The Project Charter formally authorizes a project or a project phase. The Project Charter is best delivered at a project kickoff by the project sponsor so that the Project Manager is given explicit authority by the one sponsor. A Project Charter can be very powerful if it is given the proper visibility, because it defines the roles and responsibilities within the project and aligns the project to the strategic goals and objectives of the organization.
Specifically, the Project Charter provides the project manager (PM) with the authority to bring the project team together to accomplish the task of completing the project successfully. It’s true that the PM still faces many resource challenges depending on the structure of the project. For example, in a highly matrixed project, where the PM does not directly oversee many of the Integrated Project Team (IPT) members, it may be difficult to get the dedicated resources necessary. However, a properly constructed Project Charter that is communicated to the project stakeholders as early as possible will help clarify the powers of the PM while setting expectations and responsibilities on the other stakeholders.
A Project Charter is generally issued by an entity outside of the project such as an organization, or a portfolio management unit within an organization. It would not make sense for the project to charter itself. The project cannot technically be authorized until the Project Charter is completed and authorized.
According to the Project Management Body of Knowledge (PMBOK), a Project Charter results from one of the following needs, or business requirements:
A market demand
A business need
A customer request
A technological advance
A legal requirement
A social need
I’m sure there are others. A list is meant to be broken!
Last, but definitely not least, a Project Charter should tie the project to the strategic objectives, in terms of business needs of the organization. If the project is not meeting a specific targeted business need within the organization, then serious thought should be given as to whether the project should be started. This gets into the topic of return on investment (ROI), which is a topic for another day.
The Project Charter should contain the following information:
The purpose or justification for the project through a description of the business needs that the project is going fulfill
The high level project description or requirements
The assigned Project Manager with a specific stated level of authority
The stakeholders, and other key Integrated Project Team (IPT) members
The organizations involved in the project and their role
The project assumptions and constraints that will impact the project
Information about the Enterprise Environmental Factors that may be pertinent to how the project will govern and be governed (This can be anything from government/industry standards to market conditions, risk tolerance, decision-making structures, project management information systems (PMIS) and company culture)
Organizational process assets (e.g., standard processes, procedures and tools that the organization uses)
The business case justification (Does the ROI make sense?)