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Career development Project Charter vs. Project Plan: What's the Di9erence?

Project Charter vs. Project Plan:

What's the Di6erence?
Indeed Editorial Team

Updated June 25, 2022

Project managers use a variety of documents to support their management

process when undertaking a new project. Two of these critical documents include
a project charter and a project plan. Understanding the di9erences between a
project charter and a plan can help you better prepare and manage your next
project. In this article, we discuss the di9erences between a project charter vs. a
project plan, identify the critical functions of each document, highlight the four
steps to creating a project charter and list the key elements of a successful project
plan.

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What's the di+erence between a project

charter vs. a project plan?
A project charter, also known as a project deMnition document, is a brief oNcial
record of a planned project. It outlines the project's scope, including the objectives,
goals, stakeholders and teams that support the work. An organization uses a
project charter to obtain the authorization of stakeholders to begin a project. The
company's stakeholders may sign o9 on the project charter, signifying that the
scope meets the needs and expectations of the group.

A project plan, also known as a work plan, outlines the project scope and
objectives based on the project charter. The project plan identiMes the speciMc
instructions for executing and managing the project. It also determines the
milestones and deadlines, each person's responsibilities and the organizational
structure of the project team. Both documents work together to provide a detailed
record of successful project management.

Related: The 5 Project Management Process Groups DeBned

Key functions of a project charter

A project charter functions as a sales document, selling the proposed project idea
to the organization's stakeholders. Usually, as a one-page document, it outlines
the following criteria for presentation to upper management, a board of directors
or other essential company stakeholders:

The objectives of the project and expected beneMts

Direction regarding the project's outcome

A list of stakeholders, including team members and external customers

:
 The assigned project manager and identiMed key roles

SpeciMc key deliverables and signiMcant milestones

A list of risks, potential issues, constraints and assumptions

A proposed project budget

Acceptance and approval criteria

Once the organization's stakeholders approve of the project charter, the project
manager's Mrst responsibility is to create the project plan.

Read more: How to Write a Project Charter

Key functions of a project plan

A project plan functions as the operating manual to carry out the project to
completion. Once the stakeholders approve the project charter, the project
manager creates the project plan using the charter's objective and scope. It then
outlines speciMc elements of the project, including:

The value of the project to the organization and stakeholders

The timeline of the project and particular milestones

The organizational structure of the project team

The responsibilities of the key roles involved in the project

The identiMcation of individuals who Mll vital roles

The allocation of resources required, such as technology needed

The nature of the work necessary to meet the objectives

The tasks and particular activities needed to complete the project

The determination of the work breakdown structure (WBS)

Once the project manager completes the project plan, they use it to communicate
with the stakeholders regarding the project's progress. They also use it to provide
further detail to the project planning process. For example, a project manager uses
:
 the plan to build out a risk assessment or quality planning strategy.

Related: What Is Project Planning? (With Examples)

How to create a project charter

When creating a project charter, the information contained within the document
looks at the project from a high-level view. You can use a charter to identify the
scope, objective and deliverables for the project. Below are the four steps to
creating a project charter:

1. Identify the vision of the project

The Mrst step to creating a project charter is to specify the project vision. You need
to answer the question of what the project entails and how it will beneMt the
organization. You also need to identify the boundaries, such as project costs,
timelines and required resources.

2. Identify the project stakeholders

Next, you want to determine the stakeholders or the people who can approve and
authorize the project. They are also individuals who have an interest in the
project's completion. Stakeholders can be from within the organization or external
customers.

3. Create a project organizational chart and resource

list
Once you've identiMed the stakeholders, you can now create an organizational
chart of all key positions within the project. Each position you identify can also list
out the key responsibilities within the plan. You also can include a list of resources
the project requires, such as technology, equipment, materials and people.

4. Identify the budget, constraints and risks

In the project charter, you also want to include the projected budget, constraints
and risks. Completing a risk assessment during the planning phase helps to
mitigate larger issues once the project begins. Identifying constraints such as lack
:
 of money or time are essential to recognize upfront to create monitoring systems
to catch these challenges early. An estimated budget provides insight into the
complexity of the project and the resources required.

Related: A Complete Guide to Project Management

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Elements to include in a project plan

When creating a project plan, you can include several key elements, such as:

Project schedule
A project schedule is a timeline of how long speciMc parts of the project take for
completion. This includes individual tasks, milestones within the project and even
how long it takes to plan speciMc parts of the plan. A project manager uses a
schedule to keep the team on track and to identify progress.

Scope document
A scope document details what the project entails and what the project excludes.
It outlines the reason for the project and the speciMc criteria of what is being
completed. The scope document also highlights the criteria used to determine if
the project is successful.

Change management plan

A change management plan focuses on the procedures for addressing changes
within the project. Changes can include budgetary increases, additions to the
scope of the project or additional required resources. Identifying how to manage
any changes throughout the project can help eliminate confusion for the team and
identify critical elements being missed.

Risk management plan

:
 A risk management plan provides awareness of all potential risks associated with
the project. Risks can include shortages of time, money or materials but also look
atCareer
changes
Guide
to the marketplace or economic factors that can a9ect the project.
Creating a risk management plan helps the project team to prepare for potential
problems and determine how the team will handle problems as they arise.

Communications management plan

The project manager creates a communications management plan which outlines
how communication happens regarding the project. This includes internal
communication within the project team and external communication with the
organization and stakeholders. The plan identiMes the frequency of
communication and preferred communication forms, such as email or in-person
meetings.

Quality assurance plan

A quality assurance plan provides guidelines for continuous monitoring of the
project's progress and quality of work completed within each milestone. It requires
the project team to perform quality work that meets certain standards. The quality
assurance plan outlines the standards and the process of evaluation.

Training plan
A training plan determines what training and development they provide to project
team members or other stakeholders of the project. This can include speciMc skills
individuals need to complete parts of the project. It also identiMes training within
the organization to support the project's completion.

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