Project Governance Or Is It Governance of Projects? PMI SOC PDD 2013 v 2013.1 Presented by Darya Duma, PEng, PMP, PRINCE2 www.procept.com Procept Associates Ltd. 2013
Outline What is project governance? Governance of projects, programs and portfolios as reflected in international standards Translating principles of governance of projects to a case study But first 2
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What Is Governance? Corporate governance defines the rules by which an organization conducts its operations Usually includes: Enterprise risk management strategy Description of relationships between shareholders, board, management, and other stakeholders Structure through which objectives are set and the means of attaining them Guidelines for information disclosure and transparency May include identification of values 6
Governance of Projects PMBOK : The alignment of project objectives with the strategy of the larger organization by the project sponsor and project team. is separate from organizational governance. PRINCE2 : ensures that an organization s project portfolio is aligned to the organization s objectives, is delivered efficiently and is sustainable. Wikipedia management framework within which project decisions are made. APM echoes PRINCE2 and adds: also supports the means by which the board and other major projgect stakeholders exchange timely, relevant and reliable information. 7
Governance of Projects Defines how projects are directed and controlled Aligns with corporate governance 8
Principles Business justification for project Executive accountability Defined authorities Decision-making structure Transparent communication Direction for efficient use of resources. 9
Business Justification A Business Case for every project Benefits identified Expected benefits align with strategic objectives Ownership of benefits identified Other elements to include: Business risks Priority or ranking of project with other work 10
Executive Accountability What does that mean to you? 11
Executive Accountability One distinct Project Sponsor Provides oversight and direction Project Sponsor owns the business case May be the project customer or funder Provides authority to the project manager and access to resources Authorizes project or phases in the project Directing a Project PRINCE2 process 12
Defined Authorities Senior User Steering Committee or Project Board Project Sponsor Project Team Project Manager 13
Decision-making Structure Project controls Auditable PM Process Stage gates established and recorded Business case reviewed Includes project closing and benefits review Boundaries for PM authority identified Issue escalation process 14
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Transparent Communication Project performance reporting Proactive risk management End of stage reviews Emphasis on control and accountability Lessons learned Audits of governance framework 17
Efficient Use of Resources Portfolio management Defined roles and responsibilities Appropriate accountabilities and authorities Project management office Project objectives match resource availability and capability 18
Reminder: Portfolio, Programs, Projects PORTFOLIO PROGRAMS PROJECTS PROJECTS PROJECTS PROJECTS 19
Project Portfolio Management Doing projects right is project management Doing the right projects is project portfolio management The following is most applicable to internal projects, less so if projects are for external customers 20
The Organizational Context The Standard for Portfolio Management, Fig 1.2, contributed by C Emond, R Thibaud, H Bouchard 21
Governance of Portfolios Broader outlook Portfolio alignment with business strategy Project ranking Balancing of portfolio Risk management Transparent scoring model Decision-making authority Verification of governance for projects. 22
Relationship Between Program And Project CORPORATE STRATEGIC PLAN PROGRAM GOALS & BENEFITS MANAGE- MENT APPROACH RISKS & ISSUES CHANGES TO SCOPE, COST, SCHEDULE GOALS BENEFITS? INITIATION PLANNING EXECUTION CLOSURE MONITORING & CONTROLLING PROJECT 23
Governance of Programs Programs have long life cycles May sustain parts of an organization s business May be joint ventures with other organizations Unique governance framework for each program But addresses similar elements as portfolio governance framework Should still be aligned with corporate governance. 24
Case Study 25
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Governance Framework Sarbanes Oxley, Treasury Board Of Canada Corp Gov Principles Legislation Project Gov Principles Policy PMO Org. Chart PM Framework Quality Gates 27
Project Management Policy Purpose Principles Application Authority and accountability Financial resources Relationship to corporate governance 28
Reporting Structure 29
The Project Team Structure Regional Program Management Director Office Project Board Client Regional PM (Procurement / Architect) Project Assurance (TSD) Project Officer Functional Reporting Supervisory Reporting Technical SME S Team Manager (eg. Consultant, Contractor) Client Representative 30
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Quality Gate GN PM Process Map Description Purpose Timing Responsibility Quality Process How to ensure its being done well 32
Summary Defining a governance framework for projects, programs and portfolios is essential Controversial, but we can agree that: Aligned with corporate (organizational) governance Projects should have a business justification Accountabilities and responsibilities at all levels need to be clear Policies on risk, communication, resources and stakeholder management are elements. 33
Thank you! Darya Duma, PEng, PMP, PRINCE2, PSP, MCT Procept Associates Ltd 1234 Kingston Road, Suite 125 Toronto Ontario M1N 1P3 Tel 416-693-5559 www.procept.com duma@procept.com 34