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Project Charter

Develop a Project Charter

A Project Charter is a formal document that authorizes the project team to execute project activities and provides the project manager with the ability to apply organizational resources to project activities. The PMP exam could include six to ten questions on project charter. An understanding of the components of the project charter, effective use of each component and its application during the course of the project is essential to appropriately answer the questions during your PMP exam.

Developing a project charter involves assessing the project feasibility basis the given constraints and planning the project at a high level. We do not create a detailed project plan while developing the project charter as it is generally done after official sign-off from the project sponsor. An official sign-off allows allocation of money and resources and thus supplements the development of detailed project plan. During project initiation, you define high-level objectives, scope, risks, assumptions, constraints, and requirements with a view of checking the feasibility of the project by meeting the important stakeholders.

Developing a project charter requires a few activities as follows:

  • Identification of stakeholders/customers: A project manager needs to identify all the stakeholders and the customers at the start of the project.

  • Identification of project scope: Scoping is a critical activity to create a boundary of what work to be done and what not to be done. We will cover the project scope in detail in the Scope Management chapter.

  • Identification of project risks: Identifying risks is an on-going activity of the project manager. This activity starts from the onset of the project and continues throughout the life-cycle of the project.

  • Identification of project assumptions: There are multiple activities which are done on the basis of organizational and project environmental factors. These activities are executed either because of process policies or certain assumptions. Thus, it is important to uncover all the assumptions. This is usually done by the project manager in discussion with other stakeholders.

  • Identification of high-level project requirements and objectives: Detailed level requirements and objectives are not possible at this stage of the project. Hence, the Project Manager should focus on high-level project requirements and objectives.

  • Identification of project success criteria: Project Manager should also identify the success criteria of the project. This is used as a baseline and compared with actual project performance.

  • Documentation of identified elements: All the identified elements need to be documented to help standardize the project work.

The above cannot be done by an individual project manager. This requires meeting with important stakeholders, subject matter experts, and related process people.

An important point to observe is that the creation of a project charter encompasses all the project areas including, scope, risk, time, cost, quality, human resources, communications, and procurement). Thus, making the Develop Project Charter an integration process.

Develop a Project Charter – Example

In this example of a project charter, we have detailed the Project Title and Description, Project Manager Assigned and Authority Level and Business Case.

A few questions that are answered here include:

  • What is the project?

  • Who is given the authority to lead the project, and can he/she determine, manage, and approve changes to the budget, schedule, staffing, etc?)

  • Why is the project being done? On what financial or other bases can we justify doing this project? Describe the project purpose and justification.

Further details of the Resources Preassigned, Stakeholders and Stakeholder Requirements As Known.

A few questions that are answered here include:

  • How many or which resources will be provided?

  • Who will be affected by the project (influence the project), as known to date?

  • Requirements as stated by the Stakeholders

We have also listed the names of project sponsors who will authorize the project.

A few activities that also need to be added to a project charter includes High-Level Project Risks, Product Description and Project Objectives, wherever applicable.

The project charter includes the following:

  1. Business Case

  2. Project Selection

  3. Project Purpose or Justification

  4. Measurable Project Objectives and related success criteria

  5. High-level Requirements

  6. Assumptions and constraints

  7. High-level Project description and boundaries

  8. High-level risks

  9. Summary milestone Schedule

  10. Summary Budget

  11. Stakeholder list

  12. Project approval requirements (i.e, What constitutes project success, who decides the project is successful, and who signs off on the project)

  13. Assigned Project manager, responsibility, and authority level

  14. Name and authority of the sponsor or another person (s) authorizing the project charter

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