In project management, a project charter, project definition, or project statement is a statement of the scope, objectives, and participants in a project. It provides a preliminary delineation of roles and responsibilities, outlines the project objectives, identifies the main stakeholders, and defines the authority of the project manager. It serves as a reference of authority for the future of the project. The terms of reference are usually part of the project charter.
In Initiative for Policy Dialogue (IPD), this document is known as the project charter. In customer relationship management (CRM), it is known as the project definition report. Both IPD and CRM require this document as part of the project management process.
The project charter establishes the authority assigned to the project manager, especially in a matrix management environment. It is considered industry best practice.
The purpose of the project charter is to document:
- Reasons for undertaking the project
- Objectives and constraints of the project
- Directions concerning the solution
- Identities of the main stakeholders
- In-scope and out-of-scope items
- Risks identified early on (A risk plan should be part of the overall project management plan)
- Target project benefits
- High level budget and spending authority
The three main uses of the project charter are:
- To authorize the project - using a comparable format, projects can be ranked and authorized by Return on Investment.
- Serves as the primary sales document for the project - ranking stakeholders have a 1-2 page summary to distribute, present, and keep handy for fending off other project or operations runs at project resources.
- Serves as a focal point throughout the project. For example, it is a baseline that can be used in team meetings and in change control meetings to assist with scope management.