Project governance

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The term Project governance is used in industry, especially in the information technology (IT) sector (see Information technology governance), to describe the processes that need to exist for a successful project.

Project governance will:

Outline the relationships between all internal and external groups involved in the project
Describe the proper flow of information regarding the project to all stakeholders
Ensure the appropriate review of issues encountered within each project
Ensure that required approvals and direction for the project is obtained at each appropriate stage of the project.

Important specific elements of good project governance include:

A compelling business case, stating the objects of the project and specifying the in-scope and out-of-scope aspects
A mechanism to assess the compliance of the completed project to its original objectives
identifying all stakeholders with an interest in the project
A defined method of communication to each stakeholder
A set of business-level requirements as agreed by all stakeholders
An agreed specification for the project deliverables
The appointment of a project manager
Clear assignment of project roles and responsibilities
A current, published project plan that spans all project stages from project initiation through development to the transition to operations.
A system of accurate upward status- and progress-reporting including time records.
A central document repository for the project
A centrally-held glossary of project terms
A process for the management and resolution of issues that arise during the project
A process for the recording and communication of risks identified during the project
A standard for quality review of the key governance documents and of the project deliverables.

An example of corporate governance: Home Depot's CEO Cleans Up - "CEO Robert Nardelli is a rarity among managers of major corporations: $3 million of his annual bonus is guaranteed."

[edit] See also

Project Governance is an active rather than just a controlling role.

While ‘lack of senior management commitment’ is a consistent cause of project failure, this still occurs when governance structures are in place and operating. This is because Project Governance is not well understood and even less well executed.

Recent research into Project Governance (conducted between 2005 and 2006 by Australian consultancy Capability Management) found that less than 10% of senior managers actually understood their Project Governance roles and accountabilities, let alone performed them.

“We make decisions and hope (that they’re right)” was a common theme.

Yet the research also found that effective Project Governance increases realized returns by, on average, 10% and halved the risk levels. Project Governance is both important and valuable!

Project Governance can be seen as consisting of nine key roles

establishment of the bases for project governance, approval and measurement —including defining roles and accountabilities, policies and standards and associated processes

evaluation of project proposals to select those that are the best investment of funds and scarce resources and are within the firm’s capability and capacity to deliver

enablement through resourcing of projects with staff and consultants, harnessing and managing of business support and the provision of the governance resources

definition of the ‘desired business outcomes’ (end states), benefits and value — the business measures of success and overall value proposition

control of the scope, contingency funds, overall project value and so on

monitoring of the project’s progress, stakeholder’s commitment, results achieved and the leading indicators of failure

measurement of the outputs, outcomes, benefits and value — against both the plan and measurable expectations

action to ‘steer’ the project into the organization, remove obstacles, manage the critical success factors and remediate project or benefit-realization shortfalls

development of the organization’s project delivery capability — continually building and enhancing its ability to deliver more complex and challenging projects in less time and for less cost while generating the maximum value.

As you can see, Project Governance is far from being a passive — turn-up once a month to the Steering Committee meeting — type of role.

The Project Governance team should see themselves as a resource for the project team — to actively work jointly with the project team to ensure the success (in business terms) of the project.

This level of participation and action requires education, knowledge and support — which to date has been short on the ground.