When you initially charter a plane, you don’t need to provide a seating chart or list of names to the airline company. But you need to know how many passengers you have, the cost of the trip, and your destination. The project charter is similar to that for your project.
Table of contents
- What is a project charter?
- What does the project charter contain?
- Main components of a project charter
- Why are project charters useful?
- Key sections of a project charter
- One-page project charter example
- Tips for writing a project charter
- Next steps for your project charter
- Tools for planning and upholding a project charter
What is a project charter?
A project charter is a short document that explains the project in clear, concise wording for high level management. Project charters outline the entirety of projects to help teams quickly understand the goals, tasks, timelines, and stakeholders. It is is an essential deliverable in any project and one of the first deliverables as prescribed by the PMBOK Guide and other best practice standards. The document provides key information about a project, and also provides approval to start the project. Therefore, it serves as a formal announcement that a new approved project is about to commence. Contained also in the project charter is the appointment of the project manager, the person who is overall responsible for the project.
What does the project charter contain?
When preparing the project charter, utilize the SMART method. Be Specific, ensure your goals are Measurable, Attainable, Relevant to the project, and Timely. The project charter includes:
- Purpose and objectives of the project in clear, concise language
- Requirements of the project at a very high level and without much detail
- Project description in a paragraph or two that explains the project
- Known high-level, major categories of risks for the project
- Schedule of events with the start and end dates
- Major events or milestones along the path.
- Budget or summary of how much the project will cost
- Requirements from the organization for approval, including what to approve, who will approve, and how to get the approval
- Key players or stakeholders in charge of which parts of the project and who will approve the plans to go through
- An introduction of the project manager, project sponsor, and their authority level
Read also: How to Write SMART Project Management Goals
Main components of a project charter
A project charter is a living document outlining the issues, targets and framework of a process improvement effort. A charter should have six main components that frame the document. Each of these component helps define the reasons for the project, explains how it improves the business, enumerate what steps are necessary to complete, and identifies the stakeholders responsible for the project. The project charter components are:
- Problem statement
- Business case
- Goal statement
- Team members
Why are project charters useful?
The main reason every project needs a project charter at the very start is because without it, there is no proof or official document that an authorized project manager defined and presented a project and gained its approval from stakeholders to proceed. A project charter also provides several benefits:
- Formally authorizes the project to commence
- Creates a common vision and shared understanding of the project
- Empowers the project manager to lead the project
- Identifies the high-level objectives and scope of the project
- Defines what success will look like at the end of the project
- Gains support for the project by announcing it to the whole organization
- Ensures that key stakeholders are aware of the project
- Secures budget and resources for the project
- Serves as the point of reference for the project team
Key sections of a project charter
Most project management methodologies and frameworks prescribe the use of a project charter but do not define the actual contents of the template. This is understandable, because projects differ in a variety of ways, such as in size, criticality, type, or approach. But the accepted principle in writing a project charter is that the document should help clarify the what, why, who, when, and what cost aspects or questions of the project. Referencing the PMBOK Guide, the inclusion of following sections in a project charter will answer these aspects and questions:
This section includes the name of the project, its ID (if organizations use one), the name of the project manager, and its sponsor(s). It can also include additional but brief project description details.
Business need, problem, or opportunity
This section tries to identify what the main driver for the project is for it to exist. It provides the context or situation that led the sponsor to start the project.
Project objectives and benefits
This lists the goals that the project will try to achieve. A guide for writing the objectives is to use the SMART acronym: they should be Specific, Measurable, Attainable, Realistic, and Time-bounded.
This section identifies the people governing the project. It should clearly show the key roles for its management and direction. Using a RACI chart can be helpful.
High-level project scope
This section outlines the boundaries of the project at a high level. It is important to identify not only its scope, but also what is out of scope. Specifying key deliverables of the project should also fall in this section.
High-level project timescale
The project charter should list the key stages and the estimated duration of the project at a high level, including its milestones. However, the project manager should exercise caution in writing the project schedule, assuming that the project will immediately start after the approval.
High-level project budget
This section identifies the budget requirements of the project at a high level. It should include capital and revenue expenditure forecasts.
This section lists the main assumptions that the project team took. It is important also to assess how these assumptions can impact the project should the team realize later that the assumptions they made were false or inaccurate.
Key project risks
This lists the main risks that may impact the project if they materialize. It assumes that the project team cannot avoid encountering the identified risks.
This section identifies the key metrics to help assess if the project is successful or not. The measurable terms describe an outcome that is acceptable to the end-user, customer, and stakeholders.
One-page project charter example
When creating a project charter, it is important to understand context. Project charters are usually very lengthy documents. This is to ensure that it completely describes the background of the project, the different options considered, the details of the scope, and other factors. For large projects, an additional one-page Project Charter Summary provides the summary of the most important sections of the full project charter. For small projects, this one-page template is an acceptable alternative. This short project charter is also useful when communicating with executives, who are usually not interested in all of the details and particulars. The sections of the document are as follows:
- Project Name
- Project Description
- Target Date
- Project Team
- Key Milestones
Tips for writing a project charter
Writing effective project charters comes with experience. However, it is possible to write good enough ones early on by following some advice from professionals who have spent their careers learning how to write great project charters.
Keep it brief
Try to keep the project charter simple and brief. Most likely, the more pages it contains, the less chances it will get read.
Try to get to the point as early as possible. Project sponsors and other stakeholders are busy professionals who may not show interest or enthusiasm reading a vague summary of a project.
Build it with your sponsor
Most often, the sponsor hands it over to the project manager to write the project charter. However, the project charter is always better with the involvement of the sponsor, whether in support or actually co-creating and reviewing the document.
Next steps for your project charter
After creating the project charter, let the sponsor sign it without delay. Without the sign-off, there is no formal approval and authorization—and no project. Also, it is advisable to share the document promptly after approval. When more people in the organization know what the project is about, the easier it is to have supporters on board. Since the project charter is a key document in the initiation phase of a project, creating a great project charter lays the right foundation for the project and provides a greater chance it will proceed smoothly in its remaining phases.
Tools for planning and upholding a project charter
A helpful tool in creating a project charter is project management software, which allows your team to analyze risks and choose appropriate stakeholders based on their existing resources and abilities. Project management tools also provide a view of the project’s timeline, each goal, and the progress team members make. Five of the best project management software listed below can make teams more aware of what exactly should be in each project charter.
Tackle complex projects with Wrike’s award-winning project management software. Break projects into simple steps, assign tasks to team members, and visualize progress with Gantt charts, Kanban boards, and calendars. Manage resource allocation and forecasting with software that’s easy to launch. Automation and AI features strip away time-consuming admin tasks so you can do the best work of your life. Streamline your practices, align your team, and ensure you hit deadlines and stay on budget.
monday.com Work OS is the project management software that helps you and your team plan, execute, and track projects and workflows in one collaborative space. Manage everything from simple to complex projects more efficiently with the help of visual boards, 200+ ready-made templates, clever no-code automations, and easy integrations. In addition, custom dashboards simplify reporting, so you can evaluate your progress and make data-driven decisions.
Smartsheet is an online work execution platform empowering organizations of all sizes to plan, manage, automate, and report on work. Over 80,000 brands rely on Smartsheet for project and work management.
ClickUp is one of the highest-rated project management tools today. Use Docs, Reminders, Goals, Calendars, Chat, scheduling, assigned comments, custom views, & more with this all-in-one project management tool.
Used by 800,000+ teams in companies like Airbnb, Google, and Uber, it brings all of your projects into a single app! Built for teams of all sizes and industries, Our fully customizable & proprietary features make it a must-have for anyone wanting to keep project management in one place.