts to be finalized? All of these dependencies can greatly affect your project delivery date and thus should be considered in the project charter.
Lastly, turn the focus back to yourself and define all the limitations this project will face. Think about what on your end can interfere with delivering the project on time and in full. Do you have limited resources? Maybe you have to fit into a tight budget? Is the timeline for the project manageable? Consider this and other relevant limitations when writing the project charter.
Evaluating all of these factors will allow the shareholders to make an informed decision in taking on the project. It will also help create clear expectations of what can and cannot be achieved.
The third section of the project charter should be related to the project requirements and success criteria. Both of which will help understand the project’s needs and what will make it successful.
For the requirements, you should list the human resources, office space, tools, and processes that will be needed to complete the project. Also, think about any specific requirements this particular project may have. The more accurate you are in the project charter, the easier it will be once the project gets going. If you are unsure of what resources may be needed, consult with your team or other project managers to help with this stage of project charter definition.
Next, focus on what will make your project a success. More specifically, list out the success criteria. A good way of doing this is thinking about all the stages of the project and what the project team has to do to achieve them. Think about both – criteria related to project management efforts and project deliverables.
For example, if you are opening a support center in London, some of the success criteria could be as follows:
-85% of project deadlines met.
-90% of staff trained one week before opening.
-Customer satisfaction improved by 60% in the first month.
The fourth project charter section is all about the timeline. To help monitor the progress of the project, you should specify how the team and the stakeholders will be able to track it.
There are several ways of doing this. You can identify the project milestones and define them with due dates. This is more of a traditional way of tracking the timeline and depends on your knowledge of the team and the process.
If your team is using Agile project management techniques, you could instead opt for tracking iterations. This way, define the iteration length in the project charter, and the team will then work on delivering additional value during each cycle.
The last part of the project charter should be dedicated to the resources required for the project. This will help you set the project budget and examine the possible return on investment. There are three aspects to focus on – project manager authority, stakeholders, and budget.
It is the project sponsor that is responsible for assigning and confirming the project manager. However, as the project gets going the decision-making responsibility lies on the project manager’s shoulders. Thus, the project charter should clearly list which decisions the manager can make autonomously and which should be discussed with the other stakeholders. Defining the project manager’s authority helps avoid issues and disagreements later on in the process.
Next up, you should identify all the project stakeholders. Think about both internal and external stakeholders as well as the team that will be working on the project. Furthermore, define how all of these people will communicate during the project. You should answer questions like: ‘Who is the project team reporting to?’ and ‘How are the stakeholders being informed of the changes?’ All of this will ease communication in the future.
Lastly, review all the project goals, requirements, risks, and timelines to estimate the project budget. This is an estimation based on all the information in the project charter, meaning it will give you a general idea of the required investment. Make sure this estimation is calculated and weighed well. It will be harder to change the budget as the project gets going.
Now that you are familiar with the project charter meaning and components, writing one should be fairly simple. No matter if you are the project manager or the project sponsor, you should:
1 – Get familiar with the project and gather all the required information.
2 – Write the project charter, including the 5 main sections.
3 – Get project sponsor approval on the final draft.
4 – Present the project charter to shareholders.
Remember that the project charter is aimed to be a short document that provides an overview of the main project details and helps the shareholders decide on taking it on. Thus, keeping it concise and to the point is the way to go.
Do not be afraid to customize the project charter to your needs. Change the order of sections or add additional sections that may be important to your project. Simply make sure to keep the purpose of a project charter in mind.
Here are a few examples from the Template archive of project charters to look through.
Once your project charter is approved, it is time to start working on the project. Gather your team, communicate the objective, and get going.
Looking for a way to track the progress and visualize tasks? Consider using a visual project management tool like Teamhood. Here, you will be able to quickly review the progress, identify issues, and find timely solutions.
Teamhood task details hold all of your project data in one place, time tracking allows you to analyze the effort, and automated reports allow you to know how the project is going at all times.