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Why Project Charter is important in Project Management?

Why Project Charter is important in Project Management?

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The executives engage in communication with the individuals in charge of the project. They involve the Project Managers in the decision-making process whenever they distribute tasks. Prior to giving their approval, they discuss the project with the managers of the project. Conversation with the Project Managers takes place prior to the delivery of the Project Charter. A significant number of Project Managers are unprepared to make the most of these fleeting opportunities to affect the direction of their organizations.

If you are aiming to contribute to the project's strategy, the beginning of the assignment is the perfect moment to do so. When a new task is brought to the attention of the Project Manager, they are obligated to make unambiguous requests for particular information as well as clear authority. The simple act of asking questions to explain the assignment kicks off a more nuanced dialogue over the character of the project and the extent of the authority that is being delegated. The Project Manager will be positioned as an organizational strategic thinker if they negotiate for a good Project Charter from the very beginning of the project. Any modifications made to the charter in the future will only serve to bolster that viewpoint.

The Project Manager should begin asking important questions as soon as the project has been allocated to them. During the course of the assignment is when questions regarding the project's place with respect to overall organizational strategy should be asked. If there isn’t any ambiguity on the nature of the partnership, the charter can provide a mechanism for clearly documenting those assumptions and gaining confirmation from the sponsor that the assumption is accurate. In the event that the project is already underway and a new Project Manager is assigned, reconfirming the existing charter or establishing a new one is an effective approach for the new Project Manager to establish credibility.

The Project Manager is responsible for determining the extent of his or her own power as well. However, the Project Manager exhibits their level of maturity by asking these questions early on in the process. The shape that this definition takes will vary depending on the organization. The declaration of authority and support made by a sponsor is known as a charter. A professional Project Manager will insist on having a detailed charter in place before beginning work, and especially before requesting other members of the team to take action in his or her stead.

Authorship of Project Charter

It is not simply enough to answer what is a Project Charter in Project Management alone. We also need to focus on who creates the Project Charter. If you give other people control over the creation of the charter, you are effectively giving them control over the promotion, marketing, and direction of the project. The most capable sponsors will shine in these capacities, but not every sponsor will. A disproportionally high number of Project Managers are disheartened because the sponsors of their projects refuse to set down a detailed charter. There is no mention of who writes the charter anywhere in the definition; all that is said is who "issues" it. It is possible for Project Managers to write the charter on their own and then submit it for approval. It is not important who writes the charter; what is important is that it be approved and supported by an individual who possesses sufficient authority.

In rare instances, the project sponsor might not be ready or able to give their stamp of approval to the drafted charter. Sponsors have the option of either accepting or rejecting any changes that are made. The refusal to sign a document may be an indication of misunderstanding, a lack of support, or perhaps something more serious. A skilled Project Manager needs to put a halt to work until the problem has been remedied. It is a recipe for disaster to move on with a project without first obtaining the necessary authorization and definition.

Because it enables you to do so, the charter is a one-of-a-kind opportunity to increase the maturity of the organization. Before proceeding further, it is important to think about the objectives and plans of the company. Maintain authority over the vetting and distribution of organizational resources.

Establishing standardized procedures and controls for the authorization of new projects is one of the most effective ways for organizations to significantly enhance their Project Management processes and get much better results. Establishing Project Charter guidelines can be beneficial to both portfolio management and program management because one of the primary functions of portfolio and program management is to oversee the beginning of new projects.

Importance of Project Charter

A project that does not have a charter has the potential to fail in the same way that a film that does not have a script has the potential to be a train wreck. Documenting and validating the existence of a project is the single and overarching objective of a Project Charter. This document will serve as verification that organizational resources have been committed to the project and will operate in that capacity. Project Managers are required to draught a Project Charter in order to conduct an analysis of the following factors.

  • The motivations behind beginning work on the project

  • The goals and the limitations

  • Detailed steps for completing the task at hand

  • The names of the most important individuals involved

  • Those things that fall within its purview, in contrast to those that do not

  • Early identification of potential dangers and opportunities  Responsibility for the budget and spending at the highest levels

In the lack of a charter, it is impossible to determine whether or not the project was successful.

Application Forms for Project Charters

In most organizations, projects are often started by sponsors, Project Managers, or the chairman of the organization. The tasks and obligations of the members need to be defined in a charter, which is a must. When two or more organizations work together on a project, it helps to cultivate a healthy and productive working relationship between those organizations. The Project Management Office, often known as the PMO, is in charge of handling formal contracts in order to ascertain whether or not the external organization can be trusted.

The purpose of a Project Charter is to be succinct and unambiguous so that it might be utilized to:

  • To get the project off the ground.

  • The key piece of marketing collateral for the project.

  • It acts as a focal point for the entirety of the project.

  • Designed to act as a reference point for figuring out how the project will be carried out.

  •  In order to maintain coherence with the various other organizational techniques

  • In order to persuade stakeholders and executives that the initiative will be beneficial to business.

  • To evaluate the performance of the project as well as its progress when the Phase gate is active.

This high-level document requires attention as well as revisions to the strategic plan, both of which are necessary immediately. For more effective planning and management of projects, a periodic review is necessary.

Project Charter for the Client Company

The Project Charter can be said to be the key document overall, serving as its primary pillar for client companies. This document contains both in-depth specifications as well as concise explanations of the work that will be performed. A general Project Charter is not considered complete unless it has been signed off on by an authorized individual. The authority to bind the agreement is typically conveyed through the signature of the client at the bottom of the document. A consultant officer has provided their signature as the counter signature. 

Who is in charge of creating the charter for the project?

Unmistakably a manager of some sort. He is responsible for getting the project up and running as quickly as humanly possible. In order to make the plan more workable, the first item that has to be developed is the charter. It is finished prior to the stages of planning and development being carried out. 

Even if sponsors have the opportunity to sign the Project Charter, it is ultimately the manager of the project who is responsible for the document. Up to the point where the project is finished, it is the role of the Project Manager to provide recommendations and oversight.

Although it is an important piece of business documentation, the Project Charter is by no means the sole one. The Business Case & the Benefits Management Plans are papers that belong to a Phase of the Project and act as inputs for the Project. When a project is chartered, the alignment of the project with the organization's strategy and the work that is already being done is validated.

Contract vs Project Charter 


It is a document that is used in the procurement process and it is responsible for establishing the legal relationship that exists between the customer and the supplier.

SOWs can be included in contracts; these documents contain all of the deliverables that consumers expect. Customers must first provide their approval before passing contracts on to executing organizations to be fulfilled. 

The Charter for the Project

It is a document that is only available within the organization and is given to the internal team so that the organization may explain to them what is expected of them.

The organization that is executing the contract may be responsible for more than one project and may divide the deliverables for that contract. The sponsor of the organization that is executing the contract may also add some goals or deliverables that are not mentioned in the contract. For example, the sponsor may request that the executing organization build a capability of doing projects like these as part of this project.

The executing organization (the sponsor) must first provide its stamp of approval to the Project Charter before it can be sent to the Project Manager.

Business Plan vs Project Charter 

Business plan

The business plan is a proposal that is used to persuade management or an investment board to provide financial support for the project.

It is developed when the opportunity has been validated and the entrepreneurs have considered all of the choices at their disposal.

Project Charter

On the other side, a Project Charter is formal paperwork that outlines the manner in which a project will be handled. It includes a list of preliminary assumptions, risks, issues, scope, and a high-level timeframe.

To create a Project Charter, you must first determine whether or not the project is feasible in light of the constraints that are presented, and then you must design the project at a high level.

Who Gives Their Seal of Approval to the Project Charter?

One may erroneously think that a Project Manager can sign the Project Charter if you believe that they can do so. The document is not signed by the Project Manager; rather, it is signed by the project sponsor.

Instead of writing it themselves, the sponsor only needs to sign it. The Project Manager is the one who puts together the paper. The authorization to move forward might be conveyed by the use of a formal signature by the sponsor, a formal chartering ceremony, or even just a simple reply e-mail that states "I accept." 

This is all about the importance of a Project Charter in Project Management.  


Simpliaxis is one of the leading professional certification training providers in the world offering multiple courses related to Project. We offer numerous Project related courses such as  Project Management Professional (PMP)® Certification Training, Project Management Techniques Training, PRINCE2® Foundation and Practitioner Certification Training, PRINCE2® Foundation Certification Training, PRINCE2® Practitioner Certification Training, Certified Associate in Project Management (CAPM®) Certification Training, PRINCE2 Agile® Foundation Certification Training, PRINCE2 Agile® Practitioner Certification Training, Primavera P6 v 20.12 certification training, PRINCE2 Agile Foundation and Practitioner Certification Training, Project Management Fundamental Training   and much more. Simpliaxis delivers training to both individuals and corporate groups through instructor-led classroom and online virtual sessions.

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