Project Charter: How Important Is It?

18 Oct 2010 - 05:36 AM under Scope | Posted by PMStudent


Note:? This article is by Randy Tangco, PMP, CSM and due to technical difficulties I have not yet been able to get a guest author account set up for him.? This was previously published for a few days before the trouble began.

The steering committee made a decision. They need to create a project because there is a business need to be resolved. Assign the project manager, assign the resources, and start working. Hmmm? Does this sound familiar to you?

What is the first document you need to have after the selection of a project? The project charter, of course! Every project management practitioner knows that the project charter is an important document to any project as it is an indication of your authority to start a project and use company resources as the assigned project manager. However, majority of the organizations do not recognize this and value its importance or sometimes misuse the project charter for another purpose.

Take great pride and care in your project charter because this is where you sow the good seed. It will eventually take care of you. Buy a high-quality leather-bound portfolio ? the kind graphic artists use to highlight their best work. In this portfolio, you keep an original example of a very important project document ? the project charter. Why? The leather-bound portfolio demonstrates to everyone the value that you place in this document. The PMBOK Guide? describes a project charter mainly in terms of what it can do for the project. Just as important, you should consider what this document can do for you. If your employer allows you to keep this document, take your leather-bound portfolio to your job interviews. It will demonstrate to your future employer that a charter is a high priority.

The project charter is an excellent tool to overcome personal adversity, even cultural gaps, and misunderstandings in projects. Many organizations have recognized that project management is a key competency that is needed to help meet the business strategy. However, they seldom see the value of a project charter as part of the project management initiative. Let?s take a look at an example of how the project charter was not used correctly.

Project Selection and Chartering

Let us take a look at a company. This company created a project charter template that is supposed to contain the project purpose, background, business case, scope, SDLC deliverables, milestones schedule, initial cost estimate, high-level risks, project management plan and cost-benefit information. All of this information will have to be written by the project manager on his own; guessing some of the data needed to complete the charter because there is no input from the company people that is requesting the project. This is a challenging and frustrating activity.

First, the business case should have already been written by the business sponsor and should have been an input of the project selection and approval process. In this case the project manager will have to write this on his own. Another problem that I see is the milestone schedule. I believe this is one data you should not have in the charter especially when you have not formed your project team and has no idea on the scope of work.

Looking at the content of this charter, the review and approval cycle takes about a month depending on the availability of the reviewers and approvers. The aggravating factor here is that the time you spent building the charter is also being built-in to the time you have for the project duration. By simply looking at this at a high-level, you may already known that your project will be challenging.

How A Good Charter Could Improve Projects

The basic purpose of the charter is to authorize a project manager to start an approved project and use resources to accomplish the goals of the project. Alex Brown, the CEO of Real-Life Project, Inc., once said that a project charter can be a simple email from the CEO to the PM. Intriguing, isn?t it?

A project charter can become very important after a project has started as well. Josh Nankivel, PMP, a trainer and principal of pmStudent, said that ?A project charter should also serve as an executive overview of your project, one that any new executive can reference to evaluate it. A good project charter can help save you from unnecessary scrutiny or having your project shut down because some executive didn?t see the business value in it from their perspective.

Josh also states, ?I have worked with several project managers who ran into funding issues because a particular director or executive who said they would fund a project from their budget didn?t come through. The project charter should clearly state who is responsible for funding, and they need to sign it, too!?

A good charter should be clear and concise. It should contain information about the purpose of the project, the benefits and objectives, a measurable set of success criteria, the name of the project sponsor, the list of stakeholders, and the product description and deliverables. With this, the chartering process will be much shorter and the project manager and the team can move forward with the more important parts of the project.

Final Analysis

Implementing a good chartering process may cause resistance, especially from personnel who use their position to manipulate the leadership or for those who think that the chartering process they created for the organization is the best. However, everything is always open to improvement and to change. Opponents of the change may try to subvert your ideas for improvement but stick to it and walk the talk.

Author: Randy Tangco is a business-driven project management practitioner. He has been an advocate of the best practices of project management in both the agile and traditional domain. He has been in the IT business for many years and has handled positions in various capacity including system and application support and management, computer operations support management, infrastructure deployment and management, technical leadership, business support manager, and project manager while working with international banks in the Middle East. He continues to promote the use of project management outside of the IT industry.

He is a certified scrum master (CSM) and a certified project management professional (PMP) and currently working on his IPMA level C certification.

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