The Invaluable Project CharterBy David Clark, PMPThe project charter is arguably the most important document of any project life cycle. It not only defines the unique product, service or result that is needed but also provides the rationale for the project and sets the direction for which every decision and deliverable throughout the entire project should be aligned. Why is a project charter needed?The primary purpose of the project charter is to communicate how a proposed solution to a business need provides value and aligns to an organizations overall strategy and mission. In doing so, the charter serves three important functions:1. Authorize the Project 2. Communicate Expectations 3. Mitigate Risk 1. Authorize the ProjectFormal approval of the charter by the project sponsor not only provides the project manager with authority to apply resources to the project, it also publically declares the sponsors commitment to staff, peers, upper management and business partners. Projects that lack formal approval run the risk of being derailed or even cancelled.2. Communicate ExpectationsThe project charter serves as a communication tool to provide consistent understanding among key stakeholders regarding aspects of the project. Most importantly, it illustrates what the project is, why it exists and who is impacted. It provides all the stakeholders with the same information and a basis upon which questions can be addressed. Without a project charter, stakeholders may draw incorrect conclusions about what the project is and why it exists. 3. Mitigate RiskThe process of creating the project charter provides a huge opportunity to solicit input from key stakeholders and ensure alignment. Knowing early on that a major aspect of the proposed project has not been considered or that the project significantly impacts another project helps to avoid future changes that could be costly or detrimental. Additionally, involving key stakeholders at the onset conveys that their input and support is valued which can help strengthen relationships and build trust. It is absolutely critical to ensure key stakeholders agree to the contents of the charter prior to authorization.What should be included in a charter?The art of crafting a great project charter requires that it addresses the main points, provides an appropriate level of detail and ensures its sustainability over time. The main points of the project effectively convey what the project is and why it is needed. The level of detail must be high enough for upper management to quickly understand the primary concepts while avoiding low-level project details. And the charter must be written in a manner such that the contents remain accurate throughout the entire project.While the type and amount of information contained within a project charter varies, the following information is recommended for inclusion in every charter: Business Need Project Description Constraints (budget, schedule, resources, quality) Key Stakeholders The ideal charter is short, clean and concise. Depending on the unique needs of the project, you might consider including additional information such as: Exclusions (items out of scope) Project Organization Assumptions Methodology Initially Identified Project Risks High-Level Cost/Schedule Estimates Project Dependencies Organization Standards or Policies Early Termination Criteria Projects that lack a well-prepared charter run the risk of stakeholder resistance, major change requests, or even project cancellation. A well-written and properly executed project charter is invaluable to any project.David Clark, PMP is a senior project manager with Sentry Insurance. He has over 13 years of project management experience helping companies in manufacturing, financial services, public sector, and insurance industries succeed. David is a volunteer board member of the PMI Northeastern Wisconsin Chapter and a volunteer board member providing project management support for the Central Wisconsin Childrens Museum. He welcomes your questions and comments.