Professionalising project governance

If projects are regarded as investments of organisational resources, then those governing projects are the investment managers. For our personal investments, we usually check the competence of investment managers before we entrust them with our capital. Why shouldn’t corporate governance of organisations check the competence of those to be entrusted with project governance roles, and act to raise competence where necessary?

Many organisations appear to experience difficulty in extracting maximum organisational value from investments in projects, particularly but not exclusively in areas such as ICT. Research, experience and anecdotal evidence suggest that poor project governance is widespread. Undue emphasis is often placed on the technical, financial and scheduling aspects of projects rather than on ensuring that expected business outcomes will be achieved and organisational value realised.

Those appointed to project governance roles may be more familiar with these aspects rather than benefits realisation and value delivery. Governance must concern itself with a range of issues; it is not just about compliance with a process, and it must not let the ‘noise’ around a project cause a loss of focus on the need for a ‘return on investment’.

Research also shows that delivery of value from projects is enhanced through active participation of senior managers in the governance of projects, from initiation through to realisation of benefits. An effective project sponsor is actually a predictor of project success.

The problem is that, despite the many hours spent by senior managers in project governance meetings, few actually know what their role is, nor what they should be focused on or why. Many organisations spend considerable effort in acquiring or developing competent project managers but few seem willing to develop the competence of those governing projects.

All research on why major projects fail finds that ‘lack of senior management support’ is one of the top three contributors. The UK Government lists ‘decision making failures’ as one of the top five causes of project failure. Victorian Treasury, which oversees Gateway Reviews of major projects, lists ‘poor project governance’ as the second most common cause of project failure. A recent report by QUT researchers found that project managers were exceptionally critical of the competence of those in project governance roles.

Project governance is a distinctly different activity to operational management. Approaches that work well in the latter hinder success in the former. Most sponsors and project governors are operational managers who have been promoted into senior roles through excellence in managing business-as-usual in functional units. They could be described as ‘accidental sponsors’.

There are a number of sources of information providing guidance on aspects of project governance:

• Standards: Examples include corporate governance standards, the OGC’s PRINCE2 project management method and Programme and Project Sponsor offering, the British Association for Project Management’s Governance of Project Management offering, the interim draft of AS/8016 Corporate Governance of ICT Projects, and ISO 21500 Guide to Project Management.
• Academic research, which shows how those governing projects can promote or hinder project success.
• Briefings offered by professional project management support organisations.

While some organisations have developed in-house project governance support frameworks, there are no generally accepted accreditations for those in project governance roles.

Many organisations support those in project governance roles by strengthening the project assurance role provided by the PRINCE2 method, by using the Gateway Review Process, and by providing coaching and mentoring support from experienced practitioners.

Until corporate governance is strengthened to require improvement of the quality of project governance, there may be little motivation to develop project governance accreditation frameworks. As effective project governance is critical, organisations need to seek and adopt best available practice in project governance.

—This article is based on Time to Professionalise Project Governance? Go to www.goalgroup.com.au/ResourceList for the full paper.