One can answer what is Project Charter simply by defining it as a formal outline of a project is presented in the form of a Project Charter within an organization. It discusses the various aspects of the project, including its scope, the individuals working on it, its milestones, its finances, and any possible dangers. Even though it is not the same thing as a project plan in that it does not go into depth on individual activities that are included in the project, many organizations regard this document to be a vital aspect of the Project Planning process.

A successful Project Charter provides an overview of the project's objectives and scope and makes sure that all of the project's sponsors and other interested parties are on the same page. It serves as a centralised, easily accessible point of contact for everyone participating in a project. When it is still necessary to secure buy-in from stakeholders, project sponsors should be assisted in doing so.

The Project Charter component generally include the background of the project, the stakeholders involved, the budget, the risks, the milestones, and the deliverables; however, Project Charter can vary greatly and depends on the types of project and the organizations.

This list is normative, in that it indicates what "should" be included in a charter. Even if one or more of the information items on the list are missing from a document, that document can still be deemed to be a charter. There is a continuing debate among industry professionals as to whether return-on-investment calculations are meaningful for regulatory or mandated projects, and many information technology projects do not include ROI analysis. If a return-on-investment calculation were truly required for a Project Charter, very few projects would be considered charters.

How to identify a Project Charter in Project Management?

The crucial issue besides asking what a Project Charter is that "Does a project have a charter?". This is answered by the concept itself. The following are the inquiries:

Is the sponsor aware that the project already exists, and if so, does the sponsor think that it should continue to exist? Does the sponsor know who the Project Manager is, and do they agree with that person's ability to oversee the project? In order for the project to be successfully finished, has the project sponsor given the Project Manager the authority to make decisions regarding money, people, and other organizational resources?

Has the sponsor ever indicated, even indirectly, that the following questions should be answered with a "Yes" by sending an email, writing a memo, or speaking at a meeting?

If any of these questions would have been answered with a "yes," then the project already has a charter. When put forth in this manner, it becomes apparent that all projects that were completed successfully must have been chartered at some time. If a project does not have a charter and the Project Manager spends time, money, or other resources on it anyway, the Project Manager will most likely be fired for insubordination. Without the blessing of at least one person, forward movement is impossible in the vast majority of organizations.

Purpose of Project Charter

There is essentially three purposes of the Project Charter, and they are as follows:

• Utilize a comparable structure for ranking projects based on their Return on Investment, which will allow you to give the project your approval so it can move forward.

• Serves as the key sales document for the project, with ranking stakeholders receiving a 1-2 page summary to distribute, present, and have accessible for the purpose of fending off other projects or operations run at project resources.

• It acts as one of the central points for the entirety of the project. For instance, it is a baseline that can be used to assist with the management of the scope of the project during meetings of the team or meetings controlling the change.

At the beginning of a new phase or project, the group that is responsible for initiating the process will draw out a Project Charter. Developing the Project Charter in Project Management and determining who the stakeholders are are the two primary responsibilities of the beginning process group. In many instances, a Project Manager will be the one to write out the charter. The charter will be created with the help of the information and experience that the Project Manager possesses. The Project Manager will collaborate with key stakeholders (customers and business sponsors), the Project Management Office, Subject Matter Experts both inside and outside the organization, other units within the organization, and possibly industry groups or professional bodies to develop the charter. Facilitation methods such as brainstorming, issue solving, conflict resolution, meetings, and the management of expectations, amongst others, will be utilized by the Project Manager in order to develop the charter.

The following are examples of possible Project Charter components  

• Statements of work for the project and agreements on the business case

• Assumptions

• Regulations, standards, and guidelines for enterprises, as well as industry-specific guidelines and requirements

• Organizational procedures, resources, and sample documents

After it has been signed, the charter bestows upon the Project Manager the authority to formally carry out the project and make use of the funds and resources provided by the organization to guarantee that it is successful.

A charter can be drafted for each individual phase of a huge project that is broken up into multiple phases. An example of this would be an initial charter being created at the Scope and Seek phase of a project, which would then be followed by a Planning Charter and an Execution Charter during the build phases of the project.

To create a Project Charter in Project Management, 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. Because producing a formal project plan is often done after the project sponsor has given their official approval, we do not generate a detailed project plan while we are working on developing the Project Charter. In addition to the creation of a comprehensive project plan, an official sign-off makes it possible to distribute cash and resources. The high-level objectives, scope, risks, assumptions, constraints, and requirements for the project are defined at the beginning of the project. This is done so that the viability of the project may be evaluated through meetings with key stakeholders.

Components of a Project Charter 

In this example of a Project Charter, we have provided specific information regarding the Project Title and Description, the Project Manager Assigned, and the Authority Level, as well as the Business Case.

The following Project Charter components are mentioned in the charter for the project:

• Business Plan

• Picking Out a Project to Do

• The purpose of the project or its justification

• Objectives of the project that can be evaluated, as well as criteria for success

• Essential Prerequisites at a High Level

• The assumptions and the constraints

• A high-level explanation of the project as well as its limits

• High-level threats

• A Condensed Version of the Milestones

• Budget Summary

• An Inventory of the Stakeholders

• Requirements for project approval

• The role of the Project Manager, and also the responsibilities and levels of power, have been delegated.

• The name of the individual who is sponsoring the Project Charter as well as their level of power(s).

What is Project Charter in detail?

A participant in a discussion group organized by the Financial Services Special Interest Group of the Project Management Institute distributed a sample charter template that contained 32 headings and subheadings and could be as lengthy as 25 pages. This document would be considered a detailed project plan in many different organizations, and it would be sufficient for the full and complete commitment of both the budget and the schedule for the project. It is possible that a document of this type may be required, but it cannot serve as the initiative's first charter. It is possible that this will be the charter for the second part of the project, but not for the first phase. The amount of time and effort required to prepare such a plan is excessive. According to the conventional workflow of "Initiate-Plan-Execute-Control-Close," the document would have required a large amount of planning and possibly even early execution.

During the Initiation phase, the charter is drafted prior to the allocation of major resources. A preliminary Project Charter ought to be condensed, clocking in at no more than a few pages at most. As long as the authority is communicated to the project and the Project Manager in an understandable manner, they can be as brief as a single page.

In many cases, the success of an organization or project depends on the submission of documents that are longer and more structured. These documents will serve as the governing document, replacing the brief charter that was first developed for the project team. This is a natural process that ought to be fostered in order to succeed. However, the charter is best understood in its most fundamental form, which is when it transforms an idea that someone has been mulling over into a project that has been authorized. It is vital that you are familiar with both the extended and condensed versions of this important text.

What is a Project Charter With Multiple Charters

A normal project will consist of a few different charters at the very least. A smart Project Manager must comprehend the breadth of the existing charter and make preparations in advance to develop a new charter that will apply to the subsequent phases of the project. In accordance with the PMBOK® Guide, the initiation processes are carried out in each phase of a project, and each phase also has a charter. As was mentioned earlier, a lot of Project Managers have trouble figuring out what their original charter should be. Because the charter for each step of their project is typically more nuanced, it is considerably more challenging to identify the charter for each part of their project.

Charter Hierarchy 

In certain cases, the transition from one phase of a project to the next will take place with minimal fanfare or celebration. If the customer or sponsor has limited comprehension of the stages, it is difficult to imagine how they could give their approval to have the charter written for each phase. It does not appear that it will be feasible to obtain a charter for a certain phase unless the sponsor gives their blessing.

The authority to supervise all of the internal activities of the project, including the transitions between phases, has been given to the Project Manager by the sponsor. The sponsor delegated all of the overall project authority to the Project Manager, which means that the Project Manager can take the role of authorizing agent for each phase of the project.

The work organization and stages are defined when the Project Manager constructs the work breakdown structure (also known as a WBS). In most cases, the specification of each phase as well as each deliverable will include a business requirement. There is a possibility that some deliverables will be of a technical character, with a tenuous or nonexistent connection to the business requirements established in the initial Project Charter. The business requirements for each phase or deliverable are laid forth by the Project Manager in the project's work breakdown structure (WBS) as well as in other project papers. When a Project Manager gives their stamp of approval on the first task in a phase or deliverable, they are, in effect, handing over a charter for that phase or delivery. The person authorizes the beginning of the phase by attaching the work order to it. The business reason and other aspects of a charter are provided by the work breakdown structure (WBS) and accompanying project documentation.

Within a project, the levels of authority are organized in a hierarchy. In most cases, the authority to run the project is given to the Project Manager by the sponsor. After that, the Project Manager is able to issue authorization for work that falls within the parameters of the power granted to them by the sponsor. On some projects, the Project Manager may delegate authority to persons such as team leads, sub-Project Managers, and other individuals in order to facilitate the completion of the work. These leaders and managers will occasionally develop their very own charters in certain circumstances.

In which situations does it Become Necessary for the Sponsor to Re-Charter

In some projects, the sponsor could reauthorize the undertaking at the beginning of an existing phase or at the conclusion of an existing one. It's possible that the initial charter will include some restrictions on its scope or definition. In the case of an endeavor involving research and development, for instance, the first charter might only grant authorization for study and research up to a predetermined monetary limit. The sponsor needs to provide the Project Manager with a new charter before the project's budget limit is breached and before development work may begin on the endeavor. Without a new charter, the project would be in violation of the law.

There is a possibility that the revised Project Charters will be very different from the original Project Charter. They might consist of things like detailed work plans, budgets, lists of deliverables, and other things. These revised charters may be several pages long and include all of the components that are required for a comprehensive project plan. It is not uncommon for the development of a plan for the subsequent phase of a project to be one of the final deliverables of a project phase. All of the elements that make up an all-encompassing project plan might be included in these rewritten charters.

Unanticipated occurrences have the potential to render a project's charter useless. The project team will frequently seek clearance for modest adjustments in order to ensure that the work is still pertinent; however, this may cause the charter to become increasingly out of date. It's possible that the change requests have been included in these projects like the new Project Charter. It's possible that the Project Manager will find it advantageous to request that the sponsor give the updated charter its official approval. A new charter has the potential to help in:

• Ensure that all of the team's efforts are focused on a single, well-documented vision.

• Raise the spirit of your team by formally acknowledging the changes to the project.

• Confirm the support of the executive team for the project to increase access to the resources of the organization.

The particular conditions of the organization along with its internal regulations will decide when and if it is necessary to apply for a new charter. Both the Organizational Strategy and the Charter are Presented Here.

Many Project Managers are eager to contribute to the formulation of organizational strategy, but only a select handful actually have a voice in the matter. Project Managers are eager to participate in the preliminary deliberations that concern the projects they oversee. There is significant interest in contributing to the formulation of the strategy that will direct future project launches inside the organization. By drafting and negotiating a charter, the Project Manager has the opportunity to contribute to the organization on a more strategic level. The individuals inside the organization who are responsible for strategic planning can view him or her. Strategy and action are brought together by an effective charter. It is possible for the charter to ensure that there is a clear connection between the project and the organizational strategy.

When looking forward to figuring out whether or not a project will actually serve the strategy of an organization, a charter is the best tool to use. The initial expenditure required is not very high because the project is brand new. If it turns out that a project is not actually linked with the overall strategy of the organization, the charter offers the best opportunity to cancel it before any resources are thrown away. If Project Managers were more vigilant in preventing misaligned projects from getting off the ground, there would be a significant reduction in the number of failed projects.

Although it is brief, the charter should incorporate the requirements or objectives of the firm. The particulars of the implementation are not known as of now. This is the level at which organizational strategy operates, focusing on the needs and goals of the firm while ignoring execution specifics. A simple comparison can be made between a Project Charter and a vision statement, business plan, or strategy document to determine whether or not the two are compatible with one another. The goals of the company are articulated quite specifically in the charter. The process of drafting the charter presents a one-of-a-kind opportunity to precisely connect the project with the broader corporate objectives. 

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Conclusion

In the aforementioned blog, we put forward all the things you may need to understand about Project Charter. It can really help in improving efficiency if implemented correctly and is an important part of any project.