Applied project management #13. Project chartering

Companies have very limited resources, and they must deploy them on the best projects which will yield maximum benefits. Project chartering is the process of officially approving the start of a project by the senior management / sponsor. The project charter is prepared during the initiation phase of the project, and the accountability for preparing the charter is with the project sponsor (senior management representative). Once approved, all changes to the charter must be re-approved by the sponsor.

While developing the project charter one can refer to;

• Statement of work (SOW)
• Business need 
• Product scope description
• Strategic plan 
• Business case of the project 
• Market demand 
• Organizational need 
• Customer request 
• Technological advance 
• Legal requirements 
• Ecological impacts 
• Social need 
• Agreements 
• Contracts 
• Memorandum of understanding (MOU)
• Service level agreements (SLAs)
• Letters of intent (LOI)
• Verbal agreements 
• Email or other written agreements 
• Enterprise environmental factors 
• Government standards 
• Industry standards 
• Regulations 
• Organizational structure
• Organizational culture 
• Market conditions 
• Organizational process assets 
• Organizational standard processes 
• Policies 
• Process definitions 
• Templates 
• Historical information 
• Lessons learned knowledge base 
• Project management information system 

The output of the project chartering process is the project charter, a light weight document (3-5 pages) and contains but are not limited to;

• The high level scope of the project
• The business case of the project
• Alternatives analysis
• Assumptions
• Constraints
• High level risks
• Major milestones with dates
• Key stakeholder details
• Project manager's name, roles and responsibilities
• Project approval requirements 

An approved charter  is the green signal for the project to proceed, and is a great reference document for the project manager, team to understand the project quickly. Since charter is the only document where the project manager's name, roles and responsibilities are defined and approved by the senior management, we say that the project charter gives authority to the project manager. Many projects have multiple managers / stakeholders, and a well defined charter brings in lot of role clarity, and avoids organizational politics.

The 'project chartering' process and the output of the 'project chartering', the  'project charter'   ensures the right foundation for the projects and gives better continuity to the projects.

Think of situations where the project manager changes during the course of the project, or change in sponsor. Having a pre-defined and approved project charter gives the project with a strong foundation and provides it with better continuity, despite changes in the environment.

PMBOK Version5 reference page numbers 66,67,68,69,70,71,72