What is a Project Charter and Why Do You Need One

What is a project charter?

The project charter is a document that officially starts a project or phase. It formally authorises the existence of the project and provides a reference source for the future. The charter gives direction and a sense of purpose to the management from start to finish. As Randy Tango, 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 power to utilize organizational resources to accomplish the project objectives.

What are the project objectives?

• It must explain the business need that led to the project being taken on.
• It also captures high-level planning information (scope, assumptions, deliverables, etc.) about the project. The specifics of the project activities will be developed later.
• The project statement of work (SOW) 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 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, and the benefit-cost analysis. 

  Why do we need a project charter?

  As mentioned previously, the primary 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 correctly, 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 executives 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 sponsor or the initiator signs the project charter. The PMBOK® Guide, 4th edition (the new one), states: "Projects are authorised 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 for 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 authorises 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."

  You may be interested in learning about how you can save money when implementing a project.