Introduction
Project Charter will give the overview of the project. It will have the project’s needs and expected outcomes from the project as a whole. It also provides the basic foundation so that the team can consider any decisions for the project. It will set the boundaries for the project. It will account all the project’s proposed deliverables. It will set the expectations for the whole project.
The stakeholders can get a glimpse of what they are investing and getting out of the project. If we look at it overall, Project Charter will give the vision, objectives, scopes, limitations, risks, cost and deliverables of the project.It’s advisable to put enough time and effort to create an effective charter which will help in the successful completion of the project.
How to create a Project Charter
The Project Manager will get assigned to a project by the sponsor. It is the responsibility of the project manager to complete the Project Charter. . PM will identify the key players of the project who will be stakeholders. Stakeholders will be any person or department derives benefit out of the project or their interaction is necessary for the project’s success.
PM will interview the stakeholders and collect requirements from them. PM can get additional information about the potential threats and risks during the interview process. All the information collected will put together under specified headings to complete the project charter. PM will spend enough time to create a comprehensive project charter. The detailed project charter will save time later on and will help the project success.It will give what are in scope and out of scope of the project. This will reduce the confusion and conflict later on.
The budget for the project is defined and the clarity is established to remove any miscommunication.
The well-crafted project charter is essential in keeping the project on track.
The project charter will be presented to the senior management for their approval. The senior management will review the whole document to get a clear picture of what they are getting into and what will be the output of the project. Sponsor will determine if is it worthwhile to spend money.
After they are convinced on the outcome of the project they will approve the project charter
After approval of the project charter, it authorizes project budget to be spent on the project. PM will officially kick start the project after the approval.
The following elements are addressed in the Project Charter. All the elements may not be in all project charters. Some of the elements are combinedto put together under one heading. Some of them may not be used depending on the Organization standards.
Elements of Project Charter
- Title
- Project Definition
- Background
- Stakeholders
- Executive Summary
- Goals/Deliverables
- Scope
- Impact on Other Business Systems
- RAID – Risks, Assumptions, Issues, and Dependencies
- Constraints
- Success Criteria, Success Measurements, Return On Investment- ROI
- Project requirements
- Stakeholder requirements
- Sponsor requirements
- Risk Assessment (high, medium or low)
- Impact Assessment (high, medium or low)
- Mitigation Plan
- Milestone
- Characteristics
- Critical success factors
- Budget
- Resource Plan
- Roles and responsibilities
- Project Approval
The following will describe more on the commonly used elements
Title
Project Charter will have the Project Name as the title. If it’s a sub project of a program, the program name will added as prefix.
Project Definition
The definition will explain in detail what the project is about. If it is a part of a program, it will be clearly mentioned here.
Background
Project background will give the big picture of the ‘why’ the project has come into effect. The background gives overall picture of the expectation from this project.
Stakeholders
They have vested interest in the project. They provide the requirements and approve the budget. They are the backbone of the project’s success.
Example of Stakeholders: Stakeholders are anyone who derives the benefit from the project including Sponsors, Clients, Project Manager, Team Members, Cross-functional departments, Network / Security experts etc.,
Executive Summary
This summary will give the overall picture of the project in business terminology. The goal is to highlight the alignment with the Ultimate goal and vision of the company. Also it gives the strategic initiatives that the organization is performing with this project and how this project will help the organizational units benefit from this project.
Goals and Deliverable
The goals of this project and what it is going to deliver and when it will be delivered. The goals have to be aligned with the organization’s goal, mission and vision. This will give the confidence for the stakeholders on the outcome of the project
Objective
Objective of the project is what the project is going to achieve. There may be primary and secondary objectives, which will be detailed here. The benefit of the project is mentioned here to support the objective.
Scope
Scope of the project will mention in detail on the goals, and how it will be achieved. The absolutely necessary tasks to accomplish the goal will be part of the Scope. If any task or work is not supporting the goal of the project then it is ‘Out of Scope’. Both ‘In Scope’ and ‘Out of Scope’ activities/tasks will be covered under this topic.
Impact on Other Business Systems
The impact of the project on the other business systems or other business units will be listed under this heading. The impacted group will be communicated accordingly. This will give the other group to identify any potential risks or benefits due to this project.
Constraints, Assumptions, Risks and Dependencies
Constraints are the impediments to the project. It is the restriction on the project’s limitations. It limits the scope of the project. Constraints are documented and reviewed regularly. The project is planned to overcome the constraint and any changes in constraints will affect the project plan as well.
Assumptions
All assumptions should be recorded in the Project Charter. Since the project is based on assumptions, the project will be in jeopardy when the assumptions change. Assumptions should be monitored by the PM to make sure it is true.
Risk
Risk identification is an important part of the Project Charter. If the risks are not identified properly, the project will be in danger. Considerable amount of time has to be invested in identifying risks. All stakeholders must be interviewed to get their idea on the potential risks. The PM should be able to dig deep into identifying the risks when interviewing the stakeholders.
The risks are assessed as high, medium or low and the mitigation plan is created for the potential risks.
Mitigation Plan
The mitigation plan is created for all identified risks. They are implemented when the potential risks happens.
Dependencies
The dependencies are noted down in the project plan between tasks. There are four types of dependencies
Start to Start, Start to Finish, Finish to Start, and Finish to Finish.
Please click the link to get more information.
Success Criteria, Success Measurements
Success criteria is clearly mentioned in the project charter. Unless the success criteria is accomplished the project cannot be considered as completed. This success criteria will give the definite end point to be achieved. It gives clarity for the project goal as well. Stakeholders will determine the project success based on the success criteria.
The success is measured on the basis of Success Criteria
Return on Investment ROI
It is the mathematical calculation to understand the benefit of the project. How much is invested and what was the return on the investment? This number will decide if the project is commercially worth to perceive or not.
Project requirements
These are the requirements that needs to be completed for the project’s success. The requirements are mentioned clearly and in details with a requirement id in a separate requirement document, to track where and how the requirement is accomplished in the project.
The following are few types of requirements.
Business, Solution (Functional and Non Functional), Stakeholder, Transition, Project and Quality requirements.
Milestone
All the deliverables are split into small manageable and achievable milestones. The milestone is a part of the big deliverable. They are planned properly with available resources. There will be multiple milestones in a deliverable.
Critical success factors (CSF)
The organization should know the critical success factors available that are beneficial to the project. These CSF is monitored by the PM, since any change in those may affect the project success as well.
Budget
The cost of the project will be arrived by the PM after discussing with all the team members. The total cost for the project will be the budget for the project. Usually there will be a (+/-) 10% deviation allowed to the total cost of the budget.
Resource Plan
Resource plan will summarizes all the physical resources needed to complete the project. It will specify the number of labor, equipment and materials needed to complete the project. Please go to this link for resource planning template.
Roles and responsibilities
The roles and responsibilities of the project team involved in the project is detailed in the project charter.
The following roles are generally part of any project
- Sponsor
- Project Manager
- Project Steering Committee
- Team Lead
- Team members
Project Approval
The project approval is the final step to complete in the project charter. Once it is approved the budget is assigned for the project. PM can start creating project plan defining all the tasks and dependencies.
Conclusion
The Project Charter gives the overall picture of the background and expectations of the project. Stakeholders get the confidence from the Project Charter. It’s better to spend more time in creating a complete project charter. It will pay off well at the end.
