Before even thinking on how to create a Project Charter, one should always start preparing a Project Statement of Work (A written description of the project’s product, service, or result) and a business Case (Reason for undertaking the project, Solutions to resolve problems, and analysis of the benefit cost. These factors will work as a baseline for the Project Manager to draft the Project Charter.
A legal authorization document that states the beginning of a project, while describing the purpose and scope of a project is called a Project Charter. As formal documentation, any given project nowadays requires a signed project charter before initiating a new project. For example, if stakeholder needs to know what he is investing into, the project charter will provide him/her precise details as to what the project is about and the resources required for the successful completion of the project.
The project charter is an essential part of the project management due to its importance as a legally binding document. It provides clarifications on the general specification, the purpose of the project, the key stakeholders, and the possible outcomes. The critical thing to be noted is that, upon completing the project charter, there is no room (in rare cases) for any further changes.
“Do not underestimate the value of the project charter. It is such an important document that a project should not be started without one. If the project charter serves as a definition of how success will be measured, then without a project charter, the project and project manager cannot be successful”. – Rita Mulcahy
“Take great pride and care in your project charter because this is where you sow the good seeds. It will eventually take care of you.” – Randy Tangco – PMP Expert
As discussed earlier, the primary purpose of a project charter is to authorize the project manager to start the approved project and allow him to use organizational resources to accomplish the objectives of the project. A perfect project charter will help executives see the business value of the project and also provide them with information on how well the project is aligned with the organizational strategies.
Josh Nankivel, PMP®, a trainer, and principal of PMStudent, quoted saying that “A project charter should also serve as an executive overview of your project, one that any new executive can reference to evaluate it. A good project charter can help save you from unnecessary scrutiny or having your project shut down because some executive didn’t see the business value in it from their perspective”.
Cornelius Fichtner, PMP® trainer and host of the PM Podcast, views on whether should a Project Manager be involved in creating a Project Charter – “The PM is a subject matter expert when it comes to initiating and starting a project. Hence the PM is more qualified to create the project charter. He or she has more experience in doing this and knows what kind of details to add to the project charter”.
The sources that depict the information about the project’s objectives and their business goals are the business case and the benefits management plan. Even though the business documents area developed before the project initiation, they are reviewed periodically.
Agreements are those documents that are used to define the underlying intentions of a project. Agreements can take various forms of contracts, service level agreements (SLA), memorandums of understanding (MOUs), letters of intent and agreement, emails, verbal agreements, or other written agreements. In simple terms, it’s a contract that is used when a project is being performed for an external customer or client.
Understanding all policies, practices, procedures, and legislation that prevail both on the inside and outside of the company that will impact the way a project is managed.
| Internal Factors | External Factors |
|---|---|
| Organizational Structure | Government Regulations |
| Organization’s Culture | Market Conditions |
| Working Style | Political Situations |
| Organization Policies | Weather Conditions |
| Reviews and training records | Infrastructure |
The plans, processes, policies, procedures, and knowledge bases specific to and used by the performing organization.
| Knowledge Base | Procedures / Processes / Policies |
|---|---|
| Lessons Learned | Project lifestyle |
| Project Files | Organization Process Documents |
| Financial Database | Communication Management |
| Project Management Database | Guidelines |
| Previous Projects Database | Policies |
A crucial step in executing the project by taking opinions from subject matter experts, garnering valuable inputs and understanding the business case complexity related to the project. The subject matter experts as mentioned above should have the desired skills and specialized knowledge on the following topics –
Organizational strategy
Benefits management
Technical knowledge of the industry
Focus area of the project
Duration and budget estimation, and
Risk identification
Listed below are some of the techniques that can be used for gathering data –
Brainstorming – This is a method that is used to collect vast and unique data in a short period. The project team members discuss and generate new ideas that can contribute to the project’s success. Brainstorming technique helps in two ways, namely – Generating Ideas and Analyzing Ideas. Ideas or solutions can be gathered from the project stakeholders, subject matter experts, or from the project manager during the development of the project charter.
Focus Groups – This is a technique that is used to bring together stakeholders and subject matter experts to learn about the recognized project risk, success criteria, and other topics in a more conversational way than a one-on-one interview.
Interviews – As the role of the stakeholders is considered crucial in determining the success of the project, talking to them throughout the project’s lifecycle is essential. This technique will provide the project manager with information on high-level requirements, constraints or assumptions, project approvals, and many other things.
The crucial techniques involved in this process are as follows
Conflict management – The project’s success depends on the approval of the stakeholders. They are the ones who determine the project’s objectives, requirements, the project’s description, milestones, and all other essential elements of the project charter. Hence it is best advised that the stakeholders are appropriately aligned with the project, and conflict management technique is what best suits a project manager.
Facilitation – it’s a technique that can efficiently drive a team to form a successful decision or solution. It ensures that there is active participation, mutual understanding, and contributions, from every individual. The important thing is that everyone should be given an equal opportunity in expressing themselves and their ideas or suggestions are not to be left unattended too.
Meeting Management – Meeting management is a technique which includes preparing the meeting agenda, inviting key stakeholders representatives, discussing the project outcomes and most importantly preparing and sending out minutes of meeting data.
This process comprises of meetings which are held with key stakeholders to identify the project objectives, success criteria, key deliverables, high-level requirements, summary milestones, and other summary information.
The final output of all the features mentioned above will result in creating an entirely accessible project charter. This final project charter will act as an essence that can be used during the project. The project charter documents the high-level information on the project and on the product, service, or result the project is intended to meet, like:
Project purpose
High-level requirements
Overall project risk
Preapproved financial resources
Summary milestone schedule
Measurable project objectives
Key stakeholder list
Assigned project manager
Project Manager’s responsibility and authority level.
The business case will identify the high-level strategic and operational assumptions even before the project is initiated and will be added to the project charter. Task assumptions such as defining technical specifications, schedules, estimates, and risks, etc. are generated at the lower-level of the project. Basically, the assumption log will record all the expectations and project pressures throughout the project’s lifecycle.
A project charter is not merely a document that states facts and information concerning a project. It serves as the groundwork for efficiently communicating with stakeholders and for efficiently routing work between various individuals that take part in the project. Do note that having a good and complete Project Charter is the very first step in managing a project.
