Project charter example: agree what you're authorised to do
Everyone agrees that orders need to ship faster. The project still needs a boundary, a sponsor and permission to use resources. Here's what a short charter can settle.
“Fix the late orders” sounds like a clear assignment until the team tries to book warehouse time, change a system or spend money on equipment. People support the aim. They disagree about what has been approved.
A project charter formally authorises a project and gives its project manager authority to use organisational resources within agreed limits. It establishes the purpose, high-level scope and responsibilities before the detailed delivery plan is ready.
PMI's explanation of project charters puts that authority at the centre. The project manager can draft the document; someone with the appropriate authority needs to approve and support it.
A long description of the problem won't settle who may take an operator off the line for a trial. The charter should make that kind of decision easier.
Business case, charter and project plan
These documents can share information. They serve different decisions.
| Document | Main question | For our warehouse project |
|---|---|---|
| Business case | Is the proposed investment worth pursuing? | Compare options, expected service improvement, costs and risks |
| Project charter | What project is authorised, and who can act? | Approve a bounded pilot, assign a sponsor and manager, set resource limits |
| Project plan | How will we deliver and control the agreed work? | Define deliverables, dependencies, dates, responsibilities and checks |
A charter may summarise the rationale, budget and milestones. A plan may refine those estimates as the team learns more. Neither document makes an unapproved purchase acceptable simply by listing it.
Our fictional distributor wants fewer orders to miss their promised dispatch date. The sponsor is willing to fund a small investigation and pilot. That doesn't yet authorise a warehouse-wide rollout or a new management system.
A short project charter, filled in
The baseline is 80 late dispatches among 1,000 orders due in a four-week period, or 8%. An order is late if it leaves after its confirmed dispatch deadline. It is counted once, even if several lines are delayed.
The draft objective is at most 4% late dispatches in a four-week pilot review, without increasing the picking-error rate above the measured 1% baseline. These are fictional management targets, not a forecast of what the project will achieve.
This is an illustrative charter, not a completed approval record. A real version needs named people, dates and recorded approval under the organisation's rules.
Notice what it leaves open. The team hasn't committed to buying software or changing the warehouse layout. It has authority to investigate the delay and test a supported option within a boundary.
The data quality checks are relevant before accepting that 8% baseline. A missing deadline or a revised promise date could change which orders count as late.
What can the manager approve?
Try a few requests against this charter. The distinction becomes clearer when the request is specific.
Permission has a boundary
Does this request fit the charter?
The pilot covers zone A, with an €8,000 total cap. Each request below starts from the same €5,500 already spent or committed.
Swipe the chart sideways, or focus it and use the arrow keys. The total and remaining budget are also shown below.
Graphite: €5,500 already committed. Rust: this request. Dashed line: €8,000 cap.
Within delegated authority, subject to checks
Within the authorised zone and pilot purpose. Normal purchasing and technical checks still apply.
This checks scope and total budget only. It does not bypass purchasing, safety or IT controls, and sponsor support alone may not satisfy every required approval.
A €1,200 label trial in zone A brings the total to €6,700. If it meets the purchasing and technical checks, it fits the example's delegated scope and budget.
The same amount spent on zone B is a different decision. It is outside the authorised area even though the total stays below €8,000. Remaining budget doesn't expand the project boundary.
A €3,000 zone A request would bring total commitments to €8,500. It needs a revised funding decision, a smaller proposal or an agreed reduction elsewhere. Calling the purchase essential doesn't change the arithmetic.
This is why the charter needs both scope and authority. An amount alone leaves the team guessing about which work it can commission.
Keep the detailed work in the plan
Once the pilot is authorised, the team can break down its deliverables: a checked baseline, a tested method, trained users and an accepted handover. The work breakdown structure example explains that step.
The plan then sets the activities, dependencies and dates needed to produce those deliverables. Critical path helps assess which dependencies govern the finish date. A RACI matrix clarifies responsibilities for the work and decisions.
Those details should agree with the charter. Assigning IT an implementation task doesn't create IT capacity. In this example, its manager still needs to confirm the allocation. A RACI label cannot supply authority that nobody has granted.
Keep enough detail in the charter to expose a major constraint. Leave the daily task sequence in the plan, where it can be maintained without rewriting the project's purpose after every scheduling change.
A target needs a review method
At the review, show the late count and all orders due in the period. A pilot with 24 late dispatches out of 600 is at 4%. So is one with 40 out of 1,000. The rate helps compare different volumes; the counts show the size of the evidence.
Record picking errors over the same defined population and check the order mix. A lower late rate alongside easier orders or more overtime needs explanation before wider deployment. The charter's target is a decision aid, not proof that the pilot caused a result.
For a small work-method trial, PDCA supplies a way to plan, test and review the proposed change. Use the benefits realisation approach to keep ownership and later performance visible after project delivery.
The sponsor can authorise an extension when the evidence is promising but incomplete. The week-eight review does not have to become an automatic rollout.
When the assignment changes
Suppose the investigation finds that the dispatch problem comes from promises made before warehouse work begins. The original pilot may no longer reach the cause.
Bring that finding to the sponsor. Explain the new boundary, resource needs and effect on the objective before committing the team to wider work. Update the approval and the plan together if the assignment changes.
A short charter earns its place when people can use it in that conversation. It should let the manager explain what can proceed today, what needs another decision and who will make it.
Sources and example notes
- PMI: The Charter, Selling Your Project, 2005. A conference paper discussing authorisation, delegated authority and early high-level scope.
The warehouse, roles, limits and results are fictional teaching inputs. The charter is an example of a bounded pilot, not a universal approval policy. The interactive figure checks scope and budget; it does not replace purchasing, technical, safety or funding decisions.