Project Charter: what is it and why is it important?

What is a project charter?

A project charter, in Italian known as “project initiation document”, is a formal document used in project management practices to officially define and authorize a project. This document is one of the crucial first steps in the life cycle of a project and serves several important functions. Here are some examples:

1. Definition of project objectives: this document establishes the key objective or objectives of the project in a clear and concise manner. This helps ensure that all members of the project team have a common understanding of the project’s purposes and goals.
2. Project authorization: the project charter is usually signed by an executive or a senior manager within the organization, representing a formal commitment to the project. This authorization grants the project team the necessary approval to proceed.
3. Identification of stakeholders: the document lists the key stakeholders who will be involved in or affected by the project. This helps establish who should be involved in the planning and execution of the project.
4. High-level project description: the project charter provides an overview of the project, including constraints, initial requirements, available resources, and time limits. It is an initial overview of the foundations upon which the detailed project plan will be built.
5. Definition of the project manager: the document names the project manager or project leader, who is responsible for the organization, planning, and overall management of the project.
6. Success criteria: the project charter can establish success criteria that will be used to assess the completion and success of the project. These criteria are often measurable and specific.
7. Initial risks: the document can also identify known initial risks that the project may face and may suggest some initial strategies for addressing them.

The project charter is a fundamental tool to ensure that all members of the project team and stakeholders have a clear understanding of the project, its objectives, and the parameters within which it will be executed. It also serves as a reference point throughout the project’s life cycle to assess whether the work is in line with the initial directives and to manage stakeholders’ expectations.

 When to Create a Project Charter

The project charter should be created at the beginning of the project initiation process, before actual work on the project begins. Typically, the best time to create a project charter is immediately after the initial project approval by the organization or senior stakeholders. Here are some specific stages in which you should create a project charter:

1. Project Conceptualization: when the project idea is first proposed, the project charter can be created to formalize this proposal and obtain preliminary approval from stakeholders. This helps ensure that the project aligns with organizational objectives.
2. Project Initiation: after the initial approval, the project charter is developed in detail during the project initiation phase. During this phase, obligations, resources, and initial project details are defined more specifically. The project charter should be completed before moving on to the project planning phase.
3. Stakeholder Engagement: the project charter also provides an opportunity to engage key stakeholders, such as customers, project team members, and other stakeholders. It can serve as a basis for initiating discussions and initial negotiations about the project’s scope and objectives.
4. Formal Authorization: the project charter is used to obtain formal project approval from an executive or authorized person. This approval grants the project manager the authority to initiate the project and allocate resources.

How to Write a Project Charter

Developing a project charter requires a structured process to ensure that all information and key elements are included clearly and concisely. Here is a step-by-step guide on how to write a project charter:

1. Project Title: begin with a clear and descriptive title for your project.
2. Purpose and Objectives: explain why the project is necessary and what the main objectives are expected to achieve. Ensure that the objectives are measurable and consistent with the organization’s goals.
3. Stakeholders: list all key stakeholders who will be involved in or influenced by the project, including the names and roles of individuals involved.
4. Major Deliverables: describe the main outcomes or products that the project intends to deliver. These should be specific and quantifiable.
5. Project Scope: define the boundaries of the project, i.e., what is included and what is excluded. This helps avoid ambiguity about the scope of work.
6. Constraints: identify all known constraints that the project will need to address, such as budget limits, limited resources, or strict deadlines.
7. Assumptions: elaborate on all the assumptions on which the project is based. These are fundamental assumptions that influence project planning and execution.
8. Success Criteria: define the criteria that will be used to evaluate the success of the project. These should be specific and measurable.
9. Project Manager: appoint the project manager or project leader, specifying their key responsibilities.
10. Initial Resources: indicate the estimated initial resources required to start the project, including budget, personnel, and equipment.
11. Approval: elaborate on how and by whom the project charter will be approved. This may include signatures or a specific approval procedure.
12. Review and Updates: specify when the project charter will be reviewed and updated during the project’s lifecycle, such as in the case of significant changes to scope or constraints.
13. Other Relevant Information: add any other relevant information or special notes that may influence the project.

Example of a Project Charter

Follow this example to develop a project charter template for use in your projects. Once you have completed the project charter, make sure to share it with all key stakeholders and obtain formal approval from an executive or authorized person. For the purpose of smoother software design, the project charter should be a clear and concise document that provides a solid foundation for project planning and execution. During the project’s lifecycle, the project charter can also serve as a reference to keep the project aligned with the initially established objectives.

[Project Title] Project Charter

• Purpose and Objectives
  • Purpose: briefly explain why the project is necessary.
  • Objectives: define the project objectives clearly and measurably.
• Stakeholders: list all key stakeholders involved in the project, including their roles and responsibilities.
• Major Deliverables: enumerate the primary results or products the project intends to deliver. These should be specific and quantifiable.
• Project Scope: define the project’s boundaries, including what is included and what is excluded. This helps prevent ambiguity about the scope of work.
• Constraints: identify all known constraints the project will need to address, such as budget limits, limited resources, or strict deadlines.
• Assumptions: list the key assumptions on which the project is based. These are fundamental assumptions that influence project planning and execution.
• Success Criteria: define the specific criteria that will be used to assess the project’s success.
• Project Manager: appoint the project manager and specify their key responsibilities.
• Initial Resources: indicate the estimated initial resources required to initiate the project, including budget, personnel, and equipment.
• Approval: specify how and by whom the project charter will be approved. Include space for signatures or the approval procedure.
• Review and Updates: indicate when and how the project charter will be reviewed and updated during the project’s lifecycle.
• Other Relevant Information: add any other relevant information or special notes that may influence the project.

Approved by: [Name of Executive or Authorized Person] [Date]

Once you have customized the project charter template, you can share it with your project team and stakeholders to obtain formal approval. This document should serve as a reference throughout the entire project lifecycle to ensure that the work remains aligned with the initial objectives and expectations.