Back to Basics: What is Project Governance?

In the year 2000, I was working for a small IT services organization. In those days, most companies were taking new initiatives, as the dreaded Y2K problem had passed without creating any trouble. My organization started an initiative to upgrade our project management methodology.

At that time, our organization was a certified CMM Level 3 company, and we were already using our homegrown project management methodology based on CMM L3 processes. Our charter was to improve existing processes and build new processes for L4 and L5. It involved creating new procedures and guidelines on top of the existing CMM L3-based methodology. My task was to develop guidelines and artifacts for Technology Change Management processes.

A Project Management Methodology is an integral part of project governance. Organizations can choose any project management framework or methodology to establish a project governance structure.

Project governance is sometimes confused with project management, and many people use these terms interchangeably. However, they are different from each other.

Let us understand in detail what project governance is and how it differs from project management.

Project Governance

An organization’s project governance framework provides project managers and teams with structure, knowledge base, support, and tools to for managing their projects.

Project governance is an oversight and controlling function. It aligns the organization’s governance strategy and structure with the project life cycle and provides project managers with a framework for project management tasks. It also includes support and controlling structure and ensures that project managers complete the project successfully.

Project governance defines, documents, and communicates repeatable and reliable project practices. It provides a framework for making decisions about the project, which includes definitions of roles, responsibilities, and accountabilities of project managers and project management support staff. It fits within the larger context of the organizational portfolio.

The following elements make up a project governance framework:

1. Procedures to align projects with organizational strategies.
2. A general approach and methodology for defining project life cycle and phases.
3. Acceptance criteria for project success and delivery.
4. Stage gate and phase-end review processes.
5. Processes for identifying, escalating, and resolving issues that may arise during a project.
6. Broad-level roles and responsibilities of project team members, project support staff, and other stakeholders.
7. Project organization chart showing the relationship between different project stakeholders.
8. General guidelines for communicating project information.
9. Processes and procedures for making project decisions.
10. Procedures and guidelines for reviewing, approving and updating project scope, schedule, cost, and quality.

Difference Between Project Governance and Project Management

Governance is the act of governing, which includes steering, guiding, controlling, regulating, and influencing. It is performed by senior management and project management support staff.

Management is the act of managing, which includes leading, supervising, and monitoring project tasks. It is performed by the project manager and core project team members.

Project governance happens primarily outside of day-to-day project tasks. It is an oversight function that ensures projects are appropriately managed according to organizational standards. Its goal is to make projects successful. It provides stability and consistency for project management.

Project managers and team members manage project constraints within the bounds of the project governance framework. They are responsible for initiating, planning, executing, monitoring and closing the project. They decide the best way to carry out a project.

Project Management Office and Project Governance

A Project Management Office (PMO) is a central body that comprises of technical, business, and management personnel. In most organizations, the prime responsibility for project governance lies with PMO.

The following are the main benefits of setting up a PMO:

1. It establishes a single point of authority.
2. It provides mentoring, coaching, training, and oversight for the projects.
3. It ensures compliance to project governance by doing periodic project audits.
4. It outlines roles, responsibilities, and relationships between different project stakeholders.
5. It manages and resolves people and portfolio-related issues.
6. It manages shared resources across all projects.
7. It is essential for information dissemination and transparent communication.

Pillars of Project Governance

A solid foundation is a must for establishing a solid project governance framework.

There are five pillars of project governance:

1. Governance board: Projects are not done in isolation. They are generally organized under portfolios and programs. A Governance board is established to provide sponsorship for these portfolios and programs. The board not only sponsors portfolios and programs but also represents user interests. A governance board is also referred to as a steering committee, steering group, or project board. It plays a crucial role in establishing the culture and working practices of a project.
2. Project oversight group: Even though Projects are managed by project managers who are responsible and accountable for following the proper steps and protocols throughout the project, they need oversight at the top. A project oversight group is established to ensure the governance model is followed and projects are completed. The group’s oversight should cover the entire project life cycle.
3. Structure: The structure of project governance concerns the project team and the entire company. A proper structure within the company can aid project governance. The structure should be formalized and communicated to all the stakeholders.
4. People: People are key for successful project governance. These people include – but are not limited to – project managers, project staff, governing board members, sponsors, PMO members, project sponsors, and other project stakeholders.
5. Information: The project governance model can work only if transparency and seamless sharing of information across projects. In order to ensure project success, there should be consistent and regular reporting.

Conclusion

A formal methodology and sound processes are essential for project success, but they are just cogs of a larger machine. A project’s vision and goals are vital, but without a clear strategy and communication, it is bound to be doomed. Organizations must establish a project governance function in order to succeed.

To ensure project governance, people involved in managing a project need to have open communication and be able to share information, preferably in real-time. This means regular reporting, meetings and other activities to ensure the project is directed correctly.

Do you follow a project management methodology in your organization? What is your project governance structure? Does it include a PMO?

I would love to hear from you in the comments section below.

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