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Project Charter
Published: 2009-07-19
Last updated: 2022-03-16
In its wider sense, the project charter or project management charter is a document that defines project goal(s), participants, organization, scope, schedule, and budget. If we want to focus more on tasks and benefits of the project manager or team members we use a project manager agreement or project manager target agreement.
In the early definition phase, when it becomes clear that we want or have to undertake a project of which we only had fuzzy ideas in the very beginning, we form a project team and assign its members the responsibility for managing the project. Working together with the project stakeholders, the team refines the project vision and defines the project goal(s) and requirements or specifications of the project results. Consequently, a project charter issued in the early definition phase may contain clearly defined project goal(s) as well as team member assignments including their role descriptions; however, scope, schedule, and budget might still be a little rough.
It is common practice to have different teams or team members working on the project over its different phases. Therefore, we usually prepare a charter in its wider sense on the project level and more specific target agreements for the project manager and project team members.
Let us have a look at the typical content of the project charter and the project manager agreement.
Project Charter / Project Management Charter
| Project Goal(s) | Short and clear statement about the project goal(s) |
| Problem / Scope / Benefits |
What are the reasons to undertake this project? What problem will be solved by the project? What are possible solutions? What is the expected scope? What is not included in the scope? What are the benefits for the organization, in terms of strategy implementation, innovation, revenue, profit, synergy, saving of cost, net present value (or IRR, etc., cf. sub-section Project Selection)? |
| Deliverables | Short description of project results |
| Major Milestones |
Requirements / specification of project results complete RFP or RFQ issued Proposal and / or Quotation complete Proposal and / or Quotation submitted Project plan complete, contract negotiations finalized Contract signed Design Freeze Manufacturing complete Deliverables on site Installation complete System tests successful Commissioning complete Preliminary acceptance issued List of open points closed Handover to customer complete Final acceptance issued |
| Assumptions |
Availability of human resources in relevant areas of expertise, on necessary skill levels Availability of raw materials Availability of manufacturing capacities |
| Risks | What major risks do we anticipate? |
| Opportunities | What opportunities, not yet covered under benefits, do we anticipate? |
| Participants, Roles, and Responsibilities |
Project stakeholders and sponsor(s) Project control board Project manager Commercial project manager Contract manager Scheduler Hardware systems engineer Software systems engineer Customer service, etc. |
| Authorization of the Project Manager | Signatures of control board members and project manager |
In section Free Downloads, you find a template of a project management charter.
Project Manager Agreement / Project Manager Target Agreement
| Project Goal(s) |
Project goal(s) of the customer Organization internal project goals |
| Project Description |
Scope: deliverables and services, PBS, WBS Schedule: milestones, detailed time schedule Budget: accumulated project cost plan |
| Responsibilities and Main Tasks of the Project Manager |
Leadership responsibility for the project team Responsibilities for the project contract Proposal management Project planning, implementation, closure |
| Authorities of the project manager |
Authority to issue instructions towards team members Contractual authority Other authorities |
| Responsibility of steering committee |
Authority over the project First escalation level above project manager |
| Reporting |
Regular reporting Event-driven reporting |
| Resources |
Human resources, i.e. team members Sub-contractors |
| Incentives | For project manager and team members |
| Others |
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| Validity period of this Agreement |
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| Signatures |
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In sub-section Free Downloads, you find also a template of a project manager agreement.
While project charters focus on the project, project manager agreements tend more towards target agreements for individuals.
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