What is a Project Charter: Definition and Examples

A Project Charter is a document that, while describing the purpose of a project and its scope, it legally authorizes the beginning of the project.

Any business nowadays, before initiating a new project requires a signed project charter.

If you are an investor or a contributor in a project, you want to get a clear understanding of what this project will bring about. After all, it is important to know what resources it requires before you sign for it – and that’s exactly what a project charter provides.

It clarifies general specifications, the purpose of the project, the key stakeholders, and the possible outcomes.

Originally, project charters have existed for more than a thousand years in different forms. Some such examples would be colonial charters issued by kings, the Magna Carta in the 13th century etc. Nowadays, they are an integral part of the project management due to their importance as a legally binding document.

What does a Project Charter contain?

Depending on company culture and on the person ahead of writing the company charter, the points that comprise it can vary.  Typically, however, it’s composed of the following sections:

  • Project Overview – Consists of the project name, author of the charter, creation date, project manager, project charter purpose, and charter version.
  • Project Details – here you can add a detailed project description which includes the mission, the general scope of the project, the key stakeholders, and clients.
  • Project Scope – a range of companies prefer including the project scope within the Project Details section. However, if the project is large enough, a completely separate section helps us better visualize the project scope. You would also include points such as objectives, goals, deliverables, out of scope deliverables, benefits, assumptions, risks, and constraints.
  • Project Team Organization – here you’d include a list of all team members that would take part in implementation. You can also include their contact details and their role in the project.
  • Project Resource Planning – this can include all resources starting from staff, non-human resources up to finances.
  • Project Communication Plan – it is generally a good idea to set up a communication plan to consistently revise changes and assure alignment of goals and objectives. The project rarely goes the way it’s intended; oftentimes, you’ll have to make some changes to the project charter along the way. Meaning, you should establish a communication plan, bi-weekly meetings, for example, to check on whether the project is going according to the charter or not.
  • Project Timeline – it’s important to have an idea on what the timeline for your project is. Your management, or possibly the client, will want to know whether the project is on schedule, and a timeline is a good way to estimate that.
  • Signatories – the list of signatories to the project

Why do we need a Project Charter?

Companies can be extremely chaotic. “Who’s in charge of what? Why is the project delayed? Why did the servers just catch fire?”

Accordingly, a project charter can ensure that your project doesn’t succumb to the chaos of miscommunication and missed deadlines.

This is especially true for smaller companies or startups, where there’s no clear managerial hierarchy. In such a case, you could have 3 or more employees working on similar tasks and duties.

Let’s say, for example, you’re a fledgling software development startup with 3 back-end developer employees.

When working on small-scale projects, your developers can easily work independently and ask for each-others help when needed. Things, however, get more complex when working on a bigger project.

Out of the 3 developers, one will be selected to lead the project. Unless they decide to take the initiative and write out a project charter, the development process might get a bit chaotic…

So what happens next?

After 1 month of working together, the role of the “team leader” starts fading away. The developers start making changes to the database or the application logic without consulting with the leader. Consequently, the team spends countless hours of discussing the best approach to take, how to optimize it, why it should be changed, etc…

The bottom line is: the whole team starts to get lost, each employee alters each others’ work due to the unclear specification of each individual’s reach. The developers start having their own thoughts regarding the end product. Thus, contributing to more conflicting ideas and ultimately changing the scope of the project. Finally, the team can’t deliver on time because they are not completely aware of the required deliverables and the respective deadlines.

What would have been different if there was a Project Charter?

  • For starters, the project manager would not lack authority in terms of allocating resources or day-to-day decision-making.
  • The team would have clear expectations for project outcomes and it would be easier to meet those expectations.
  • Deliverables would have been well organized, periodical and punctual.
  • The number of disagreements and conflicts on how to approach simple tasks would have been reduced significantly.
  • The project would have well-specified risks, thus allowing and helping the team overcome them.

Conclusions

A project charter is not simply a document stating facts and information about a project. It serves as the groundwork for effectively communicating with stakeholders and for efficiently routing work between actors that take part in the project.

Having a good and complete Project Charter is the very first step in managing a project.

Or, you could even take it a step further and adopt workflow management software. It comes with all the benefits of a project charter, the added benefit of being able to track everyone’s work, deadlines, to-dos, etc. online. So, why not book a demo with Tallyfy?

Feel like we missed something? Do you have any experience with a project charter ending up being a life-saver? Let us know in the comments below!

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