Project governance is the management framework within which project decisions are made. Project governance is an essential element of any project because accountability and responsibility associated with the organization's business as a regular activity are set out in their organizational governance arrangements, there is rarely an equitable framework for regulating the development of its investment (project) investments. For example, an organizational chart provides a good indication of who in the organization is responsible for the particular operational activities of the organization. But unless an organization specifically develops a project governance policy, no such graph may exist for project development activities.
Therefore, the role of project governance is to provide a logical, robust and repeatable decision-making framework for organizing organizational capital investments. In this way, the organization will have a structured approach to conduct its business activities as usual and change its business, or projects, activities.
Video Project governance
Three pillars of project governance
The decision-making framework is supported by three pillars:
Structure
This refers to the structure of government committees. In the first example, the Capital Expenditure Agency approves the resources (capital, human and other) for projects. Second, the portfolio committee ensures that the right project is selected. As well as the Project Board or Project Steering Committee, the broader governance environment may include multiple stakeholder groups and possibly user groups. In addition, there may be a Program, which organizes a group of related projects where this is one, and perhaps some form of group decision-making portfolio. The right of decisions of all these committees and how their relation shall be established in the documentation of policies and procedures. In this way, project governance can be integrated within the broader governmental arena.
Other governing bodies include the following:
- Functional Management is responsible for the tactical governance of project team members and their work and results
- Project team for governance of resource operations and project activities
- Review and audit functions as independent process governance and information quality and delivery
- Financial audit for independent financial compliance audit
People
The effectiveness of the committee structure depends on the people who fill the various government committees. The membership of the committee is determined by the nature of the project - other factors come into play when determining the membership of the program and portfolio councils - ultimately determining which organizational roles should be represented in the committee.
Information
This involves information that informs the decision maker and consists of regular reports on projects, issues and risks that have been upgraded by the Project Manager and key documents that describe the project, the most important being the business case.
Maps Project governance
Principles of core project governance
The project governance framework should be based on a number of core principles to ensure its effectiveness.
Principle 1: Ensure a single point of accountability for project success
The most fundamental project accountability is accountability for project success. A project without a clear understanding of who is responsible for its success has no clear leadership. Without clear accountability for the success of the project, no one is pushing the solution of the difficult problems that hit all projects at some point in their lives. This also slows the project during the important project initiation phase because no one is making the important decisions needed to put the project on a firm footing. The concept of a single point of accountability is the first principle of effective project governance.
However, it is not enough to nominate someone to be responsible - the right person should be responsible. There are two aspects to this. The responsible person must hold sufficient authority within the organization to ensure they are empowered to make the decisions necessary for the success of the project. But beyond this is the fact that the right person from the right area within the organization should be responsible. If the wrong person is selected, the project is no better than if no one is responsible for its success. The person who will be responsible for the project's success is the subject of Principle 2.
Principle 2: Project ownership is not dependent on Asset ownership, Service ownership, or groups other stakeholders
Often organizations promote the allocation of the Project Owner's role to the owner of the service or asset owner in order to provide more assurance that the project will meet the owner's underlying needs, which is also a critical measure of the success of the project. However, the outcome of this approach may involve the inclusion of wasteful scope and failure to reach alternative stakeholders and customer requirements:
- The benefit of the doubt goes to the stakeholders allocated to the Project Owner's responsibility, reducing the project outcome;
- Project Owner Requirements receive less supervision, reduce innovation and reduce yield efficiency;
- Different skills surrounding Project ownership, Asset ownership, and ownership of the Service place risky project decision and procedures;
- Operational requirements are always applicable, placing the project at risk of being ignored during that time;
- Contingencies of risky projects are allocated to additional scope for ownership of projects allocated by stakeholders.
The only proven mechanism to ensure the project meets the needs of customers and stakeholders, while optimizing value for money, is to allocate Project ownership to specialists, who otherwise would be stakeholders for the project. This is the 2nd principle of project governance.
Project Owners engage in clear provisions that outline key organizational outcomes and organizational outlooks of key project stakeholders. Often, the organization establishes the Project Governance Committee, which identifies the project's existence and appoints the project owner as early as possible in the life of the project, establishing the Project Board on which customer engagement and stakeholder engagement, establishes key areas of outcomes for projects consistent with organizational values, oversee project performance. These parameters are usually detailed in the Project Governance Plan that remains applicable to the life of the project (and differs from the more detailed Project Management Plan that appears only during project development).
The project has many stakeholders and an effective project governance framework should meet their needs. The next principle relates to the way in which this must happen.
Principle 3: Ensure the separation of stakeholder management and project decision-making activities
The effectiveness of decision making of a committee can be considered as inversely proportional to its size. Not only did the big committee fail to make timely decisions, the decision was often considered bad because of the dynamics of certain groups in the game.
As project decision-making forums grow in size, they tend to transform into management groups of stakeholders. As the number increases, a detailed understanding of each participant from critical project issues will be reduced. Many of the audience were present to make no decision but as a way of knowing what happened to the project. Not only is there sufficient time for everyone to make their points, but those with the most valid inputs should compete for time and influence with those who have only peripheral involvement in the project. Furthermore not all attendees will have the same level of understanding about these issues and therefore time is wasted to get everyone to the pace on the particular issues being discussed. Therefore, for all intents and purposes, large project committees are formed more as a stakeholder management forum rather than a project decision-making forum. This is a big issue when projects depend on the committee to make timely decisions.
There is no question that both activities, project decision-making and stakeholder management are critical to the success of the project. The problem is that they are two separate activities and need to be treated as such. This is the third principle of effective project governance. If this separation can be achieved, it will avoid blocking of decision-making forums with multiple stakeholders by limiting membership to only the selected stakeholders who are critical to their success.
There is always a concern that this solution will lead to further problems if dissatisfied stakeholders do not consider their needs met. Any stakeholder management mechanisms implemented should adequately meet the needs of all project stakeholders. It will need to capture their insights and views and address their concerns for their satisfaction. This can be partially achieved by leading each of the major stakeholder groups by the Project Council chairman. This ensures that stakeholders have project owners (or SROs) to fight for their concerns and concerns within the Project Board.
Principle 4: Ensure the separation of project governance and organizational governance structures
The project governance structure is properly defined because it is recognized that the organizational structure does not provide the framework necessary to generate the project. Projects require the flexibility and speed of decision-making and the hierarchical mechanisms associated with the organization chart do not allow this. The project governance structure overcomes this by attracting key decision makers out of the organizational structure and placing it in a forum so as to avoid the serial decision-making process associated with the hierarchy.
As a result, the project governance framework established for the project must remain separate from the organizational structure. It is recognized that the organization has legitimate requirements in terms of reporting and stakeholder engagement. However, the specific reporting mechanisms established by the project can address the first and the project governance framework should in itself deal with the latter. What should be avoided is the situation in which the decision of the steering committee or project board must be ratified by one or more persons within the organization outside the project decision-making forum; either including these people as members of the project decision-making body or fully empower the current project steering committee/board. The project steering committee/board is responsible for approving, reviewing progress, and delivering project results, and the intended benefits, therefore, they must have the capacity to make decisions, which can carry out resources and funding beyond the original plan. This is the final principle of effective project governance.
Adoption of this principle will minimize multi-layered decision-making and time delays and the inefficiencies associated with it. This will ensure the project decision-making body is empowered to make decisions in a timely manner.
Additional and complementary governance principles
The Board has overall responsibility for governance of project management. Roles, responsibilities and performance criteria for project management governance are clearly defined. A disciplined governance setting, supported by appropriate methods and controls is applied throughout the project life cycle. Coherent and supportive relationships are shown between the overall business strategy and the project portfolio.
All projects have an approved plan that contains authorization points, in which case the business is reviewed and approved. Decisions made on authorization points are recorded and communicated. Members of the delegated authorization body have sufficient representation, competence, authority and resources to enable them to make informed decisions. The project business case is supported by relevant and realistic information that provides a reliable basis for making authorization decisions. The delegated board or agency decides when an independent examination of the project and project management system is required, and applies such supervision.
There are clearly defined criteria for reporting project status and for escalating risks and issues to the level required by the organization. The organization fosters a culture of project improvement and disclosure honestly. Project stakeholders engage at a level commensurate with their interests to the organization and in a way that fosters trust.
Principles for multi-owned projects
Multi-owned is defined as a project in which the stock control board ends with the other party. The principles are:
- There should be an officially agreed governance arrangement
- There should be a single point of decision for the project
- There should be a clear and unambiguous allocation of authority to represent the project in contact with owners, stakeholders, and third parties
- The business case of the project should include an agreed definition, and currently, the project objectives, the roles of each owner, their incentives, inputs, powers and responsibilities
- Each owner must ensure that the legal and liability competencies and internal governance arrangements of the joint owner are compatible with acceptable governance standards for the project
- There should be project authorization points and limited restrictions to give the owner the required level of control over the project
- There should be an agreed recognition and allocation or distribution of prizes and risks by considering the ability to influence outcomes and create incentives to encourage cooperative behavior
- Project leadership should utilize the synergies arising from multi-ownership and must actively manage potential sources of conflict or inefficiency
- There should be a formal agreement that specifies the process to be requested and the consequences for the asset and the owner when the change in material ownership is considered
- Reporting during the project and the realization of benefits should provide honest, timely, realistic, and relevant data on progress, achievements, estimates and risks as far as necessary for good governance by owners
- There should be a mechanism in place to request independent review or supervision when there is a legitimate interest of one or more of the project owners.
- There should be an agreed dispute resolution process between owners who do not compromise the achievement of the project objectives.
Role
A key role in project governance is the sponsorship project. The project sponsor has three main areas of responsibility: to the board, project manager and project stakeholders.
Board
For councils, sponsors provide leadership in culture and values, have business cases, create projects aligned with organizational strategy and portfolio direction, manage project risks, work with other sponsors, focus on benefits realization, recommend opportunities to optimize cost/benefit, ensure sponsor continuity, provide assurance and provide feedback and lessons learned.
Project manager
For project managers, sponsors provide timely decisions, clarify decision-making frameworks, explain business priorities and strategies, communicate business issues, provide resources, generate trust, manage relationships, and promote ethical work.
Project stakeholders
For other project stakeholders, the project sponsor engages stakeholders, organizes stakeholder communication, directs client relationships, directs user governance, directs supplier management, and arbitration among stakeholders.
Element
Project governance will:
- Describe the relationship between all the internal and external groups involved in the project
- Describe the appropriate flow of project related information to all stakeholders
- Make sure the reviews are appropriate for the problems faced in each project
- Make sure that the approvals and directives required for this project are obtained at each appropriate project stage.
Important specific elements of good project governance include:
- Interesting business case, which states the project object and determines the in-scope and outside scope
- Mechanism for assessing compliance of completed projects against original goals
- Identify all project stakeholders
- Communication methods specified for each stakeholder
- A set of business-level requirements as agreed by all stakeholders
- Specification agreed for project submissions
- Appointment of project manager
- Remove assignments from project roles and responsibilities
- Current published project plans that cover all stages of the project from project initiation through development to transition to operations.
- Accurate status reporting and progress system including time records.
- Document storage center for project
- Glossary of centrally-held project terms
- The process for management and problem solving that emerged during the project
- The risk recording and communication process identified during the project
- Standards for quality review of key governance documents and project submissions.
See also
- The cost is flooded
References
- Patrick S. Renz: "Project Governance: Implementing Corporate Governance and Business Ethics in Nonprofits." Heidelberg: Physica-Verl., 2007. (Contribution to the Economy)
- Ralf MÃÆ'¼ller: "Project Governance". Aldershot, UK: Gower Publishing, 2009. ISBNÃ, 978-0-566-08866-7.
Source of the article : Wikipedia
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