Project Charter vs. Project Management Plan: Key Differences Explained

In project management, a clear plan is not only useful but also necessary. Success is not a matter of chance, but it is something that is built on a solid foundation, and two documents, the project charter, and the project management plan, serve as the foundation.

Although the project charter gives a high-level understanding of the project, the project management plan goes deeper and gives a step-by-step how-to-do-it that is a procedural roadmap.

How can project management tools like PaceAI facilitate the development, alignment, and monitoring of these items so that they contribute to the successful conduction of a project? Let’s find out in the sections below.

What Is A Project Charter?

A project charter is a formal one-page document that essentially initiates the project. It is also referred to as a “Greenlight” paper that describes, amongst other things, project scope, people involved, high-level business aims, substantial risks, and persons who will be working on the project.

The project chart is defined and updated by the project manager, who also acts as the interface between the team and stakeholders. Following are some of the questions that the project charter shall cover. These questions are: 

• What is the business need for this project?
• What are the objectives and high-level scope?
• Who are the key stakeholders and sponsors?

It allows you to set boundaries and set a baseline on what it will offer, including setting expectations on what the project will deliver. Hence, it is extremely important and serves as a touchstone against which you can measure the success of the project.

A project charter helps you to define boundaries and establish a reference point for what the project will entail later on, including expectations for what a project will produce. 

What Are The Components Of A Project Charter?

A good project charter will serve no purpose unless and until you don’t mention this component within it.

• Project title
• Business case
• Project objectives
• Project scope
• Project sponsor
• Major stakeholders
• Resources required
• Constraints
• Budget
• Major risks
• Budget
• Major timeline or schedule

What Is A Project Management Plan?

The project plan is a more detailed and general blueprint than the project charter and is a reference plan for the project team and internal stakeholders until the end of the project. 

Basically, this begins by decomposing the business requirement document into a statement of work, including the task to be executed, resource plan, and communication plan, and goes even further to include a change management plan.

It also serves as a point of reference for team members and internal stakeholders until the project comes to an end. 

The Key Components Of A Project Plan

• Scope management plan
• Schedule management plan
• Risk management plan
• Communication plan
• Work Breakdown Structure (WBS)
• Budget and cost management
• Resource management

Project Charter vs. Project Management Plan : Key Differences

Many people confuse the project charter document with a project management plan. While both documents may appear to provide similar information at first glance, however, each of them serves a very different purpose. 

In the sections below, we will discuss the differences between these two documents in a more practical manner. 

Time of Creation

The project charter is developed at the start of the project, while the project plan is developed when the project charter is validated and signed by the project sponsor. 

The project sponsor is the one who is directly related to the project and will sponsor the project after the project sponsor approves the project charter and is ready to enter the project planning phase. Meanwhile, project planning will follow after the project initiation phase.

Who Creates What?

The project sponsor creates the project charter by filling out the template that is given to them by the project manager. At other times, the project charter establishment task is shared between the project manager and the project sponsor.

Meanwhile, the project manager solely creates the project plan, which includes all the specific information about the scope, schedule, communication, and risk management.  

Content Depth

The project charter is broad and includes high-level requirements. It covers the basics: why the project exists, the general scope, and who is involved. The charter doesn’t move deeper into the specific tasks, timelines, or risks but instead focuses on aligning stakeholders on the big-picture objectives. 

Concurrently, the project management plan contains the critical information required for each of the aspects of the project, such as scope, schedule, budget, communication, risk, and resources.

The Audience 

The project charter is a useful reference for stakeholders and project managers. On the other hand, the plan document for the project is a comprehensive working guide for the project team (technical team) to ensure efficient management of activities.

So these are the contrasting differences between the project charter and the project management plan, which clearly talks about who needs to do what, which document is necessary at what phase, and who it is intended for throughout the project lifecycle.

Now, let us see what the best practices are to create a successful project plan and a project charter. 

Best Practices For Developing The Project Charter And Project Management Plan

It is very important to develop a stable foundation for a project by writing a high-quality project charter and project management plan. Here are some best practices to guarantee that these documents lead to project success

1. Engage Stakeholders Early

From the outset, try to identify and build rapport with all major project stakeholders during the development of both the project charter and the project management plan. 

If you involve stakeholders from the very beginning, then it guarantees that their needs, expectations, limitations, and possible risks are being properly recorded. 

Early engagement is also a key factor that gets others on board and makes it easier to obtain buy-in and support, which will be important at every stage of the project cycle.

2. Define Scope Clearly and Thoroughly

For the project charter, describe the scope, objectives, and deliverables of the project as clearly as possible. This high-level scope serves as a boundary, defining the expectations that the project shall have and shall not have. 

In the project management plan, describe in more detail how this scope will be delivered and how this will be achieved, decomposed into tasks, deliverables, and milestones in order to give a clear idea of what will be done.

3. Establish a Change Management Process

Projects are dynamic, and changes and feedback are inevitable; hence, it’s very important to have a change management plan early on. This management plan allows the project to move smoothly. 

You need to have a structured approach by evaluating, approving, and incorporating feedback and changes to the scope, timeline, or budget into the project management plan. This structured approach helps the project team adapt while maintaining project goals and stability throughout.

4. Implement Regular Review Cycles

Throughout the project plan, facilitate regular review cycles for the project charter and project management plan. Keep revisiting the documents that allow the project team to reassess assumptions, address any emerging risks, and make necessary updates. 

Regular reviews are also done to make sure that the documents are current and represent the current status of the project, thus contributing to responsiveness to new evidence.

5. Capture Lessons Learned for Future Projects

At project closure, conduct a “lessons learned” or retrospective session with the project team and stakeholders. By doing so, you can reflect on what worked well and what could be improved. 

Such sessions also provide valuable insights for creating more effective project charters and plans in the future. These insights can help streamline planning, avoid common pitfalls, and build on best practices in subsequent projects.

By adhering to these best practices, project teams can develop clear, powerful project charters and project management plans–which serve as an excellent starting point for successful project delivery.

In addition, the use of PaceAI tools extends and simplifies these steps by aiding in the management of stakeholders’ input, keeping track of changes, automating review processes, and documenting inestimable lessons. 

Frequently Asked Questions (FAQs)

Conclusion

The project charter and project management plan are the dynamic duo of project success. The charter gives the project its “green light” and sets the vision, while the management plan lays out the “how” with all the details needed to reach that vision. Together, they keep everyone aligned, clear, and ready for action.

With smart tools like PaceAI, you can simplify and supercharge this process—making it easy to build strong foundations and stay on track every step of the way. Get these documents right, and you’re already halfway to a successful project.