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Project Charter: Purpose & Assumptions

Instructor: Michelle Marshall

Project Manager and Governance, Risk & Compliance Specialist

In this lesson you'll learn what the purpose of a project charter is and some of the elements that should be included in the project charter, and discover the importance of documenting all of the project assumptions when drafting the project charter.

Purpose of a Project Charter

The most important deliverable (output) of the initiation phase of a project is the project charter. This is a document that formally authorizes the project to begin, and gives the project manager the authority to do his job. In a way, the project charter serves as a contract between the project sponsor and the project manager. It helps the project manager to communicate his authority and explain to the project team and other stakeholders why the project is needed, who it involves, how long the project will take to complete, how much it will cost, what resources are needed and how successful completion of the project will help the organization.

Elements of a Project Charter

At a minimum, a project charter should possess the following characteristics:

  • Background and a description of the business need the project will meet
  • Key objectives and goals of the project
  • Description of the product resulting from the project
  • Project scope & exclusions
  • Any assumptions or constraints affecting the project's schedule, budget, or quality
  • Key stakeholders of the project
  • Estimated project budget
  • High-level project plan and milestones
  • Project approach
  • Project team structure
  • Roles & responsibilities
  • Project communication

Who Drafts the Project Charter?

The project charter should be issued by someone external to the project team and at the appropriate organizational level to satisfy the needs of the project (ideally the project sponsor). For example, you need someone senior enough in the organization to be able to acquire necessary resources, influence key stakeholders, enforce accountability on all project team members, and so on. However, in practice the drafting of the project charter is normally delegated by the project sponsor or steering committee to the project manager.

Assumptions

When drafting the project charter, it is important to think about what assumptions are being made about the project, and to include these assumptions in the charter document. These assumptions are just the things you're taking for granted in the absence of concrete information. Projects are often affected by information and events that the team either does not control or does not understand, yet assumptions need to be made concerning these to allow the project to progress.

Examples of assumptions that can usually be made about a project are:

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