Elements of a Project Charter: Full List of Components
Project success results from effective project planning and the contributions of key stakeholders.
The management team in charge of project coordination and execution has to prepare a series of documents and analyses before the project is actualized. One such project document is the project charter.
A project charter serves as a primary sales document and a safety bridge for the project initiator and manager. The project initiator uses it to communicate project executions, while the project manager uses it as a guide for effective project management.
This article covers the full list of components in a project charter.
Let’s get started.
What Should Be Included in a Project Charter?
According to the Project Management Institute (PMI), “a project charter is a document issued by the project sponsor or initiator that formally authorizes the existence of a project, and provides the project manager with the authority to apply organizational resources to project activities.”
The project manager requires it to run, coordinate effectively, and complete a project. This project documentation gives the project manager assurance and security to carry out the proposed project.
A project charter has features. It is often drafted from the business case and project statement of work. What, then, does a project chapter contain?
- Title of the Project: What is a project without its title? The title is the first item you will encounter on the project charter.
- Name of the Project Sponsors and Responsibilities: The project charter contains the project initiators and sponsors' names and outlines their responsibilities. Without this vital information, your project charter is not complete.
- The Project Statement of the Problem: A good project charter explains what the project is trying to solve and why. The project statement of the problem should be clear enough for every stakeholder to understand easily.
- Project Objective: This section in the project charter outlines what the project is trying to accomplish. A project without a clear and attainable objective is doomed to fail.
- Date: You must include the date the agreement was drawn and the day of the contract signing in the project charter.
- Expectations from the Team: The project charter must contain expectations from the project team.
- Scope of the Project: The project scope includes all the boundaries of the project.
- Project Teams and their Responsibilities: Aside from outlining what is expected from the team, the project charter must contain a breakdown of project teams and their assignments.
- Project Duration: The time frame of the project must be included.
- Project Timetable and Schedule: The project charter must include how a project is expected to be carried out in a timetable format.
Include all the above information in a project charter for smooth running and delivery.
If the necessary information is not included, it can devastate the project manager's work. Without the project objectives and scope, the project manager will struggle to manage the project team.
A good project charter acts as a focal point in the project and must be able to answer three questions: who, why, and when.
Project Charter Elements
Project charters are of utmost importance to the project manager and initiator. They are formal documents that provide project managers with the project details, authority, and security needed for the successful completion of project deliverables.
The project charter describes to its reader the detailed plan of the project involved. There are key elements that make up a project charter. These elements are peculiar to both the traditional project charter and the six sigma project charter.
Anyone drafting a project charter must consider these elements.
1. Project Overview
The project overview gives a summary of the project. It shows what the project entails and what is required to execute the project. You can liken the project overview to a high-level project description.
In a project charter, the overview is the first element to include. It provides a complete description of the project.
To understand what needs to be done, the person drafting a project charter must carefully present a well-structured project summary in the overview section.
2. Project Objectives
The project objective is vital information that explains the project's purpose. You can find the project objective in the business case. However, it must be in the project charter.
A project objective might be one or more, but it must be narrowed down to the project itself and not the company's general objective. It must state the project's aim and explain what the project team aims to accomplish.
Without an objective, a project's purpose will be unknown. These project objectives must be specific and easy to understand.
3. Project Scope
A project scope gives the project focus. The content defines the extent of the project, i.e., what is included in the project and what is not. It sets the limit for a project team's performance.
Just as the overview explains what should be done, the project scope defines the project brief.
The project scope helps the project manager to plan and know how to deploy the project team. Also, it informs the project manager of the chances of a new project being introduced in the long run.
The project scope statement includes the goals, project cost, boundaries, team tasks, responsibilities assigned, and deadlines.
To avoid scope creep, the business initiator or appropriate stakeholders must be specific when drafting a project’s scope.
In the case of large projects, amendments may be necessary with a well-detailed project scope already included in the charter, making it easy to attend to such modifications.
4. Project Schedule
A project schedule is like a project timetable; it includes the project's starting and finishing dates. The project schedule is instrumental in assignment distribution among the team members.
This project charter element contains the project lifecycle, which must be documented in the project charter and updated regularly for stakeholders to know the project progression per time.
The project schedule provides a breakdown of information about the project time frame. It serves as a reminder for the project manager.
Project sponsors use the project schedule to ensure workers' productivity per time. It helps the project manager know how fast the project is progressing and what is left.
5. Project Risks
A project charter must include the project's potential risks. The project risk is any likely or uncertain conditions affecting project execution. Every project has one or more risks attached.
Anyone drawing up a new project's charter must find out the potential risk involved with the project and list them in the project charter.
Having these anticipated risks in a project charter is essential for effective project management. It prepares the project management team for the danger ahead.
The awareness of the potential risk involved in the project allows the team to make the necessary preparation to tackle all these assumptions.
However, the solution to the project risk is not usually listed in the project charter. It is left for the project management team to find ways of handling the danger ahead.
6. Project Budget
A project budget is the proposed total estimate of a project cost. It helps the project manager track the project expenses and check if it is within the budget limit.
Although the project sponsor must have included the project budget in the business case, it is necessary to include it in a project charter.
A part of the project charter must include the project's estimated costs, which you must draft from organizational budget constraints. Update the budget incurred during project execution from time to time within the project's duration.
Although expenses may exceed the budget during the project, it still serves as an instrument to control project costs. It is also a parameter to measure project progression and project delivery.
7. Project Stakeholders
The project manager cannot execute the project alone. Project stakeholders are those involved in bringing the project to actuality. A project charter must include the main stakeholders and other stakeholders.
Stakeholders are those who are actively engaged in a project. They are directly or indirectly affected by the project's success or failure.
The project's main stakeholders could be an individual or a group. Key stakeholders include the project owner, initiator or sponsor, the project supervisor, and the workers.
When drafting the project charter, there is a need for a section to contain information about the stakeholders' names and the role they will play in the project.
Due to their importance, the project manager must report to the appropriate stakeholder and update them on the project's progression and execution.
8. Project Approval Requirements
Project approval requirements are what constitutes project success. For a project management firm to effectively prepare for project execution, the project charter must contain the necessary approvals from government parastatals or bodies that may be involved.
The project requirements vary from project to project. For instance, a building construction project will require approval from the ministry of works and housing, while other projects may not. There may also be a need to have a registered trademark for the project.
These approvals are necessary for high-level project execution. Therefore, when preparing a project charter, you must determine all the permission the project will require and clearly outline them in the alliance.
If the project team pays attention to the related success criteria, it will curb unnecessary harassment of the project team by the government agents in charge of such a project.
9. Assigned Project Manager and Team Structure
A good project charter must contain the name of the assigned project manager and state the responsibility given. This section of the project charter is what gives the PM the assurance and security he needs to carry out the project.
The project manager works as the deputy overseer of a project. He is next to the project sponsor in the project management hierarchy. The project manager coordinates the affairs of the project workers and keeps the team aligned with the detailed project plan.
Project managers are expected to apply organizational resources to complete the project successfully. Clearly state the project manager's duties and expectations for the best result.
The project charter must include how the project team will be structured. Project teams are usually crucial to a project's success.
The project charter must state who are those required to carry out the project assignment and how they will be expected to work. It must include project team members' responsibility and assignment breakdown.
If a project charter includes a well-detailed team structure, it will make the division of labor easier to practice, and there will not be overlapping duties.
Every team leader and their members will understand the scope of the assignment within the project objective.
10. Project Sponsor
The organization or a person responsible for a project is referred to as the project sponsor. Ensure you include their names in the project charter and their responsibilities. The project owner usually awards them the project contract.
Project sponsors play vital roles when discussing project management and execution. Their roles begin from project initiation to planning, following up, and overseeing the project delivery.
They are responsible for providing the project manager with the resources needed for project execution.
In the project management hierarchy, they are above the project manager. However, they are not usually in charge of the daily activities of the project. The project manager reports to the project sponsor frequently.
When drafting a project charter, there must be a section outlining the name of the project sponsors and their responsibilities.