The Value Proposition of a Project Charter

The advantages of having an approved Project Charter are numerous. Yet many projects proceed without them and often encounter issues and risks that could have been avoided by having a Charter in-place. The value proposition of a Project Charter can be covered by the “What”, “Why”, “When”, “How” and “Who”. 

What is a Project Charter? 

The Project Management Body of Knowledge (PMBOK) Guide is published by the Project Management Institute (PMI) and is a globally recognized standard for managing projects. The PMBOK defines a Charter as a “document that formally authorizes the existence of a project and provides the project manager with the authority to apply resources to the project activities.” Common key elements in a Charter include: 

  • Purpose of the Project (background and business problem);
  • Summary Scope (what’s in and out), Timeline, and Cost;
  • Key Team Members;
  • High-Level Requirements; > Success Criteria (SMART goals, operational metrics);
  • Major Assumptions, Risks / Issues, Dependencies and Constraints;
  • Key Stakeholder Approval (i.e., sponsor and/or other supporting executives)

Why create a Project Charter?

The main purpose of a Project Charter is to increase your chances for project success. A Charter enhances the likelihood you will experience the following: 

  • Effective level-setting of expectations for leadership and team members;
  • Improved stakeholder communications by decreasing ambiguity; 
  • Ability to keep the team focused (decrease “rabbit” holes);
  • Mitigation of scope creep

The value-add of a Project Charter increases as the project size and complexity increases. 

When should a Project Charter be created?

  • The Happy Path: A Charter should be composed when starting the project, commonly termed as the Initiation Phase. During kick-off, an approved Charter can set clear expectations.
  • The Other Path: A Charter can also be developed when the need arises while the project is in-flight. Common examples include, during a major project revamp or for stakeholder management. 

How to create your Charter?  

It is almost the best strategy to keep your Charter as simple as possible. It is not meant to be a lengthy document and is usually between 2 – 5 pages. Use the following tips to create one.

  • Leverage your Business Case.
  • Engage and incorporate input from sponsors and key stakeholders. Their participation is crucial. 
  • Include important internal and external parameters such as organizational policies and regulatory requirements.
  • Keep it concise and appropriate based on the project size and complexity.
  • Do not re-invent the wheel.

Who should approve your Charter?  

Sign-off on your Charter is the final and critical step. It is not an effective tool without approval. At a minimum, your project sponsor should approve it. Other key stakeholders may include functional managers, the Project Management Office (PMO) and/or governance body, and key vendors. 

The Project Charter is one of many project management tools that a team can use to effectively and efficiently monitor a project’s execution course. Ninestone has experienced and certified Project Management Professionals (PMP®) to partner with your organization and steer your project to success. 

Tammy Chu, Senior Ninestone Consultant

February, 2017