Formulating a Project Charter

The project charter is the formal kickoff document that starts the project going. It differs from the project concept document in that the charter is an official document that carefully stipulates the resources that will go into implementing the project. The project concept document is one that says "I have a project here and, from what I can tell, this is what the project ' s all about." After your project concept and requirements formulation documents are done, you have enough information to create the project charter.

Note In the PACE (planning, activating, controlling, and ending)

methodology I mentioned in the previous chapter, you combine the project concept, requirements, and charter documents into one paper that, when signed by the sponsor, authorizes the project to go forward and allows the use of resources to create the project ' s deliverables. Once this is done, you prepare a project plan, then put your project team on the project and work toward its finish.

The project charter is a very fundamental document. It includes, but isn' t necessarily limited to, the following components:

Authorization for the project to begin

■ The appointment of the project manager

■ A brief business justification for the project

■ Necessary accounting criteria used to accumulate and track project costs

The charter is usually written by the PM but published by the person authorizing the project work and providing its funding.

The exam objective 1.2 says "... which outlines an enterprise's minimal requirements for a project charter...". This implies that people with the authority to put formal corporate documentation into place have synthesized a de facto project charter boilerplate for you to use—one that stipulates the minimum amount of information needed in a project proposal.

If such boilerplate exists, you' l l have an easier time constructing your charter, of course. But you might find that a "starter" document doesn't exist and you' l l have to build one yourself. I listed the components that go into a good project charter. Let ' s discuss them in a little bit more detail.

Authorization The project charter authorizes the project to officially begin. That' s why it' s called a "charter," because it is the formal declaration that the project exists and has been agreed to by the person or persons authorized to allow it.

Appointment The project charter appoints, by name, the individual(s) who will be responsible for the project. If a PM vacates a project and a new one is appointed, it ' s not necessary to formulate a whole new charter, but there should be room on the charter to make a note of such changes. Methods by which the charter is amended vary by company policies and guidelines. Typically they' re handled under some form of change-management practices employed by the company.

Business justification In this section of the charter, you describe, in business terms, why the project is being considered—how the business will benefit from the deliverables of the project. Dor example, you might have something like this: "The introduction of a more sophisticated call- routing program will enhance the business' s customer support capabilities, reducing the wait times that customers experience while waiting for customer-service personnel."

Account establishment It is always all about money. Never forget that. It ' s about money. While people have a vested interest in solving a given business problem, most individuals are good stewards of corporate funds and want to make sure that the coffers aren' t drained in pursuit of a project that may not produce much bang for the buck. The charter will establish an account where funds are appropriated and utilized and an accountability method so that those funds can be tracked.

Monitoring Although the project manager writes the charter, most often the executive sponsor is the one who publishes it. The person authorizing the work and publishing the charter is also typically funding the project.

The formal sign-off by the project sponsor(s) puts the project into motion. The sign-off sends the statement: "I agree with the scope of this project and authorize not only the consumption of financial resources, but also of organizational resources, toward the successful completion of this project." The project charter reflects the objectives of the project, agreement by management as to the requirements of the project, and input from stakeholders.

It' s time to add some detail to our project management process diagram. Digure 2.3 is the top portion of Digure 2.1, showing everything you' ve read about up to this point. This is how far you ' ve gotten once you' ve written the charter.

Figure 2.3: The IPECC initiating phase of a project
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