Want to ensure your projects are successful? Creating a project charter at the start is crucial to establish unified effort across teams, determine the best action plan, and visualize the project outcome. This is useful for projects of all types and sizes, whether simple or complex.
This article explains all you need to know about project charters: what they are and why you need them, essential elements every charter must contain, and different project charter templates to bring your project planning together.
We’ll end with a walkthrough of how to map every phase of your project life cycle using Wrike’s free work plan template.
What is a project charter and why do you need one?
A project charter is a brief, formal document outlining the scope, objectives, budget, and stakeholders of a project. It is created before project planning or execution begins and provides a high-level overview and roadmap for the project team to follow.
The project charter is written by the project manager and approved by project sponsors. It is a collaborative document that provides a clear, shared understanding of the project’s goals to ensure the team and stakeholders are aligned on what is to be achieved.
The project charter provides a foundation for creating a more detailed project plan. It also serves as a reference point throughout the project execution, ensuring the team stays on track with the expected schedule and achieves the objectives without any misunderstanding, deviation, or avoidable risk.
Here are the key functions of a project charter:
- Clarify project goals: The project charter outlines the goals of the project right from the start, providing a clear understanding of what needs to be accomplished and by when. This clarity aligns the team’s efforts and keeps everyone focused on achieving the same results.
- Define project scope: The project charter defines the project scope, which helps clarify the project’s boundaries, constraints, and limitations.
- Establish project governance: Project charter templates help to identify key stakeholders and team members involved in the project, e.g., project sponsors, project manager, and team lead, indicating who is responsible for specific tasks and who has the authority to make decisions.
- Identify project risks: A project charter helps to identify potential risks and challenges that could impact the project, outline strategies for mitigating those risks, and allocate a contingency budget to cater to them if needed.
- Allocate resources: A project charter helps determine the resources needed for a project. This includes personnel, equipment, and funding. It helps ensure the required resources are available at the right time during the project.
- Define project timelines: Project charters include an estimated project schedule for the project to be completed. This provides a target as well as time-bound milestones to keep the project team on track.
- Baseline the project: The project charter establishes a baseline for the project scope, budget, timeline, and desired outcomes, keeping everyone working within set parameters to hit the most important metrics.
What are the eight essential elements of a project charter?
The elements of a project charter may vary depending on the organization and project but typically include the following:
1. Project title and description
The project charter title and description provide a concise overview of the project. The title should be specific and relevant, and the description should be brief but detailed enough to explain the project’s goals.
A well-crafted title captures the essence of the project and is easily understandable for the team members and stakeholders. It should also be unique, making it easy to recognize and reference throughout the project’s life cycle.
2. Project goals and objectives
The project goals and objectives define what the project aims to achieve and why it is important. Goals are high-level statements that describe the overall purpose of the project, while objectives are specific, measurable, and time-bound targets that support the project’s goals.
Project goals and objectives should be defined and agreed on by involved stakeholders. Once set, they provide a framework for measuring the project’s success, enabling the team to recognize when they are deviating from the plan. Goals and objectives provide direction for the team, help prioritize tasks and allocate resources, and ensure that everyone works towards the same outcomes.
3. Project scope and boundaries
The project scope and boundaries establish the project’s parameters and limitations. The scope outlines deliverables, tasks, and activities, while the boundaries define constraints, limits, and exclusions.
Clearly defining the project scope ensures all team members and stakeholders understand what is expected and what is not. This prevents scope creep — i.e., when a project expands beyond the original plan, resulting in delays and cost overruns — as well as misunderstandings and unrealistic expectations among stakeholders. For example, a project focused on developing new software may have limitations that exclude developing new hardware, which would require a separate and expensive undertaking.
4. Project timeline and milestones
Timelines and milestones in a project charter provide a roadmap for project planning and execution. The timeline establishes an estimated schedule, while milestones represent key points in the project’s life cycle, e.g., completion of key deliverables, external reviews or input, and minor product releases.
The project timeline should be as realistic as possible, taking into consideration the project’s scope, budget, and resources. Project timelines are best developed in collaboration with the project team to get the best estimations on how long it takes to complete tasks on time and within budget.
5. Stakeholders and their roles and responsibilities
Stakeholders are individuals or groups who have an interest in the project and can influence or be influenced by the project’s outcomes. These include project sponsors, project managers, team members, customers, suppliers, industry regulators, etc.
The project charter identifies key stakeholders and their roles and responsibilities. This ensures everyone involved knows what is expected of them and others. The project sponsor is typically the primary stakeholder and has overall responsibility for the project’s success. The project manager is accountable for planning and managing the project team executing the tasks. Customers and users may provide input and feedback on the project requirements and deliverables.
6. Budget and resource plan
A budget and resource plan is a crucial element in a project charter. It helps to identify the resources needed and those available to complete the project on time and to the expected standard.
A well-defined budget and resource plan ensures available resources are utilized and allocated to the best uses at the team and organization levels. Enterprises running multilayered projects and programs can use Wrike to synchronize budget and resource allocation for interlinked projects and make the most out of organizational talent and resources.
7. Risk management plan
A risk management plan outlines potential risks that may arise during the project and strategies for managing them. This helps project teams and managers anticipate and prepare for potential challenges, minimize adverse impacts, and improve the odds of success.
Risk plans ensure project sponsors are aware of potential risks before signing off on the project. They typically include brief sections for:
- Identification of risks: Here, the project team lists potential risks that could impact the project. This can be anything from technology failure to human error or changes in regulations and market conditions.
- Risk analysis: Once risks have been identified, the team analyzes each risk’s potential impact and likelihood of occurrence and sorts them in order of priority and urgency.
- Mitigation strategies: The team develops mitigation strategies for each identified risk. Mitigation strategies can include risk avoidance, risk reduction, risk transfer, or risk acceptance.
- Risk monitoring: The team monitors identified risks to assess whether the mitigation strategies work effectively. Risk monitoring also helps identify any new challenges that may arise during the project.
- Contingency planning: The team establishes contingency plans for managing risks that cannot be mitigated. Contingency planning involves identifying alternative courses of action that can be taken if a significant risk occurs.
8. Communication plan
Not all project charters include a communication plan. However, effective communication planning is critical to a project’s success. Some project charters dedicate a section to track progress and outline how updates will be shared among the team and stakeholders throughout the project life cycle.
Communication plans in project charter templates include:
- Communication objectives: These should align with the organization’s project management systems, e.g., Agile, Scrumban, etc. Communications goals may include keeping stakeholders informed, promoting engagement, and ensuring timely reporting and decision-making.
- Communication channels: The communication plan identifies the channels through which information will be shared. These may include email, meetings, project tracking software, or other tools. The communication plan should also specify the frequency of communication and who will be responsible for each one.
- Audience: This includes stakeholders, team members, and other involved parties. The communication plan should specify the information needs of each audience, how the information will be tailored to meet those needs, and who will be responsible for creating and delivering each message.
- Feedback systems: The communication plan should also establish systems to ensure that all parties can provide feedback and that the feedback is incorporated into project decisions. Feedback may include surveys, sprint reviews and retrospectives, focus groups, or one-on-one meetings.
Simple project charter template
A simple project charter template is a straightforward document outlining the priorities and budget of a project to keep team members and stakeholders aligned throughout its execution. This may be used for smaller projects with limited resources.
Wrike’s action plan and work plan templates can be easily customized and adjusted as a project progresses.
Agile project charter template
An Agile project charter template serves as a roadmap for Agile teams to draft a project charter and get the needed approvals throughout a project. Agile project charter templates come with a framework focused on effective team communication and collaboration.
Wrike has a range of Agile project management templates to help Kanban and Scrum teams establish their project planning and execution workflows from the start.
Construction project charter template
A construction project charter template outlines the key elements of a construction project, including its various phases, labor costs, and completion dates.
Project managers can get started with Wrike’s template for complex projects and then cross-tag tasks with projects and programs to create a big-picture view of how resources are used across teams.
Software development project charter template
As the name suggests, a software development project charter template outlines the purpose and scope of a software development project. Like other project charter templates, it describes a software project’s objectives, scope, timeline, budget, stakeholders, and deliverables.
The software development project charter template may also include a quality assurance section outlining strategies and processes to ensure the delivered software meets expected quality standards. The quality assurance section also outlines testing and validation processes to ensure the final deliverable meets the project objectives.
As Scrum is a popular methodology in software development, Wrike’s sprint planning template would be a good starting point here.
Wrike is here for every phase of the project life cycle
Wrike’s PMO software helps project managers and teams align strategy, planning, and execution on one platform.
Whether you’re a growing team working on multiple projects simultaneously or a large enterprise running numerous programs and portfolio-level projects, Wrike’s platform, tools, and resources can help. Wrike makes it easy to communicate project progress, track budget utilization, and close projects successfully with all the necessary sign-offs from stakeholders.
Are you ready to set the tone for your next project plan with an effective project charter? Wrike is here for every phase of your project. Try our platform for free and map out your project from initiation to delivery, starting today.