Every project needs to start somewhere. Someone in the organization identifies a new idea, a problem to be solved, or a business need to be fulfilled, and initiates the project through some form of communication to the group that manages the project initiation process. Depending on the organization and the type of project request, the initial communication has different names–project charter, business case, enhancement request, service request, or investment proposal (to name a few).
In my experience, the project initiation process is a critical component of the overall project delivery process because the time lost "up-front" identifying and formalizing new projects is seldom recovered throughout the remainder of the project life cycle. No matter what you call the document that is used to initiate the project, the process and content utilized to capture and approve the project concept will have a significant impact on time to market and reduce the number of "false starts" associated with new project requests. Consistent and well-understood project initiation processes and deliverables makes it "easier to do business" with the project delivery organization.
For purposes of this blog, I refer to the project initiation deliverable as the Project Charter. This is the term most commonly utilized within the project management community, and is often adopted as the name of the project initiation deliverable within organizations’ project delivery processes / methodologies.
Project Charter Content
The information captured within the project charter is utilized to provide a high level description of the project concept (business need or problem to be solved), and answer some basic questions utilized to justify approving initiation of the next step in the project delivery process (project planning and execution).
- Why? Describes the goals and benefits of completing the project. A good project charter will provide a description of tangible benefits to the organization, including quantification of the potential range of benefits (optimistic – realistic – pessimistic).
- What? Describes the high level scope of the initiative, and the key requirements associated with the request (often in the form of critical success factors).
- Who? Provides a list of the primary person/organization requesting the project (the project sponsor), and the key people/organizations impact by the project (stakeholders). It is helpful to describe how the people/organizations are impacted (e.g., suppliers, subject matter experts, end users, customers).
- When? Highlights timing related requirements associated with fulfillment of the project request (e.g., window of opportunity). In some cases, how the project request will be fulfilled is known, and the project charter provides key project milestones and target dates.
- How? Describes what is known about the project delivery process. In many cases the project is not starting from a "blank piece of paper". The project may represent an enhancement to an existing product or system, or the implementation of a product / technology that has already been identified or purchased.
- How much? Establishes funding available to complete the project request (e.g., amount budgeted in the organization’s budget), and/or cost related parameters associated with fulfilling the project need. In many cases, the project charter will define a rough order of magnitude type estimate for completing the project (e.g., +/- 50%).
- What else? The charter will include any additional information that is relevant to approving the project request and initiating the next step in the project delivery process (e.g., project assumptions or constraints). The project charter may also include an assessment of risks and issues associated with the project request.
Listed below are elements commonly found in a project charter. Many project charters include a summary section that "scores" the request based upon the initial estimates of benefits, costs, timing, and resources. This score is utilized to help evaluate the relative value of the request (compared to other requests) within the project initiation process.
Elements of an Effective Project Charter:
- Background / Description
- Goals & Benefits
- High Level Scope
- Key Product Requirements
- Critical Success Factors
- Proposed Project Delivery Process
- Project Sponsor & Key Stakeholders
- Cost Estimates / Targets
- Target Dates / Milestones
- Assumptions & Constraints
- Known Risk & Issues
- Score / Ranking
Project Charters do not need to be lengthy documents that represent a long and arduous process to complete. The specific content within the project charter should be tailored based upon the type, size and complexity of the project request. The project charter should be viewed by the customer of the project initiation process as an "enabler" vs. a "blocker" to launching a new project.
Who Is Responsible for the Project Charter?
Ultimately the person or group that has identified the business need or problem to be solved is responsible for the project charter. However, in my experience, many areas of the organization do not have the experience, knowledge, or skills required to create an effective project charter. Their "best attempt" frequently does not adequately describe the business need, high level scope, or the best approach to fulfill the need. These project charters are often "hung up" in the project initiation process, requiring significant rework and additional justification prior to approval. Again, delays during project initiation are seldom recovered in the remainder of the project delivery process.
To solve for this problem, I recommend assigning a member of the project office to help the project initiator with gathering and documenting the information required to create a strong project charter. If the person assigned is also the person that is anticipated to be the project manager for the initiative (assuming it is approved), assisting the project initiator with the project charter will streamline the project manager’s on-boarding and ramp-up during the official project launch and planning processes.
6 Attributes of a Good Project Charter
- Written – Although the initial idea may be communicated and vetted verbally, project initiation requires some form of written documentation to efficiently approve the request and launch the project planning effort. In addition, documenting the project charter enables collaboration of key stakeholders, and improvement of the end deliverable.
- Objective – The project charter should fairly represent the perspectives of all key parties involved and impacted by the project request. Although the project charter is not intended to be a legally binding document, it is expected to be a reasonable representation of the anticipated benefits, as well as the estimated effort required to fulfill the request.
- Explicit – A project charter should clearly and concisely communicate each of the key elements of the request–goals/benefits, timing, costs, risks/issues. Based upon the information known at the time the project charter is created, these elements should be described in detail, and quantified if possible. In many cases, the use of project assumptions enables quantification of benefits, costs, and timing. Project charters that contain ambiguous elements are often the source of contention and change during the project planning and execution processes.
- Available – The project charter should be maintained in a location that is available to all stakeholders. Collaboration on the project charter improves the quality of the end deliverable. In addition, the project charter represents a deliverable that will continue to be referenced throughout the project life cycle, particularly during the project planning process.
- Consistent - Establish a template for the content and organization of the project charter. Within the template describe how the content can be tailored based upon the size, complexity, and type of request. Best practices and lessons learned from previous projects are used to continue to enhance the project charter template.
- Approved – As defined by the organization’s project initiation process, the project charter should be approved by the appropriate parties (including sign-off) prior to launching the project planning process. All project charters (in process, approved, and rejected) should be maintained in the project office’s project archives.