Project Charter

Introduction

Following are the three main reasons for using a Project Charter:

1. To authorize the project. This is used to sell the project to the stakeholders and give them a roughly idea what the return will be.
2. To serve as the primary sales document. The project has a frame work so the resources can be allocated as necessary.
3. To use it throughout the life cycle of the project. The project manager and the team can pursue the project by using the charter and can refer to it during the project life time. projectmanager.com

Develop Project Charter

A flow diagram of the process can be seen in Figure 1. The process of developing a project charter is divided into three main steps; Inputs, Tools & Techniques and Outputs. In the following sections these steps will be explained in more detail.

Inputs

The inputs to develop a Project Charter are following:

• Project Statement of Work
• Business Case
• Agreements
• Enterprise Environmental Factors
• Organizational Process Assets

Tools and Techniques

In Figure 1 it can be seen that two elements are needed for this step, expert judgment and facilitation techniques. An individual or a group of expertise with special knowledge or training criticize the inputs. These individuals can come from different source, for example, other units within the organization, professional and technical associations, stakeholders, project management office and consultants. In addition, the project manager will apply various methods that are within project management, like brainstorming, problem-solving and conflict resolution. This processes will help to develop the project charter.

Outputs

The output is the project charter, furthermore the project manager will allocate the project to organizational resources and has authority to use project activities. Contents of a project charter are following:

• Executive Summary

This section will be a high-level summary of reasons for creating the project and what problem it is supposed to improve. Moreover, it can contain background information and general statements.

• Project Purpose/Justification

It is vital to know the purpose or justification of the project and what is the expected outcome of it. This section describes the project and how it is related to the company’s business/operation by defining the business case and business objectives. The business case will explain the need for the project and how the company will benefit from it. It is important to define the final goal for the project, so it is vital to list objectives for the project that are in relation of the company’s strategy.

• Project Description

This section will include; project objectives and success criteria, requirements, constraints, assumptions and preliminary scope statement. It will provide a more detailed description of the project, but be careful not to have too many details. General information such as; what is the project, how will it be done and what will it achieve. It can be useful to use the SMART method to set the project objectives. The effect is that each objective will be specific, measurable and achievable within a certain time frame, and for that reason it will be easier to monitor them. Therefore, the project manager can monitor if the project is on the right path and it is more likely that the project will be a success. In the requirements section, a list of all project requirements needs to be stated by the project team, it will not be exhaustive list since the requirements can change as the project moves forward.

• Risks

Risk and other potential issues that may happen in a project need to be taken into account because without it the project can derail. So, by addressing this and create a plan to solve these issues if they occur, the team would be more ready and could reduce project delays and prevent complications.

• Project Deliverables

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• Summary Milestone Schedule

All known or estimated milestones in the project are listed. It is clear that the milestones can be modified throughout the project and will be communicated to the project manager.

• Summary Budget

Section that includes sum of all relative costs and the total budget for the project. Since the project charter is done very early in the process, the costs can change but the charter will give a rough plan. In addition, it is crucial to run all changes by the project manager.

• Project Approval Requirements

Project approval requirements will state when the project has reached its goal. The goal and the requirements need to be clear, incisive and should be accepted by the authorized person. At last, if the project is approved and has met all the requirements it will be signed-off by the sponsor.

• Assigned Project Manager

This section will state the assigned project manager, along with the responsibilities and authority level, which can be various between organizations.

• Authorization

The sponsor will sign the charter.

Limitations

Even though potential risks and issues are considered in project charter, nobody can predict the future, so the project manager cannot predict each complication. The teammates will rely on the project charter to manage obstacles but when a problem occurs that is not included in the charter it can take a lot of time to solve it. On the other hand, another problem if the charter has a solution to a problem that occurs, it may not be adequate to solve it and therefore the project will delay.

Later on, the challenges are presented in this section.