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EuroProjex [email protected] © 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
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The Governance of Project Management
DefinitionsThe project-oriented organization
The projectThe context
Linking corporate strategy to project strategy
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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.
OECD
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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
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Three levels of governance of projects
Board
Context
Projects
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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
GoPM
ProjectsProgrammes &
Portfolios
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Project governance
Governing the context inwhich projects are done¾ programs and portfolios¾delivery capability
Governing individualprojects
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Four project governance paradigms
Flexibleeconomist
(maximize valuefor sponsor)
Conformist(minimize
costs)
Agilepragmatist(follow the
process)
Governance orientationShareholder Stakeholder
Versatileartist
(balancerequirements)Control
focus
Outcome
Behaviour
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The Governance of Project Management
DefinitionsThe project-oriented organization
The contextLinking corporate strategy to project strategy
EuroProjex [email protected] © jrt/gpbo/jul08
Purpose of governance of projects
¾ Portfolio efficiency and effectiveness¾ Sponsorship effectiveness and efficiency¾ Project management effectiveness and
efficiency¾ Disclosure and reporting
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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
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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
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11 principles of the governance of projects
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
EuroProjex [email protected] © jrt/gpbo/jul08
11 principles of the governance of projects
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
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Three levels of process and stage-gate reviews
PortfolioDesign
PortfolioImplementation
PortfolioMaintenance
PortfolioReview
Lessons learned
DefineProgramme
ExecuteProgramme
CloseProgramme
0 0
Businesscase Feasibiliy Design Execution Closure
1 2 3 4 5
0
EuroProjex [email protected] © jrt/gpbo/jul08
The Governance of Project Management
DefinitionsThe project-oriented organization
The projectThe context
Linking corporate strategy to project strategy
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A project is ……
¾ A temporary organization¾ to which resources are assigned¾ to do work¾ to deliver beneficial change
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Results-based viewExploitation
Implementation
Resources Project Outputs
Outcomes
Goals
Benefit
Improvedperformance
Operation
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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.
EuroProjex [email protected] © jrt/gpbo/jul08
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
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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
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BusinessChange Mgr
Governance roles
Sponsor
Owner
ProjectManager
Steward
DeliveredOutcome
ClientNeed
DeliveredOutput
RequiredProcess
DesiredOutput
DesiredOutcomeDefine
Objectives
DefineMeans
MonitorProgress
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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
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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
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EuroProjex [email protected] © jrt/gpbo/jul08
The Governance of Project Management
DefinitionsThe project-oriented organization
The projectThe context
Linking corporate strategy to project strategy
EuroProjex [email protected] © jrt/gpbo/jul08
Corporate strategy to project strategy
PortfolioStrategy
PortfolioObjectives
CorporateStrategy
Context
ProgramStrategy
ProgramObjectives
ProjectStrategy
ProjectObjectives
Work areaStrategy
Work areaObjectives
TeamStrategy
TeamObjectives
IndividualObjectivesProject strategy
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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
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Investment portfolio
Portfolio ofmediumprojects
Portfolio ofsmall
projects
Largeprogram D
Largeprogram C
Largeproject B
Largeproject B
Investmentportfolio
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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
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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
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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
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Resourcerequirement &progress
Agreedresults
Long-termdemands
Resourceavailability
Workpackages
Objectives &Time/Resourcewindow
Portfolio management
People scheduling
to maximiseefficient usage
Capacity planning
to achievedevelopment
objectives
Time schedulingto deliver
projectobjectives (unitary)
ProjectManagers
PortfolioDirectors
ResourceManagers
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Three levels of process and stage-gate reviews
PortfolioDesign
PortfolioImplementation
PortfolioMaintenance
PortfolioReview
Lessons learned
DefineProgramme
ExecuteProgramme
CloseProgramme
0 0
Businesscase Feasibiliy Design Execution Closure
1 2 3 4 5
0
EuroProjex [email protected] © jrt/gpbo/jul08
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
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Three positions of PMOCompany
ProjectsDeptDept BDept A
StrategicPMO
PortfolioOffice
LargeProject
LargeProgram
ProjectOffice
ProgramOfficePermanent
StructuresTemporaryStructures
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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
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The Governance of Project Management
DefinitionsThe project-oriented organization
The projectThe context
Linking corporate strategy to project strategy
EuroProjex [email protected] © jrt/gpbo/jul08
Strategic drift
Time
Cumulativechange
Environmental change
Incremental changeFlux
Demise
Project
Project
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Strategic Management
Position
Choices Action
Capability
ExpectationContext
OperationalLevel
CorporateLevel
BusinessLevel
Organizing
Enabling
ManagingChange
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UnrealizedStrategy
Deliberate and emergent strategies
EmergentStrategies
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Corporate strategy to project strategy
PortfolioStrategy
PortfolioObjectives
CorporateStrategy
Context
ProgramStrategy
ProgramObjectives
ProjectStrategy
ProjectObjectives
Work areaStrategy
Work areaObjectives
TeamStrategy
TeamObjectives
IndividualObjectivesProject strategy
EuroProjex [email protected] © jrt/gpbo/jul08
Three levels of process and stage-gate reviews
PortfolioDesign
PortfolioImplementation
PortfolioMaintenance
PortfolioReview
Lessons learned
DefineProgramme
ExecuteProgramme
CloseProgramme
0 0
Businesscase Feasibiliy Design Execution Closure
1 2 3 4 5
0
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Project strategy
¾ Context¾ Organizational strategy¾ Project requirements¾ Business case¾ Success criteria¾ Success factors¾ Project model
´ plan´ organization´ tools
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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
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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
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Results based viewExploitation
Implementation
Resources Project Outputs
Outcomes
Goals
Benefit
Improvedperformance
Operation
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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
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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 Reputation
Repeat business¾ Environment
Social cost/benefit
Impact - +years¾ Whole life value
Learning¾ Advantage
Development¾ Operability, ARM
Learning¾ New projects
Learning¾ New projects
Learning¾ New projects
Learning¾ New projects
Learning¾ Environment
Social cost/benefit
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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
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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
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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
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Feedback
Project-
results
Project Results
Appreciation client
Appreciation projectpersonell
Appreciation users
Appreciation indirect parties
Appreciation contract partners
Leadership &
Team
Project-
management
Project Organization
Policy &
Strategy
Environment
Resources
Contracting
Project excellence modelWesterveld
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That’s All Folks
[email protected] @skema.edu