Project Charter Overview: Definition & FREE Project Charter Template

In a world where 70% of projects fail for various reasons, one could be the project charter, which is a crucial part of project management and ensures the project's success.

A complete understanding of the project charter is essential for any project management professional (PMP). 

This foundational document does more than just initiate a project - it serves as the cornerstone of project governance and success. When organizations skip the creation of a project charter, they often find themselves managing unclear expectations, conflicting priorities, and resource disputes.

In this blog, we’ll dive into the importance of a project charter, its key components, and best practices for creating one to support your business goals.

What is Project Charter?

A project charter is a short document that authorizes a project and gives the project manager the authority to begin work. 

It outlines the project’s goals, objectives, and what resources are needed, helping everyone involved understand the basic idea before diving into detailed planning.

Project charters are crucial for guiding the project’s direction and can be referred to throughout its duration. 

They also help show if the project is worth the investment, aiding in getting approval. The charter clearly explains to the team and stakeholders the project’s scope, goals, key players, and potential risks. 

While a large organization may have a more detailed multipage charter, smaller companies might use a simpler version with just the essential points.

What is the Purpose of the Project charter?

Think of a project charter as a game plan for building a new house. It's the primary document that answers the big questions before you start working:

1. What are we building?

Example: A three-bedroom family home with a garden

2. Why are we building it?

Example: To provide comfortable housing for a growing family

3. Who's involved?

Example: The homeowner, builder, electrician, plumber, and designer

4. What is the estimated budget?

Example: $300,000 total budget

5. When does it need to be done?

Example: Must be finished within eight months

6. What could go wrong?

Example: Bad weather might delay construction, and building materials might cost more than expected

7. What makes this project successful?

Example: The house is built safely and within budget, and the family can move in by Christmas

This document helps because:

• Everyone knows what they're supposed to do

• It's clear who makes decisions

• You can spot problems early

• Everyone agrees on what success looks like

• You can check if you're on the right track

Think of it like writing down the rules of a game before you start playing - when everyone knows the rules, the game runs smoothly!

How to Write a Project Charter?

The process of creating a project charter document consists of four straightforward steps.

Step 1: Start with the basic information

Start with the basic information like the project's name, add the date, write the names of those in charge, and who approved this project.  

Step 2: Tell the story of “Why”

Explain why you are doing this project and creating this project. The website of our new venture is too slow, and customers are facing problems while shopping. 

Step 3: What success looks like

Write what you want to achieve. For example, a fast-loading website that boosts sales by 30%.  

Step 4: Jot down the critical dates 

Listing the important dates is very important because it provides a clear roadmap of the project’s timeline, ensuring everyone knows when the project started and should be completed.

Step 5: Write who all are assigned to which task

Write down who is involved in this project and who is responsible for each task. For example, Mohit is designing a website, Tom is creating content, and Sarah is testing what’s working fine and what's not. 

Step 6: Decide about the budget

Decide how much money you can spend and what you will spend on it. For example, $20,000 Total: $15,000 for website building, $5,000 for photos and content

Step 7: What might go wrong

List all the possible problems and how you will handle them. Have a backup designer ready for problems like the absence of a website developer for particular days. 

Step 8: Set the rules

What kind of decisions can team leaders make, and is there any need to ask for permission? For example, team leaders can spend up to $500 without asking. More significant amounts need approval.

Step 9: Get Everyone to Agree

Share the document with all the team members and people involved, get signatures and approval from the key people, and ensure everyone understands their part.

Helpful Tips:

1. Keep the document short and clear

2. The document should be easy, and it should be free from jargon

3. Include visuals and charts to explain things better. 

4. Make sure to keep the copy.

Pro Tip: A good project charter is like a clear map - it helps everyone know where they're going and how to get there!

Agilemania Project Charter Template

When and Who should write the Project charter?

The project manager creates a project charter, and the creation of project charters starts during the initial phase before stakeholder alignment is required. At this point, the project is formal, and now, the project charter can act as a roadmap for the team members. 

Conclusion 

One of the best things about a project charter is that it brings your entire team together. When everyone knows their role and responsibility and what success looks like, the project executes smoothly. It's just like how a blueprint helps builders construct a house - everyone knows exactly what they're supposed to do.

Creating a project charter is a relatively easy nut to crack. Just follow the steps we discussed, keep your writing simple, and make sure everyone involved agrees with the plan. The project manager should create this document right at the start before any work begins.

Remember - a little time spent planning at the beginning can save you from lots of headaches later. Before you jump into your next project, take a moment to create your project charter. Your future self (and your team) will thank you for it!