7 Components Project Charter

The 7 Components of a Project Charter Your PMO Needs to Include

Your project management office (PMO) will be responsible for making sure a project charter is written for every project it oversees. Before you can make a template, you need to know the components of a project charter you need to include.

A project charter can serve a range of purposes for a project, your PMO, and the wider business. To be fully effective, you need to make sure that it contains all the relevant information.

Here, we’re going to cover the seven key components of a project charter, looking at:

  • What each component is
  • The information that should be in each section
  • Why you need each component in an effective project charter

1.      The project objective

To start a project charter, you need to understand what the project is going to do. Here, you want to look at the problems the project will solve and how it will do that.

You should be defining information such as:

  • The project methodology
  • Other project dependencies
  • The tools you’ll need to complete the project

This information will be the bedrock of the project. If the project manager or a stakeholder feels like the project is going off track or needs to realign, the objective of the project is a positive place to start.

2.      The business reason or justification

This component of a project charter is especially important if your PMO is business-focussed. When it’s up to your office to decide which projects are commissioned, the business case can help guide the decision-making process.

Even for governance or directive PMOs, the business justification can help define the value that the project will add. You should include information such as the expected return on investment and how it aligns with strategic goals such as environmental, social, and governance concerns.

3.      The people involved in the project

The project charter is a high-level view of what the project will look like, and you need to know who is going to be involved at this stage.

There are two types of people you need to be thinking about:

  1. The human resources who will be needed to realise the project
  2. The project stakeholders

You need to understand who will be on the project team and the skills you need – now is the time to consider freelancers or contractors. The stakeholders need to be identified at this early stage to make sure everyone is involved at the right stage and sign-off is sought from the right people.

4.      The project scope

In this section of your project charter, you need to include the scope of the project. You want to make sure that what will be done is well-defined to help avoid scope creep.

You need to also make sure to cover what isn’t included in the project’s scope. This can help your projects keep a rein on what is happening, and it can also ensure that work isn’t duplicated.

5.      The project timeline and budget

Every project should aim to complete on time and on budget, and this project charter component sets the target.

You will have detailed project plans with complete timelines and assigned resources – at this stage, you want to give a general overview and some solid milestones to work towards. The budget will also not break down into line items here, but you should have an idea of how much will be spent on people, technology, etc.

6.      The project risks, assumptions, and constraints

Once you know how long and how much the project will be, you should outline the potential roadblocks to achieving this.

A general risk assessment now will help your project manager plan and mitigate risks later on. Knowing the assumptions made, such as the exchange rates or commodity prices that went into the budget, can also help justify changes to budgets in the future, for example.

7.      The definition of project success

What does the project look like at the end, and what will make it successful? Think about what each facet of success looks like, considering time, money, stakeholders, and the end-user.

You can start to lay out general KPIs and define what you will be measuring throughout the project. This will help you set the KPIs and project expectations later on.

Components of a project charter

There are seven components of a project charter that you need to include to make a useful document.

Using these components, in the next article, we’ll look at how you can go about creating a project charter.