Where Governance and PM meet

Transcription

1 Where Governance and PM meet Carol A Long, CEng FBCS CITP, MAPM Three Triangles Performance Ltd 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 1

2 Governance and Project Management What is Governance? Why does it matter to programme and project management? What did the Governance SIG find? Next steps 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 2

3 What is Governance? Governance is a control framework within which directors direct and manager manage: the way those with power use that power. (Asian Development Bank) The word governance derives from Latin origins that suggest the notion of "steering Seen as a set of processes, customs, policies, laws and institutions affecting the way an organisation is directed, administered or controlled, and how it relates to the many stakeholders involved The process by which policies are set and decision making is executed (Gartner) 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 3

4 Legislative Framework Governance layers Organisation level corporate governance, technical policy Programme level programme governance, governance of projects Project level project governance, technical practices 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 4

5 The Board s need for good Governance of Project Management Obligations the Board must meet Opportunities the organisation wants to have Links between the organisation and its projects 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 5

6 Obligations the Board must meet The board should present a balanced and understandable assessment of the company s position and prospects (Combined Code) Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined (OECD Principles of Corporate Governance 2004) 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 6

7 Obligations the board must meet (2) Strict disclosure and reporting rules (Sarbanes Oxley) Optimal return on capital (Shareholders needs) More requirements from European Union (effective 2007 and 2008) on transparency in annual accounts 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 7

8 Drivers for Governance of PPM 80% of turnover in projects for change and the future 25% of projects fail Organisation Change Business as usual 50% of organisations have no PPM processes Programmes Projects Initiatives 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 8

9 Drivers for Project Governance 60% to 95% of stock market valuations are made up of intangible assets such as cultural capital, intellectual capital and structural capital. Kotter and Heskett, Corporate Culture and Performance Companies implementing PPM process and tools see a 10-15% cost reductions and have capacity for more advanced projects Gartner 2005 Project failure rates between 28% and 9% Standish Group, Capers Jones, Computer Weekly, KPMG - various surveys between 1998 and /10/2008 BCS Hampshire Three Triangles Performance Ltd 9

10 What about our projects? 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 10

11 Why good Governance can help PMs improved benefit realisation better organisational coherence potential for improved cost control tax advantages for R&D clearer picture of the prospects reduced opportunity for clashing projects 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 11

12 Key questions senior managers asked - project managers need answers How do you know if : your projects align with business aims: are you doing the right ones? you have the appropriate resources to do your chosen projects: know the key constraints? Can you list which projects spend what budgets? Can you identify who is responsible for each project & who has decision making authority? 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 12

13 Reasons for Project Failure 6 out of 8 of the main reasons cited as reasons for project failure indicate a breakdown in governance Skilled resources Emerging problems Strategic alignment Benefits focus Senior management support Supplier management Project and Risk Management Stakeholder engagement 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 13

14 Failures attributable to poor governance 1. Lack of a clear link between the project and the organisation s key strategic priorities, including agreed measures of success. 2. Lack of clear senior management and ministerial ownership and leadership 3. Lack of effective engagement with Stakeholders 4. Lack of skills and proven approach to project management and risk management 5. Lack of understanding of and contact with the supply industry at senior levels within the organisation. 6. Evaluation of proposals driven by initial price rather than longterm value for money (especially securing the delivery of business benefits). 7. Too little attention to breaking development and implementation into manageable steps. 8. Inadequate resources and skill to deliver the total delivery portfolio. Source: POST Report on UK Government IT Projects 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 14

15 Questions for project managers to answer for themselves Can you identify who is responsible & who has decision making authority within the project? Do you have a direct reporting line to the programme manager, SRO or executive responsible for your project? How do you measure the success of projects? Is there frank internal reporting of project status? 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 15

16 Two publications to help Directing Change Co-Directing Change Short books: quick reads for serious thinking Every Principle in the book is applicable to every significant project Every component is accompanied by self assessment (or audit) questions 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 16

17 GoPM Directing Change Four Components & Eleven Principles: portfolio direction, sponsorship, project management, disclosure and reporting Appendix 1 Relationship with Combined Code Appendix 2 Relationship with Sarbanes Oxley Download from: 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 17

18 Collaborations? Prone to failure: lack of clarity on goals, insufficient relationship management, culture differences, different and unaligned objectives Unclear management structures 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 18

19 GoPM Co-Directing Change Joint ventures, collaboration, co-owned projects Twelve Principles, Six Components Alignment sponsorship Joining and leaving Risk and reward Project management Disclosure and reporting Appendix - Combined Code & Sarbanes Oxley Download sample from: 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 19

20 The Future What sort of projects will we see? Who are the players in that space? What is next for the Governance of Project Management group? 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 20

21 What IT Projects can we expect? Technology investments are being directed towards tools that will increase information sharing and boost productivity. Economist Intelligence Unit September 2008 The more operational experience companies have, the more heavily they invest in IT. SAP March 2008 The most important element of operational excellence is end-to-end visibility into operations Economist Intelligence Unit March 2008 These are systems to support governance, especially resource planning and progress reporting 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 21

22 Magic Quadrant for Enterprise Governance, Risk and Compliance Platforms Source: Gartner June /10/2008 BCS Hampshire Three Triangles Performance Ltd 22

23 GoPM SIG Currently working on guidance for Sponsors Group membership continues to draw a number of professions: engineers, company secretaries, IT professionals, project managers, lawyers Continues as a SIG of APM (Association for Project Management) Group website: 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 23

24 Summary Organisations need good Governance of Project Management Projects must be part of their organisation s governance structure Project managers can benefit from good Governance of Project Management through career development opportunities project success from Directing Change books to give a start to people from multiple professional groups Understanding what good Governance of Project Management looks like is the first step 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 24

25 Three Triangles Performance Ltd Improving Management: Programmes, Projects, Process 21/10/2008 BCS Hampshire Three Triangles Performance Ltd 25