From this article, you will learn what a project charter is and why you need one. The key elements that make a successful project charter and how you can implement these elements using our free Project Charter Template.
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- What is a project charter?
- Elements that make a good project charter
- Why do you need to create a project charter?
- Project charter examples: When projects go wrong and how a project charter could have helped
What is a project charter?
A project charter is a formal document used in business that states a project’s objectives, and how the project aligns with an organization’s vision. The project charter is produced during the initial steps of a project, issued by the project initiator or sponsor, to formally authorize a project’s existence.
Only 58% of organizations fully understand a given project’s value. Fortunately, project charters close this gap in understanding, which is vital if the initiative is to be fully backed and executed to completion.
Producing a project charter is easy with a template like Process Street’s Project Charter Template. Our template has been built to guide you through the process needed to deliver a good project charter.
Before you jump in and use our template, take the time to familiarize yourself with the term project charter, the elements that make a good project charter, and why a project charter is needed. Having this foundation of knowledge will prevent confusion, and keep you and your team motivated and on top of your project planning processes.
Elements that make a good project charter
For clarity, and to emphasize the point, these elements are explained below.
Producing a project charter: Element #1, project purpose and justification
Firstly, you need to state the business need that a given project is addressing. This gives direction and clarity, building a foundation for strong leadership. Think about it, when everyone in your team knows why the project is being performed, they are more likely to be focused on making the result happen.
You can edit this template to include Process Street’s Stop Task feature. This will ensure that the project’s purpose and justification are determined before any other task in the process is available. A simple action that superpowers your workflow.
Producing a project charter: Element #2, measurable project objectives, and related success criteria
Defining a project’s goals and criteria for success creates a strong statement for what the company is expecting from the project. It ensures everyone is working towards the same goals and are clear on what those goals are.
Producing a project charter: Element #3, project requirements
Project scope defines the features and functions of a project and all the work and requirements needed to complete the project.
Separating project in-scope requirements gives clear thinking for exactly what is needed for project completion. This prevents the over-allocation of resources. Defining the project in-scope is covered later, under element #5.
Producing a project charter: Element #4, assumptions and constraints
Many project issues arise due to unclear assumptions. A lot of the time, assumptions are understood by upper management but there is a failure to communicate these assumptions down the organizational hierarchy. Defining project assumptions in the project charter uses the platform as a means for clear communication regarding assumed criteria for a given project.
Producing a project charter: Element #5, high-level project description and boundaries
When thinking about producing a high-level project description with boundaries, we are determining the project’s scope. The scope is generally defined before the project becomes a project. Documenting the project scope is vital for clarity over what the project creators were thinking.
However, it must be noted that the project scope outlined in the project charter should not be used as the final project scope.
For more information on project scope, read: Project Scope: How to Meet Deadlines and Keep Stakeholders Happy.
Producing a project charter: Element #6, high-level risks
It is normal for a given project to have 1 or 2 significant risks that must be accounted for. For instance, setting up a new website poses risks such as website glitches and security threats.
Risks documented in the project charter are fundamental to the project’s success, and again, generally thought-out way before the project becomes a project. Bear in mind that documenting project risks in the project charter should not take the place of a detailed risk analysis.
For more information on risk analysis and how to perform one, read:
- The Ultimate Risk Management Guide: Everything You Need to Know
- Why You Need a Risk Management Process (+ Free Template)
- Risk Mitigation: What It Is and How to Implement It (Free Templates)
- What Is ISO 31000? Getting Started with Risk Management
- Business Risk: The 3 Main Threats to Your Business and How You Can Manage Them
Producing a project charter: Element #7, milestone schedule summary
The determination of project milestones is completed by project executives.
Project milestones: A project milestone has no duration applied and is used to show the importance of a project’s achievement. Project milestones are incremental events, that build-on one-another until final project completion.
For instance, let’s say an access road needs to be completed before further construction on a given site continues. This is because, without the access road, essential equipment cannot be moved onto the site. The completion of an access road is therefore a milestone to overcome for the completion of the entire project.
It must be noted that a detailed description of project milestones in the project charter does NOT mitigate the need for a detailed project schedule.
Producing a project charter: Element #8, summary budget
Budgets will constrain a project regarding scope. It is important to maintain work inline with a given budget, which should be added to the project charter and communicated in the project’s planning phase.
Producing a project charter: Element #9, stakeholder list
Most projects have one or two major stakeholders. However, a project charter is not the place to list all stakeholders beholden to a given project.
Producing a project charter: Element #10, project approval requirements
Most projects require approval by external stakeholders and other authorities. The project charter should explicitly state approvals that will have a major impact – although a fully comprehensive list of approval requirements is not necessary.
Our free Project Charter Template utilizes Process Street’s approvals feature. This feature allows external stakeholders to approve or reject (or reject with comments) a given task. Continuation in the checklist is not possible until the appropriate approval is obtained. This prevents errors and the continuation of a process that is not in line with stakeholder needs.
Producing a project charter: Element #11, assigned project manager
The project manager should be named to assign responsibility. 3/4 of projects fail due to a lack of involvement from upper management. The assignment of a project manager in the project charter prevents managerial project neglect.
In our Project Charter Template, to assign the relevant project manager an email form-field has been used. By entering the manager’s email into this form field, managerial tasks can be assigned later on in the checklist using Process Street’s role assignments feature. With this feature, you can dynamically invite the relevant managers to a specific task as appropriate. With automatic reminders, you can see how such a feature supports managerial involvement in a given project.
Producing a project charter: Element #12, project/executive sponsor
The project sponsor is one level above the project manager. The project sponsor should be named and their responsibilities made clear regarding the project.
Regarding the above 12 elements, we saw how Process Street features – namely, stop tasks, role assignments, and approvals – support each element for the creation of a successful project charter. However, there are more features you should consider for the creation of your checklists via Process Street. Such features include:
- Dynamic due dates: Adjust when a given task is due via a dynamic due date. In our Project Charter Template, dynamic due dates have been set to ensure checklist completion 1 day before the project charter deadline.
- Webhooks: Webhooks can send automated messages or information from one app, directly to another app. For instance, you could use Process Street’s email widget to send the final project charter summary to a given Gmail account.
- Conditional logic: Incorporate if-this-then-that logic into a given checklist to build paths into your workflows that change depending on the actions that occur.
Why do you need to create a project charter?
70% of projects fail. The top reasons for this failure include:
- A lack of involvement by senior management,
- Lack of effective project management systems,
- Poor alignment between the project and the organization’s strategy,
- Out-of-sync stakeholders, and excessive rework.
The cost of project failure is a staggering $50-$75 million annually.
A project charter prevents project failure by targeting the issues from the root. The above 12 elements needed for a project charter are vital in that they work to prevent project failure.
For instance, element #10 approval requirements maintains involvement from senior management. Detailing the project purpose or justification (element #1) maintains a constant stream of communication between executives and employees.
Our Project Charter Template has been designed using the 12 key elements, and so by using this template you will write a successful project charter.
Project charter examples: When projects go wrong and how a project charter could have helped
If you read some of my previous posts, you will know how I like to communicate the need for a particular process by exposing what happens in the absence of pre-set, established workflows. In this instance, we are referring to following a recognized process for the creation of a project charter. I have listed 3 examples of projects gone wrong due to poor project planning. The mistakes acknowledged in these examples could have been avoided via a successful project charter.
Project charter examples: Projects gone wrong case study #1, Ford Edsel
Ford carried out intensive 10-year market research, spending $250 million before releasing the new Edsel product. However, due to a lack of motivation backing the product, project velocity was slow. An opportunity was missed, as when the Edsel project was ready for commercialization, the market had moved on with compact cars.
With an effective project charter, strong communication channels would have been planned for and maintained throughout the project. As we have learned, a project charter will communicate the need for a given project to maintain motivation across the entire organization.
Project charter examples: Project gone wrong case study #2, TAURUS
TAURUS (Transfer and Automated Registration of Uncertified Stock) was a program created to transfer settlements for the London Stock Exchange System. The system aimed to move from paper share certificates to an automated system. In doing this, it was thought that the cost and time taken for settlement would be reduced, in addition to increasing convenience and reducing settlement risk.
However, the pre-planned project’s scope – the work needed to meet the pre-set objectives – was bypassed. That is, scope creep caused cost overrun, stopping the project before completion.
If you want to find out more about scope creep, read: How Scope Creep Negatively Impacts Project Success (& How to Fix It).
With a project charter, the scope of a given project is clearly defined along with out-scope (project boundaries) to prevent over-budget costs and scope creep.
Project charter examples: Projects gone wrong case study #3, my experience
Before Process Street, I worked for an environmental testing laboratory as a Technical Administrator. My role involved overseeing environmental testing projects from start to end. One such project focused on how the pond ecology in a given area was impacted by surrounding clay pigeon shootings.
This project had a tight budget, and there was a miscommunication regarding this budget between the laboratory and the project’s manager. As such, the first invoice charged more than budgeted, putting the project to a grinding halt until enough funds were raised once more. On top of this, the results obtained from these first samples taken were noncomparable and therefore deemed useless. These samples needed to be re-sampled and re-tested.
If the budget was communicated to the laboratory more effectively i.e. via a project charter, we could have selected relevant but cheaper testing and wasted time, effort, and resources would have been prevented.
How to use Process Street to ensure the success of your project
Process Street is superpowered checklists.
You can use Process Street to create a checklist for any process. Whether this is for the management of your project as a whole, or to create checklists for unique sub-processes.
For more information on how you can create and edit checklists using Process Street, watch the below video: Basics of Creating and Editing Templates.
Before you begin creating your checklists, why not take the time to consider our pre-made templates designed to assist in project planning, management, and execution. These templates are free and ready for you to use right away
I have detailed out top 10 project-related templates below. All you have to do is sign up for Process Street for free and get started!
“Operations keeps the lights on, strategy provides a light at the end of the tunnel, but project management is the train engine that moves the organization forward.” – Project auditor Joy Gomez
Continuation Project Proposal Template
Run this checklist when you need to submit a continuation proposal and update the client on the progress of your project.
Financial Management For New Projects
Run this process whenever you need to manage your finances for a new project so that you’re never again left in the mud whilst your golden idea crumbles around you from lack of funding.
Project Management Process
Run this checklist to manage and complete each project in your pipeline. From project conception and planning to the final stages of closing, this template provides the basic framework to keep every one of your projects on track and target.
Project Proposal Template Checklist
Project Report Checklist
Ever wanted an easy way to present a project for review? Well, that’s exactly what this project report checklist is designed to do. Run this checklist before each meeting to report project status.
Project Request Form Template
Run this project request form template to clearly document your projects before they begin. This is a good template to be used alongside our Project Charter Template.
Renewal Project Proposal Template
Run this checklist when you need to submit a renewal proposal to renew your contract and continue to work on a project.
Scrum Project Management
Although practices vary from company to company, having a regular process to follow during your scrum project management is crucial. Run this checklist for every sprint you undertake.
Solicited Project Proposal Template
A solicited project proposal is a written document that establishes the concept of a project and what it will accomplish. Use this template to submit project proposals and get approval.
Supplemental Project Proposal Template
A supplemental project proposal is created and sent when more resources are needed to complete a project than originally proposed. It’s a request for more funds, supplies, materials, or labor. Run this checklist when you need to request changes or additional resources for the project.
Ensure project success using Process Street’s Project Charter Template
This article has emphasized the importance of a project charter for the successful completion of a given project. However, to avoid common project pitfalls, a project charter must include:
- Project proposal and justification,
- Measurable project objectives and related success criteria,
- Project requirements,
- Assumptions and constraints,
- High-level project description and boundaries,
- High-level risks,
- Milestone schedule summary,
- Summary budget,
- Stakeholder list,
- Project approval requirements,
- An assigned project manager,
- Project/executive sponsor
Using Process Street’s Project Charter Template will ensure all the above elements are included in your project charter.
How do you ensure the success of your projects? Do you use a project charter? What successes and failures have you experienced? Please comment below as we would love to hear from you. Who knows, you may even get featured in an upcoming article!