The Project Charter is the first official document that answers the question, “When does a project start?”
“A project starts officially when the project charter is created and signed-off by the project sponsor or anyone from the top management authorized to do so.”
The Project charter is also known as a Project Definition Document.
(This topic is very important from a PMP Exam point of view. You may see one or two questions from this topic in your exam.)
If you go through the second paragraph, it says that — a project starts officially when the project charter is created…
Now you may ask:
- What it meant by “Officially Starting” the project?
- Why did we simply not say that “A project starts when the project charter is created…”
There is a difference between the “starting of the project” and “officially starting of the project.”
A project may start when the project sponsor just thought of it, or some of his friends gave him an idea about it, or the night he dreamed of it. There may be some other starting points as well. Think of them…
Afterwards, he may give serious considerations to those ideas. He discusses it with his friends and applies cost benefit analysis to see if it is really profitable to go for it, or if he should just leave it.
Once he makes the decision to go ahead with it, he will call someone (project manager) to lead his project and some other people to work with him.
Then he will create the project charter (or he may ask the project manager to create the project charter to authorize the project officially), and gives the project manager authority to lead and complete the project.
The moment the project sponsor signs the project charter, the project starts officially.
As per the PMBOK Guide, the project charter is an official document that formally authorizes a project or a phase and documenting initial requirements that satisfies stakeholders’ need and expectation.
A project charter documents the business need or demand that causes the project’s existence, and includes a short description of the product, service, or the result of the project.
A project charter:
- Recognizes the existence of the project.
- Appoints the project manager.
- Sets the authority of the project manager to apply resources to the project.
- Defines the project objectives.
- Contains the list of main stakeholders.
- Consists of only one or maximum two pages.
- May be created by the project manager.
- Must be signed by the project sponsor or someone from top management (external to the project).
These are the few characteristics of the project charter.
Please note that the project charter may be created by the project manager, but it must be authorized by someone external to the project, as it is very obvious that how a project manager can authorize himself as a project manager.
The project manager may create a project charter, or provide the input to create it, but only top management has authority to sign it.
In the creation of the project charter, help from the project manager is required because he is the one who will be leading the project and knows about the project methodologies.
The project charter should be created as soon as possible because if there is no project charter, there will be no project manager, no project title, and consequently a cost account cannot be opened to log the cost of the project.
A project charter is a very important document, and it is very rare to make amendments or changes in it.
A project charter contains the information such as:
- Project title and description.
- Project purpose or justification.
- Measurable project objectives.
- Description of output of the project.
- Assigning the project manager and setting his authority level.
- Pre-assigned resources.
- Main stakeholders.
- High level Project and product requirements.
- Acceptance criteria.
- Summary of important milestones.
- Estimated budget.
- High level risks.
- Name of the sponsor.
- Project’s approval criteria
This was all about the project charter. Post your doubts or suggestion in comments section.
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Who will sign the charter if there are more than one sponsors and what would be the problem in such a case?
First Paragraph, Page 74, the PMBOK Guide 4th Edition says…
"Projects are authorized by someone external to the project such as a sponsor, PMO, or portfolio steering committee."
Now, my understanding is that, if there is more than one sponsor, in this case they should form a committee and chose a committee head. And then this committee will approve the project charter to authorize the project.
This is what I understand, let me know if you have any different thoughts.