A project charter is a document that formally authorizes a project’s existence and gives the project manager the authority to apply organizational resources to project activities.

In this guide, we will cover what a project charter is, the benefits of using one, best practices for creating an effective charter, and examples of project charters used in various workplace settings.

What is a Project Charter?

Definitions

A project charter is a document that outlines and authorizes a project.

It formally documents the project’s goals, objectives, scope, timing, milestones, roles and responsibilities, risks, and measures of success.

The charter authorizes the project manager to use organizational resources for the project.

Background Overview

Project charters provide a preliminary delineation of roles and responsibilities, outline the project objectives, identify key stakeholders, and define the project manager’s authority.

They serve as a reference document throughout the project lifecycle, ensuring the team remains aligned with the business case and goals.

Project charters and team charter meetings are used in the initiation phase of a project before significant resources are allocated.

Key stakeholders and sponsors collaborate to outline the project’s vision, goals, and framework.

Features and Benefits

Some key features and benefits of developing a project charter include:

• Formally authorizes the project.
• Documents scope, objectives, and measures of success.
• Outlines high-level roles and responsibilities.
• Helps align stakeholders on the project goals and framework.
• Provides the project manager with authority over resources.
• Creates a reference document for decision-making throughout the project.
• Sets clear expectations for timing, budget, and milestones.
• Reduces risk by outlining known constraints and assumptions.

Importance of Project Charters

Why Use Project Charters?

There are several key reasons why developing a project charter is considered a best practice:

• Ensures stakeholder alignment on the project goals, scope, timing, and measures of success.
• It grants the project manager the authority to lead the project and apply resources.
• Creates a document for reference throughout the project lifecycle.
• Outlines project assumptions, risks, and constraints.
• Sets clear expectations for all parties involved.
• Reduces ambiguity surrounding the project goals and framework.
• Improves decision-making aligned to the charter.
• Increases chances of project success by formalizing details upfront.

The project charter is a critical document that brings stakeholders together to formalize project details, grant authority, and set expectations.

This leads to increased alignment and reduces project risk.

Best Practices for Project Charters

What to Include

Some best practices for developing an effective project charter include:

• Project purpose/goals – Outline the overall goals and justification of the project. Link to business objectives.
• Scope – Define the scope and limits of the project, including deliverables, exclusions, and constraints.
• Milestones – Identify and celebrate key milestones, target completion dates, and budget estimates.
• Roles and responsibilities – List the project sponsor, key stakeholders, project manager, and authority levels within organizational charts.
• Measures of success – Define quantitative and qualitative measures to track project success.
• Assumptions and risks – Document known assumptions, risks, and constraints that could impact the project.
• Signatures – Include signatures of critical stakeholders to authorize the project formally.
• High-level requirements – Outline major requirements and project objectives.
• Change management – Define the change approval process and who has authority.

Tips for Effective Project Charters

• Keep it high-level but specific enough to set clear expectations
• Make sure critical stakeholders review and sign off
• Align the goals to business objectives and strategy
• Set measurable outcomes to track success
• Outline project assumptions, risks, and constraints
• Define change approval procedures upfront
• Establish apparent authority of the project manager
• Set realistic but aggressive timelines and budget
• Use as a reference tool throughout the project lifecycle

Examples of Project Charters

IT Software Development

An IT project to develop a new software application may include these key sections:

• Goal – Develop a new iOS mobile app for customers.
• Budget Estimate – $400,000.
• Scope – iOS app with features x, y, z; Integrations with databases A and B.
• Milestones – Complete design by 5/1/22; Complete development by 8/30/22.
• Roles – Project sponsor: CTO; Project manager: John Smith; Team members: Developers Sue, Bob, Lisa.
• Success Measures – App rated 4+ stars; 10,000 downloads in the first month.
• Risks – Delay in API integration; Underestimated complexity.

Construction Project

A construction project charter may contain:

• Goal – Build new office headquarters in Atlanta, GA.
• Budget – $20 million.
• Scope – 5-story, 200,000 sq ft building; LEED certified.
• Milestones – Break ground 6/1/22; Complete construction 12/30/22.
• Roles – Sponsor: CEO; Project manager: Jane Doe; Contractor: ABC Company.
• Success Measures – Completed on time and under budget.
• Risks – Permit delays; Material price increases.

Internal Software Upgrade

An IT project to upgrade internal systems may have:

• Goal: Upgrade the ERP system to the latest version by Q4 2022.
• Scope: Upgrade ERP system, including modules for supply chain, finance, and HR.
• Roles: Sponsor – CIO; Project manager – John Smith.
• Milestones: Complete upgrade of employee training by 9/1/22; go live on 10/1/22.
• Success Measures: 100% uptime in first-month post-go-live; Project completed under $100K budget.
• Risks: Training takes longer than expected; Custom integrations break after upgrade.

Business Process Improvement

A business process improvement charter may contain:

• Goal: Reduce new customer onboarding time by 50%.
• Scope: Onboarding process for new client accounts.
• Roles: Sponsor – Sales VP; Project Manager – Jane Doe.
• Milestones: Document current process by 7/15/22; Implement improvements by 9/30/22.
• Success Measures: Onboarding time was reduced from 10 days to 5 days.
• Risks: Resistance from the sales team; Complex integrations.

Conclusion

Developing a detailed project charter is a critical best practice to launch any successful project.

The charter authorizes the project, aligns stakeholders, defines goals and success metrics, outlines roles, documents risks, and sets expectations.

This process leads to increased clarity, accountability, and oversight to boost the chances of achieving project objectives.

Use the charter as an authoritative reference tool throughout the project lifecycle to ensure that activities remain aligned with the original goals and parameters.

Catherine Fitzgerald B.A. M.A. PGDip( Founder )

With over 30 years of experience in training and development, I am the founder of Oak Innovation, a company dedicated to empowering training professionals with high-quality, editable course materials. I hold a Bachelor’s and Master’s degree from University College Cork and have furthered my expertise with qualifications in Professional Development and Training from University College Galway. Since founding Oak Innovation in 1995, I have focused on helping busy training professionals and business managers enhance their courses efficiently by providing them with instant access to customizable training materials. Our training solutions have been trusted by leading organizations such as Apple, Time Warner, and Harvard University, reflecting our commitment to excellence.