Any professional who leads or manages projects should know what a project charter is and how to use it. This document should enable you to save time, boost your team's productivity and eventually deliver a better product. In this article, you'll discover the project charter definition and will get to know how it differs from the statement of work. Plus, you'll learn about the software that you might want to use to compose a project charter.
Project Charter: What Is It?
The broadest and the most abstract project charter definition states that it's the sum of the three components of a project:
Yet if we reduce the essence of this document to these three elements, we might misinterpret its importance. The term "charter" in this case is required to authorize the project to exist. It accentuates that the project manager has enough rights and resources to achieve the set goals.
So here is a more comprehensive project charter definition: it's a formal project authorization that documents the shared understanding of a project's scope, development and objectives. Plus, the charter defines the roles and duties of all professionals who participate in the project.
Is Project Charter Synonymous with Statement of Work?
The project charter and statements of work (SoW) are not synonyms. To maximize the efficiency of your efforts, you need both types of documents. Normally, you would compose the SoW first and incorporate it into your project charter later.
In the statement of work, you should provide answers to the following questions:
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Why should your organization launch this project?
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What is included or not included in the project?
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What are the project's scope and deliverables?
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What are the project's assumptions and exclusions?
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Which criteria do you propose for accepting the project?
A meticulously created statement of work might save a lot of time and effort for all the professionals involved in the project.
A project charter is a formal document that is based on the statement of work. It authorizes the project manager to spend the budget on the delivery of the project.
Some might state that a project charter is more or less identical to a project plan. In fact, the former serves as a foundation for the latter. You need a project charter before getting approval for your work. It's an initiation document. As for the project plan, it makes sense to compose it only after you get the approval. So these terms are not interchangeable.
The Importance of the Project Charter
Teams and managers can benefit from a project charter in the following ways:
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Better determine the value of the project. Is it worth starting it at all? How realistic are the goals of the project? Will there be enough demand for it?
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Save time. The project charter should enable you to minimize the time that you might need to spend on negotiations and troubleshooting.
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Clearly understand the scope and structure of your budget. You should make sure you have enough funds and can get them on time. Before the project gets started, you should appoint your spending authority.
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Get coherent guidelines to your whole staff. All your staffers should share an identical vision of the milestones and criteria for the measurement of your project.
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Inspires confidence and boosts team morale. If your staffers realize their work is well-structured and efficiently coordinated, they will be more motivated. Their performance will increase and they will make fewer mistakes. When professionals feel confident in what they do, it should become easier for them to meet the deadlines and allocate resources most reasonably.
Your stakeholders and customers can benefit from the project charter as well. First, it becomes easier for them to understand the essence and perspectives of your project. They should be able to give their informed and conscious approval. Plus, they should realize how many resources the project might require. Second, the project charter might serve as an excellent marketing instrument. If you distribute it outside your project team, it can double as a sales document that helps you to justify expenses and investment.
What Should You Include in a Project Charter?
A typical project charter template would suggest the following structure of the document:
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Introduction. Strive to explain to your readers why you need a project charter.
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Business case, project statement and scope. In this part of the document, you should focus on the distinctive features of your project.
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Success criteria. List the factors that are crucial for your project's success. Give a definition to the project's success.
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Major requirements or deliverables. Enumerate the requirements and deliverables of your project. Your stakeholders should understand how you're planning to track your deliverables.
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Budget. Try to estimate upcoming expenses in your project charter. Let your audience know who your spending authority is and what they are responsible for.
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Schedule or milestones. Outline the main milestones of your project. Try to predict when it can be complete.
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Constraints and assumptions. At the moment of composing your project charter, some parameters of your project will remain unknown. Talk about these parameters as well as those that you already know.
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Summary of risks. Which factors might pose a threat to your project's development, when and why? What can you do to overcome these risks or minimize their impact?
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Team and organization. Name all your staffers who will be collaborating on the project. Mention the exact role and scope of responsibilities of each professional.
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Approvals. You should leave some free space in your project charter for stakeholders to record their approval or disapproval.
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Sometimes, your project charter template might also offer three additional sections:
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List of deliverables. Instead of merging the deliverables with the requirements, you can list them separately. You can briefly describe the essence of each deliverable and mention its success criteria.
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Scheduling documents. In this section of your project charter, you may include calendars, timelines or other documents that illustrate the project schedule. When talking about each stage or milestone, you should pay attention to its details and importance.
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Communication plan. Let your audience know how you're planning to inform each person involved about the progress of your project and any potential changes.
The two key characteristics of an ideal project charter are clarity and adequate information.
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How To Compose a Project Charter?
There is no one-fits-all tutorial on composing a project charter. Here, we'd like to share an approximate list of steps that you can modify according to the needs and established practices of your team and company.
- Run a series of roundtables with your staff and stakeholders to discuss the upcoming project. Collect information about the project and invite everyone whose approval you need to start the work. You might want to listen to the opinions of your colleagues, customers and sponsors.
- Take notes. All your conversations should be anchored on the primary objective of your project. As the discussion goes on, you should take notes to fill out the information for all the parts of your project charter. Once you've discussed the main topics, you should switch to the details and record them as well.
- Use a project charter template. You can find many templates on the Internet. Or, you might want to install dedicated software that should facilitate the process of composing your project charter and suggest templates for it. Most templates are customizable: you can edit them so that they meet the specifics of even the most complex projects.
- Include specific information. Try to formulate the goals of your project as precisely as possible. Let's imagine that a client wants you to improve their marketing strategy. This goal is too vague. To figure out what exactly you should do, you might want to ask the client a series of questions. Are they talking about online marketing, or offline marketing, or both? Do they mean the overall marketing strategy of their company — or the strategy for some of their brands and products? What is the available budget? Which goals does the client want to achieve and in which time? Do they want to improve the already existing marketing strategy or create a new one from scratch? You should include the answers to all these questions in your project charter. Here is an example of how it might look: "Our goal is to create a new online marketing strategy for this and that brands by April 2022. The goal of the strategy is to help the company to acquire such and such number of customers and boost its sales to a certain level". Please mind that these two sentences are not your project charter but only its goal. The whole document should also include milestones, a summary of risks and other elements that were listed above. Your readers should get exhaustive and up-to-date information about the project to be able to approve it.
- Review with your colleagues. After you have completed the project charter, you should ask the key members of your team to review it. Do they have any questions? Should you clarify any parts of the document? Do your team members disagree with something that you say? When you realize that the document is accurate and easy to understand, you can proceed to the last phase.
- Present for approval. Once your project charter is ready, you should make an online or offline presentation for your customers, sponsors and stakeholders. It would be a mistake to simply send them the document as an email attachment. Instead, you should create a slide presentation and convince your audience of the practicability of your plans. At the end of the presentation, you should leave time for questions and answers.
This scheme of composing a project charter should be useful for businesses of any size and industry.
Which Software Can You Use to Compose a Project Charter?
Among all the tools that enable you to compose a project charter, you might want to opt for Bitrix24. It's a powerful and versatile system with extensive functionality. You can use it to manage time, tasks and projects, keep a database of your clients, carry out email marketing, use HR tools, benefit from a built-in contact center and many other useful functions. And of course, you can compose a project charter.
When you choose a project charter template, you'll be able to customize it in a couple of clicks. To discuss the document with your team members, you can rely on the internal communication capabilities of Bitrix24 — such as audio calls, videoconferencing, an opportunity to exchange text messages and attach files to them. When you need to edit the document, you can do it collaboratively: other team members can comment on your text and improve it in real-time. Once your project charter gets approval, you can start distributing tasks among your team members in Bitrix24. It should be very convenient for you to monitor the performance of your teams and team members, detect delays or bottlenecks long before they happen and take measures to prevent them.
Bitrix24 is available in on-premise and cloud formats as well as a mobile app for iOS and Android. Its free basic plan accommodates an unlimited number of users and its functionality is rather impressive. If you realize you need more features, you can easily upgrade to one of the three paid plans. The most expensive plan costs USD 199 per month — but thanks to frequent discounts, you might be able to get it for as little as USD 120 per month.
Final Thoughts
Hopefully, you found this article informative and now you better understand the essence and benefits of a project charter. This document authorizes your project to exist and enables you to estimate how many resources it will require. You can use the project charter for sales and marketing purposes as well as for communication with your stakeholders. To compose this document, you might want to use dedicated software that can offer you a comprehensive project charter template — such as Bitrix24.
