The Most Important Items of a Project Charter

The charter may be the single most important document in determining the success of a project. It documents the project’s objectives, scope, participants, costs and risks, as well as authorizes resources for its completion. By involving all stakeholders in its creation and requiring the sponsors to sign off on the finished document, it ensures that your business won’t wind up watching what’s intended to be a small effort become an extended drain on resources.

A project charter begins by listing the reasons behind the project and what the purpose is. For a small business, one need that might require a project charter is an inefficient online ordering system. If your IT support has uncovered that your conversion rate for online order fulfillment is far lower than that of your competitors because customers are failing to complete the process, a project charter could note the project purpose as investigating the reason for this inefficiency and proposing a solution.

The charter authorizes the project by name and number, and identifies the project manager who is to oversee the work. The manager’s degree of authority should be noted -- does she have the power to select team members, for example, or do you assign them for her. Initial project resources should be provided with a note on what else can be expected. This project might start off with one full-time employee who has a background in online order fulfillment systems, for example, and the project manager who is able to assign other resources as needed. A charter also includes basic resource information such as costs and schedule.

Documenting the project scope is a critical element of any charter. It documents what the project requirements are and the work needed to accomplish them, and also may specifically indicate what is not included. Particularly for an IT project, having the scope agreed to by all stakeholders can keep what is designed as a small effort from morphing into a massive systems upgrade.

Information on deliverables answers the basic question of customer expectations, including milestones along the way. In the example, the deliverables might be a report that outlines the causes of the problem, the effect they have had on business and a list of potential solutions with their costs. A project of longer duration might require monthly progress reports to satisfy stakeholder concerns.

For any project to be successful there should be a data-driven way to tie the project outcome into organizational goals that are specific enough to be meaningful, but not at such a granular level that your people get lost in the details. A common acronym used for this process is SMART – meaning the goals must be specific, measurable, attainable, relevant and time-bound. You might have a goal that within four weeks you'll have a report with at least five potential solutions for correcting the online ordering problem, for example.

Risks -- the known obstacles to project success or potential problems associated with its efforts -- should be detailed in the charter to make it clear that everyone understands obvious factors that could go wrong and prevent what could be an explosive situation if they occur unexpectedly. It’s possible that any upgrade that would fix the order fulfillment system would require a general hardware and software upgrade that your company isn’t equipped to handle without alternative financing, or that its installation could cause your site to go down for an extended period, costing business and perhaps losing customers.