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Chapter 3
Chartering Projects

Chapter 3 Describe what a project

charter is and why it is
critical to project success
List elements of a charter
and why each is used

Core Create each section of a

Objectives charter

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What is a Project Charter?

An informal contract between the project team and the sponsor

A contract
is entered into freely by two or more parties.
cannot arbitrarily be changed
offers something of value for each party

1. Authorizes the project manager to

proceed
Why is a Project 2. Helps to develop a common
Charter used? understanding
3. Creates commitment

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Authorizes the project manager to proceed

Project charter authorizes Project charter provides official

commitment of resources to a status within the parent
project organization

Developing a common understanding

Teamwork develops
Agreement, trust, communication, and commitment
develop.
Project team does not worry if management will accept a
decision.
Sponsor is less likely to change the original agreement.

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Typical Elements in a Project Charter

Title
Scope overview
Business case
Background
Milestone schedule
Risks/assumptions/constraints
Spending approvals/budget estimates
Communication plan requirements
Team operating principles
Lessons learned
Signatures and commitment

Typical Elements in a Project Charter

Charter Element Answers the Question

Scope overview What?
Business case Why?
Background Why?
Milestone schedule When?
Success criteria What?
Risks, assumptions and constraints All of them (what, how, when)
Resources How much?
Stakeholders Who?
Team operating principles How?
Lessons learned How?
Signatures and commitment Who?

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Constructing a
Project Charter
Sponsor creates first draft of
scope overview and business case
Leadership team may contribute
additional information
Scope overview and business
case should be one to four
sentences each

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Scope Overview

High-level description of “what” and “how”

The project in a nutshell
Used to help prevent scope creep
Considered to be the project boundaries
Quantifying the scope helps with understanding of project size

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Business Case

Project purpose or justification statement

Answers the question “why?”
Used to justify the necessity of the project
Ties project to the organization’s strategy
Provides rationale or high-level cost/benefit estimates
Persuades and inspires decision makers and team members

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Background

Used to provide more detail to support the scope statement and business
case statements
Background statement is optional

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Milestone Schedule
with Acceptance Criteria

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Risks, Assumptions, and Constraints Instructions

Brainstorm all risks to

Schedule Budget Usefulness Satisfaction

Identify and document assumptions

Quantify risks based on:
probability of occurring
impact if realized
Which risks should be considered “major?”
Major risks require formal response plan

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Risk Assessment Example

© 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except
for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected
website for classroom use.
© 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom
use.

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Risk Response Planning Example

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Resources Needed
Instructions
Use crude estimates for people,
equipment, space, and money
needs
Describe how estimates were
developed & level of confidence
Develop limit of spending authority
for project manager

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Stakeholder List Instructions

Identify all stakeholders

Determine most important stakeholders
Ask each stakeholder what interest they have in the project

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Team Operating Principles Instructions

Establish how:
meetings will be conducted
decisions will be made
work gets done
everyone will treat each other with respect

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Lessons Learned Instructions

Consider what has worked/not worked

Copy or tailor what has worked
Avoid what has not worked
Report lessons learned more than once over life of project
Before undertaking project
At key reviews
Upon project completion
Make lessons available in a knowledge base

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Project Lessons Learned Example

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Signatures and Commitment Instructions

Project sponsor, manager, team members

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Ratifying the Project Charter

Present the project charter to the sponsor for approval

Sponsor asks questions for clarification and agreement
Sponsor, project manager, and core team sign the project charter

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