Why do we need a project charter?
Quite recently , I had the opportunity to volunteer with a not-for-profit organization to manage
their website development project . While working with my portfolio manager , I asked him
“ What would be one of the first deliverables that you would expect from me ” . He
replied “Delivering the project charter “. “Why the big deal about delivering a project charter for
a small project such as a website development project ? ” , I wondered . However , while working
with him on the charter , I realized that even for a project such as this , a lot of time and
effort is required for preparing a charter .
As Rita Mulcahy writes in one of her prep books for the PMP certification exam, “ Do not underestimate the value of
the project charter. The project charter is such an important document that a project should not be
started without one. If the project charter serves as a definition of how success will be measured,
then without a project charter, the project and project manager cannot be successful. ”
So let us take a look at what the project charter is all about and why it is so important.
What is a Project Charter ?
The project charter is a document that officially starts a project or a phase . It formally
authorizes the existence of the project and provides a reference source for the future of the project .
The charter gives a direction and a sense of purpose to the management from the start of the
project till the end . As Randy Tangco , a business driven project practitioner , mentioned in
one of his articles:“Take great pride and care in your project charter because
this is where you sow the good seed. It will eventually take care of you.”
A project charter names the project manager and defines the authority of the project manager
It provides the project manager with the the authority to utilize organizational resources to
accomplish the project objectives .
It should explain the business need for which the project is undertaken .
It also captures high level planning information (scope , deliverables , assumptions , etc )
about the project . The specifics of the project activities are developed later .
The project statement of work and the business case document are some of the documents
that need to be prepared before we start working on a project charter .
The project statement of work (SOW) is a written description of the project’s product , service
or result .
The business case explains why a project is being undertaken , the problem it will solve as well as
the benefit cost analysis .
Why do we need a Project Charter ?
As mentioned earlier, the basic purpose of a project charter is to authorize the project manager to start an
approved project and allow him to use organizational resources to accomplish the objectives
of the project .
If the charter is created properly , it also helps executives to see the business value of the
project .They can also reference the charter to understand how well the project is aligned with
the organizational strategies .
Josh Nankivel, PMP, a trainer and principal of pmStudent, said that “A project charter
should also serve as an executive overview of your project, one that any new executive can
reference to evaluate it. A good project charter can help save you from unnecessary scrutiny
or having your project shut down because some executive didn’t see the business value in it
from their perspective . ”
When do we create a project charter ?
As per the PMBOK guide , the project charter is created in the define project charter process .
This process is one of the first ones to be perfomed in a project and is completed in the
Initiating process domain .
Who signs and issues a project charter ?
The project charter is signed by the sponsor or the initiator .
The PMBOK Guide , 4th edition (new one) states: “ Projects are authorized by someone
external to the project such as a sponsor, PMO or portfolio steering committee. The project
initiator or sponsor should be at a level that is appropriate to funding the project. They will
either create the project charter or delegate that duty to the project manager. The initiator’s
signature on the charter authorizes the project.”
It should clearly state who is responsible for funding and should be signed by them .
Josh Nankivel states in one of his articles , “I have worked with several project managers who
ran into funding issues because a particular director or executive who said they would fund a
project from their budget didn’t come through. The project charter should clearly state who is
responsible for funding, and they need to sign it, too!”
Can a project manager be involved in the preparation of a Project Charter ?
Although the project manager himself is appointed in the project charter , the project manager
can be involved in the preparation of the project charter .The charter is usually created by the
sponsor or the initiator along with the project management team . The sponsor may lack the
skills required to prepare a project charter and may need the help of a project manager to
prepare a charter .
As Cornelius Fichtner , PMP trainer and host of the PM Podcast mentions in one of his
articles “The PM is a subject matter expert when it comes to initiating and starting a project .
Hence the PM is more qualified to create the project charter . He or she has more experience
in doing this and knows what kind of details to add to the project charter ” .
Some key facts to be remembered about the project charter for the PMP certification
It is developed in the develop project charter process in the initiating process domain .
It is created based on some business need and it should explain that need .
It is signed by the sponsor or the initiator .
It names and authorizes the PM .
It should include the high level project requirements .
It should include a high level milestone view of the project schedule .
It is a high level document that does not include the project details . The specifics of project
activities will be developed later .
It includes the summary level preliminary project budget .
Finally , lets check our level of preparation on this process for the PMP certification exam .
1.The project charter should always include :
a.The Schedule Management Plan
c.A detailed budget
d.The business need underlying the project
2.In which of the following processes is the project manager assigned his or her role in
d.Monitoring and Controlling
3.Who issues a Project Charter
d.Sponsor or initiator
1. Ans d. The project charter should include the business need behind the project .
2.Ans a .Initiating
The project manager is officially named and assigned in the project charter .The project
charter is developed in the develop project charter process in the Project integration management
knowledge area and the Initiating performance domain .
3. Ans d. Sponsor
The sponsor or the initiator issues the project charter , not the customer , project manager or
any other stakeholder .
Sabyasachi Gupta , PMP