A Quick Guide to Project Charters

ProjectManager

Projects 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.

What Is a Project Charter?

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.

Related: Free Project Charter Template for Word

Follow our quick guide to writing and executing your project management charter below.

Key Elements of a Project Charter

The project management charter serves as a reference document. It should define these three main points.

  1. What is the essence of the project? What are the goals and objectives of the project? How are you planning to reach and achieve these goals and objectives?
  2. Why does this project exist? Provide a shared understanding of the project. The charter should communicate its value and/or reason for existence to every person who has a part in it, from the team to the project manager, stakeholders, sponsors, etc.
  3. Can we agree on this project? The charter acts as a contract between the project sponsor, key stakeholders and the project team. By noting the responsibilities of each party involved in the project, everyone is clear what their duties are.

How to Create a Project Charter

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.

1. State the Project Information

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.

2. Define Project Team Roles & Responsibilities

An important function of a project charter is to document who are your team members and what their roles and responsibilities are. You should also identify the main stakeholders. It’s always crucial to note the stakeholders in any project for 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.

3. Identify Project Goals and Project Objectives

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.

4. Present a Business Case

A project charter needs a business case because it essentially states the reasons for undertaking the project. It helps project managers explain what are the business needs that the project will meet and what are 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.

5. Outline the Project Scope

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.

6. Create a Project Timeline

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.

7. Build the Project Budget

While you’ll go into greater detail when you create the project budget, here is 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.

8. Note Key Assumptions & Constraints

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.

9. Log Key Project Risks

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 on. This should be followed up 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.

10. Define Project Requirements and Success Criteria

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.

Project Charter Template and Example

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 off of.

free project charter template for word
ProjectManager’s Project Charter Template for Word

Software can help you get your charter organized

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 right and on time by using ProjectManager free today.

ProjectManager list view of tasks, deadlines, priorities and more
Collect all the data for your project charter with ProjectManager’s list view. Learn more

What Are the Uses of A Project Charter?

There are a lot of documents necessary to run a project. Before you even get started there are many you have to create, from a project plan to a project budget and more. All these documents delve into detail on the items you’ve broadly stroked out 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, and there’s a reason it’s more general and comes before everything else. The following are three main uses of the document:

  1. You need it to authorize your project. This is the document that sells the project to your stakeholders and defines broadly what their return on investment will be. It’s like an elevator pitch, so it has to sell the project.
  2. It serves as a primary sales document. When you present this to the stakeholders they now have a summary to distribute or present when approached about other projects, so they can focus their resources where they’re needed.
  3. This is a document that stays with you throughout the life cycle of the project. You will be referring to it throughout, whether at meetings or to assist with scope management. The charter acts as a roadmap without all the minutia to distract you from other project materials.

Tips on Writing a Project Management Charter

There’s a process for writing a project charter, which starts with knowing what is the vision of the project. That vision statement can’t be vague, but must capture the purpose of your project, defining the end goal for the project team.

Vision

Once you have the vision clear, then you can break it down into more practical bits.

  • Objective. List three to five objectives of the project, be SMART: specific, measurable, achievable, realistic and time-bound.
  • Scope. Now outline the formal boundaries of the project by describing how the business may change or alter by the delivery of your project, also note what’s relevant to the scope of work and what is not. This is how you maintain better control of the project.
  • Deliverables. Describe each of the deliverables the project is tasked to produce. Once you’ve gotten all of them down, you’ve got a foothold on your charter and are ready to move on. You can use a WBS template to help identify your deliverables.

Organize

When you’re building a structure for your charter there are four subsets you’re going to need to identify. This is done by listing the following:

  1. Customers/End Users. To complete this list, ask yourself: What is a customer and/or end-user in the context of this project? Who are the project customers? Is there a specific individual or entity responsible for accepting the deliverables of the project?
  2. Stakeholders. As noted earlier, identifying the stakeholders of the project is crucial. They are the person or entity within or outside of the project with a specific key interest in that project. It might be a financial controller overseeing costs or the CEO, but whoever it is they’ll have a slightly different focus depending on their role.
  3. Roles. You need to assign the key roles and responsibilities to those involved in delivering the project, from the project sponsor, project board and project manager. After each entry writes a short summary defining their role and what their responsibilities are in the project.
  4. Structure. Now you need to define the lines of reporting between these various roles in the project. Use a project organization chart to do this. It diagrams the structure of an organization and the relationships and roles of those involved in the project.

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, track progress in real time. More than that, you can filter the critical path quickly then set the baseline to compare planned effort with actual effort. Keep on schedule and stay within your budget by using ProjectManager.

A screenshot of a gantt chart in ProjectManager
Use the online Gantt chart from ProjectManager to organize your tasks and stay on track. Try It Free!

Implementation

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:

  1. Plan. If you’re going to implement, then you need an implementation plan. This is a way to develop an atmosphere of confidence for your customers and stakeholders by listing the phases, activities and timeframes of the project’s life cycle.
  2. Milestones. Milestones mark major phases in the project and collect smaller tasks into bigger chunks of work. The project should only have a few of them, that’s why they’re milestones, but they are an important way to acknowledge the completion of a key deliverable.
  3. Dependencies. List all key dependencies and what their importance is to the project. These are tasks or activities that are linked to one another, as they will impact the project during its life cycle.
  4. Resource Plan. What resources are involved in the project? Break down this list into labor, equipment and materials. This is how you’ll know what you need before you need it, and you’ll be able to estimate your budget more accurately. As the project progresses, and changes are introduced, you’ll need to adapt your resource plan. ProjectManager features workload and resource management tools that let you quickly see everyone’s workload, so you can reassign tasks as necessary. This keeps everyone from being over or underworked.

Risks, Issues & Budget

We’re almost done, but 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 is not always negative, as there is 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. Basically, the risk is future tense and an issue is a present tense, but 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 out a rough figure on how much it will 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.

Take the Next Step in Planning with ProjectManager

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 the award-winning project management software you need to manage your project from start to finish.

Gantt Charts for Planning

Turning a charter into a plan requires a tool that is 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.

ProjectManager's Gantt chart

Collaborate on Tasks

When assigning teams, it’s critical that they’re given 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 is always a channel open between team members to communicate and collaborate.

collaboration on ProjectManager's list view

Report on Everything

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, then you’re going to need the right tools to manage the scope, tasks and resources of your project to ensure you bring it in under budget and on schedule. ProjectManager is a cloud-based project management software that reports instantly when statuses are updated, so you know where your project is and how to keep it moving towards successful completion. Try our award-winning software now with this free 30-day trial. 

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