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Project Charter As Agreement Between Project Stakeholders

Eric McConnell
June 7, 2010

Project Charter Definition

Project Charter is a primary document that states initial requirements for the project to meet the expectations of stakeholders. Formally, Project Charter is an agreement between an organization which is committed to producing a product/service and a customer which requests and receives the product or service. Practically, Project Charter is an activity planning tool that helps set obligations, rights and privileges for all the groups and individuals involved in the project.

Project Charter should not be in conflict with Project Business Case and other documents and provide the project team with a single and consolidated guidance on how to perform project tasks and activities. Project Charter gives quick references and overview of the project in whole. Project Charter is to be created on the Project Initiation Stage and implemented on the Project Planning stage. When Project Charter is designed and agreed, it is usually not changed or modified throughout the project life cycle.

The idea behind Project Charter

Why create Project Charter? The idea behind Project Charter lies in the possibility to get a completed and consolidated overview of the project. Project Charter serves as a document which all stakeholders can use to review agreed goals, deliverables, scope and approaches of the project. It also provides information on control mechanisms, and communications plans and responsibilities of the project team. You can learn more about Project Charter and Project Initiation Stage by reading the Project Management Guidelines.

The ideas to create and agree Project Charter is corroborated by the following benefits:

  • Improved partnership between parties involved in the project.
  • Improved project sponsorship.
  • Better recognition of roles, activities and responsibilities within the project.
  • Better decision-making process and team collaboration
  • A well-adjusted mechanism of communication between headquarters and local authorities.
  • An improved project framework to get on-time and on-budget completion of the project.

Creating and Signing Project Charter

The process of creating and signing Project Charter is undertaken at the Project Initiation Stage and usually managed by two persons: the project manager and the project sponsor (the project initiator). The process can be divided into the following two stages:

  • Creating which involves gathering all information required, analyzing requirements and submitting a sample of the document.
  • Signing which involves providing initial data for a new project, setting a list of project requirements, approving the received sample of the document, and signing the final edition of the document.

Since Project Charter is an agreement between the project stakeholders, the project initiator provides the project manager with a solid understanding of the project background, support and approval. In this context, the project manager is committed to developing and submitting Project Charter, and the project initiator is committed to providing all information required and signing Project Charter. Sometimes, the project manager can also sign the document but the right to make the primary signature is belonged to the project initiator (only at the Project Initiation Stage).

Project Charter Components

Project Charter is a consolidated document that includes many documents, statements and approvals. Here are several components of Project Charter:

  • Project Purpose
  • Project Objectives and Scope
  • Project deliverables
  • Project Team
  • Governance
  • Project Plan
  • Project Effort Estimate
  • Project Cost Estimate

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