A project charter template is a statement of the project scope, objective, and stakeholders. It defines the project in all of its details. As the first phase of the project is to define the project scope and objectives. Thus, project managers make a project charter using a template to present in front of investors.
It is a formal document that describes the project scope, objective, deliverables, and strategies for project successful completion. Also, the project charter is useful in all the project phases. Thus, project managers put a lot of effort into making an effective, accurate, and proper project charter.
Investors use a project charter to analyze the feasibility and profitability of the project. Thus, it plays a very important role in project management. A project charter is also referred to as project definition or project statement. However, it is a little different from the project statement of work.
The project statement of work is a contract between the client and the agency. While its formal form is known as the project charter. Also, the project SoW only focuses to describe the project scope, deliverables, objectives, and assumptions. While the project charter discusses these aspects in detail in terms of 7W’s strategy.
Table of Contents
- 1 What is a project charter?
- 2 What is the purpose of a project charter?
- 3 Why do you require a project charter?
- 4 Components of Project Charter
- 5 What does a project charter include?
- 6 Project Charter Objectives and Benefits:
- 7 How to create a project charter?
- 8 How to Create a Project Charter Template?
- 9 Difference between a project charter, a statement of work, and a project proposal:
- 10 If the project doesn’t have a project charter then what happens?
- 11 Faqs (Frequently Asked Questions)
- 12 What are the main parts of the project charter?
- 13 Which one comes first either the project charter or a WBS?
What is a project charter?
A project charter is a formal document that explains the purpose and scope of the project, how it will be carried out, and who are the stakeholders. It is used throughout the project lifecycle therefore it is the most important ingredient in planning out the project.
Nowadays, every business requires a signed project charter before initiating a new project. A project charter acts as the groundwork for productively communicating with stakeholders and work professionally between members that take part in the project.
What is the purpose of a project charter?
The project charter serves multiple purposes that are mentioned below;
- It clarifies the costs and resources. It tells in advance how much the project will cost and what human resources it will need.
- It is used as a reference for more project planning. It assists the project manager with real planning activities.
- It is used for the improvement of project communication.
- It acts as a basic risk assessment tool that will assist the project team to prepare for potential problems.
- Permits you for negotiation about the project details.
Why do you require a project charter?
You need a project charter to outline the reasons for initiating a project. This document is also used to specify project team is going to be structured to meet the goals of the project. The vision, objectives, scope, and deliverables of the project are some of the things described in a project charter.
A project charter also states everyone’s responsibilities in the project and describes how you are going to take on the project. This document contains the project scope, resources, and stakeholder requirements.
Components of Project Charter
The project charter develops a clear understanding of the project key stockholders and used as a tool to attract investors. Therefore, the essential elements of the project charter document are:
- Project Introduction
- Project Statement and Scope
- Project Success Criteria
- Project Requirements and Deliverables
- Project Budget Estimation
- Project Schedule and Milestone
- Project Assumption and Constraints
- Project Risk and Issue Management
- Project Team and Organization Introduction
- Stakeholder Approvals
What does a project charter include?
A project charter includes the following sections;
- Project Overview: The project overview includes items such as the name of the project, creation date, project manager, the purpose of the project charter, and charter version.
- Project details: in this section, there is a detailed project description that contains the mission, the general scope of the project, the key stakeholders, and clients.
- Project scope: In the project details section, you can also explain the scope of the project. Here you can point out the objectives, deliverables, benefits, assumptions, etc.
- Project team: Here you will tell about the team members that take part in the implementation. You can also provide their contact details and their role in the project.
- Resource planning: This section contains all the resources initiating from staff and non-human resources up to finances.
- Communication plan: Here you can set a communication plan or bi-weekly meetings. It’s a better way to set up a communication plan to continuously revise changes.
- Timeline: In this section, you should provide a timeline for your project so that the management or clients will know whether the project is on schedule.
- Signatories: here you will provide the list of the signatories to the project.
Project Charter Objectives and Benefits:
The project charter template document is very essential and one of the earliest required documents for a project. It covers all the details with logical reasoning and analysis of the project scope, objectives, and deliverables.
The essential components of the project charter include project overview, details, scope, team, organization, timeline, and resource, and communication plan.
The project charter is beneficial in attracting investors. The key stakeholders of the project are identified using the project charter. It helps to explain the project value. Save a lot of time and gives clarity about the project budget.
It works as a guideline for the project team to work on project activities. Also, the project team gets inspired by the project guidelines, and their morale gets boosted.
How to create a project charter?
Here are some guidelines that will help you in creating a project charter;
- At first, you should understand the project goals and objectives. Determine the project vision and identify the project scope.
- Secondly, explain the project organization. Provide the list of all important roles for the project such as customers, stakeholders, and day-to-day project team.
- Next, develop an implementation plan. Specify major milestones, dependencies, and the timeline for the whole team and stakeholders.
- Then, list the potential problem sections. As we know no one wants to be a downer so inserting potential risks and issues to the project charter assists everyone thinks ahead should the worst happen.
How to Create a Project Charter Template?
There isn’t any hard and fast rule to make a project charter. However, project management professionals have defined a few guidelines to make a project charter.
Moreover, several MS Word-based templates are available on the internet to make an effective project charter. These templates outline the structure and format of the project charter. So, it allows the project managers to have a basic understanding of what information has to be included in the project charter template.
Also, it is important to do proper research and gather the most relevant information about the project and present it to the project team. It is important to include information about the communication mediums and frequency of communication. Make a draft of the project charter and present it to sponsors and stakeholders for approval.
Difference between a project charter, a statement of work, and a project proposal:
Let us discuss below the difference between these terms;
Project Charter vs Statement of Work (SoW)
A statement of work (SoW) is a document that describes the reason for the project and provides an overview of the deliverables. On the other hand, a project charter is based on the SOW. It provides the project manager the authority for project start.
Moreover, SOW is an internal document used by the company to specify the business requirements and gives an overview of the deliverables. While the project manager through the project charter gets the authority to start the project and spend the budget.
Project Charter vs Project Proposal
A project proposal is used to provide stakeholders with the viability of the project. You can’t start the project charter until the project proposal has been authorized. The ownership of these documents is also different. The project charter and the project director are owned by the project manager as the owner of the project proposal.
During the planning phase of a project, the project charter is made and during the initiation phase, the project proposal takes place. The project proposal determines a problem and gives suggestions on how to fix it. While the project charter outlines the roles and responsibilities of the project team.
If the project doesn’t have a project charter then what happens?
You may have to face the following consequences if the project doesn’t have a project charter;
- Project resources are often limited and the project manager won’t have enough authority. For the project manager, the absence of official authorization becomes very challenging in case many similar projects are out there competing with yours.
- The project and the project manager need the project charter to validate the support of the management. The signatures of the project sponsors or the initiator on the document verify that they are willing to provide their backing to the project.
- Your project may not have clear goals without a charter. Also, it would also become impossible to know the expected project outcomes. This, in turn, makes it difficult for the project team to work on the project.
- You can establish the scope and nature of the project without the charter.
- You don’t even know without a project charter what needs to be done.
Faqs (Frequently Asked Questions)
What are the main parts of the project charter?
There are three main parts of the project charter;
- Project objectives
Which one comes first either the project charter or a WBS?
The project charter comes first because you can use its details to make the scope and the work breakdown structure plan.