When done well, a project charter serves multiple, critical purposes: project marketing tool, team alignment document and scope creep shield.
To reap these benefits, of course, the project charter must be developed thoughtfully and contain all the key elements a project charter should have.
What is a Project Charter?
A project charter includes the project’s scope, the objectives and players involved, the business case and the project statement. The project charter ensures all players – team members, project sponsors, and stakeholders – hold the same understanding of the project’s goals and scope.
The project charter also clarifies the project manager’s authority and designates project team roles and responsibilities to each member. The project charter serves as a contract between the key players, helping the project stay on track.
Project Charter vs. Project Plan vs. Statement of Work
While sometimes referred to interchangeably, a project charter, project plan, and statement of work are all separate documents, each building on the one that precedes it.
First, a statement of work (SOW) is developed in the early stages. This document establishes the scope, proposes deliverables, makes assumptions and exclusions, and outlines criteria for acceptance.
Then, based on the SOW, the project charter is submitted to address more specifically why the project is being launched, who is responsible, what they will do, when the project will be completed, and how it will be delivered.
Finally, using the project charter as a foundation, the project plan establishes necessary tasks to complete the project and assigns owners. This is a much more tactical document that is created after the project charter.
Why is a Project Charter Important?
Project charters are critical to avoiding project failure and executing projects successfully. They offer several benefits for teams and project managers, including:
- Establishes project value, including whether a project is worth executing
- Saves time when the project is active by handling much of the problem-solving and negotiation
- Ensures the project funding is available and pre-establishes spending authority
- Creates clear guidelines for milestones and measuring success
- Positions the project manager as organized and in control
- Supports team morale by eliminating confusion, ensuring productivity, and offering motivation to work toward clearly defined success.
What is in a Project Charter?
Project charters should contain several components, overall detailing four key elements, which include the problem statement, business impact, measures and goals, and the project’s scope. This breaks down more specifically into several items, including:
- A statement of purpose that provides a short summary of the project
- A detailed statement of the project’s goals and its top priorities
- An overview of the project
- Key milestones
- Processes for monitoring costs
- A list of stakeholders
- Risk management plans
- Measures for evaluating the project’s success
- An appendix may also include the deliverables, detailed scheduling documents, and a plan for communication
How to Write a Project Charter
Like most forms of writing, drafting a project charter should follow a process to help create an effective document.
- Establish a vision for the project. The goals and objectives the project should accomplish must be clearly laid out, along with the scope of the project.
- Clarify how the project will be organized, listing citing roles and responsibilities for the project team, customers, and stakeholders.
- Develop a plan for implementation, highlighting key milestones, identifying dependencies and benchmarking an overarching timeline.
- Identify potential issues and establish contingency plans.
Don’t forget to meet with all necessary parties to ensure buy-in, including not only the players immediately involved, but also teams that may have limited involvement, such as a security expert or a marketing manager.
Do strive to be as specific as possible. Generic visions like “improve processes” are difficult to measure, and hard to control for scope creep, not to mention challenging to determine whether or not they were successful at the conclusion.
Project charters are a dynamic tool for project managers to measure timeline, check assumptions, and gauge whether or not the project is on track to meet its objectives.
Want to learn how to create and implement a project charter? Florida Tech’s Lean Six Sigma Green Belt course provides the concepts, definitions and tools professionals can apply across industries to lead successful projects.