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by William Malsam | May 1, 2023Projects need approval before they can be executed. A project charter is a project planning document that sells the project to stakeholders and sponsors. If you’re able to show its viability and return on investment, the work will get the green light to move forward.
But there are a lot of elements to any successful project charter. If you’re new to project management, a project charter template can set you up to make sure you’re hitting all the major points. We’ve included a free project template charter help as an example of what a project charter should include.
So, what is a project charter, exactly? The following quick guide will help give you a fuller understanding so that when you’re pitching your next project, you’ll have everything you need to achieve success.
A project charter is the statement of scope, objectives and people who are participating in a project. It begins the process of defining the roles and responsibilities of those participants and outlines the objectives and goals of the project. The charter also identifies the main stakeholders and defines the authority of the project manager at the outset of the project plan.
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There are a lot of documents necessary to run a project. Before you start, there are many you have to create, from a project plan to a project budget and more. All of these documents delve into detail on the items you’ve broadly covered in your project statement. So, why do you need another document, isn’t it redundant?
While it’s true you’re going to cover this ground on a granular level, this is your first pass; there’s a reason it’s more general and comes before everything else. The following are three main uses of the document:
To further understand what a project charter is, let’s compare it to other project documentation, which should bring it into sharper focus. We’ve already explained that a project charter is a high-level document used when initiating a project. It’s only a few pages long and outlines the objectives, scope, vision, team role and responsibilities as well as the stakeholders involved in the project.
The project plan is used to show how to execute the project. It’s a practical guide to running the project from start to finish. It comes after the project charter has been approved by the stakeholders and acts as a direction for the project plan. What’s outlined in the project charter is fleshed out and defined in far greater detail in the project plan. In that sense, they’re related and very much part of the larger progression of the project.
When we’re talking about a project plan, it’s a way to identify the value of the project for the stakeholders and organization. But then it gets down to a more practical level. There’s the creation of a project timeline, with tasks, duration and milestones. It structures the project team, their roles and responsibilities, and who will do what when executing the project. Resources are allocated, a work breakdown structure (WBS) is used to identify all the deliverables and costs are estimated.
As already defined, a project charter is a high-level description of the project and its deliverables. But a business case, as the name suggests, speaks to the value of the project, what the return on investment (ROI) will be or how it positions the organization to exploit opportunities in the future.
Therefore, a business case focuses on the business opportunities or a problem to be fixed by the project. These benefits can be tangible or intangible, such as increasing profits or market saturation. Whatever they are, the benefits are supported by a detailed analysis of the ROI. Any assumptions and constraints are listed.
So while a project charter is a broader document, the business case is only interested in what the project can do to help the organization. It justifies the project and the time, money and effort it’ll take to complete the project. A project charter authorizes the project and the business case is the research to prove the viability of the time, money and effort required to execute the project.
The project management charter serves as a reference document. It should define these three main points.
Writing a project charter takes time and effort and it can be challenging if you’re new to project planning. But you don’t have to worry, you can use our free project charter template to get started. Use it as a project charter example to work from.
So, those are the broad strokes, and while a project statement doesn’t need to go into great detail, there are many more key elements to it than these general statements. Remember, the sections outlined below should be short because they refer to more detailed project planning documents, such as a scope statement, project budget, risk management plan or request for proposal.
This first section in your project charter is where you’ll include your project’s general information, such as its name, description and who are the project sponsor, project manager, team members and stakeholders.
An important function of a project charter is to document your team members and their roles and responsibilities. You should also identify the main stakeholders. It’s always crucial to note the stakeholders in any project as they’re the ones who you’ll be reporting to and, in a sense, managing their expectations. The sooner you know who they are, the sooner you can build a productive stakeholder management plan.
It’s important for project managers to differentiate between these two. Project goals are the high-level benefits that the project should generate, while project objectives are the specific milestones or steps that are needed to complete them. If you don’t have a clear target, your project is going to miss the mark.
A project charter needs a business case because it essentially states the reasons for undertaking the project. It helps project managers explain the business needs that the project will meet and the expected financial benefits and return on investment for project stakeholders. A good way to sell the project is to have a sense of what good the project will bring to sponsors and stakeholders. Figure out what those benefits are and list them here.
What are the in-scope and out-of-scope items? The scope is the boundaries of your project, such as its start date and when it concludes. So, what are the in-scope items, such as those parts of the project process as opposed to tasks or actions that lay outside the step-by-step process of the project? Outline your key project deliverables and milestones. Later, during the planning phase, you’ll need to create a scope statement that describes the project scope in more depth.
A project timeline is a simplified version of your project schedule. This project timeline should show key deliverables, milestones and project stages so that stakeholders understand the big picture.
While you’ll go into greater detail when you create the project budget, here’s where you want to get a ballpark figure on what project costs you expect. Define the budget for the project and who will have spending authority. Include the estimated costs for the tasks you’ve defined, but be aware that new project requirements and tasks will require adjustment of this budget.
It’s important to write down all the assumptions or constraints that can have an impact on the development or execution of your project plan. Noting key assumptions is very important for stakeholder management, as setting clear expectations is key to success. You also want to have at least an outline of how you’re going to deal with project constraints. If you don’t cover it now, you’ll have to play catch-up later.
Identify all potential risks that could arise in the project so you’re not taken by surprise. Here, you’ll want to highlight the most probable or impactful risks so that stakeholders are aware of them early. This should be followed by a risk register and risk management plan in your project plan, where you detail how you’ll resolve those risks and who on the team is responsible for catching and fixing them.
The project management team and project stakeholders must reach an agreement in terms of success criteria. The most common aspects to determine project success are the triple constraint elements, time, cost and scope. But depending on the project, there can be many project requirements such as risk tolerance levels and quality standards.
Now, let’s use the steps above to write two simple project charter examples.
For this project charter example, let’s imagine a construction firm that’s going through the initiation phase of a residential construction project, more specifically an apartment complex.
Project Information
Roles & Responsibilities
Project Vision and Objectives
Business Case
The district is ripe for housing. Recent mixed-use construction has produced popular retail and restaurants. The area is lacking in luxury residential housing for the moneyed class which has increasingly made this part of the city a destination. Attached is supporting research, demographics, etc.
Project Scope
The construction project will be built as per the construction drawings, specifications and other documents such as the construction plan and construction schedule.
Project Timeline
The project is expected to start by the last quarter of the year and be completed between 12-16 months.
Project Budget
The project budget is $15 million, based on the number of units and their square footage, as specified in the construction drawings, architectural designs and computer-assisted designs (CAD) models. The project budgeting process was completed thanks to a cross-functional effort by the architecture, engineering and cost estimation team.
Project Assumptions
Project Constraints
Project Risks
The following risks might affect this project:
Project Requirements and Success Criteria
The quality, safety standards, success criteria and other requirements for this project are explained in the construction drawings and construction specification documents. These include but are not limited to the quality of materials, skills required from the construction crew, environmental compliance standards and building codes.
For another project charter example, we’ll look at something less physical, the creation of a website. While the deliverables for the project charter example are tangible, they’ll still follow a similar outline as with the construction project charter or, frankly, any project.
Project Information
Roles & Responsibilities
Project Vision and Objectives
Business Case
Currently, Widgets Manufacturing has the capacity to deliver its popular brand at retail locations around the country. To broaden its global brand in a cost-effective manner, the development of a website to further its reach is the next step to grow and increase profitability.
Project Scope
The website is constructed to match the sensibilities of Widget’s target audience. Deliverables include design rough and finish, graphic elements, content, backend and frontend development and testing.
Project Timeline
The project is to be finished by the end of the year to exploit the seasonal spike in buying. Estimates for the timeline are six months.
Project Budget
The project is estimated to cost $1 million. A breakdown of equipment and labor is attached.
Project Assumptions
Constraints
Project Risks
The following risks might affect this project:
Project Requirements and Success Criteria
The website must be completed on time and within budget. It should be consistent with the overall brand image of Widget Manufacturing and speak to our customers’ needs. The collection of leads and the delivery of goods, including secure payment, should all work as designed.
Even with the help of a template, a project charter required a lot of work. Project planning software can help you organize all the information needed to build a charter.
ProjectManager has a dynamic list view that does more than other software tools that just digitalize your to-do list. Attach files to each item on your list, set priority and add tags to make it easier to find. Keep on track by setting due dates for each item. We show you the percentage complete. Get your charter built properly and on time by using ProjectManager free today.
There’s a process for writing a project charter, which starts with knowing what the vision of the project is. That vision statement can’t be vague, but must capture the purpose of your project, defining the end goal for the project team.
Once you have the vision clear, then you can break it down into more practical bits.
When you’re building a structure for your charter, there are four subsets you need to identify. This is done by listing the following:
Gantt charts are the traditional planning tool for projects. They turn your tasks and deadlines into visual timelines. ProjectManager has an online Gantt chart and other planning tools that let you assign tasks and track progress in real time. More than that, you can filter the critical path quickly and then set the baseline to compare planned effort with actual effort. Keep on schedule and stay within your budget by using ProjectManager.
You have a vision and have organized the various parts of your project. Now you have to develop a plan to implement them. There are four parts to this:
No charter is complete without collecting the potential risks and issues that can derail a project. This includes assumptions and constraints related to the project. A risk is a potential issue that may or may not happen in a project. Risk isn’t always negative, as there’s such a thing as positive risk, and you should prepare for that as well.
An issue is something that has already occurred in the project. Think of risks in the future tense and issues in the present tense. Regardless, you have to be prepared for any and all eventualities when creating a project management charter.
Finally, with all the above information, you can sketch a rough figure on how much it’ll cost to deliver the project within the timeframe you’re allowed. Then you present your charter, and once it’s approved and signed, the real work begins.
The charter lays the groundwork for the project. It provides a vision and determines where all the parts will be placed. It’s a great framework, but it’s not a plan. The charter leads to project planning, and ProjectManager is award-winning project management software you need to manage your project from start to finish.
Turning a charter into a plan requires a tool that’s flexible enough to respond and adjust to the many tasks involved. The online Gantt chart project view takes tasks and populates a project timeline, where dependencies can be linked-to avoid bottlenecks later. Set milestones, quickly edit dates and even assign work to team members.
When assigning teams, it’s critical that they have clear directions. Project managers have too much to do to spend time micromanaging their teams. ProjectManager makes assigning easy, but also with its unlimited file storage, you can attach as many documents and images as necessary for instruction. Comments can be made at the task level, so there’s always a channel open between team members to communicate and collaborate.
A powerful window into the project is the reporting feature, which creates in-depth project reports with just a few clicks. Managers can filter reports to show just what they need to see, such as task progress or project variance. These reports monitor the project to keep it on track, but can also be shared with stakeholders to keep them in the loop.
Once you’ve written your project charter and have approval from your stakeholders, you’re going to need the right tools to manage the scope, tasks and resources of your project to ensure you deliver it under budget and on schedule. ProjectManager is online project management software that reports instantly when statuses are updated, so you know where your project is and how to keep it moving toward successful completion. Try our award-winning software now with this free 30-day trial.
