Whenever there is a confirmed decision to pursue a project, creating the project charter is one of the initial and key steps to take to start the project. A project charter is a document that formally authorizes the project and provides high-level project information such as the project objectives, scope, the project manager and the project team, and more. In addition to formally initiating the project, the project charter gives project manager the authority to formally manage the project.

Project Charter Overview

A project charter typically provides high-level information about the following:

• Information about the project manager, the project team and key stakeholders
• The authority of the project manager on the project
• Project objectives and the business need for the project
• Scope of the project
• Project requirements
• Project success criteria
• Project deliverables
• Budget of the project
• Project resources
• Project assumptions
• Project constraints
• Project milestones
• Project risks

Even though the project charter provides different types of information about a project, it is not a detailed project planning document. From the definition of the project charter, note that it provides high-level information about a project that is created at the very start of a project. In the later stages, the project charter will be used as a starting point for the preparation of detailed project planning documents.

The project charter should document how the project will contribute to the business need. This means that any needs analysis, feasibility study, and business case created before initiating the project can provide input on the development of the project charter.

Who Creates The Project Charter?

Project charters are typically created by the project sponsor. In some cases, the project sponsor may also ask the project manager to create the project charter. Whatever the case is, it is highly recommended to involve the project manager in the creation of the project charter along with the project sponsors to ensure all parties have a common understanding of the project.

It is also important to note that the project charter is signed by the project sponsor, not the project manager. This is because the project sponsor appoints the project manager. Once the project charter is approved, the project is formally initiated.

Project Charters vs Contracts

Some people tend to confuse the project charters with the contracts. A project charter is a short and straightforward document that authorizes the project and the project manager, and shows the support of the project sponsors. While a contract is a legally binding agreement between two or more organizations (between the buyer and the seller) which should definitely be used for any type of external work. Legal team is not involved in the preparation of the project charters, but they definitely need to be involved in the preparation of the contracts. Contracts should contain all the necessary details about the project, while the project charter is a high-level project document.

Which Projects Need A Project Charter?

Project charters can be created for all projects whether predictive, agile, or hybrid. As it is a high-level document, the complete scope of the project does not need to be known with all the details in order to prepare the project charter. For predictive projects, the detailed planning will typically begin after the approval of the project charter. For agile projects, the scope of work and the requirements will be detailed at the beginning of each iteration.

Now let's take a look at our project charter template.

Project Charter Template 

1. PROJECT INFORMATION

Project Name:

Project Sponsor:

Revision Number:

2. PROJECT DESCRIPTION

Provide a high-level description of the project.

3. PROJECT MANAGER

Name:

Phone:

Email:

4. RESPONSIBILITY AND AUTHORITY OF THE PROJECT MANAGER

Describe the responsibility and the authority of the project manager.

5. PROJECT TEAM

List the names, phones and the emails of the project team members.

6. KEY STAKEHOLDERS

List the names, phones and the emails of the key stakeholders.

7. PURPOSE OF THE PROJECT

Describe the business need for the project and describe how the project will align with the organizations business strategy.

8. SCOPE OF THE PROJECT

What is the scope of work for this project? What are the boundaries?

9. PROJECT REQUIREMENTS

List all the high-level project requirements.

10. PROJECT SUCCESS CRITERIA

List all the high-level approval criteria for the project.

11. PROJECT DELIVERABLES

List all the high-level deliverables that will be created with this project.

12. PROJECT ASSUMPTIONS

Describe the conditions and factors that are considered to be true for the project.

13. PROJECT CONSTRAINTS

List all the high-level limitations that can affect the project such as the budget, resources, schedule, etc.

14. KEY PROJECT MILESTONES

List all the important milestones of the project, such as the project start and finish milestone, finish milestones for different project phases etc.

15. KNOWN PROJECT RISKS

List all the identified risks that can affect the project.

16. PROJECT AUTHORIZATION

Names and signatures of the project sponsors approving the project charter.

PMP And CAPM Exam Tips On The Project Charter

As mentioned, creating the project charter is one of the initial and key steps to take to start a project. This is true for both predictive and agile projects. For that reason, throughly knowing the project charter is also very important for PMP and CAPM exam preparation.