Project Charter

Project Charter

A Project Charter is a one page document that is used to summarize the findings of the project definition process at the very start. It clarifies the project objectives and scope, addresses the stakeholders needs, and determines the roles and responsibilities of the project team members. The information in the project charter is critical for obtaining leadership support and commitment to provide the necessary funding and resources. Once signed, it authorizes the project leader to formally implement the project and use the necessary resources and fund to make the project successful.

A project charter establishes a shared understanding of the project scope and objectives and enables all stakeholders to review the project and commit to it. It acts as a contract between the project sponsor, key stakeholders and the project team. It also communicates the objectives to those outside the project team and serves as a reference for future projects. Project charters ensure that all projects are business focused, well scoped, executed in a timely manner, have the necessary support and resources, and deliver the desired business benefits.

Key Elements of a Project Charter

A completed project charter is a short document that may refer to more detailed documents. It should provide clear answers to many project related issues such as: what must be done? why doing it? when must it be done? who does what? and who will be benefited form the results of the project. The components of a project charter will vary depending on the methodology used but often include: the business case, the objectives, the scope and boundaries, the business impact, the personnel participating, and the time period for executing the project. The key elements of a project charter are:

  • A problem exists when there is a difference between where we are and where we want to be. A Problem Statement should be brief and specific, describes when and how often the problem occurs, and what is the impact on the customer when it occurs. It should not include a background information or discuss the causes or solutions. It should state however the symptoms and their effects.
Example of a Goal Statement:
“Reduce oil losses of the manual refilling process of the cupper and bodymakers in line #3 to less than 1% per drum by the end of the year”.
  • A Goal Statement responds to the problem statement and defines the target for the project. It should be brief, specific and clearly define the purpose of the project. A goal statement is often written in the following format: “improve (primary metric) from (baseline performance) to (desired future performance) by (desired date of completion)”. Avoid using technical language when writing a goal statement.
  • A Project Team is often composed of a dedicated project leader and team members from different groups. A project leader provides the purpose, establishes a shared ownership, communicates and facilitates, monitors and tracks. The team members are responsible for executing the project activities to produce the desired deliverables. It is also common to have a project sponsor who has the authority to commit the necessary resources and provide the support for the project team.
  • A Project Scope defines what is involved in the project and what is not. It is important to identify the products, services, processes, departments, locations, lines and customers during the project definition phase. You can also identify the main steps of the process to ensure that they are aligned with the project goals. Avoid the temptation of expanding the scope of the project or you will not be able to complete the project within the allocated time, more resources will be required, and the control plan will be overly detailed.
  • Customers are the business units that identify the need for executing a project and may be an internal or an external. It is important to take the Voice of the Customer into consideration during the project definition phase. A customer representative may evaluate the outcomes during the project and provide feedback to the project team as necessary.
  • Using Project Metrics brings attention to the progress made and keeps the team focused to achieve the project goals and expectations. The success of any project is often measured by a primary metric, a financial metric or both. The primary metric should be measured at the baseline and when the project ends. Tracking these metrics is important not only during the project period but also several years after the project completion.
  • The Time Frame of a project is the time required to complete the project and represented by the start and estimated completion date. It will only be possible to assign approximate completion date which may need to be revised as the project progresses.
  • It is important to obtain the Signatures on the charter from the key project stakeholders (project sponsor, process owner, a financial representative, etc.). Signing on the project charter serves as a formal approval of the project and empowers the project leader to proceed with the project.

Other Elements

A project charter may also contain the following elements:

  • The key Stakeholders affected by the project, their expectations, and their concerns and possible resistance. The project will fail if their support were to be withdrawn.
  • The implementation Methodology of the project.
  • Cost of Poor Quality that will help determine the potential savings.
  • Project cost and Benefit Analysis.
  • Risk assessment of the planned activities and identification of the barriers and obstacles that could hinder the team.
  • The project Deliverables (the tangible parts of the project) at every stage. If a deliverable is significant, it may have a milestone attached.
  • The Milestones of the project which provide regular opportunities to review progress and could be as simple as the completion of each project phase.
  • The required Resources needed for the project to be succeed including the source of funding.
  • Assumptions, constraints and dependencies.
  • A communication plans.
  • A go/no go decision to decide whether to move forward with the project as defined or to stop.

Example of a Project Charter Template

How to Prepare an Effective Project Charter:

  • A project charter should be clear and concise (preferably one page).
  • It should be customer focused and addresses their specific needs and expectations.
  • It should contain realistic and achievable objectives (use the SMART checklist).
  • It should be considered a live document during the project lifetime and be referred to and updated as the project progresses.

Project Closure:

All projects are designed for a specific period of time and the process of closing the project is an important aspect of project management. A Project Closure is part of the overall project life cycle that is used to bring the project to its final state. It provides a formal place to record the final project outcomes and formally hands off the project to the process owner. It also allows to release the team from the project. It is important to obtain signatures from the key stakeholders to confirm the completion of the project and ensure controls are in place and sufficient to sustain the benefits achieved.

Example of a Project Closure Template