I believe as PM’s we believe
the project charter is the essential document for your projects. It’s the first
document that will your project life, dictates the tone and direction of your
project and the one document where you may revert back to for referencing
project expectations. However the charter is meaningless unless you have
stakeholder “approval”.
Without a charter the PM and
authorities can’t be established or defined... Among many other critical items;
It's not a formality, it's a necessity. I’ve seen various forms of Project
Charters from formal to informal and inherited projects without project
charters and/or plans creating a lack structure. The lack of structure places a
burden on both parties the customer and the PM. It’s cost effective to include
the Charter in your projects and should be a basic tool in your PM tool belt. A
project charter can be a one-page document, but it can save you a lot of time
and money. Here is why:
What is a Project
Charter?
According to PMI's
PMBOK , a project charter is "a document that formally authorizes
a project and documents the initial requirements that satisfies stakeholders'
needs and expectations".
When is a Project Charter
Written?
A project charter is written
during the initiation phase of a project.
What is the Content of a
Project Charter?
I usually include the
following in a project charter:
· Why the
project is needed
· A
description of the project
· A rough
(+/- 50%) estimate of what the project will cost
· A
justification (economic or other) of the project
What is the Purpose of a
Project Charter?
The purpose of the project
charter is to provide the project sponsor with sufficient information so that
the project can be formally authorized. Once the project charter is approved,
the project team can then proceed to develop the project plan. The project
charter provides a go/no-go decision to develop the project plan.
Project Plan Without Project
Charter
Imagine the following (well
known) scenario: company X requests Project Management Office Y to write a
project plan. The PMO charges the company $ 30,000 to write the plan and gets
the job. When the project plan is finished, it is presented to the company. The
project plan contains the project budget. The project budget is $ 5,000,000.
This amount surprises the company, since they had in mind that the project
would cost at most $ 800,000. The project sponsor of company X can’t approve
the project because of the high budget.
The Importance of the Project
Charter
Had company X taken the time
to approach a PMO to develop a project charter, they would have known that a
+/- 50% estimate for this project is around say $4,500.000. With such a rough
estimate, the sponsor would have never authorized the writing of a project
plan. Company X would have saved time and $ 90,000.
How the Project Charter is
positioned versus a Contract when you are in a client-supplier
relationship?
At the end of the day, the
contract is the ultimate place to refer and in such the Project Charter
shouldn't be a re-statement of the contract. In another words the project
charter is a document that exists within the supplier organization and is
provided by a sponsoring business manager (who accepts the cost, risk, etc. of
creating the deliverable) for the project manager (who is empowered by the
sponsor). In the case of an external contract, the sponsor in the supplier
organization has decided they should respond to and deliver against the
contract and, with the PM, will aim to ensure that the project then complies
with the contract; internally, the work of the PM is authorized, however, by
the charter which may for example impose additional constraints and rules that
are not in the contract.
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