How to Create a Project Charter

What is a Project Charter?

If there is a ranking of the most important project artifacts, the project charter would be in the top 3.  A Project Charter is a document that provides direction and focus to the project team.  It authorizes the project manager authority to use company resources to execute on project activities.  It documents the purpose, goals and scope of the project by the following:

• Formally authorizes the project.
• Gives the project manager authority to spend money and resources to execute and deliver expectations.
• Ties project outcomes to customer expectations.
• Communicates the overall project commitment towards a goal.
• Used as input to the overall project management plan that will follow.

Elements of a Project Charter

There is no right or wrong way to write a project charter.  However, the following elements should be part of your project charter:

How to create a Project Charter?

As a project manager, it is your job to collect all of the necessary information so that you are clear on the customer expectations.  You need to work with your stakeholders to understand the projects purpose, objectives and expected outcomes.  You will have to set up stakeholder meetings to create the project charter.  Good meeting facilitation and communication skills are required to be successful when you are meeting with stakeholders to gather information.  When meeting with your stakeholders, Here are some recommended guidelines:

1. Review the Business Case.  Larger projects that require large financial investments have a business case or some type of justification for taking on the project.  The information contained in the business case will give you an overview of the problem, the proposed solution, success criteria and financial justification.
2. Review the Statement of Work. In a consulting arrangement, a Statement of Work is usually provided as a contract to provide a service with expected outcomes, terms and conditions.  Use this information as input to the Project Charter. Not all projects will have a Statement of Work, but if one exists, you need to carefully review the contents.
3. Understand the big picture.  It’s important to fully understand the project by proactively asking questions, being an active listener, understanding the business case and the project value.
4. Identify the stakeholders.  Stakeholders are individuals or groups that are actively involved and/or impacted by the project, are affected by its outcome, or can influence its outcome.  When a project is in its initiation phase, your stakeholders will likely be the project sponsor, executive leadership, functional managers and others who will be involved. 
5. Confirm project scope. Scope defines the work of the project and allows for effective estimating.  Confirming project scope is imperative as it sets the boundaries and assumptions for the project.  If scope isn’t understood, it will lead to misconceptions and risks not meeting customer expectations.  Scope definition is an iterative process throughout the initiation and planning phase.  You will have to meet with internal and external stakeholders to confirm and review the project scope.
6. Identify project assumptions.  This is a very important step, assumptions affect the rest of the project and should be documented.
7. Document project risks.  List the risks and actions required to mitigate them.  Clarify how each risk affects the project’s success and assign responsibility for each action.
8. Approvals and Signatures.  Make sure the project sponsor and other key stakeholders sign off on the project scope.

As you gather information from your customers, document the information using a Project Charter Template. Creating a project charter is an iterative process.

Conclusion

Having a project charter is an artifact that’s needed for your project to be successful from the beginning. It provides direction and focus to the project team and will set boundaries around the project deliverables and expectations. Be sure to make it as clear and concise as possible so your stakeholders understand what is and is not in scope. Also, make sure your review sessions are productive by proactively asking questions and listening to what your stakeholders want. I hope you find this article useful for your project.

Download our Project Charter Template.