Project charter is simply a document that formally authorizes the existence of an ongoing project with a clear concise of its goals.
It outlines the totality of projects to help team members to quickly grasp the goals, tasks, timelines and stakeholders involved.
The project charter along with the clear concise of the project goals also officially announces the commencement of the newly approved project. Therefore it not only essential but a primary deliverable in any project. Since project charter are the gateway to the initiation of the project and it also helps in the appointment of the project manager who is responsible for the overall governance of the project. It also guides the project manager with authority to assign resources to various project activities.
It is important to identify and summarize the high level objectives and scope of the project in a project charter. It defines the outcome and deliverable of the project. It must gain interaction and support from the organization by announcing it to the whole organization. This document also ensures that key stakeholders are aware of the project.
Benefits of Project Charter:
- It gives formal approval to commence the project.
- It is a very important document to get started with any project.
- It also creates a common goal and shares the understanding of the entire project for the project manager, team members and the stakeholders.
- It appoints project manager to lead the project.
- It maintains the budget and resources for the project.
- It serves as the point of reference for the project team.
Develop a Project Charter:
It is the process of establishing a formal written document that authorizes the existence of a planned project and provides the designated project manager with legal authority to work with organizational resources to support various project activities.
It also creates a formal record of the project and shows the organizational commitment to the project. This process is performed in the beginning or at predefined points in the project. The project charter establishes a partnership between the performing and requesting organizations.
In the case of external projects a formal contract is a clear path to establishing an agreement but a project charter may still be used to establish internal agreements within an organization to ensure the proper delivery of the project under the contract.
The approved project charter formally initiates the project. Initially a suitable project manager is identified and assigned as early as possible preferably while the project charter is in its nascent stage and always before planning and assigning resources. The project charter can then be developed by the sponsor or the project manager in collaboration with the initiating entity. This collaboration enables the project manager to understand the project’s purpose, objectives better and expected outcomes or deliverables. This clear picture will better allow for efficient resource allocation to various project activities.
The project charter also gives the project manager the authority to plan, execute and control the project.
The external entities/organizations that assign projects are sponsors, programs, the project management office or even a portfolio governing body chairperson or authorized representative.
The project initiator must be appropriate to procure funding and commit resources to the project. The internal business needs and external influences often trigger the creation of a needs analysis, feasibility study, business case or description of the project situation.
Chartering a project validates the project‘s alignment to the organization’s required strategy and ongoing work.
The project charter is not considered a contract because there is no consideration or money promised or exchanged in its creation.
Elements of a Project Charter
- Inputs of a Project Charter
- Business Documents
Business case and Benefits management plan explain how the project will contribute to the business goals.
It is a documented study that is used through out the project life cycle. It lists the objectives and reasons for project initiation. It helps measure the success of the entire project at the end against the project objectives.
- Business needs that is determination of what is prompting the need for action along with the written statement documenting the business problem including the outcome for the organization.
- Analysis of the Situation namely organizational strategies, goals and objectives, risks, success factors, cause of the problem.
- Recommendation is a formal statement of the recommended option to track in the project.
- Evaluation is a statement describing the plan for measuring benefits the project will deliver.
Benefits Management Plan
The project benefits management plan is a document that describes how and when the benefits of the project will be delivered, and describes in detail the mechanisms that should be in place to measure those benefits.
- Target benefits
- Strategic alignment
- Timeframe for realizing benefits
- Benefits owner
Business Case is created as a result of:
- Market Demand
- Organizational Need
- Customer request
- Technological Advance
- Legal Requirement
- Ecological Impact
- Social Need
Agreements are used to define the initial intensions for the project. A contract is a mutually binding agreement between the buyer and seller. It is obligated to provide the specified products, services or results. It also obligates the buyer to compensate the seller and represents a legal relationship subject to remedy in the courts.
Major Components of Agreement:
- Procurement statement of work or major deliverables
- Schedule, milestones, or date
- Performance reporting
- Pricing and payment terms
- Inspection, quality and Acceptance criteria
- Warranty & future product support
- Incentives and Penalties
- Insurance and performance bonds
- Subordinate subcontractor approvals
- General terms and conditions
- Change request handling
- Termination clause and alternative dispute resolution mechanisms
Forms of Agreements
It can be in the form contracts, memorandums of understanding, service level agreements, letters of agreement, letters of intent, verbal agreements, email.
- Government or industry standards
- Legal and regulatory requirements and /or constraints
- The Marketplace conditions
Enterprise Environmental factors
- Organizational culture and political climate
- The Organizational governance framework
- Stakeholders expectations and risk thresholds
Organizational Process Assets
- Organizational standard policies, processes, and procedures
- Portfolio, program, and project governance framework
- Monitoring and reporting methods
- Historical data
- Project Charter: Tools and Techniques
It is the Judgement based on expertise in application or knowledge area, discipline, industry concerning the activity being performed.
Any group or person may provide this expertise with specialized education, knowledge, skills, experience or training in their field for this process.
Area of Expertise
- Organizational strategy
- Benefits Management
- Technical knowledge of the industry and focus area of the project.
- Duration and budget estimation, and risk identification
- Focus Groups
- Questionnaires and Surveys
Interpersonal and Team skills:
- Conflict management
- Smooth/ Accommodate
- Collaborate/Problem Solve
It is the ability to successfully guide a groupo event to a successful decision, solution, or conclusion
- Meeting management
It includes preparing the agenda, ensuring that a representative for each key stakeholder group is invited, and preparing and sending the follow-up minutes and actions.
Meetings are held with key stakeholders to identify the project objectives, success criteria, key deliverables, high-level requirements, summary milestones, and other extra information.
Outputs of a project charter:
The project charter documents:
- The project purpose
- Measurable project objectivesand relate success criteria
- High level requirements
- High level project description, boundaries and key deliverables
- Overall project risk
- Summary milestone schedule
- Preapproved financial resources
- Key stakeholder list
- Project approval requirements
- Project exit Criteria
- Assigned project manager responsibility and authority level
- Name and authority of the sponsor.
It is used to record all assumptions and constraints through out the project life cycle.
High level strategic and operational assumptions and constraints are identified in the business case before the project is initiated and will flow into the project charter.
Lower level activity and Tax assumptions are generated throughout the project such as defining technical specifications estimates, the schedule risks.