Why do we need a project charter?

Why Do We Need a Project Charter?
...

Sabyasachi

Published on May 31, 2013


  • 5746 Views
Recently, I had the opportunity to volunteer for 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 fuss about delivering a project charter for a small project like a website development project?”, I wondered. However, while working with him on the charter, I realized that even for a project like this, a lot of time and effort is required to prepare 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. It 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. The charter gives a direction and a sense of purpose to the management from start to 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 seeds. It will eventually take care of you.”
 
A project charter names the project manager and defines the authority of the project manager. It gives the project manager the authority to utilize organizational resources to accomplish the project objectives.
It must explain the business need that lead to the project being taken up.
 
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 a few 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 previously, the basic purpose of a project charter is to authorize the project manager to start the 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 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 during the "Define" process . This process is one of the first ones to be performed in a project and is completed during 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 who needs to sign the document. 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?

Though he is appointed in the project charter, a project manager can still 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 exam are
  • It is developed in the "Develop" project charter process in the initiating process domain.
  • It is created based on a business need and the document must to 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.
Here are a couple of sample questions on project charter. 
 
1.The project charter should always includes:
a.The Schedule Management Plan
b.Historical Information
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 the project?
a.Initiating
b.Planning
c.Executing
d.Monitoring and Controlling
e.Closing

3.Who issues a Project Charter?
a.Customer
b.Project Manager
c.Any Stakeholder
d.Sponsor or initiator

Answers
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.

About the Author

Sabyasachi has over a decade’s experience in leading IT and non IT projects in the Healthcare, Oil and Energy, eCommerce, Public Sector Undertaking , and Services industry . He is a PMI certified Project Management Professional , PMP, and a volunteer in the Project management community with a focus on best practice and mentoring other project management professionals . His writings are regularly published in several blogs , forums and online project management communities .


{{detail.h1_tag}}

{{detail.display_name}}
...

{{author.author_name}}

Published on {{detail.created_at| date}} {{detail.duration}}

  • {{detail.date}}
  • {{detail.time}} {{detail.time_zone_code}}

Registrants:{{detail.total_registered_number}}

Downloaded:{{detail.downloads}}

About the Webinar

Hosted By

...

{{author.author_name}}

{{author.about_author}}

About the E-book

Register Now!

Webinar Expired

Download the Ebook

Name
Email
Please enter valid email id!

Show full article video

About the Author

{{author.about_author}}