Project charter development is a critical process that occurs during the initiation phase of the project life cycle. This foundational document formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activities.…Project charter development is a critical process that occurs during the initiation phase of the project life cycle. This foundational document formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activities.
The project charter serves as a contract between the project sponsor, key stakeholders, and the project team. It establishes the high-level framework that guides all subsequent project planning and execution activities.
Key components of a project charter include:
1. Project Purpose and Justification - Explains why the project is being undertaken and the business need it addresses.
2. Measurable Project Objectives - Defines specific goals with clear success criteria that the project must achieve.
3. High-Level Requirements - Outlines the major deliverables and product requirements expected from the project.
4. Project Description and Boundaries - Provides an overview of what is included and excluded from the project scope.
5. Overall Project Risk - Identifies initial high-level risks that could impact project success.
6. Summary Milestone Schedule - Lists major milestones and target completion dates.
7. Summary Budget - Provides preliminary cost estimates and funding requirements.
8. Stakeholder List - Identifies key individuals and groups who have interest in or influence over the project.
9. Project Manager Assignment - Names the project manager and defines their authority level.
10. Sponsor Authorization - Includes approval signature from the authorizing sponsor.
The development process typically involves gathering input from stakeholders, reviewing business cases, and analyzing organizational strategy alignment. The project sponsor usually initiates charter creation, while the project manager may assist in developing its content.
Once approved, the charter becomes a reference document throughout the project, ensuring alignment with original objectives and providing legitimacy to the project manager when making decisions or requesting resources from functional managers.
Project Charter Development
What is a Project Charter?
A project charter is a formal document that officially authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activities. It serves as the foundational document that defines the project's purpose, objectives, and key stakeholders.
Why is Project Charter Development Important?
The project charter is critical for several reasons:
• Formal Authorization: It provides official approval to begin the project and commit resources • Establishes Authority: Grants the project manager legitimate power to lead the project team • Defines Scope Boundaries: Sets initial high-level scope and prevents scope creep • Stakeholder Alignment: Ensures all parties understand and agree on project objectives • Reference Point: Serves as a baseline document throughout the project life cycle
Key Components of a Project Charter
A comprehensive project charter typically includes:
• Project Purpose/Justification: Why the project is being undertaken • Measurable Objectives: Specific goals the project must achieve • High-Level Requirements: Initial needs that must be satisfied • High-Level Scope Description: What is and is not included • Overall Project Risk: Major risks identified at initiation • Summary Milestone Schedule: Key dates and deliverables • Pre-approved Financial Resources: Budget allocation • Key Stakeholder List: Primary parties involved • Project Approval Requirements: Success criteria • Assigned Project Manager: Name and authority level • Sponsor Authorization: Signature of authorizing executive
How Project Charter Development Works
The process follows these steps:
1. Gather Inputs: Collect business cases, agreements, enterprise environmental factors, and organizational process assets
2. Apply Tools and Techniques: Use expert judgment, data gathering through brainstorming and interviews, and interpersonal skills like facilitation and meeting management
3. Draft the Charter: Compile information into a structured document format
4. Review and Refine: Obtain feedback from key stakeholders
5. Obtain Approval: Secure formal sign-off from the project sponsor
Who Creates and Approves the Project Charter?
• The project sponsor or initiating authority typically creates or commissions the charter • The project manager may assist in development but does not approve it • The sponsor signs the charter to formally authorize the project
Exam Tips: Answering Questions on Project Charter Development
Remember These Key Points:
• The project charter is created during the Initiation phase, not Planning • The sponsor approves the charter, not the project manager or stakeholders • A project charter must exist before detailed planning begins • The charter provides high-level information, not detailed specifications • Changes to the charter require sponsor approval
Common Exam Question Types:
• Questions asking what document authorizes a project - Answer: Project Charter • Questions about who approves the charter - Answer: Project Sponsor • Questions about when the charter is created - Answer: Initiation Phase • Questions about what the charter contains - Look for high-level items
Watch for Trick Questions:
• The project manager has authority AFTER the charter is approved • The charter is NOT a contract with external parties • The charter should be referenced throughout the project, not just at the start • A charter is required even for small projects
Key Vocabulary to Know:
• Statement of Work (SOW): Input to charter development • Business Case: Justification document that supports charter creation • Assumptions Log: Output that begins during charter development