Developing the Project Charter

Project charter

When we develop the project charter we are assuming that the project manager is internal to the organization. Oftentimes people confuse a statement of work with a project charter. Let’s clarify this for you. A project charter is the document that is comprehensive and across all of the various components of a project. Say you have multiple phases of a project. This charter is the type of document that can be able to help you be able to manage all the phases of the project because you’re identifying, number one, who is the sponsor, who is the owner of this particular type of project. You’re also identifying the project manager, so you’re understanding the roles and responsibilities of that project manager as well as the authorities of that project manager.

Project statement of work is assuming that, as an example, you are outsourcing some piece of the work related to that project that’s contained within the project charter. So that project statement of work is going to include some kind of product scope description for a component of the project itself and it might also include the business need related to that product scope.

The business case is an input to developing the project charter because we need to understand, again, what is the business need that is driving developing the project charter. One kind of company that I worked with, their business need was to be able to update their particular website and this was a huge website and then about 6 months into it they decided, you know, it might be a good idea that we hire a project manager to do this because we’re already 6 months behind and also past the budget that we expected at this point. So they had a business need, but they really couldn't get their mind around what exactly did the project look like.

So a project manager was finally hired for the update of this particular website and when she came on board, she found out it was actually 5 projects in itself. We need to keep in mind that a project charter is for every single project and that if we have 5 projects, we might found out that it’s actually a program rather than just a project.

The agreements associated with the development of our project charter could be a memorandum of understanding, which would be something that would be put in place until maybe some of the contracts are finally formally created. A service level agreement could also be an agreement that we’re working with, as well as a letter of intent because sometimes it takes us a while to develop these contracts and negotiate the contracts to final formal sign-off and agreement.

The tool that we utilize with developing the project charter is expert judgment. The experts we could utilize, as an example, might be lawyers to develop the contracts related to our statement support. The facilitation techniques that we can utilize in our development of our project charter is brainstorming for divergent thinking and problem solving and conflict resolution. The output of develop project charter is the project charter itself. This is the key document that we utilize as an input to other types of processes because it’s the document, that helps us to stay on course and be able to link to the business case and ultimately to the business requirements of why is this project produced in the first place.

The other types of information included in the project charter are the assumptions. Assumptions are those things that are assumed to be true but haven’t been proven yet. The business, technical and resource constraints are anything that limits our options. We can include also high level risks and risks are anything that are positively or negatively influencing our project. Our milestone schedule might be something that is a high level schedule and will continue to be developed, if needed, as we develop our plan. Our Rough Order of Magnitude (ROM) budget that’s been approved by the sponsor and any stakeholders that we are aware of.

What’s also really critical in our project charter is to define what success looks like. Again, many organizations equate success of a project with on time and on budget but what we are driving at here in our project charter is linking back to the business case and the business need, is to understand what does success mean and how will we measure success. If we’re going to spend a million dollars as investment by the organization to be able to do this project, we have to recoup a minimum of one million dollars in order to be able to consider this investment is a success.

The sponsor is the owner of the charter. What does that mean? I’m working with a company which brought me because all of their projects are late. They identified as one of root causes of the project failure is because they’re not involving their sponsors enough during the course of the project. Basically if a sponsor is just signing off on a document like the project charter, project managers are not engaging with the sponsors to help make better decisions all during the course of the project itself. The sponsor needs to understand that their responsibility is to be a champion of that project which is more than just formally approving it. It takes both the project manager and the sponsor to be able to help make projects successful.