Governance of project management

EuroProjex rodneyturner@europrojex.co.uk© jrt/gpbo/jul08

EuroProjex

The Governance of Project Management

PMI Beirut 29th May 2014

Prof Rodney TurnerManaging Consultant, EuroProjex

Editor-in Chief, International Journal of Project ManagementSKEMA Business School

DefinitionsThe project-oriented organization

The projectThe context

Linking corporate strategy to project strategy

Corporate governance

Corporate governance involves a set of relationships between a company's management, its Board (or management team), its shareholders

and other stakeholders.Corporate governance provides the structure

through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined.

Governance

¾ Governance defines´ the objectives of the organization´ the means of obtaining those objectives´ the means of monitoring performance

¾ Governance defines the relationship between´ shareholders´ the board´ management´ other stakeholders

Three levels of governance of projects

Context

Projects

APM’s Special Interest Group

¾ Project Governance is the overlap between projects and corporate governance

www.mylara.com/gopm or www.apm.org.uk

CorporateGovernance

ProjectsProgrammes &

Portfolios

Project governance

Governing the context inwhich projects are done¾ programs and portfolios¾delivery capability

Governing individualprojects

Four project governance paradigms

Flexibleeconomist

(maximize valuefor sponsor)

Conformist(minimize

costs)

Agilepragmatist(follow the

process)

Governance orientationShareholder Stakeholder

Versatileartist

(balancerequirements)Control

Outcome

Behaviour

The contextLinking corporate strategy to project strategy

Purpose of governance of projects

¾ Portfolio efficiency and effectiveness¾ Sponsorship effectiveness and efficiency¾ Project management effectiveness and

efficiency¾ Disclosure and reporting

Good governance results in ……

¾ Link to strategy¾ Senior management support¾ Engagement with stakeholders¾ Organizational capability¾ Contact with suppliers¾ Value for money (focus on value not price)¾ Breakdown to manageable steps

11 principles of the governance of projects

¾ Board has overall responsibility for governance of projects

Objectives, What, Doing the Right Projects¾ Coherent and supportive relationship between

business strategy and project portfolio ¾ Business case supported by relevant and

realistic information

Means, How, Doing Projects Right¾ Roles, responsibilities and performance criteria

clearly defined¾ Disciplined arrangements, supported by appropriate

methods and controls applied throughout life-cycle¾ Responsible managers have sufficient representation,

authority, competence and resources to make decisions

¾ Stakeholders engaged at an appropriate level and in a manner that fosters trust

Monitoring Progress¾ All projects have approved plan with stage gates.

Decisions made at stage gates clearly recorded and communicated.

¾ Board decide when independent scrutiny of projects required and implement such scrutiny

¾ Clearly defined criteria for reporting project status and escalating risks and issues

¾ Organization fosters a culture of improvement and frank disclosure

Three levels of process and stage-gate reviews

PortfolioDesign

PortfolioImplementation

PortfolioMaintenance

PortfolioReview

Lessons learned

DefineProgramme

ExecuteProgramme

CloseProgramme

Businesscase Feasibiliy Design Execution Closure

1 2 3 4 5

A project is ……

¾ A temporary organization¾ to which resources are assigned¾ to do work¾ to deliver beneficial change

Results-based viewExploitation

Implementation

Resources Project Outputs

Outcomes

Benefit

Improvedperformance

Operation

Project governance

Project governance involves a set of relationships between a project’s management, its parent

organization, its client and other stakeholders. Project governance provides the structure

through which the objectives of the project are set, and the means of attaining those objectives and monitoring performance are determined.

Governance of projects

¾ Governance defines´ the objectives of the project´ the means of obtaining those objectives´ the means of monitoring performance

¾ Governance defines the relationship between´ owner´ sponsor, steering committee´ project manager, team leaders´ other stakeholders

Governance of projects

¾ Define objectives´ do the right projects

¾ Define the means´ do projects right

¾ Monitor performance´ do projects right first time, every time

BusinessChange Mgr

Governance roles

Sponsor

ProjectManager

Steward

DeliveredOutcome

ClientNeed

DeliveredOutput

RequiredProcess

DesiredOutput

DesiredOutcomeDefine

Objectives

DefineMeans

MonitorProgress

Benefits definition and delivery

GoalValue

Problem 1

Problem 2

Problem 3

NewAsset

Capability1

Capability3

Capability2

Benefits Definition - SponsorCapability DefinitionSteward

Capability DeliveryProject Manager

Benefits Delivery – Owner/or Business Change Manager

The Project Manager’s responsibility ends here

Step13

Step11

Step12

Step21

Step23

Step22

Program Director

Project Executive(Sponsor)

Senior UserSenior supplier

Project Board

Program management

Project management

Project Manager

Sponsoring Group

ProgramManager

Senior businessmanagement

Business ChangeManager

ProgramOffice

Deliver capability Embed changeControl program

PortfolioManager

BoardOwner

PRINCE2 and MSP

Portfolio management

Program management

Corporate strategy to project strategy

PortfolioStrategy

PortfolioObjectives

CorporateStrategy

Context

ProgramStrategy

ProgramObjectives

ProjectStrategy

ProjectObjectives

Work areaStrategy

Work areaObjectives

TeamStrategy

TeamObjectives

IndividualObjectivesProject strategy

Programs and portfolios

¾ A program is a set of projects sharing a common objective

¾ A portfolio is a set of projects or programs sharing common resources

¾ The investment portfolio is the sum total of an organization’s investment activity

Investment portfolio

Portfolio ofmediumprojects

Portfolio ofsmall

projects

Largeprogram D

Largeprogram C

Largeproject B

Investmentportfolio

Steps of portfolio management

¾ Step 1: Awareness of ongoing projects through a project data-base

¾ Step 2: Awareness of the status of all projects through a project reporting system

¾ Step 3: Projects are prioritized and selected through transparent procedures

¾ Step 4: Resource needs for all projects are planned and assigned centrally

¾ Step 5: Business benefits of projects are evaluated post completion for continuous improvement

Project traffic light report

Project 1 100 3

Project 2 200 3

Project 3 300 4

Project 4 900 1

Project 5 450 3

Project 6 600 2

Project 7 750 4

Project 8 800 3

Project Name Budget Cost Time Risk Benefit Status

As planned Problems Crisis

Prioritizing projects

Available resources Projects in rank order��

These you can do

��

These you can do if higherpriority than ongoing projects

��

These you can’t do

Resourcerequirement &progress

Agreedresults

Long-termdemands

Resourceavailability

Workpackages

Objectives &Time/Resourcewindow

People scheduling

to maximiseefficient usage

Capacity planning

to achievedevelopment

objectives

Time schedulingto deliver

projectobjectives (unitary)

ProjectManagers

PortfolioDirectors

ResourceManagers

PortfolioDesign

PortfolioReview

Lessons learned

DefineProgramme

ExecuteProgramme

CloseProgramme

1 2 3 4 5

Program Director

Project Executive(Sponsor)

Senior UserSenior supplier

Project Board

Program management

Project management

Project Manager

Sponsoring Group

ProgramManager

Senior businessmanagement

Business ChangeManager

ProgramOffice

Deliver capability Embed changeControl program

PortfolioManager

BoardOwner

PRINCE2 and MSP

Program management

Three positions of PMOCompany

ProjectsDeptDept BDept A

StrategicPMO

PortfolioOffice

LargeProject

LargeProgram

ProjectOffice

ProgramOfficePermanent

StructuresTemporaryStructures

What are organizations competent in?

¾ Project Management processes´ project life-cycle

O concept, feasibility, design, execution, commissioning´ project management life-cycle

O plan, organize, implement, control´ project functions

O scope, time, cost, quality, risk

¾ Delivering individual projects successfully¾ Technology, engineering and craft skills

Strategic drift

Cumulativechange

Environmental change

Incremental changeFlux

Demise

Project

Strategic Management

Position

Choices Action

Capability

ExpectationContext

OperationalLevel

CorporateLevel

BusinessLevel

Organizing

Enabling

ManagingChange

UnrealizedStrategy

Deliberate and emergent strategies

EmergentStrategies

Corporate strategy to project strategy

PortfolioStrategy

PortfolioObjectives

CorporateStrategy

Context

ProgramStrategy

ProgramObjectives

ProjectStrategy

ProjectObjectives

Work areaStrategy

Work areaObjectives

TeamStrategy

TeamObjectives

IndividualObjectivesProject strategy

PortfolioDesign

PortfolioReview

Lessons learned

DefineProgramme

ExecuteProgramme

CloseProgramme

1 2 3 4 5

Project strategy

¾ Context¾ Organizational strategy¾ Project requirements¾ Business case¾ Success criteria¾ Success factors¾ Project model

´ plan´ organization´ tools

Evolution of the business case

ProgrammeBrief

Projectbusiness caseProject

business caseProjectbusiness caseProject

business case

AggregationSets scopeand objectives

BlueprintRisksBenefitsResourcesPlans

Inform

Monitoringand review

AlignmentCheck

Programmebusiness case

Drivers forchange

Programmemandate

Project success

¾ Success criteria´ dependent variables by which we judge project

success¾ Success factors

´ independent variables which influence the achievement of the success factors

Results based viewExploitation

Implementation

Resources Project Outputs

Outcomes

Benefit

Improvedperformance

Operation

Measures of success

Measure Stakeholder TimescaleShareholder value Shareholders End+yearsProfitable Board End+yearsHappy sponsor Board End+yearsHappy consumers Consumers End+monthsEasy to operate Users End+monthsEasy to sell Marketing End+monthsTime, cost, quality All EndHappy project team Project team EndProfitable for contractor Project team End

Multiple views, multiple stakeholders, multiple time-frames (Turner, 2009)

Stakeholders¾ Investor

¾ Consumer

¾ Operators

¾ Sponsor

¾ Manager/team

¾ Senior supplier

¾ Suppliers

¾ Public

Output - end¾ Efficiency

¾ Price, timeFeatures

¾ DocumentationTraining

¾ EfficiencyRisk, safety

¾ EfficiencyExperience

¾ EfficiencyProfit

¾ ProfitClient satisfaction

¾ Environment

Outcome - +months¾ Profit

Reputation¾ Price

Benefit¾ Operability

ARM¾ Relationships

Investor loyalty¾ Reputation

Repeat business¾ Reputation

Repeat business¾ Environment

Social cost/benefit

Impact - +years¾ Whole life value

Learning¾ Advantage

Development¾ Operability, ARM

Learning¾ New projects

Learning¾ Environment

Social cost/benefit

Project success factors – Pinto and Slevin (1988)

1. Project mission¾ Top management support¾ Schedule/plans¾ Client consultation¾ Project team¾ Technical tasks¾ Client acceptance¾ Monitoring and feedback¾ Communication¾ Troubleshooting

agree clear goals and objectivespolitical supportgood clear planscommunicate with stakeholdersgather a competent teamtechnical competencesell product to final userstimely, comprehensive controltimely data to key playerscan handle unexpected problems

ICT project success factors- Standish Group (2006)

1. User involvement2. Executive support3. Clear business objectives4. Scope optimization (lean)5. Agile processes (iterative)6. Project management expertise7. Financial management8. Skilled resources9. Formal methodology10. Tools

Context´political´economic´social´environment´legal

Sponsorship´benefit´finance´value´schedule´urgency

Attitudes´commitment´motivation´support´right 1st time´shared vision

Definition´objectives´scope´technology´design´resourcing

People´leadership´management´teamwork´influence´IR

Systems´planning´control´reporting´quality´risk

Organization´roles´resources´type´contract

strategy

Project Drivers

Seven forces of project management

External to Organization

Pressures Resistance

Internal to Organisation

Feedback

Project-

results

Project Results

Appreciation client

Appreciation projectpersonell

Appreciation users

Appreciation indirect parties

Appreciation contract partners

Leadership &

Project-

management

Project Organization

Policy &

Strategy

Environment

Resources

Contracting

Project excellence modelWesterveld

That’s All Folks

rodneyturner@europrojex.co.ukrodney.turner@skema.edu

Governance of project management

jrtgpbojul08 europrojex

group project governance

project strategy europrojex

governance of projects

levels of governance

individual projects

europrojex editor

oecd europrojex

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