Project Charter (Project Definition Document)
If you are working in a project, you must have heard about the project charter. Project Charter is one of the most important documents which authorizes the existence of the project. It involves basic information regarding the project such as start date, project objectives, end date etc. A Project Charter and Project Definition Document have the same meanings. In this article we will discuss this important project document and the key components of it.
What is a Project Charter ?
Typically projects comes from ideas or dreams. Then feasibility analysis are performed to understand if it is really profitable or feasible for the organizational objectives. If the project is feasible, the organization assigns a project manager to lead the project. At that moment the the project charter is created and given to the project manager to manage and complete the project.
The project sponsor signs this important document and the project starts after signing.
A project charter is a formal and short document that describes the project, project vision, project objectives, who the stakeholders and participants are.
It is a key document which explains why the project is needed, what are its benefits to the organization, how long will it take to complete, which resources are needed and how much will it cost. It also describes the output of the project.
Since the project charter contains highly important information such as project title, project manager, project budget, project scope, milestones etc. it should be created as soon as possible to avoid time loss.
How to Create a Project Charter ?
Making a project charter is an interactive process. Below steps can be followed for preparing it.
Step 1: Determine the Project Vision
The vision of the project should be determined at this step. It is not possible to go next step without clearly identify the vision. Also in this step, project scope, objectives and major project deliverables should be clearly identified.
Step 2: Describe the Project Organization
In this step, customers, stakeholders, roles, responsibilities and reporting lines should be described clearly. In order to avoid conflicts and problems, a project organization chart should be prepared at this step.
Step 3: Plan the Approach to Implementation
After determining the project vision and organization structure, project implementation plan should be prepared. Activities, timeframes of the project’s lifecycle and phases are listed in this process.
Project milestones, activity dependencies, mobilization plans and resource allocations should be effectively planned at this step.
Step 4: List the Risks and Issues
The final step is to identify the risks and issues. Identification process of project dangers, issues, premises and constraints is critical for an effective project risk management.
What Does the Project Charter Include?
Typically a project charter contains the below information.
- Project’s Name, Title and Description
- Project’s Purpose
- Project’s Scope
- Project’s Output
- Project’s manager authority level
- Project’s Objectives
- Project’s Budget
- Constraints, Assumptions, Risks and Dependencies
- Key Milestones
- Key Stakeholders
- Project’s Approval Criteria
Key Aspects & Benefits of the Project Charter
Below are the key aspects of the project charter;
- It authorizes the existence of the project
- It authorizes the project manager and describes the autority level
- It determines the project’s vision and objectives
- It includes the list of key stakeholders
- It is a short document one or two pages long.
- It is signed by someone external to the project (from top management)
- It describes the outcome of the project.
- It creates a foundation for the project’s success.
The project charter may be created by the project manager or the project manager may provide inputs to create this important document. However he does not have authority to approve or sign it.
Creating a project charter builds a framework for your project and provides a common understanding of the project goals. It includes basic project information and demonstrates management support for the project. It helps to create a clear reporting system and improves communication within the project team. Also it helps to avoid conflicts, disputes, scope creep and gold plating.
Approving the Project Charter
The PMBOK® Guide emphasizes that projects are authorized by someone external to the project such as a sponsor, PMO, or portfolio steering committee.
Therefore, The Project Sponsors, Program managers, Portfolio managers, Senior managers, Directors can sign the Project Charter. Generally speaking, anyone above the level of the project manager can sign it. The project manager can not sign this document.
A project charter is a communication tool that helps to establish a good communication channel among project’s stakeholders. It is one of the most important documents for project management. Many professionals become confused about who signs this document. Project team and project manager may be involved to create it because they have expertise and knowledge about the project. However signing authority must be someone out of the organization such as a Project Sponsor, a Program manager, a Portfolio manager or someone from the client.
Without this document, you can not set the direction for the project effectively. It also creates a guideline to control the scope of your project by defining exactly what it is included in the scope.
Note that this is an important concept from the PMP Certification Exam point of view.