I discussed “Understanding Project Management Process Groups.” in the last post. This edition will focus on the first Process Group, the “Initiation Phase”. In the initiation phase, we have two crucial processes:
(1) Develop the Project Charter and
(2) Identify Project Stakeholders.
This post will focus on the importance of developing an effective project charter. We have some questions that we would like to address, such as what is a project charter? Why is a project charter so crucial to project management? What is the list of content of good project management? Do we need a project charter in both waterfall and agile project management?
When it comes to IT projects, the first step is always creating a project charter. This document outlines the project’s goals and how everyone involved will work together to achieve them. The importance of project charter cannot be overlooked. It helps ensure everyone is on the same page and knows what they’re working towards.
Therefore, what is the Project Charter as defined in PMBOK
The PMBOK® Guide, 3dEdition defines a project charter as “a document issued by the project initiator or sponsor that formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activities.” (PMI, 2004, 368).
The key word in this definition is “authority.” It authorizes both the project and the project manager.
The PMBOK® Guide lists specific information that the charter should provide, either directly or by reference, including:
- Requirements
- Business needs
- Summary schedule
- Assumptions and constraints
- Business case, including return on investment
Importance of Project Charter
A project charter serves as a formal agreement between the project sponsor, the project manager, and key stakeholders, outlining the project’s purpose, objectives, scope, and key stakeholders and providing the project manager with the authority to proceed.
It ensures that all stakeholders are on the same page and provides a clear roadmap for the project from start to finish. Without a project charter, it would be very difficult to accomplish anything in a business setting.
The charter is created at the Initiation phase before significant resources are assigned. An early project charter should typically be short, a few pages in length. They can be as short as a part of a single page, so long as they clearly provide authority to the project and project manager. A charter should be simple, straightforward, and short but contain certain key elements.
A charter helps ensure the project is completed on time, within budget, and with minimal conflict.
While a project charter serves as a formal agreement, it’s important to note that it is not a legally binding contract.
Element of Project Charter
The charter should be created at the beginning of the project planning process and approved by all stakeholders before work begins. The following are some of the key elements that contribute to the benefits of a project charter.
Project Name and Description:
Every project has a name and a description. The name is typically chosen by the project sponsor, while the description provides more detail about the project aims to achieve.
Goals and Objectives:
All projects have specific goals and objectives that must be met to succeed. These should be clearly defined at the outset and communicated to all project stakeholders.
Project Scope:
The scope of a project defines its boundaries. It includes everything that needs to be done to complete the project, and anything outside of scope is considered out of scope.
Stakeholders:
These are individuals or groups with a vested interest in the success or failure of the project. They can be internal (e.g., employees of the organization undertaking the project) or external (e.g., suppliers, customers, regulators).
Project Team Roles and Responsibilities:
Every project has several different roles that must be fulfilled for success. It is important that everyone involved knows what their role is and is clear about their responsibilities.
Timeline: A project timeline sets out the starting and ending dates for the project, as well as any milestones that need to be achieved along the way.
Project Budget:
Every project has a budget that sets out the maximum amount of money that can be spent on the project. It is important to stick to the budget to avoid going over budget and jeopardizing the project’s success.
High Level Risk:
Few high level risk can be identified and put together in project charter. A project charter could contain high-level risks that could impact the project’s success, and mitigation strategies can be decided upon later during the project planning phase.
High Level Project Timelines and Duration:
The project charter will contain the duration of the project. This can be modified later, but the project charter will need to have at least the proposed project’s start and end dates.
Project Charter Approval: A good project charter must have a column or space where both project management and project sponsor will provide their signatures to approve the project charter.
Project Assumptions and Constraints:
Steps to develop Project Charter
To develop a project charter, start by gathering information, defining the project’s purpose and objectives, outlining scope and deliverables, identifying stakeholders, and assessing risks and resources, before creating a formal document.
The project manager in consultation with the project team and other stakeholders, typically creates a project charter.
With so many components, it can be challenging to determine where to begin.
Project charter importance is unquestionable, and the process of creating a project charter generally follows these steps:
- Initiate
The first step is to initiate the project by identifying the need for a new project and developing a high-level overview. This may be done through a Feasibility study or other information sources.
- Develop
Once the project has been initiated, the next step is to develop the project charter. This document will outline the project’s scope, objectives, and goals in more detail. It should be created in consultation with the project team and other stakeholders.
- Get Agreement
Upon developing the project, it needs to be approved by the relevant authority. This ensures that all stakeholders agree with the project’s objectives and goals.
- Sign-off by the Authority
Once the project charter has been approved, it is signed off by the relevant authority. This officially initiates the project and gives the project manager the go-ahead to proceed with planning and execution.
- Publish the Project Charter
The final step is to publish the project charter. This document should be made available to all stakeholders so that they know the project’s scope, objectives, and goals.
Once you follow this process, you will be able to wrap up the project charter with ease.