Project Charter

Project charter is the very first formal document that gets created when a project officially gets initiated. Project charter document becomes the formal identity certificate of the new project. Project charter document gets approved by the project sponsor formally authorizing the existence of the new project. Project charter also formally includes the name of the project manager and defines his/her responsibilities. Project charter becomes an agreement between the project manager and the senior management of the organization.

Project charter is a broad document which serves more as initial authorization document with goals to be achieved from the project. Once approved, the project charter authorizes the project manager to start using the organizational resources towards project activities. 

A project charter document will include the following information:

• Project Background (Containing the business need and the reason for taking up the project)
• Project Objectives and Goals (Clearly defined set of objectives and goals to be achieved to fulfil the business need)
• High level requirements 
• High level project risks
• High level milestones 
• Budgetary constraints 
• Key stakeholders and their names
• Project manager’s name (Responsibility of the project manager and granted authority level for the project manager)
• Project Sponsor’s name
• Approval and signature of project sponsor

Developing Project Charter

Once the senior management decides to start a new project in the organization, they need to appoint a project manager for this who can take the project forward and complete the project successfully. At this stage, the sponsor or the customer will have to provide the clear objectives to be fulfilled from the project. The objectives, as explained by the sponsor or customer, need to be understood and accepted by the project manager. It is important to ensure there is consensus between the project manager and sponsor regarding the goals of the project.

Project charter will contain the information as explained above. The information has to be deliberated and finalized between the sponsor, project manager and if needed with some key stakeholders. Generally the project manager may be appointed at this stage and may be asked to develop the project charter document. Project manager will collaborate with the sponsor and other stakeholders to finalize the goals and other things as above and document them formally. Developing the project charter document may necessitate number of meetings and discussions between the various stakeholders during the initial stage.

The project manager will refer to the business case document (if this is an internal project) and to the contract document if the project is initiated based on the request of an external customer, to understand the relevant goals regarding the scope, time and cost of the project.

It is a good practice if the project manager is involved in developing the project charter in collaboration with others. This provides the project manager with an opportunity to start understanding about the project from the very beginning and the project manager can facilitate by asking more questions to bring clarity. While the project manager helps write this, project charter is always approved only by the project sponsor. In some projects, the customer can also play the role of a sponsor.