What is a Project Charter in Project Management?

A project charter is a formal, typically short document that describes your project in its
entirety — including what the objectives are, how it will be carried out, and who the
stakeholders are. It is a crucial ingredient in planning out the project because it is used
throughout the project lifecycle.

Project Charter Overview

The project charter typically documents:

 Reasons for the project

 Objectives and constraints of the project
 Who the main stakeholders are
 Risks identified
 Benefits of the project
 General overview of the budget

How to Create a Project Charter

1. Understand project goals and objectives. Identify the project vision and
determine the scope of the project
2. Define project organization. List all of the essential roles for the project,
including customers, stakeholders, and day-to-day project team.
3. Create an implementation plan. Outline major milestones, dependencies and
timeline for the entire team and stakeholders.
4. List potential problem areas. No one wants to be a downer, but adding potential
risks and issues to the project charter helps everyone think ahead should the worst
happen.
 PROJECT CHARTER GUIDE
This guide covers everything you need to know about the project charter. It is based on the
template you can download here.

WHAT IS A PROJECT CHARTER

A project charter is a central document that defines the fundamental information about
a project and is used to authorize it.

In a nutshell, a charter provides a picture of where you are going, why you are going there,
who will be impacted, the main risks involved, and who is going to help you. It’s crucial that
the charter not only establishes basic information, but also that it reflects the key
stakeholders’ common vision.

A project charter is typically created early in the project lifecycle, hopefully before the
project is staffed and the business is running for a delivery date. It is usually created
collaboratively as a team and shared with stakeholders upon completion. In most cases the
charter is signed off for approval by project sponsors.

It’s some kind of must-have document for any project.

WHAT IT LOOKS LIKE?

The project charter is a document. There is no universal formula for a project charter. It
can either brief or as long as 50 pages. But the more detailed it is the less chance that
someone will actually read it. We believe that you do want your project charter to be read, so
try to keep your project charter to a maximum of 5 pages. Ideally it should be 1-2 pages.

Usually project charters are text documents or google documents, although it can be a
presentation, too. Take a look at a template or sample sections to see how a real charter looks.

DO I REALLY NEED IT?

Absolutely yes. Here are two killer benefits supporting why you must use project charters:
 You circulate a big picture of your project amongst key stakeholders. It’s crucial that
the common vision of basic parameters and structure be the same for everyone, especially
during the initial stage of your project when there are so much uncertain or vague things.

It will drastically decrease your problems with miscommunications and eventually save a
ton of your time (because we all know that one thing might look absolutely different from
someone else’s perspective).
 Basic information about your project is gathered in one place. Without establishing
things like: Why are you undertaking this project? What do you consider to be a project
success? How will you measure this success? Without these benchmark questions you'll
feel like as though you're aimlessly wandering, never quite knowing if you're heading in
the right direction.
WHAT TO INCLUDE IN THE CHARTER?

We suggest using the following sections:

1 Background

Give a straightforward answer to the question: ‘why are you doing this project?’
Describe what problem it solves and what gave you the opportunity to make your idea a
reality. Try to articulate this section as if you’re trying to hire a complete stranger and you
need to briefly explain the basic elements of your project.

2. Goals

Describe what goals you are going to achieve and when. It’s crucial that your goals be
specific and measurable (SMART). For example, “Significantly increase customer
satisfaction level” is a bad goal because it’s up to interpretation as to whether or not you’ve
met it. However, “Increase retention rate from 5% till 10% by the end of 2015” is a good one.

It’s essential that upon reading over your goals you clearly understand what you consider to
be a successful part of your project and how you measure that.

3. Scope

What product, service, or result do you expect to get from this project? What actions will
your team take to undertake the project?

It’s also important to mention what your team will not do. For example, your end product is
“a new website for a public library”. You will develop and design it. But will you test it, set it
up or fill this site with content? Try to make it absolutely clear what you are going to do and
what you aren’t. It helps you eliminate any confusion in the future.

4. Key Stakeholders

Make a list of people involved in your project. Some sort of who is who in it: PM, sponsor,
client and team members. If you don’t know names of individuals, list the title of the required
position and department.

5. Project Milestones

Establish significant dates of your project: start date, end date, invoicing dates. It’s important
to understand that these dates are merely guesses. When writing the charter you don’t have
firm dates yet.
 6. Project Budget

Make a note of the main project expenses. Treat them as rough estimations. Try to make note
of non-recurring and monthly recurring costs separately.

7. Constraints, Assumptions, Risks and Dependencies.

Constraints:

These are the limiting factors that impact your project in a particular way. For example, when
developing a new website the number of available programmers and technical limitations
(platform, coding language, etc.) must be considered.

Assumptions:

Factors that you are relying on in order to succeed in your project. These factors are
considered to be true, but without including proof. A few assumptions: contractors will be
paid without delay and your client will test the website.

Risks:

Anything that might get in the way of you and your team when you’re trying to accomplish
your project goals. Make sure to carefully weigh in on this point and clearly articulate the
risks. A few examples:
 Tight timeframe. The deadline doesn’t allow for any force majeure circumstances
 Part of the team are volunteers with no-money motivation –which may mean that you’ll
have to find and train new project participants.
 Technical risks: i.e. part of the platform where you’re planning on setting up your website
may be an open source and may not be updated.
Dependencies:

An absolutely essential part of the project. For a new website it’d be client-driven content.

HOW TO CREATE IT.

Don’t do it alone. The best way to create a charter is to do it with your entire team by having
a project charter session. Get everyone together and cover the main points in the document.
You may notice that many participants will have different perspectives on the project and
that’s excellent. You’ll reach a consensus during the discussion.

But keep in mind that making a project charter is an interactive process. After the
project charter session write a rough draft and send it to all project participants. Gather their
feedback and update the document. Discuss and finalize the document one more time and
have the project sponsor sign it once it’s been approved.
 FINAL THOUGHTS
Here’s a free project charter template you might use with this guide. If you think you need
more information – browse the video tutorials and check out articles in the additional
information section.