- Learn the crucial elements of a project charter and their importance.
- Discover how to define project goals, scope, and stakeholders effectively.
- Understand the differences between a project charter, plan, brief, and business case.
- Get practical tips and real-world examples to guide you in crafting an impactful project charter.
A project charter is the foundational document in the project initiation phase. It sets the tone, vision, and boundaries of your project. A good project charter leads to a good planning phase in the project management process, but how to write a project charter? This blog will guide you through all the essential steps, tips, and examples to craft a good project charter. Furthermore, it will answer essential questions such as what is a project charter in project management, and when should you use a project charter. Let’s dive in!
A project charter outlines your project scope, objectives, and participants or stakeholders in the initiation phase of your project. It is a critical element of the Project Management Body Of Knowledge (PMBOK). Developing this document falls under the responsibilities of a project manager. A good project charter ensures that the project is greenlit by the stakeholders involved.
However, a carefully crafted charter aims to align stakeholders, provides a roadmap for the project's direction, and sets critical expectations for project success. It is also essential to distinguish the project charter from other documents that may look similar but have a different intent.
Project Charter Vs. Project Plan
It's important to distinguish project charters from other related documents. While project charters and plans are crucial for a project’s success, they serve distinct purposes. The project charter provides a high-level overview, focusing on the project's ‘why’ and ‘what.’
On the other hand, the project plan dives deeper into the ‘how,’ outlining the specific tasks, resources, and timelines needed to achieve the project's objectives.
Project Charter Vs. Project Brief/Business Case
Project charters also differ from project briefs and business cases. Project briefs are often used for external communication, providing a concise overview of the project's purpose and target audience. On the other hand, project charters are internal documents used to guide project execution.
Likewise, business cases focus on justifying the project's existence by outlining the importance of project charter, benefits, costs, and return on investment. They are typically used to secure project approval from stakeholders, whereas project charters come into play after the project is greenlit.
Writing a project charter becomes straightforward if the process is broken down into small, actionable steps. The following actions are a guide to creating an impactful project charter.
Step 1: Define Title And Project Name
Give your project a clear and descriptive name and use this as the title of your project charter. The project name should be relevant to the project objectives. Supposedly, if a company is revamping its existing website, a clear and relevant title might look like ‘E-commerce Website Redesign Project.’
Step 2: Explain Project Purpose Or Justification
Explain why the project is necessary and why it must be carried out. What problem does it solve, or what opportunity does it address? A project purpose that might justify the project need by highlighting both the desired outcome and the specific problem might look something like: ‘To increase online sales by 20% through a more user-friendly and mobile-responsive e-commerce website, enhancing customer experience and brand image is highly necessary.’
Step 3: Finalize Project Objectives
Project objectives refer to the attainable goals of your project. These are the things you want to accomplish. Your project's objectives should be specific, measurable, achievable, relevant, and time-bound (SMART). The following example of project goals might give you an idea of how to have SMART objective:
- Increase website traffic by 15% within 3 months of launch
- Achieve a conversion rate (visitor to customer) of 3%
- Reduce website bounce rate (visitors leaving after one page) by 10%
These goals are not highly ambitious and follow the SMART model.
Step 4: Define Project Scope
Define the boundaries of what the project will and will not include. This can be the trickiest element, as it needs to strike a balance between specificity and flexibility. Let’s look at a project that includes design and development of a new e-commerce website. The scope would include page designs, revamping of cart system, and integration with mobile. You also need to define what is not part of the scope such as a new payment gateway system that might be added later.
Step 5: Identify Stakeholders And Project Team
Identify all the key stakeholders, not just within the organization but also externally. Who needs to be involved or informed about the project? Also, define the project team and their roles. All parties involved must recognize and understand their contributions. Some stakeholders that might be involved in your project include the CEO, Marketing Director, Sales Manager, and IT Director. Moreover, as mentioned, it is important to define the project team as well; it might include a web developer, UI/UX designer, content writer, and SEO specialist.
Step 6: Project Risks And Assumptions
Document any assumptions or constraints that might affect the e-commerce project. List potential risks and outline a high-level risk management strategy. Risks include potential delays due to third-party vendor issues and unforeseen technical challenges. Some assumptions made are that content will be provided by the marketing team on time and user testing will be conducted smoothly. You need to document all these.
Step 7: Project Constraints And Dependencies
Constraints could be anything from regulations to deadlines. Dependencies refer to elements of the project that are reliant on one another. Make sure your project charter caters to both. Some constraints to be included in a project charter would be a tight budget and a fixed deadline for the launch period. Furthermore, for the example we are already discussing, certain dependencies might exist between web development and content creation, as the website needs product descriptions before launch. Considering limitations and interconnected tasks is important in this step.
Step 8: Figure out the Project Schedule
Include a high-level project timeline, highlighting critical deadlines and milestones. This will keep your project focused and look achievable. Make an outline of the schedule, such as:
The project will run for 6 months with key milestones:
- Design finalized by Month 2
- Development completed by Month 4
- Testing and launch by Month 6
Step 9: Finalize the Project Budget
Estimate the resources required for the project. This is not a detailed budget but should give stakeholders an idea of what's needed. A preliminary budget should be allocated (it should be a number). Break the budget down into categories such as web development, design, content creation, and testing to give stakeholders an idea of what you are planning to spend on each phase of the project.
Step 10: Get Approval Signatures
Seek approval from the appropriate stakeholders. Their signatures represent formal acceptance of the project charter and all its elements. Signatures from the project sponsor (such as the CEO) and key stakeholders signify the approval and commitment of these people to the project’s success. It also formalizes the agreements and accountability of the project giving it an official go.
To understand the nuances of a well-put-together project charter, it's essential to look at examples that are theoretical, actionable, and can be used in the real world.
Example A - Technology Upgrade
Title: Enterprise Resource Planning System Implementation
Purpose: To update the existing ERP technology to a more robust system that can scale with the organization's growing needs.
Objectives
- Implement the new ERP system within 12 months
- Increase operational efficiency by 20%
- Reduce manual entry errors by 95%
Scope
The ERP implementation project will only include the finance and human resources modules.
Stakeholders and Project Team
The core ERP project team comprises members from the finance, IT, and human resources departments. The CFO and CEO will act as project sponsors.
Constraints
The project must operate within the budget of $1.5 million and use only approved vendors.
Dependencies
The ERP system implementation depends on a scheduled server upgrade and office relocation.
Example B - Marketing Campaign
Title: New Product Launch Campaign
Purpose: To raise awareness and drive sales of a new product line.
Objectives
- Achieve 80% brand recognition in the target market
- Increase market share by 15%
- Reach a sales target of 100,000 units in the first quarter
Scope
The marketing campaign will encompass digital and traditional channels targeting millennials.
Stakeholders and Project Team
The marketing team will lead the project, with input from sales, product development, and customer service teams.
Constraints
The project must adhere to the existing brand guidelines and use approved advertising vendors.
Dependencies
A campaign's success depends on timely product delivery and the availability of support staff.
Example C - Organizational Change
Title: Agile Transformation
Purpose: To shift the organizational culture towards a more agile framework.
Objectives
- Complete the initial training phase within six months
- Implement agile practices across 60% of teams within the first year
- Improve time to market (TTM) by 25%
Scope
The agile transformation project will start with the software development teams and expand to other departments based on their applicability.
Stakeholders and Project Team
The Agile Steering Committee will oversee the project, representing every affected department.
Constraints
All major product launches must follow the existing project management framework until further notice.
Dependencies
The success and speed of Agile adoption are linked with completing a mentorship program for all team leaders.
If these simple barebone examples do not work, you can customize them or choose a project charter template. These can be found in various project management software. You can also check one here on our platform to better understand how to write a project charter.
