What is a Project Charter?

Recently, I had the opportunity to volunteer for a not-for-profit organization to manage its website development project. While working with my portfolio manager, I asked him, “What would be one of the first deliverables that you would expect from me.” He replied, “Delivering the project charter.“ “Why the big fuss about delivering a project charter for a small project like a website development project?”, I wondered. However, while working with him on the charter, I realized that even for a project like this, a lot of time and effort is required to prepare a charter.

As Rita Mulcahy writes in one of her prep books for the PMP certification, “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”. So let us take a look at the importance of a project charter and what the project charter is all about.

What is a Project Charter?
The project charter is a document that officially starts a project or a phase. It formally authorizes the existence of the project and provides a reference source for the future. The charter gives a direction and a sense of purpose to the management from start to end. As Randy Tango, a business-driven project practitioner, mentioned in one of his articles: “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.”

A project charter names the project manager and defines the authority of the project manager. It gives the project manager the power to utilize organizational resources to accomplish the project objectives.

What Are the Project Objectives?

• It must explain the business need that leads to the project being taken up.
• It also captures high-level planning information (scope, assumptions, deliverables, etc.) about the project. The specifics of the project activities are developed later.
• The Project Statement of Work (SOW) and the business case document are a few documents that need to be prepared before we start working on a project charter.
• The Project Statement of Work is a written description of the project’s product, service, or result.
• The business case explains why a project is being undertaken, the problem it will solve, as well as the benefit-cost analysis.

Why Do We Need a Project Charter?
As mentioned previously, 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.

If the charter is created correctly, it also helps executives see the business value of the project. They can also reference the charter to understand how well the project is aligned with the organizational strategies.

Mr. Mouli, PMP®, Author of Project Management Guides, said 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 executives didn’t see the business value in it from their perspective".

When Do We Create a Project Charter?
As per the PMBOK® Guide, the project charter is created during the "Define" process. This process is one of the first ones to be performed in a project and is completed during the "Initiating" process domain.

Who Signs and Issues a Project Charter?
The sponsor or the initiator signs the project charter. The PMBOK® Guide, 4th edition (new one) states: “Projects are authorized by someone external to the project such as a sponsor, PMO or portfolio steering committee. The project initiator or sponsor should be at a level that is appropriate for funding the project. They will either create the project charter or delegate that duty to the project manager. The initiator’s signature on the charter authorizes the project”.

It should clearly state who is responsible for funding and who needs to sign the document. Mr. Mouli states in one of his articles, “I have worked with several project managers who ran into funding issues because a particular director or executive who said they would fund a project from their budget didn’t come through. The project charter should clearly state who is responsible for funding, and they need to sign it, too!”

Can the Project Manager Be Involved in the Preparation of a Project Charter?
Though he is appointed in the project charter, a project manager can still be involved in the preparation of the project charter. The sponsor or the initiator usually creates the charter along with the project management team. The sponsor may lack the skills required to prepare a project charter and may need the help of a Project manager to make a charter.

As As Venkat Vasi, PMP® trainer at ITechgurus,, mentions in one of his articles, “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 ”.

Some Key Facts to Be Remembered About the Project Charter for the PMP Certification Exam Are

• It is developed in the "Develop" project charter process in the initiating process domain.
• It is created based on a business need, and the document must explain that need.
• The sponsor or the initiator sign it.
• It names and authorizes the PM.
• It should include high-level project requirements.
• It should include a high-level milestone view of the project schedule.
• It is a high-level document that does not include the project details. The specifics of project activities will be developed later.
• It includes the summary level preliminary project budget.

Conclusion
The project charter is an important part of any project wherein it actually accredits the existence of any project and allows the project manager to start the project. To learn more about project charter and several other project management aspects, the PMP Certification course will help you to understand the role of a project manager.