Developing Project Charter

Project charter also known as project statement, or project definition is a statement defining the scope, objectives, and participants in a project.

Features of Project Charter

1. It is usually a short document that refers to more detailed documents such as a new offering request or a request for proposal.
2. Provides a preliminary description of roles and responsibilities, outlines the project objectives, identifies the main stakeholders, and defines the authority of the project manager.
3. It acts as a reference of authority for the future of the project where the terms of reference are usually part of the project charter.

Project charter should:

• Contain the fundamental nature of the project
• Provide a shared understanding of the project
• Act as a contract between the project sponsor, key stakeholders and the project team.

Purpose of the Project Charter

1. To have a good undertaking of the project
2. To understand the objectives and constraints of the project
3. To understand the directions concerning the solution
4. To analyse the identities of the main stakeholders
5. To understand the in-scope and out-of-scope items
6. To identify the risks early on
7. To understand the benefits of the target project
8. To develop the high level budget and spending authority

Need of the Project Charter

Often it is seen that a biggger picture of your project amongst key stakeholders is circulated. It is therefore very crucial that a common vision of basic parameters and structure should be developed which is same for everyone, in particular during the initial stage of the project. Having a clear picture drastically decreases your problems with miscommunications and eventually saves a lot time and resources. Therefore it is important to gather the basic information in one place.

Primary need for project charter

1. Authorize the project: Project charter helps to authorize the project by using a comparable format, with the help of which projects can be ranked and authorized by ROI.
2. Acts as a Sales Document: Project charter serves as the primary sales document for the project which has a detailed summary of the stakeholders ranking to distribute, present, and keep handy for other project or operations that runs with project resources.
3. Acts as a Focal Point: Project charter serves as a focal point throughout the project. For instance, it can be used in team meetings and in change control meetings to assist with scope management.

Project Charter Composition

Project charter is a document with no universal formula. It can either very brief or as long as 50 pages. It is always suggested to keep it brief as there are less chance that someone will actually read it if it is more detailed. Ideally a project should be 2-5 pages.

Composition of Project Charter

1. Background – In this section you have to describe what problem does the project solves and the opportunity to make the idea into a reality. Briefly explain the basic elements of your project.
2. Goals – Define the goals to be achieved and the prescribed time frame. It is equally important that your goals should be specific and measurable (SMART). For instance, a significantly increased customer satisfaction level counts to be a bad goal as it is up to interpretation as to whether or not you have met it. But, an iincreased retention rate from 5% till 10% by the end of the year is considered satisfactory. Therefore, you must ensure that on reading the overall goals in the charter, a clear understanding of the successful part of the project is developed and how it is measure
3. Scope – It is important to understand the product, service being offered and the expected result from this project. Define the necessary steps to be taken by the team to undertake the project and define the roles and responsibilities of the project.
4. Key Stakeholders – Define a list of people involved in the project which may include project manager, sponsor, client and team members. In case you are unsure of the names of the individuals, then list the title of the required position and department.
5. Project Milestones – Specify the significant dates of your project such as start date, end date, invoicing dates, where these dates are merely pre-assumptions.
6. Project Budget – Specify the main project expenses in the project charter which are rough estimations. It is suggested to make note of non-recurring and monthly recurring costs separately.

Constraints, Assumptions, Risks and Dependencies

1. Constraints: Project charter consists of limiting factors which impact the project in a particular way. For instance, when developing a website the number of available programmers and technical limitations like IP, coding language, etc must be taken into account.
2. Assumptions: Project charter consists of factors in order to succeed in the project wherein these factors are considered to be true, even without including proof.
3. Risks: Risk is any element or situation that might get in the way of you and your team when you are trying to accomplish the project goals is referred as risk. Make sure you clearly articulate the risks.
4. Tight timeframe. These are deadline presumed for completing any given task.
5. Dependencies: To define clearly the dependency of the task on the concerned person which is considered to be an absolutely essential part of the project.