A project charter is a common and useful tool for communicating the goals, costs, and risks of a project, and it is the first step in project management. Many failed projects were doomed by a poorly understood or absent project charter.
The process of developing a charter may also help to clarify intentions and refine project goals. Writing the charter sets an objective standard for project success, and defining that standard before work begins creates stakeholder consensus.
A project charter also defines the costs and risks associated with the project. It determines broadly the return on investment and the importance and value of successfully completing the project.
When to use a charter
Projects that require a large amount of resources, or projects that could have a very large impact should be accompanied by an in depth project charter, if for no other purpose then to fully understand the costs associated with the undertaking.
Smaller projects may not justify a full project charter, but thinking through each of the standard elements may be very helpful in refining the goals and realizing a return on the resources.
How to get started with a project charter
Before work begins on a project, before the project is fully planned, while the idea for the project is unkempt, unclear, and unarticulated, begin work on the project charter.
If there are several stakeholders in the project, include them in developing the charter to establish consensus. Project charters are often used to gather the support of a project sponsor, or a person of authority in the organization who can authorize resources and push for completion.
A project charter should include the following:
- Background for the project– What is the state of the organization, and why should the organization pursue the project now? What is the history and evolution of the project idea?
- Business problem or opportunity– What prompted the organization to pursue the project?
- Project goals– What change is needed in the organization? What is the purpose or objective being pursued?
- Expected benefits– How will successful completion of the project benefit the organization? Why would you pursue this in the first place?
- Deliverables– A deliverable is the tangible or intangible object produced as a result of the project that will be delivered to an internal or external customer. A deliverable and a project goal may be one and the same.
- Project milestones– What minor goals must be met on the path to completing the major goal?
- Approach– Will the project be approached in one fell swoop or in smaller phases?
- Scope of Work– What is included in the project, and, perhaps more importantly, what is not included in the project?
- Critical Success Factors– With any project, some tasks are more important than others. Which tasks must be done well, and on time for the project to be successful?
- Project schedule– When will the project need to be completed? When should each milestone be completed?
- Project budget – What is the cost of pursuing the project in hours, dollars, people, effort, etc.?
- Project risks- What could prevent the project from being completed on-time, on-budget, and on-target?
- Assumptions and constraints– What has been assumed in evaluating the costs, benefits, and risks of the project? What potential limitations could limit the flexibility of the project? Could unrealistic constraints doom the project from the start?
- Project staffing– Who will need to work on the project? Are they available?
- Approval– Who will approve work on the project and who will approve the successful completion?
Finishing the charter
Most organizations use the project charter as a way to elicit support for the project from the project sponsor and other stakeholders. It communicates the return on resources for the project and sets an objective standard for successful project completion.
Once the project has been approved, include the project charter as the first page of the project plan. The project plan will cover similar topics but in far more detail.
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