1. Purpose #
Bottom line: The Charter authorizes a project internally; the SOW binds parties contractually.
Project Charter
- Acts as the internal authorization document for a project.
- Gives the project manager the mandate to use resources and begin work.
- High-level and strategic.
Statement of Work (SOW)
- Acts as the contractual agreement between a client and a service provider/vendor.
- Defines exactly what will be delivered, how, when, and under what conditions.
- More detailed and operational.
2. Content Differences #
Charter typically includes
- Business case (why the project exists).
- High-level scope.
- Key stakeholders.
- High-level timeline and budget estimates.
- Assigned project manager and authority level.
SOW typically includes
- Detailed deliverables (features, services, outputs).
- Scope of work (boundaries).
- Acceptance criteria.
- Pricing, payment terms, and responsibilities.
- Assumptions, constraints, and governance mechanisms.
3. Timing #
- Charter → Created first, during project initiation, to authorize and align stakeholders.
- SOW → Created after or in parallel, usually before execution, to contractually lock down expectations with vendors or clients.
4. Connection Between Them #
- The Project Charter provides the WHY and WHAT at a high level.
- The SOW provides the HOW and WITH WHOM at a detailed, contractual level.
Example:
- Charter: “Implement an e-commerce platform to improve online sales by 20% in 12 months.”
- SOW: “Vendor will build the platform using Shopify Plus, deliver in 3 phases, with X integrations, at Y cost, by Z date.”
5. Industry Practices #
- In corporate internal projects (like IT upgrades): sometimes only a Charter exists; the SOW is optional unless external vendors are hired.
- In government or construction projects: both are mandatory — Charter for internal approval, SOW for contractual control with suppliers.
- In consulting/outsourcing projects: the SOW is critical because it defines the legal and financial boundaries of the work.
✅ Summary #
The Charter is the project’s birth certificate (authorizes existence). The SOW is the project’s contract (defines the work and obligations). They are connected because the Charter sets direction, and the SOW operationalizes it into a binding agreement.
Project Charter vs. SOW — Side-by-Side Comparison #
| Section | Project Charter Internal Authorization | Statement of Work (SOW) Contractual Agreement |
|---|---|---|
| Purpose | Authorizes project existence and assigns a PM | Defines deliverables, scope, and obligations between client & vendor |
| Audience | Executives, sponsors, project team | Client and vendor/service provider (legal binding) |
| Business Case | Explains why the project is needed (strategic value, ROI, alignment) | Not included |
| Objectives | High-level project goals (e.g., “Increase sales by 20%”) | Translated into measurable deliverables and acceptance criteria |
| Scope | Broad boundaries of what’s in/out of scope | Detailed description of tasks, deliverables, and exclusions |
| Timeline | High-level milestones | Detailed schedule (phases, timelines, dependencies) |
| Budget | Rough estimates (ballpark figures) | Detailed pricing, cost breakdown, payment terms |
| Roles & Responsibilities | Names sponsor, project manager, key stakeholders | Assigns responsibilities between client & vendor |
| Authority | Gives PM authority to allocate resources | Authority comes via contract |
| Assumptions & Risks | High-level assumptions and initial risks | Specific contractual assumptions and constraints |
| Acceptance Criteria | Not detailed (only broad success definition) | Specific, measurable criteria for deliverables acceptance |
| Legal/Contract Terms | Not included | Mandatory — includes T&Cs, SLAs, warranties, penalties |
| Change Control | High-level governance approach | Detailed process for scope, schedule, and cost changes |
🔗 How They Fit Together #
- Charter comes first → gives the green light for the project.
- SOW is derived from the Charter → fleshes out details for external agreements.
- Think of it like this:
- Charter = “We will build a new hospital wing because demand has doubled.”
- SOW = “Construction company X will deliver the building in 3 phases, using Y materials, at Z cost, with penalties for delay.”
✅ Quick Analogy #
Project Charter = Birth Certificate → proves the project exists, gives it an identity.
SOW = Employment Contract → defines what work will be done, how, when, and under what terms.
⚠️ Common Mistakes #
- Using a Charter as a contract (it’s not legally enforceable).
- Skipping acceptance criteria in the SOW (creates disputes later).
- Writing a Charter that’s too detailed (leads to rigidity before discovery).
- Approving vendors before the Charter clarifies the project’s “why”.
🧭 Quick Decision Guide #
Choose the right doc fast:
- Need internal approval and direction? → Create a Project Charter.
- Engaging a vendor or consultant? → Draft a Statement of Work (SOW).
- Doing both? → Start with the Charter, then derive the SOW to align scope, schedule, cost, and quality.
❓ FAQ #
Is a Project Charter legally binding?
No. A Charter is an internal authorization document. It aligns stakeholders and empowers the PM, but it is not a contract.
Can the SOW exist without a Charter?
Yes, especially in consulting/outsourcing where the legal agreement (SOW) is primary. However, a brief internal memo or mini-charter still helps ensure alignment.
Where should acceptance criteria live?
In the SOW. The Charter may define broad success measures, but the SOW must include measurable acceptance criteria tied to deliverables.
What if details change during the project?
Use the Charter's governance to initiate a change; execute changes through the SOW's change control to adjust scope, schedule, or cost.