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Project Governance

Project Management is a well defined concept found in many guidebooks and Bodies of Knowledge. Putting these guides and BOK’s to work for the benefit of the enterprise is the role of Project Governance

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IPT Management

Program Management

Project Management

Project  Driven  Requirements  

Project  Delivery  Performance  

The Elements of Project Governance

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+A Big problem in any discussion of Governance

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+What do we mean when we say “governance?”

!  gov⋅ern⋅ance [guhv-er-nuh ns] – noun !  government; exercise of authority; control.

!  a method or system of government or management

!  gov⋅ern [guhv-ern] – verb !  to rule over by right of authority: to govern a nation.

!  to exercise a directing or restraining influence over; guide: the motives governing a decision.

!  to hold in check; control: to govern one’s temper.

!  to serve as or constitute a law for: the principles governing a case.

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+What is Business Governance?

Governance is the set of decisions that defines expectations, grants power, or verifies performance. It consists either of a separate process or of a specific part of management or leadership processes.

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+Project Governance

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Project governance is the framework which ensures the project has been correctly conceived and is being executed in accordance with best project management practice within the wider framework of the firms of organizations governance processes.

Effective project governance ensures projects deliver the value expected of them. An appropriate governance framework ensures that all expenditure is appropriate for the risks being tackled.

Project governance is not about micro–management, it is about setting the terms of reference and operating framework, defining the boundaries and ensuring that planning and execution are carried out in a way which ensures that the project delivers benefits.

+Five Core Outcomes of Project Governance

!  Strategic alignment of projects within the portfolio with business strategy to support organizational objectives

!  Risk management by executing appropriate measures to manage and mitigate risks and reduce potential impacts on projects and programs to an acceptable level

!  Resource management by utilizing available resources and skills efficiently and effectively

!  Performance measurement by measuring, monitoring and reporting on project governance metrics to ensure that organizational objectives are achieved

!  Value delivery by optimizing the project portfolio in support of organizational objectives

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+Five Core Outcomes of Project Governance – Applicable to GPMO

!  Strategic alignment of projects within the portfolio with business strategy to support organizational objectives

!  Risk management by executing appropriate measures to manage and mitigate risks and reduce potential impacts on projects and programs to an acceptable level

!  Resource management by utilizing available resources and skills efficiently and effectively

!  Performance measurement by measuring, monitoring and reporting on project governance metrics to ensure that organizational objectives are achieved

!  Value delivery by optimizing the project portfolio in support of organizational objectives

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+ Three Elements of Project Governance

Project  Governance  3.  How  do  we  know  we  are  being  successful  at  what  we’re  supposed  to  be  doing?  

2.  How  are  we  going  to  do  what  we  said  we  would  do?  1.  What  do  we  want  to  do?  " Business  and  Technical  Strategy  

" Deliverables  Based  Planning  

" Measures  of  Performance  (MoP)  

" CapaciCes  Based  Planning   " Assessment  of  increasing  maturity  

" Measures  of  EffecCveness  (MoE)  

" ConnecCons  to  the  delivery  of  business  value  

" DefiniCons  of  physical  progress  of  plans  

" Measures  of  Physical  Percent  Complete  

Project Governance is the Primary Role of the Program Management Office (PMO)

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+ What’s the difference between Business Governance & Project Governance? !  Business Governance is the organizational control of the

business’s ability to deliver value

!  Project Governance is the centralized control of the projects that produce this value

Governance reduces the asymmetric information exchange between the providers and consumers of project information. Governance assures the providers of products or services have the full consent of the consumers that continuously increases visibility, maturity, and value of these products and services.

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+What’s the Real Problem Here?

!  Corporate Governance is well defined

!  Project Management methodologies are mature and generally applicable to a wide variety of business domain

!  There are gaps in the “governance” of projects through … !  Applying Project Management methods is not governance, it is

project execution controls

!  Having document artifacts is necessary but not sufficient for successful project work

!  Consumption of time and budget is never a measure of progress

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+ What are the activities of Project Governance? ! Establishing the basis for project

governance, approval, and measurement with roles, accountabilities, policies, standards, and associated processes

! Evaluating 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

! Enabling resourcing of projects with staff and consultants, harness and manage of business support and the provision of the governance resources

! Defining the “desired business outcomes”, benefits, and value — the business measures of success and overall value proposition

! Controlling the scope, contingency funds, overall project value, and other project performance attributes

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

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

!  “Steering” the project into the organization, remove obstacles, manage the critical success factors and remediate project or benefit-realization shortfalls

! Developing 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.

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+Good Project Governance Elements

Elements Project Governance Physical Artifact

A compelling business case, stating the objectives of the project and specifying the in-scope and out-of-scope elements Risk Adjusted Business Case

A mechanism to assess the compliance of the completed project to its original objectives identifying all stakeholders with an interest in the project

Deliverables Plan connected to business case

A defined method of communication to each stakeholder Communications Plan

A set of business-level requirements as agreed by all stakeholders Master deliverables

An agreed specification for the project deliverables and their measures of effectiveness and measures of performance

Capabilities, features, functions, and testable requirements

Clear assignment of project roles and responsibilities Responsibility Assignment Matrix

A current, published project plan that spans all project stages from project initiation through development to the transition to operations

Integrated Master Plan Integrated Master Schedule

A system of accurate upward promoting status and progress-reporting including connections between cost, schedule, and technical performance

Measures of physical percent complete and delivered business value

A central information repository for the project Enterprise PM System

A process for the management and resolution of issues that arise during the project Issue tracking system

A process for the recording and communication of risks identified during the project Risk management system

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+3 Simple Steps to Governing the Project Management Processes

!  Define what Project Governance means for the enterprise in terms of its artifacts

!  Understand “governance” does not replace actionable beneficial outcomes of a Project Management method

!  Initiate the cultural introduction of “governing” as well as “managing”

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+A Project Governance Framework

!  OGC P3M3 !  Maturity model for Project, Program, Portfolio

Management Maturity Model

!  This framework is simple, well formed and in use in the UK for council, township, county and regional governments for IT management

!  It is a maturity model in the same way CMMI is a maturity model

www.ogc.gov.uk

The OGC P3M3 V2.0 defines 5 levels of maturity for project, program, and portfolio management processes. P3M3 is “owned” by the same organization that “owns” ITIL

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+Universal Process Maturity Levels

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Process characterized for projects and is often reactive

Process characterized for the organization and is proactive

Process measured and controlled through formal data gathering and assessment processes

Focus is on continuous process improvement through assessment, feedback and preemptive corrective actions

Level 4: Quantitatively Managed

Level 1: Performed

Level 2: Managed

Level 5: Optimizing

Level 3: Defined

Each maturity level is a layer in the foundation for continuous process improvement

Process unpredictable, poorly controlled and reactive

+Characteristics of Each Maturity Model Level

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Maturity Level Attributes found in the organization

Level 5 Optimized

"  Project, Program, Portfolio management improvement environment is actively encouraged "  Built on a flexible PMO centered organizational structure "  Career path for project and program managers "  Project, program, and portfolio management training is a component in staff development

Level 4 Managed

"  Active senior management support for integration of business planning and execution "  Organization efficiently plans, manages, integrates and controls multiple projects "  Database of previous project data maintained and utilized

Level 3 Defined

"  Senior management support for project, program, and portfolio management "  Organization efficiently plans, manages, integrates, and controls single projects "  Repository of previous project experience maintained and utilized "  Team members and project managers trained in project management "  Consistent use of tools and techniques for project management processes

Level 2 Repeatable

"  Managed support for project management "  Repeatable processes are applied to basic project management steps "  Project and program outcomes are more predictable "  Use of common tools and techniques for key project management processes

Level 1 Initial

"  Many, incomplete, informal approaches – each project handled differently "  Highly dependent on Project Manager "  Project and program outcomes unpredictable "  Little organizational support for project management "  Lesson learned are not gathered and passed on to other projects

+What sets high maturity organizations apart from the rest?

!  High performing organizations are significantly more mature in their project management practices than organizations in general

!  The most significant difference between high and low performing organizations is in allocating resources optimally and in estimating accurately

!  High-performing organizations are very good at satisfying project customers and in completing projects on schedule, on budget

!  A significant percentage (23%) of high-performing organizations are at Level 5 maturity in quality management

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Project Management Maturity: A Benchmark of Current Best Practices, CBP

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Governing Projects by Getting to Level 3 of the OGC P3M3 A mature organization has the ability to manage portfolios, programs, and projects based on standard, defined processes.

+ Project, Program, and Portfolio Management Maturity Model

Level 1 – Initial Recognize projects and run them differently from the ongoing business

Level 2 – Repeatable Ensure that each project is run on its own processes and procedures to a

minimum specified standard

Level 3 – Defined Each organizational element has a centrally controlled project processes. Individual projects flex within these processes to suit a particular project

Level 4 – Managed Each organizational element obtains and retains specific measures on its

project performance. These measures used to improve the quality of projects

Level 5 – Optimizing The entire organization runs a continuous process improvement process with

proactive problem and technology management

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+The Program Management Office Governance Structure using the OGC P3M3 Framework

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Management Control

Benefits Management

Financial Management

Stakeholder Management

Risk Management

Organizational Governance

Resource Management

Portfolio Management

Program Management

Project Management

Program Office Governance

+Key Performance Improvements

!  Understand the key practices that are part of effective portfolio, program, and project management processes

!  Identify the key practices that must be embedded within the organization to achieve the next maturity level

!  Understand and improve the capability to manage programs and projects more effectively in the future

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+ P3M3

The 25 (2+11+12) Process areas of OGC P3M3 include all core Knowledge Areas of PMBOK

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+Assessment of the Path to OGC P3M3 Level 3

!  Where are we today?

!  Where do we want to be?

!  How can we get there?

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+Benefits to reaching Level 3

!  Improved budget and schedule predictability

!  Reduced cycle time

!  Increased productivity

!  Improved quality

!  Increased customer satisfaction

!  Increased return on investment

!  Decreased cost of quality

TeraQuest / Gartner 2006 Maturity ROI

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+Measureable Improvements by moving between the Maturity Model Levels

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Moving from One Level to the Next L1 to L2 L2 to L3 L3 to L4

Reduced SW Defects 12% 40% 85%

Reduced Cycle Time 10% 38% 63%

Reduced Costs 8% 35% 75%

Schedule Variance 145% 24% 15%

Data presented at 5th Annual CMMI technology Conference & User Group, Denver Colorado, November 2005

+Benefits to Deploying a Project Governance Process at Level 3

!  Substantial ROI improvements (from historical SEI data)

!  Identified strengths and weakness by Key Process Area (KPA) with improvement plans for weaknesses

!  Prioritized roadmap to Level 3 with actionable outcomes connected to business strategies

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+Steps to get to OGC P3M3 Level 3

!  Competency Assessment of Project Managers !  OGC P3M3 assessment criteria

!  PMI – PMBOK process areas for project execution details

!  OGC P3M3 Deployment !  Level 3 process areas

!  Deployment of PPM Business processes against Level 3 Process Areas

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+Failure Modes along the way to Process Maturity

Failure Mode Failure Description Mitigation

Design and Definition

Scope and outcomes not clearly defined

Deliverables Based Planning (DBP) with physical % complete measures of progress

Decision making

Inadequate levels of sponsorship

Scorecard based mission and vision defined up front with maturity assessment units of measure

Risk Discipline Weak arrangements for risk management

Embedded risk management, retirement and mitigation in the Master Plan

Supplier management

Lack of shared understanding between suppliers

Deliverables based plan with risk adjusted measures of performance

People Disconnects between program and stakeholders

Deliverables focus with measureable value to stakeholders

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+Beneficial Outcomes using a Project Governance Approach

!  Change initiatives address and achieve strategic objectives

!  Business value realized earlier

!  Risks retired or managed

!  Total change investment is coherent, prioritized, and visible

!  Allocation of resources optimized

!  New initiatives evaluated for operational effectiveness

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+Characteristics that must be in place for successful Project Governance

!  Focus on leadership and alignment with strategy

!  Vision covers entire organization

!  Risk visible from a strategic perspective

!  Integrity of business transformation managed through programs in a Project Portfolio Management system

!  Benefits oriented to organization not just technology

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+What’s the 1st Step to Level 3?

!  Perform a gap analysis between “As Is” and “To Be” at Level 3

!  With these gaps, build the gap closure plan

!  Execute the closure plan with measurable beneficial outcomes to the organization

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