Have you ever been asked to do a project, only to discover that the project did not have support of upper management and had a high probability of being cancelled? Are cancelled projects a common occurrence in your organization? To gain support and cooperation for projects, a project manager must obtain a project charter that has been signed off by the project’s sponsor.
The project charter, developed in the initiating process of a project, is a formal document issued by the project’s sponsor that authorizes the project and the project manager. A project charter dramatically reduces the risk of a project being cancelled due to lack of support or perceived value to the company. It documents the overall objectives of the project and helps manage the expectations. Think of it as a target for the project. The document needs to be broad enough so it does not need to be changed, as the project evolves. If the project charter is changed, the changes have to be approved the sponsor.
A project charter is owned by upper management and/or the project sponsor. The charter gives the project manager and his or her team the high-level scope, schedule, and resource window from which to operate. If events change those overall parameters, the sponsors must be contacted and approve the actions.
It is important not to confuse the project charter and the project management plan. The charter is owned by the executive sponsor. The project management plan is owned by the project manager. The project planning process, covered in depth in the following chapters, expands the project charter to a detailed project management plan Any deviations to the plan that are still within the overall window of the project charter can be handled by the project manager and the project team. Many times, however, project sponsors are included in the decision-making process to manage expectations and to give early warning of events that could at a later time impact the charter parameters.
What Is Included in the Project Charter?
The project charter includes fundamental information used to authorize and establish the basis for a project. The charter justifies the project in terms of its value to the company.
Project Title and Description This section includes a simple, high-level description of what is the project. For example, the description may be to upgrade all existing TDM-based desk phones to IP telephones; or to implement softphones on all sales personnel laptops.
Project Manager Assigned and Authority Level This section names the project manager and states whether he or she can determine, manage, and approve changes to the budget, schedule, staffing, etc. The charter gives the project manager authority to make use of company resources to complete the project and may be a big help on projects when authority must be used to gain cooperation.
What a project manager is given authority to do is very company-specific. Some companies allow the project manager to select resources; others require the sponsor to be involved. Some companies allow the project manager to come up with a detailed schedule that meets a requested end date. Others are not concerned with a required end date and let the project manager tell them how long the project will take.
Business Case This section of the charter explains what business problem is being solved with the project. It addresses the question of why the project is being undertaken. The project manager needs to know this, as he or she will need to make many day-to-day decisions, keeping the business case in mind.
Resources Preassigned In this section of the project charter, the sponsor identifies how many and what resources will be provided for the project. Some projects come with a limited number of human resources available or with some team members preassigned. Some team members may need office space, computers, or other capital expense items. Some team members may be in a different geographic location, impacting the project it different ways than a wholly localized team.
Stakeholders This is the sponsor’s impression as to who are the stakeholders. Stakeholder analysis comes later in the project management process.
Stakeholder Requirements as Known This section of the project charter identifies the high-level requirements related to both project and product scope. Known stakeholder requirements are the requirements that have been used to justify the project. Further work to clarify and finalize the requirements will come later.
Product Description/Deliverables This section includes the project sponsor’s indication of what specific product deliverables are wanted, and what will be the end result of the project. It is important to have a clear picture of what constitutes the end result of the project. Is it a report on an emerging technology or a network upgrade? Should the report include recommendations to implement the technology, or is it limited to fact gathering? A measure of project success is that all the deliverables are met.
Measurable Project Objectives This section addresses how the project ties into the organization’s strategic goals, and includes the project objectives that support those goals. The objectives need to be measurable and will depend on the defined priority of the project constraints.
Soft metrics are typically difficult to quantify. If you receive a project charter with only soft metrics, consider it a red flag for needing to establish solid metrics prior to beginning the project. Alternatively, by adding hard metrics to a soft metric statement, the metric can become more meaningful. Hard metrics have a unit of measure (e.g., a percentage of change, a specific dollar value, a unit of time).
Examples of soft metrics include:
- Improve client satisfaction
- Increase product quality
- Improve process flow
- Increase employee productivity
- Improve information flow
Examples of hard metrics include:
- Increase in sales by a defined percentage
- Reduce costs by a defined percentage or specific dollar amount
- Reduce product production waste by a defined percentage
- Reduce manufacturing time by a defined period of time on a per unit basis
A project manager should encourage the project sponsor to convert soft metrics. Instead of “increase product quality,” try using “reduce defective products by [a defined percentage.]” Instead of “increase employee productivity,” consider using “increase the number of calls handled by each contact center agent by [a defined percentage], allowing us to handle more calls with the existing staff.”
Notice in each of the interviews in Appendix C how different metrics are used when developing the project charter. The key “ah-ha” that spans all of the interviews is that the metrics selected for a project’s charter are selected specifically to support the company’s bigger vision or strategy. This was consistent whether the firm was vertically market-centric, conducting internal IT projects, or implementing IT projects for an external customer.
Project Approval Requirements This section identifies what items need to be approved for the project, and who will have sign-off. The question “What designates success?” is answered.
High Level Project Risks Potential threats and opportunities for the project are listed here. In-depth risk identification occurs later in the planning processes.
Signature and Approval The charter requires a signature from the project’s sponsor. The signature is necessary in order to give authority and make the project official. Depending on the environment in which your project will be completed, there could be more than one signature necessary on the project charter.
Sample Project Charter
Do not underestimate the value of the project charter. The project charter is such an important document that a project should not be started without one. If the project charter serves as a definition of how success will be measured, then without a project charter, the project and project manager cannot be successful.
A project charter provides, at a minimum, the following benefits:
- Formally recognizes (authorizes) the existence of the project, or establishes the project—this means a project does not exist without a project charter
- Designates the parameters within which the project manager has the authority to operate
- Gives the project manager authority to spend money and commit resources
- Provides the high-level requirements for the project
- Links the project to the ongoing work of the organization
A project charter is needed because:
- It ensures the project manager understands the sponsor’s needs
- It provides key information needed to get started
- It provides a reference document to make sure everyone is on the same page later in the project
- It provides the basis to plan the project
- It empowers and protects the project manager by describing what he or she is being asked to accomplish
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Exercise: What’s Wrong with This Picture? Using what you have learned in this chapter, analyze this sample project charter.
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Answer: The project charter has a title, but no detailed project description. The project manager is assigned, but what exactly is the contact center director going to do on this project? The goal is to complete the employee transfer to home offices in 90 days, but what happens if the agents have small children at home? How will supervision of the agents be handled? Are there any assumptions or constraints? Does this project have financing? Who is responsible for setting up the home offices to OSHA standards? This product description does not give enough details to know what is and is not going to be included in the employee transfer. What are the deliverables? What are the due dates for the deliverables? Crystal Clearly is one of the sponsors, but if the entire contact center team of agents is being transferred, human resources, IT, and the telephony team should also be included as sponsors. |
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Exercise: Create a project charter for your real-world project. |
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“After you have identified the project, try to find every possible thing you can do to draw out the information and get it
down on paper. It will give you a very good idea of exactly what it is going to take to get it complete.”
—Abe McCallum, CEO, Clikthrough, Inc.
Read the complete interview with Abe McCallum in Appendix C.
During the life of the project, stakeholders can easily lose track of what the project is trying to accomplish. Here are some tricks for using the project charter to prevent this from happening.
The project manager can use the project charter to remind everyone involved on the project exactly what the project is. It
is a great help in preventing or limiting scope creep.
Have the project charter graphically designed (so it looks official). Then send color copies to all stakeholders and team
members’ bosses to post on their walls. This keeps the focus on what is the project, and therefore what is not in the project,
thereby preventing some scope creep. It will also keep team members reminded of the project, making them more apt to complete
their work assignments.
Design the approved project charter to be used as a screensaver by all team members throughout the project. This keeps the
project in the minds of the team members, and serves as a visible reminder to all who see it that an important project is
underway.
Review the charter with the team members at team meetings one-third and two-thirds of the way through the project in order
to keep them focused on the project. Not only will this prevent some scope creep, it will also help the team see if they are
off track.