One of the very first steps in the phases of the project management lifecycle is developing the project charter. It helps inform everyone in the team what they are in charge of and what needs to be done.
Let’s define the project charter and discuss how to create one. We have added some useful project charter templates that will help you kick-start your project. Customize them to your liking and export them as images or SVGs to add to presentations or documents.
- What is a Project Charter?
- Why Use a Project Charter?
- When to Use a Project Charter?
- Who Can Benefit from a Project Charter?
- Benefits of Using a Project Charter
- What to Consider Before Developing a Project Charter
- How to Develop a Project Charter
- A Visual Project Charter
- Project Charter vs Project Plan
What is a Project Charter?
The project charter is a formal document that lays out the project vision, scope, objectives, project team and their responsibilities, key stakeholders and how it will be carried out or the implementation plan. It is also known as the project statement and project definition report. Usually used at the beginning of a project, the project charter communicates the project’s objectives and expectations to all stakeholders, including the project team, sponsors, and other interested parties.
The project charter is also helpful in defining the project manager’s authority level and the project’s direction.
A project charter typically includes the following:
- The project overview: briefly describes the project, its purpose, and expected benefits.
- The project scope: outlines the project’s boundaries, including what is included and excluded.
- Project goals and objectives: outlines the specific goals and objectives the project is expected to achieve.
- Project timeline: a schedule of the project, including milestones and deadlines.
- Project budget: outlines the estimated costs and the resources that will be required to complete the project.
- Project stakeholders: a list of all stakeholders involved and their roles and responsibilities.
- Project risks and assumptions: outlines the potential risks and assumptions associated with the project and how they will be managed.
Why Use a Project Charter?
There are several reasons as to why you should consider kick-starting your project with a project charter. A few are given below.
A project charter
- Describes the purpose and the outcomes of the project
- Ensure clarity of project goals and objectives
- Legally authorizes the start of a project
- Helps keep track of project deadlines
- Defines roles and responsibilities of each member/stakeholder
- Helps identify constraints and risks and define preventive measures
- Outlines a general overview of the budget
- Provides a useful framework for decision-making
- Improves communications
- Helps align the project goals with the interests of the stakeholders
When to Use a Project Charter?
A project charter should be used during the planning phase at the beginning of a project. It is usually the first formal document created when beginning a project and serves as the basis for all subsequent planning and execution activities.
The project charter should be created or developed before any detailed planning or major project resources are committed. This is because the project charter helps ensure everyone understands the project’s goals, objectives, and scope. It is also helpful in identifying possible risks along with any associated strategies to manage them.
Regardless of the size or complexity of the project, the project charter should be used. It is especially helpful for projects that are large or complicated, have many stakeholders, or have a lot of risks or uncertainty.
In summary, a project charter should be used:
- At the beginning of a project, during the planning phase.
- Before any detailed planning takes place and before significant project resources are committed.
- Ensure that everyone involved has a common understanding of the project’s goals, objectives, and scope.
- To identify potential risks associated with the project and outline strategies for managing them.
- For all types of projects, regardless of their size or complexity.
Who Can Benefit from a Project Charter?
It is important to note that any individual or organization responsible for initiating or managing a project can use a project charter. This includes but is not limited to,
- Project managers are responsible for overseeing the planning and execution of a project.
- Project sponsors include senior executives or managers who provide the funding and resources necessary.
- Project team members who are responsible for executing the project tasks and delivering the outcomes.
- Other stakeholders include customers, suppliers, regulators, and other interested parties. They can use the project charter to understand the project’s goals, objectives, and scope.
Benefits of Using a Project Charter
Anyone involved in initiating, planning, or executing a project can use a project charter to ensure a project’s success. As such, there are numerous advantages to developing a project charter. Some of these benefits are detailed below.
- Provides a clear understanding of the project’s goals and objectives.
- Aligns the project with the organization’s strategic goals, ensuring that the project’s outcomes are consistent with the organization’s overall direction.
- Helps to manage project risks by narrowing down potential risks and relevant strategies to mitigate them.
- Defines all stakeholders' roles and responsibilities, which helps ensure that everyone knows what is expected of them.
- Improve communication by serving as a communication tool that helps ensure everyone is on the same page and clearly understands each aspect of the project.
- Provides a framework for decision-making throughout the project’s lifecycle, which ensures that decisions align with the project’s goals, objectives, and scope.
- Increases the likelihood of project success. It ensures the project is completed successfully, on time, and within budget.
What to Consider Before Developing a Project Charter
Purpose
Be clear on the purpose of the team charter. Is it to improve communications, establish team guidelines or set expectations? Gaining a clear understanding of the purpose can inform and help guide the creation of the project charter.
Members of the team
Get to know who will be part of the team. This is important to ensure that all key stakeholders are included when creating the team charter.
Team dynamics
Understanding the team dynamics, including any conflicts or tensions. Addressing these issues ahead of time can help to improve team performance.
Project goals and scope
Have a clear understanding of the project goals, objectives, and scope. The project charter should be aligned with these goals and objectives, while the project scope should have the deliverables and the timeline. Establish guidelines as to how the team will work within the scope.
Communication
Establish guidelines for communication within the team, including how often the team will meet, how the progress will be reported, and how conflicts will be resolved.
Decision-making
Make sure to establish guidelines for decision-making within the team as well. Include how decisions will be made, who will be responsible for making them, etc.
Metrics and evaluation
Determine the metrics for measuring the team’s progress and success. This should include identifying key performance indicators (KPIs) and establishing a process for evaluating the team’s performance.
How to Develop a Project Charter
Here we’ll look into how to create a project charter while identifying its key elements. To create a project charter, follow the below steps.
- Identify the project vision
- Identify the stakeholders and the customers
- Create an organizational chart
- Define project milestones
- Create a resource plan
- Set the budget for the project
- List down the dependencies, constraints, and risks
- Lay out the implementation plan
Let’s take a look at each of the above steps in detail.
1. Identify the Project Vision
The vision of the project is expressed through its end goal and its purpose. It can be divided into,
Scope: Explain the boundaries of the project in terms of project goals, deliverables, costs, deadlines and the work to be done. Defining the project scope early in the project lifecycle is important as it will impact the project cost and the schedule.
Objectives: When setting objectives, make sure that they adhere to the SMART criteria, or in other words that they are specific, measurable, attainable, realistic, and timely. Taking into consideration the overall goals of the organization, set about 5 objectives to be accomplished by the end of the project.
Deliverables: List down the deliverables that will be produced at the end of each successful accomplishment of an objective.
2. Identify the Stakeholders and the Customers
Stakeholders are the individuals who have a key stake or interest in the successful completion of the project. They could be within or outside of the company and include those who fund your project as well as the team members and clients.
You can use a stakeholder map like the one below to categorize the stakeholder and make the information at your hand more presentable and easy-to-understand.
3. Create an Organizational Chart
Now that you have identified the project team, clarify their responsibilities.
Use an org chart to list down their names, roles, and responsibilities. At the same time, you can highlight the reporting relationships among the member with the help of connecting lines.
4. Define Project Milestones
Milestones represent important events within the project lifecycle and include the start and end dates of the project, the successful completion of key deliverables, etc.
5. Create a Resource Plan
List down all the resources that you need for the project; equipment, machines, people, materials, etc. This can help you when allocating your budget.
6. Set the Budget for the Project
List down the expenses your organization will have to bear in order to carry out the plan. As these expenses may change during the project, you can make rough estimations. Also, note down the person who will be responsible for authorizing the approval of the expenditure.
7. List Down the Dependencies, Constraints, and Risks
Dependencies: Identify and list down project dependencies, or the activities that will have an impact on the initiation or the completion of another task.
Constraints: Figure out the factors that would hinder the progression of the project outcomes. For example, lack of resources or time.
Risks: Risks could occur during any stage of the project lifecycle. It’s important that you identify these beforehand and have taken precautions. Here are some great risk management techniques that would come in handy here.
8. Lay Out the Implementation Plan
This is where you will put together an action plan, highlighting the key dates or milestones.
Visualize Your Project Charter
Usually, a project charter spans for 5-6 pages. This is one of the major reasons why they get overlooked in the project management process. An easier way to write a project charter that everyone can quickly read and understand, with minimal effort is through visualization.
Project charters that incorporate graphic elements like the ones below help you bring together all project charter elements onto one page. They are easy-to-read and visually pleasing.
The following are a few examples of how you can visualize your project charters. You can edit them online to add or remove elements and customize them based on your project’s needs. Download them as SVGs or as images to add to presentations, websites, company wikis, documents, etc.
Template 1
Template 2
Template 3
Project Charter vs Project Plan
The project charter is a high-level initiation document that consists of no more than two pages. It lists down the project objectives, scope, vision, team and their responsibilities and stakeholders.
Project plan on the other hand, is a detailed document that describes how to accomplish the project objectives. It elucidates the project deliverables, action plan, the required resources and milestones.
What Are Your Thoughts on the Guide?
Throughout the project lifecycle, the project charter plays an essential role in keeping things on track. In this guide, we have covered what is a project charter, how to create one along with some editable project charter templates.
Any best practices you follow when creating a project charter? Do share them with our readers in the comments section below.
FAQs About the Project Charter
Who is responsible for creating the project charter?
Can a project charter be updated during the project’s lifecycle?
What are some common mistakes to avoid when creating a project charter?
- Not involving key stakeholders when creating the project charter
- Being too vague or too detailed
- Failing to clearly define the project objectives and scope
- Not establishing clear roles and responsibilities
- Not considering risks and constraints
