Project Charter vs. Project Plan, what are the differences? In project management, we often encounter these two documents, Project Charter vs. Project Plan, or project management plan. However, difference between the two is not always clear. Today, we will explain it in plain English.
Introduction to Project Charter vs. Project Plan
Before diving into the difference, it is worth spending a few words to discuss what a project charter is, and then what a project plan is.
What is a Project Charter?
A project charter is a brief document that defines the goals and scope of the project at high level. It is the first document you create after the business case is approved. It does not go into technical details but gives a summary description of what needs to be done. Anyone can understand the content of a project charter, and it is particularly useful because it generally confers authority to the project manager.
Conferring authority to the project manager means that the document says: “this is what needs to be done, now go out there, find a way to do it, and do it”.
At an abstract level it might be all clear, but what does this mean in practice? In practice, a project charter may say something like:
“We need to build a new factory, the factory must be located in Greenville (South Carolina), and it must be able to produce 10 tons of cereal boxes per day at max capacity. This project will have a $40m budget”
Of course, a real project charter will be more detailed and contain about 10 pages, but for the sake of this example just a sentence is fine. This single sentence, together with the definition of the budget at the end basically tells us all our expectations.
We need to create a factory for our cereal company, and it must be in Greenville. We need to structure it in such a way that it will be able to produce these 10 tons of cereal boxes per day if used at 100% of the capacity. If we know that one production line can produce 1 ton per day, then it means it must host 10 lines, so we need to find a building that is large enough or build one.
In this brief example many things are left to figure out. Should we buy the property, or should we rent it? Should we buy the equipment, or should lease it? If we are renting, how long we must secure the rent? In a real case, the project charter will pose more constraints than this.
What is a Project Plan?
Most people use the words project plan and project management plan interchangeably. However, they are different things, and you should understand both.
A project plan is not a term defined in the PMBOK, but even if it is not a formal term of project management, it is widely used. It indicates, guess what, the plan of the project. That is, the set of activities that must be completed, how long will they last, and what are the dependencies between activities. The best practice is to represent it with a Gantt diagram.
Instead, the project management plan tells us how to do project management stuff. It is like a plan for the planner or, more correctly, a guideline for the planner. This document is officially recognized from the Project Management Institute. Even if for some small projects it may be overkill, for large projects it is especially important.
It defines things such as how to manage risks, how and when to involve stakeholders, what strategies to manage the schedule are allowed (waterfall planning? Agile planning?) and so on. Depending on the circumstances, the project manager may create it from scratch, or use a standard project management plan that the organization always uses.
More realistically, the project manager will take a standard project management plan from the organization and adapt it to better suit the project. For example, if the company tends to work with agile methodology, constructing a new factory may be better managed with waterfall planning (sequential planning).
Now that all these documents are clear, we can focus on comparing project charter vs. project plan.
Project Charter vs. Project Plan
In this section, we will see all the key difference of project charter vs. project plan, uncovering them one by one. No difference is more important than the others, we just selected our order arbitrarily.
1. When they are prepared
Project charter is written right before the project has started; project plan is written right after the project has started.
The project charter authorizes the project, so it must be prepared before the project can start. Before the project start, we do not know if it is actually going to start at all, so there is no need to define how to manage a project that does not exist. Of course, there is not even the need to plan for actual activities.
2. Who prepares them
The sponsor writes the project charter, the project manager writes the project plan.
Since the project is yet to start when we are creating the project charter, there is no project manager just yet. The person who wants the project to be completed (the sponsor) has to prepare the project charter to outline the requirements and the high-level scope. Sometimes, the sponsor already knows who would be the project manager that he wants to appoint to the project, if it is to start. In that case, the project manager may work together with the sponsor on the project charter.
Instead, the project plan is created after the charter and exclusively by the project manager. It is much of the work of the project manager to define how to go about planning, and then plan with a Gantt diagram.
As we briefly mentioned before discussing project charter vs. project plan, the project management plan may be a predefined document coming from the organization Project Management Office as well.
3. Their mission
The project charter aims to authorize the project, the project plans aim to guide the implementation of the project.
Our next item in this project charter vs. project plan comparison relates to the mission of each document. As we know, they are two different documents that serve two clear different purposes.
The project charter authorizes the project, and with that it also authorizes what needs to be done at high level and sets a budget. Instead, the project plan does not need to authorize anything. It only provides guidance on how to executes the activities that have been authorized.
4. Intended Audience
The project charter is for stakeholders and project manager, the project plan is for the project team.
Finally, we can turn to the last item of our project charter vs. project plan comparison: the intended audience. Since the project charter and the project plan are two different documents, it is no surprise that they are meant for different people.
The project charter authorizes the project to be done. So, it is for the project manager to know he is authorized to run the project, and also for all other stakeholders to recognize his authority and allow him to run the work. Instead, the project plan does not talk about authorization: it assumes authorization already exists. Instead, the project plan clarifies to the project team (people actually doing the work) what are the things that are to be done, and how to go about them.
Project Charter vs. Project Plan in Summary
In this brief comparison we saw what it means to compare project charter vs. project plan. In short, the project charter defines what needs to be done and gives the project manager the authority to do so. Instead, the project plan is created afterwards, and defines how activities will actually be executed.
Knowing the difference between project charter and project plan is crucial for any project manager, or really any member of a project team. With this knowledge, you can easily navigate complex projects and understand what is going on behind the curtains. Yet, the road to be a good project manager does not stop here. A good point to continue your journey is to learn about soft powers such as referent power.
