How do projects start? The project charter

In project management theory, projects start in the initiation phase with the release and approval of the project charter, which has as its objectives the initial definition of the project, the designation of the project manager, the allocation of the main resources (human and material) and the formal approval of the start of the project.

What is a Project Charter?

The deliverable of this phase is the project charter, which includes the following points:

  • Project name and description.
  • Designation of the project manager and definition of his or her level of authority. This point is important because it recognizes you as the project manager and allows you to start working.
  • Justification of the project. This is the opportunity and motivations that generate the project.
  • Allocation of resources to the project. In the initialization a preliminary allocation of the main resources (human and material) is made, and the strategy to follow is defined (use own resources or outsource).
  • Initial definition of key stakeholders and their interests. Stakeholders are those who are affected by the project or can affect it, whether they work on it or not.
  • Description of the product or service to be developed by the project, and the main deliverables expected. This is the definition of the project scope.
  • Definition of the project constraints, including the preliminary schedule and initial budget.
  • Project approval requirements. This point is very important, as it defines the criteria that will be used to determine whether the project has delivered what was requested.
  • Preliminary definition of risks.

As you can see, the project charter sets the starting points for many of the aspects that you are going to have to plan and manage during the following phases; although it does so in a very general way and without enough detail to be able to start the execution phase.

Additional resources on this topic.....

  Learn more in "A Practical Approach to Project Management"

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If you have already worked on a project, you may be wondering: Is this really the case? Why have I never seen a project charter? Is this just theory?

From my professional experience, it is rare that the initialization is developed in a visible way and that a project charter is created as such; in fact, I have never received one in any of my projects.

But this does not mean that this phase does not exist, only that many companies do not consider it as part of the project, and it ends up taking other forms.

How do projects actually start?

Initialization phase in internal projects

Internal projects are those that are carried out for the organization or company itself, after being analyzed and approved by the management.

In them, the initialization phase is equivalent to the feasibility analysis and approval of the project. This analysis involves defining what you want to do (scope), with what objective (motivation or business model), estimating the necessary investment (budget), when you want to achieve the result (deadline), and analyzing the economic viability based on assumptions or conditions (potential risks if they are not met).

What usually happens in these cases is that once the project has been approved and its director assigned, the information is not transmitted in a single document, but is usually transmitted in meetings or several documents.

Initialization phase in external projects

External projects are those that we carry out for other companies (what most of us understand by the client), which usually hire us to do the project.

Where is the initialization phase in this case? The initialization phase corresponds to the commercial phase prior to the order.

The commercial phase ends with the receipt of the order from the customer, or with the loss or cancellation of the project.

The order, together with the confirmation of the order by our company, constitutes the formal authorization to start the project. And it is at this point that the project manager is formally assigned, if he/she has not been involved in providing support during the commercial phase.

Therefore, in projects for third parties, do not expect to see a project charter as such. Instead, you should look at the following documents:

  • Client's request for quotation (RFQ), description of contents in the submitted proposal and list of deviations. These documents will tell you the scope and possible deviations agreed between the company and the customer.
  • The order and proposal will indicate the deadline, main deliverables, agreed acceptance criteria and price. At this point you should ask for the study done to calculate the selling price, as this will tell you the estimated costs, how they have been distributed, and the breakdown of the work considered.

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