How to Use a Project Charter to Start a Project [Template]

Table of Contents

What is a Project Charter?

Is a Project Charter something that an Information Technology Project should have?


Is There any Value in Having a Project Charter?


Does a Project Charter apply only to Information Technology projects such as an SAP BI/BW or an SAP Business Objects technology project or could we say that a Project Charter applies to a wide range of all types of projects? Is there any differences between a regular project charter versus a SAP project charter?

Could a Project Charter Apply to an SAP HANA Implementation?

SAP Project Charter

Some of the Issues You Might Want To Consider in Developing Your Project Charter


The short answer is you should always have a Project Charter regardless of project type such as a greenfield or a brownfield SAP project or project size. I can already hear people saying “I’m too busy for that. I don’t have time to write a project charter. That’s someone else’s job”. It sounds like I have heard those excuses before, doesn’t it? 


It’s true.


I have heard all those excuses before on failed or failing projects that I was asked to join to save or help turn around.


Get a Project Charter Sample Template


Invest The Time To Prepare Your Project Charter Correctly

The reasons projects fail are easy to identify and the fixes to turn around troubled projects are easy to implement. By investing 1 hour or 1 day to sit down and write a project charter you will save yourself many hours and many days of false starts and lost effort down the road. By starting your project out right, by following proven, successful project management practices you can give your project the best chances of success including achieving the expected Return on Investment. Make sure your project always has a project charter.


So what exactly is the content of a Project Charter?


In Project Management How To Use a Project Charter to Start a New Project


A project charter answers the question “How to Start a Project”.


Regardless of the size of any proposed project, a project, by definition, does not exist without a Project Charter. A Project Charter is the tool that Senior Management or a Project Sponsor within an organization uses to:

  • Initiate the project.
  • Authorize the project.
  • Identify the initial Project Key Stakeholders
  • Identify other potential Project Team Members
  • Defines the initial scope and expectations of the project.
  • Define Project's Goals.
  • Define High Level Project Success Criteria.
  • Names the Project Manager.
  • Sets the initial budget for the project
  • Proposes schedule and defines project completion acceptance criteria.
  • Define a High-Level Project Timeline
  • Provides Project Governance Guidelines
  • Establishes the Project Budget
  • Green light the Project

Agreeing on the Definition of Done is Critical

This last step is critical to helping the sponsor and project manager agree as to when the project can be recognized as being complete 'done'.  The Project Charter Document is also where all the other project stakeholders are made aware of what constitutes done, what acceptance criteria have been agreed to and what they need to look at in order to agree what done is.

A Project Charter, once approved by the Project Sponsor, formally authorizes the project. A Project Charter documents the initial requirements (the scope) and deliverables that will satisfy the Stakeholder's needs and expectations.

Without a clearly defined scope, your project will just drag on forever.


This is called Scope Creep.


The Project Charter also names the Project Manager.

Have you ever wondered who was in charge on a large project?

Have you ever had trouble getting paid for a project and you did not know who to go to?

The project manager is also responsible for planning the procurements and for getting you paid.

To Answer this Question, all You Have to Do is Look on the Project Charter.


If you are working on a project and you don’t really know who the project manager is, then you can pretty much say that the project is already in trouble.

You’re on a Project Running on Autopilot.

Are you getting calls from headhunters and they do not know who the project manager is? Maybe they don't know what the scope of the project is. Then a whole bunch of project management planning processes have already been skipped.


Signs of Trouble to Look Out For


The Human Resource Management Plan, for example, has not been developed. You can again pretty much say the project is already in trouble.

The project charter documents the initial high level project scope. So if you don’t have a project charter, then you don’t really know what the scope is, so how will you know when the project is complete?

Well, you can’t. How do you know if that new request is in scope or out of scope. Well you can’t know that either without a project charter.


Print Out The Project Charter


I recommend that Project Managers print out the project charter, frame them and hang them on their desk cubicle wall so that everyone in the organization is aware who the project manager is, who they report to and what their authority level is.  


There are Different Types of Organizational Structures that all Project Managers Must Operate Within.


There are project oriented organizations where all work is project related and everyone works on projects. Everyone works on projects to build bridges, for example, and there are no ongoing repetitive operations such as collecting tolls.


Project Oriented Organizations


In project oriented organizations, Project Managers are at the top of the hierarchy and have a wide range of authority to get things done.


Functional Organizations


Another type of organization is the Functional Organization. Each Line of Business (LOB), or Business Unit, is headed by a Functional Head. The Functional Head has authority over everyone else below them, including the Project Managers who might be working on projects for that particular Functional Department. In Functional Organizations, the authority of the Project Manager is more limited.


Matrix Organizations

A third type of organization is the matrix organization. In a matrix organization, the Project Manager reports to several department heads, any one of which can overrule the project manager or each other.

In the different types of organizations, Project, Functional and Matrix, the Project Manager has different levels of authority within the organization to get things done. 

The functional managers can block, sabotage or overrule the Project Manager.  How is the project manager going to get things done when things come to a log jam with the different functional heads?


The Project Manager Will Have to go Up the Ladder to the Project Sponsor.


The Project Sponsor, if they actually want to see their project realized, should be external to the project. 

The project sponsor must have a high enough authority level within the organization to overrule the department heads.   These department heads may perhaps be blocking the Project Manager from doing the task they have been authorized to do in the project charter.

What this means is, the project manager has friends in high places. That’s why I said, the project manager should print out the project management charter, frame it, and hang it on their cubicle wall.


So what are the must haves in a Project Charter?


A project charter should identify the following:


  • Project Name and Description
  • Project Purpose, Justification or Business Case of the project
  • Measurable Project Objectives (No vague or general statements.)
  • High Level Requirements
  • Where products or services are involved, Product or Service requirements
  • High Level Schedule
  • Initial Budget
  • Identifies what constitutes project success
  • Identifies who will decide if the project is successful or not
  • Identifies who is authorized to sign the project completion acceptance
  • Names the Project Manager
  • Specifies the Authority Level of the Project Manager
  • Specifies the Responsibility of the Project Manager
  • Name, Title and Responsibility of the Project Sponsor or the person authorizing the project charter.
  • Signed by the Project Sponsor.

The Project Plan Will Be Progressively Elaborated


The project charter will be a high level statement of the project. The project manager will go through repeated cycles of progressive elaboration to develop a detailed project plan with very specific requirements and details. Don’t worry about the high level statements in the Project Charter. Those just get the Project Manager started.


Now in the world of SAP,  SAP has their own project management methodology known as the SAP ASAP Methodology now renamed SAP Activate due to the introduction of SAP HANA. The SAP ASAP Methodology, if you download it and study it, also has a project charter phase.

Creation of the project charter is not step one on day one. In the SAP ASAP Methodology, creation of the charter takes place perhaps months after project planning work began. In other words, Product Selection has already occured which in a normal project occurs only after much project planning has already occured and long after the project was initiated.

Where You Can Get A Project Charter Template

So in this How-To Guide or Tutorial on Project Management and specifically on Project Charters, I hope it is clear that creation of a Project Charter occurs first and many months prior to any pre-sales cycle or product or vendor selection.


As you can see, the project charter identifies many useful items pertaining to the project that will be useful in one way or another as the project methodically progresses to completion. To help you get started, we provide a Sample Project Charter Template which you can get by pressing the button below.


Download Project Charter


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Doug Ayers

I am an MBA, B.S. in Computer Engineering and certified PMP with over 33 years working experience in software engineering and I like to go dancing after work. I program computers, solve problems, design systems, develop algorithms, crunch numbers (STEM), Manage all kinds of interesting projects, fix the occasional robot or “thing” that’s quit working, build new businesses and develop eCommerce solutions in Shopify, SAP Hybris, Amazon and Walmart. I have been an SAP Consultant for over 10 years. I am Vice-President and Co-Founder of SAP BW Consulting, Inc.

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