What is a project charter? Definition & guide
Discover the significance of a project charter. Understand its role in project initiation and execution.
Imagine you've conceived a promising business idea for your department's upcoming project. Yet, merely having an idea isn't enough to actualize it. You must pitch it to the appropriate stakeholders and secure their endorsement.
Enter the project charter.
In this manual, we'll delve into what constitutes a project charter and its essential components. Additionally, we'll outline the primary distinctions between a project charter and other crucial project management records.
What is a project charter?
A project charter is a formal project management document that officially recognizes a project's existence and acts as a persuasive pitch for the project, seeking approvals for its implementation.
Essentially, it provides a concise summary of your project, outlining key elements such as project scope, objectives, and responsibilities to help stakeholders grasp its essence.
Typically, project sponsors or initiators oversee the creation of this document.
Once approved, the project charter empowers the project manager to allocate organizational resources to project endeavors.
12 components of a project charter
While there's no standardized set of project charter elements, an effective project charter typically comprises the following 12 components:
- Project purpose
- Project title
- General project information
- Deliverables
- Scope
- Milestones
- Resources
- Risks
- Key stakeholders
- Project team structure
- Success measurements
- Project approval
Let's provide a brief overview of each of these elements.
Project title
Your project title should be clear and descriptive.
For example, if your project involves creating new landing pages for products on a website named "X," a suitable title could be "Development of New Product Landing Pages for Website X."
Project purpose
Your project should have valid reasons for its existence.
To define the project purpose, consider addressing these questions:
- What business needs will this project fulfill?
- What are the desired outcomes of the project?
- How do the project goals align with broader organizational objectives?
Additionally, applying the SMART criteria can facilitate the establishment of clear and achievable project goals and objectives.
General project information
Every project charter should encompass the following general information:
- The designated project manager
- The project sponsor
- The business unit accountable for project execution
- The date of project initiation presentation
Deliverables
Depending on the nature of your project, deliverables can encompass a range of products or services achieved upon project completion. Here are some typical examples:
- Business cases
- Landing pages for various products
- Prototypes
- Wireframes, etc.
Defining deliverables establishes a tangible endpoint for your project, enhancing the value of your project charter to stakeholders and increasing the likelihood of approval.
Scope
Providing a concise summary of what will and will not be encompassed within the project tasks helps maintain alignment with your client and minimizes misunderstandings.
Milestones
In addition to forecasting the expected start and finish dates, it's recommended to outline all significant project milestones and their anticipated completion dates.
Resources
Ensure you have an initial project budget estimate. Alongside financial factors, determine:
- Required manpower
- Necessary equipment
- Other project resources, tailored to your industry, project type, and complexity.
Risks
Taking the time to identify potential project risks and understanding their potential impact on the project's outcome early on can help prevent more significant issues later. So, carefully consider potential risks and document potential challenges that may arise.
Key stakeholders
Identifying the primary project stakeholders, whether internal or external, is crucial as they can impact the project’s outcome. Within your project charter, specify the individuals responsible for:
- Providing funding
- Approving the project charter
- Holding other key responsibilities.
Project team structure
Create a roster of individuals involved in the project and outline their respective roles and duties. To refine the team structure, consider addressing these queries:
- Who will oversee project management?
- Which other team members will contribute to the project?
- What specific tasks and responsibilities will each team member undertake?
Success measurements
Specify the metrics you will utilize and the objectives you aim to accomplish with your project.
For instance, regarding the budget key performance indicator, success could be denoted by achieving total cost savings of $100,000 or reducing production time by 25%.
Project approval
Ultimately, clarify the individual responsible for authorizing the project charter, indicating who approves the project.
Project charter example
Now that we've outlined all the components of a project charter, let's see how it works in practice.
To demonstrate, let's consider a project example focusing on mobile application development, specifically a food ordering app.
Here's a sample project charter for your reference:
| Element | Description |
| Project title | Go Guacamole food ordering app. |
| General project information | Project Manager: Marry Stark Project Sponsor: James Jones Business Division: Product Development Date: March 3rd, 2024 |
| Project purpose | - Mobile application designed for vegan and vegetarian food ordering. - Available for download on both Google Play and the App Store. - Goal: Streamlining the process of ordering vegetarian and vegan meals from our Go Guacamole physical stores. - Features mobile ordering and delivery services across major cities in the United States. |
| Scope |
Inclusions: Exclusions: |
| Project milestones | Commencement Date: April 4, 2024 Design Concept Finalized: May 4, 2024 App Development Concluded: July 7, 2024 Quality Assurance Testing Completed: August 15, 2024 Product Descriptions Finalized: August 26, 2024 Launch Date: September 1, 2024 |
| Goals and objectives | - Achieving a 20% sales boost within the initial quarter post-launch - Positioning our company as a frontrunner in the vegetarian and vegan food sector within the United States |
| Deliverables | - Design guidelines - Blueprint sketches - Interface design - Compiled application versions - Secure keys and certificates - Access credentials - Additional development guidelines - Records of bugs and issues |
| Risks | The team might encounter delays in meeting deadlines because of: - Incorporating unanticipated alterations into the specifications or broadening requirements with additional features. |
| Resources |
Team composition: Project Duration: 5 months Project Budget: $100,000 |
| Key stakeholders | Chief Executive Officer: Peter Drake Sponsor of the Project: James Jones Investor in the Project: Mark Johansson |
| Project team structure | Project Manager: Marry Stark Product Manager: Emily Boyle Business Analyst: Terry Knope Finance Manager: Piter Blunt Designers: Mark Wild, Lucy Dale QA Team: Tamara Jonas, Natasha Potter Developers: Philip Levison, Simon Nowicki, Maria Barres |
| Success measurements | - The application garners a minimum of 5,000 downloads across Google Play and the App Store within its inaugural month. - The application achieves a rating of 4 to 5 stars on Google Play and the App Store, accompanied by over 15 favorable reviews on each platform within the initial 2 months following its launch. |
| Project approval | Chief Executive Officer: Peter Drake Investor: Mark Johansson Sponsor: James Jones Project Manager: Marry Stark Finance Manager: Piter Blunt Approval Date: March 4th, 2024 |
Project charter template
Keep in mind—avoid overwhelming readers with lengthy text.
In addition to keeping your project charter concise, enhance its visual appeal for those responsible for approval by employing effective structuring and formatting. Utilizing tables to segment your charter into distinct sections will facilitate scanning and comprehension.
We recommend employing a straightforward project charter template to streamline the process.
Rest assured, you need not expend valuable time crafting such a template. We've assembled an accessible project charter template for your convenience, which you can edit and download at no cost.
How do project plan and project charter differ?
The primary distinction between a project plan and a project charter lies in their timing and purpose. The project charter precedes the project plan, serving to obtain project approval and authorize the project manager to initiate work.
While the project charter offers a broad overview of the entire project, the project plan delves into the specifics of each project phase.
In contrast to the project charter's macro-level description, the project plan offers a detailed breakdown of key project elements and elucidates the execution of project activities.
How do a project brief and a project charter differ?
The primary distinction between a project brief and a project charter lies in their purpose and content. A project brief offers a concise overview of the key elements outlined in the project plan, whereas a project charter serves to formally authorize the project.
In essence, the project brief serves as a summary of the approved project plan, created subsequent to project approval. It functions as a reference guide for the project team and stakeholders.
How does a business case differ from a project charter?
The primary distinction between a business case and a project charter lies in their focus and content. The business case elucidates the rationale behind investing company resources into a particular project, elaborating on its potential benefits and risks as a significant business venture. Moreover, the business case involves making assumptions regarding project costs and anticipated revenue to ascertain its financial viability.
On the other hand, the project charter provides a high-level overview of the project's objectives and sets forth constraints such as budget, timeline, and scope.
While both documents are crafted during the project initiation phase, they serve distinct purposes and are not interchangeable terms.
What are the steps involved in creating a project charter?
While there isn't a standardized method for constructing a project charter, we've identified several helpful tips:
- Collaborate with your project team to develop the charter.
- Ensure brevity and clarity in the document.
- Incorporate essential details.
- Present the project charter to pertinent stakeholders and obtain approval.
Engage in discussions about the project charter with your team
No one anticipates the project manager to possess superhuman capabilities. A team is consistently more robust than an individual, as each member contributes their unique experience and expertise.
Therefore, harness collective strengths and seek input from every team member regarding the project. Deliberate on project objectives, milestones, and potential risks together.
Insights from team members can aid in capturing critical details and crafting a more precise project charter. Ultimately, the clearer the benefits outlined in the project charter, the greater the likelihood of stakeholder approval.
Maintain brevity and simplicity in your project charter
A project charter should be precise, ensuring clarity without overwhelming key stakeholders with unnecessary information that could lead to disinterest in your project. While other planning documents like the project plan can provide more extensive details, keep each section of the project charter concise, ideally limited to one or two sentences.
Incorporate all essential details within your project charter
While there isn't a one-size-fits-all template for project charters, certain crucial details should always be included, such as:
- Specific project objectives
- Identified risks and constraints
- List of stakeholders and team members
Share your project charter with pertinent stakeholders and obtain their approval
To ensure project approval, it's essential to go beyond merely emailing your project charter as a PDF to key stakeholders. Instead, consider arranging a presentation or scheduling a meeting to articulate the goals of the project. This provides an opportunity to address any questions or concerns stakeholders may have and alleviate any apprehensions they may harbor.
What is the objective of a project charter?
There are several rationales behind the necessity of a project charter. Some of the most prevalent purposes of a project charter include:
- Serving as a promotional tool for the project, facilitating stakeholders' approval: The project charter offers a concise overview of the project, effectively advocating for its significance to key stakeholders responsible for project approval.
- Authorizing the initiation of the project: The project charter officially sanctions the existence of a project. Without stakeholder approval, the project cannot commence. Its primary function is to grant authorization for the project's initiation, enabling the project manager to proceed with project execution.
- Clarifying the business significance of the project: Prior to embarking on a project, it is imperative to ensure that stakeholders comprehend the business relevance of the endeavor and where their resources are being allocated. The project charter articulates the business importance of the project, elucidating its strategic value.
- Mitigating scope creep: By delineating the project's parameters, the project charter helps to prevent scope creep, ensuring that all stakeholders have a clear understanding of the project's boundaries.
A well-crafted project charter ensures the approval of your project
Think of a project charter as your sales pitch—put your best effort into preparing it to effectively "sell" your project.
While the components of a project charter may vary, we've outlined the essential ones you shouldn't overlook.
In conclusion, heed our guidance and utilize our project charter template to persuade stakeholders to embrace your idea and breathe life into your project.
