How to Develop a Project Charter

What Is a Project Charter?

A Project Charter is a document that outlines a project's goals, objectives, and activities. It is used to determine whether or not a project is feasible and, if so, how much it will cost. If your organization plans to implement a new project, one of the first things you need to do is develop a Project Charter.

Project Charters are generally created for large projects with multiple departments or divisions. This can include an entire department moving into a new office space or positioning itself in an entirely different industry segment.

For example, if your organization has been in business for 20 years and has grown from 5 employees to over 100 employees, creating a new Project Charter may be needed.

Purpose of Project Charter

Project charters are the foundation of all projects and are essential to a successful project. A well-written project charter will ensure that all parties involved in the project understand the scope of work, time frame, deliverables, and responsibilities. It should also highlight any risks that might impact the project's success.

Project charters can vary in length depending on what is required for each project.

However, they must include all essential information to ensure you have a clear understanding of what needs to be achieved by your team during their time on the project.

The Project Charter is used to convince stakeholders about the advantages of working with your company and what you have planned for their business. It also explains how you will meet their expectations as well as yours.

The charter includes the following sections:

A project Charter is a document that outlines a project's scope, deliverables, and schedule. In addition, it includes all the relevant information needed to plan and manage the project, including:

Project Purpose

This document's purpose is to define why we are undertaking this project. This can be anything from improving customer satisfaction to enhancing productivity. However, it should always be focused on the customer and their needs.

Project Objectives

This section defines what you want to achieve using your project. These objectives should not just be about meeting your expectations but also those of the sponsor, stakeholders, and other stakeholders. It should also include measurable results showing if you have achieved your objectives.

Project Scope

This section defines what is included in the scope of your project. It can consist of all aspects of the work you need to do, including marketing, technical, administrative, etc.

In addition, it should include all deliverables, such as reports, presentations, etc., that will form part of your project output, along with timelines for completion and budget estimates for each phase of work (both short-term and long-term budgets).

Project Schedule

This section defines how long your project will take to complete, along with dates for completion against each phase of work.

Analyze the Situation

This involves gathering information about the project and its objectives.

The next step is to determine what resources are needed for the project. These include time, money, people, equipment, and information.

The third step is to determine if there are any constraints on completing this project. These constraints may be legal or physical limitations that must be considered before proceeding with a project.

For example, suppose you want to build a house on your property and want it to be suitable for habitation. In that case, you must consider whether it can be made under the existing zoning laws in your area before starting construction on the house itself.

Create Assumptions and Constraints

Assumptions and constraints are the lifeblood of a good project charter. They are the things you have to be able to answer when people ask you questions about your project.

If you don't have any assumptions, how can you know how much money is needed? How long will it take? What technologies does it require? It would help if you had assumptions to answer these questions.

Assumptions are also crucial for setting expectations with other stakeholders.

If you don't set expectations, your team will be disappointed when they find out they didn't get what they expected.

Assumptions help keep everyone on the same page, so they can focus on their work and not waste time arguing about who has done more job or why some things weren't included in the plan.

Describe Milestones

Milestones are important because they allow you to track progress, manage time and budget and ensure you meet your deadlines. The purpose of a milestone is to clearly define a specific point in time by when the project must be complete.

Milestones are an excellent way to keep people on track. Still, they can also lead to resistance if poorly thought out or communicated.

Milestones should be defined at the beginning of the project and should reflect what will be completed by each milestone. It's best to avoid using vague terms like "weeks" or "months" when referring to milestones because these terms can be misleading. Instead, use specific dates such as "by June," "by August," etc., so everyone knows when the milestone must be completed.

Identify Major Risks

The key to developing a good project charter is to identify significant risks in advance so you can plan for them ahead of time. By doing this, you will be able to minimize any potential problems during your project.

For example, suppose you know that there is a chance that your client may not pay for services rendered. In that case, it's essential to include this risk in your project charter so that everyone involved knows what's at stake if this happens.

Project Budget

The project budget is the total cost of all the work to be done by your company. It includes all the expenses for each project stage, such as salaries, materials, equipment, and other costs.

In addition, the project budget may include additional charges such as travel expenses, administration fees, software licenses, and overhead expenses.

The total cost of a project is usually expressed in thousands or millions of dollars. However, the actual amount may vary depending on how much work you want to do on different parts of your project and how quickly you want to complete it.

Stakeholder requirements

The stakeholders involved in a project are those affected by it. They might be customers, partners, or other stakeholders.

The stakeholder requirements in the Project Charter are to identify the people affected by the project or their roles in it.

The purpose of a project charter is to delineate what each stakeholder expects from your project.

In other words, it allows you to identify who should be involved in each phase of the project and their responsibilities. You can use this information to manage your efforts better and ensure everyone understands what they need to do.

Conclusion

It's essential to develop a project charter because the process forces you to identify and structure everything that needs to be done to create the features that are being requested.

Whether you're working alone or on a team, having all these different pieces in one place ensures that no development aspect is overlooked. It also provides information for anyone else who might need it—including managers, senior leaders, and clients.

 Ultimately, whether you're developing a product from scratch or implementing new features, the process for creating a project charter doesn't change. Instead, there will be several steps involved, each one being important.

The result is a document that is detailed enough to serve its purpose—which is ensuring that all requirements have been met.