Without the project charter, there is no project.
Develop Project Charter is the first process in the Project Management Institute’s project life cycle.
It is the process that results in formal authorization of the project’s existence and the project manager’s authority.
So what goes into the charter?
Develop Project Charter: Inputs
PMI identifies four key inputs in the sixth edition of the PMBOK Guide:
1. Business documents — specifically the Business Case
2. Agreements
3. Enterprise Environmental Factors
4. Organizational Process Assets
Develop Project Charter: Outputs
There are two important outputs of the Develop Project Charter process.
1. The Project Charter, of course
2. The Assumption Log
The Business Case is the most important of the inputs. The PMBOK Guide, sixth edition, also notes the Benefits Management Plan among the business documents used as inputs to the Develop Project Charter process, but it doesn’t spend much time detailing its importance, so I chose to focus primarily on the Business Case.
Business Case
The Business Case is a document that justifies the investment required for the project and explains how the project aligns with overall company goals. It often includes a cost-benefit analysis and outlines the business need for the project.
While the project manager can and often does help with the creation of the project charter, it is important to remember that business documents are not project documents, and the project manager does not modify the Business Case, or any of the other business documents, at any point in the project. The project manager can make recommendations for changes to these documents, but that is the extent of the PM’s involvement in updating business documents.
Agreements, EEF’s and OPA’s
I didn’t spend as much energy on the remaining inputs to the Develop Project Charter process, but they are important to note. Agreements are included here to define the intentions of or reasons for a project. For example, if a project is being undertaken by request from a customer, a contract would often be used as an input to developing the project charter.
Enterprise Environmental Factors can influence the project charter. For example, legal requirements, regulations, market conditions, stakeholder expectations and risk appetites can all factor into the charter.
Organizational Process Assets such as the company’s policies, reporting methods, required templates and historical information from the lessons learned repository can all play a role in developing the charter, as well.
What is Included in the Project Charter?
As noted previously, the project charter formally authorizes the project and the project manager’s authority. That’s its primary purpose, but there are many more elements to a project charter, most of which is a high-level description of items such as the project’s purpose, requirements, objectives and overall risk. Also included are:
- Success criteria, such as: How will success be defined and who will determine whether the project is successful?
- A summary milestone schedule
- Key deliverables
- A list of key stakeholders
- Approved finances
- Exit criteria
What is Included in the Assumption Log?
The second output of the Develop Project Charter process is the assumption log. The PMBOK Guide, sixth edition, notes that high-level assumptions are often included in the Business Case, but the assumption log is updated throughout the project life cycle and is used to record all assumptions, large or small, that can have an impact on the project.