A project charter is a great marketing tool for a project. It is created by a project manager before a project begins—when the goals and ideas are conceptualized. The document explains the relationship between the company’s organizational strategy and the project. However, it is one of the least used documents in project management. Scheduling and communication software generate far more attention.
A charter formally authorizes the existence of a project and serves as a reference source for the future. It gives direction to the project management process from beginning to end. In a charter, a project manager has all the information they need to utilize organizational resources and fulfill project objectives.
A project charter puts your vision into words. It communicates your vision to all key project stakeholders. This post explains the importance of a project charter and how to create one.
What is a project charter and why is it important?
A project charter is a formal document that describes a project in its entirety. It states the objectives, how they will be carried out, and mentions the stakeholders. It is vital in project planning because it’s used throughout the project life cycle.
The main goal of creating a project charter is to provide a foundation on which the project can be established. It broadly defines the purpose of the project and the business goals and objectives. It is the first of project-definition documents that define the goals and objectives a project will meet. Additionally, the charter also defines the authority of the project manager.
Is a project charter different from a project plan?
Yes. A project charter creates the foundation for a project plan. It’s a formal document that defines project goals and the roles of everyone in the project. A manager usually presents the document to stakeholders to get official approval to start the project. A project plan, on the other hand, outlines the execution and milestones of a project.
Why is a project charter important?
Here are just a few reasons why a project charter is important:
- It is the single most important document in determining a project’s success. It describes the project scope, objectives, costs, risks, and participants. It also authorizes resources needed for project completion.
- The charter has a strong influence on the application of organizational strategies, project maturity, project portfolio management, and program management.
- It helps you to determine the value of a project—whether it’s worth carrying out or evening proposing.
- It offers clarity on a budget: You know if funding is available and whether it will be released on time.
- It saves you time down the road: You won’t have to spend a lot of time troubleshooting or negotiating with stakeholders right before the project begins.
- It gives your team clear guidelines: Everyone understands their role, the project milestones, and its goals. A well-written charter won’t leave your team confused; they will know what they are supposed to do and when they are supposed to do it. The guidelines for success will be made clear.
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What are the key project charter elements?
Long before a project begins, its project charter must be created. The document states who the stakeholders are and explain the project in detail. Many projects, even multimillion-dollar projects, operate without a project charter. But the document is very important. It formally authorizes the project and can be an important tool in ensuring lines of authority are clear. It also helps key stakeholders know what the organization would like to achieve with the project.
Some project issues can be avoided if a project manager–or the project’s sponsor–creates a project charter. But you can’t create a project charter if you don’t know where to start.
So, what are the key project charter components?
Why? (Why does this project exist?)
This section helps all key stakeholders understand the purpose of the project. The charter must communicate the project’s value and state its reason for existence to every person: the project manager, stakeholders, sponsors, and the project team.
Who? (Who are the key stakeholders?)
These days, management structures are more horizontal than vertical, so it can be hard to know who plays which role in a project. A project charter lists every project stakeholder involved in the project and outlines their roles—who’s responsible for what.
What? (What is the essence of the project?)
This section explains project goals and objectives and how they will be achieved. By describing the goals and objectives, it helps stakeholders determine whether a project is worth pursuing and if the organization has the necessary resources to work on it.
When? (When is the project due?)
This section defines the project schedule and timespan. It outlines the start and completion dates and the milestones that have to be achieved for the project to be completed on time.
Where? (Where will the work be performed?)
This refers to the general area where the work will be performed. This section states where the project materials and equipment will be installed.
How to create a project charter
If your company doesn’t have a project charter template, you can use a project management tool. The more thorough the document is, the more convincing it will be. It will also become a better reference source in the future. Your project charter should have the following sections.
Project Name: This is the name of your project, like, “Software Update to Prevent Cyber Attacks” or “New Company Wellness Program.” Make the title as detailed as possible.
Project Goals: Explain the project’s purpose, the pain points it will alleviate, the impact it will have on the company, and how it fits in with larger organizational goals.
Stakeholders: Name the stakeholders and define their roles in the project. Stakeholders may be clients, other project managers, or project teams. Explain if they will be actively involved or beneficiaries.
Budget: How much will the project cost and where will the money come from? You can also list the additional resources needed for the project.
Deliverables: What will the project deliverable be upon completion? A product, service, or a result? You can also talk about the measurements for success.
Risks: State the known risks and project constraints, and your plans for analyzing and managing project risks.
Timeline: Structure the project timeline and show when you plan to accomplish each milestone. Include the start and end dates of the project.
Roles and Responsibilities: Who will be involved in the project and what will be their role? Define each team member’s specific responsibilities to avoid the need to reference another document.
Tips for writing an effective project charter
- Discuss with stakeholders: Gather information about the project.
- Take and organize notes: This ensures you have all the information for the project charter.
- Use a template: Use a project charter template to create a document that best serves your project.
- Include specific information: Use the Why, Who, What, When, and How project charter elements to provide detailed information.
- Review the document with your team: Review the charter with key team members to make sure it’s accurate.
- Present for approval: Don’t send your charter as a PDF document in an email. Present it to sponsors, stakeholders, or clients—through a slide presentation or print-outs.
Take the next step in project planning with Kissflow Project
Without a project charter, a project has no direction. Stakeholders, customers, project managers, and employees all have different visions and expectations for a project. Use Kissflow Project to prevent misaligned expectations and miscommunication. Further, use it to create an intuitive project charter.