+

Project Governance
Project Management is a well defined concept found in many
guidebooks and Bodies of Knowledge. Putting these guides
and BOK’s to work for the benefit of the enterprise is the role
of Project Governance
+ 2

The Elements of Project

Governance

Program
Management

Project  Delivery  Performance  

IPT Project
Management Management
Project  Driven  Requirements  
+ 3

A Big problem in any discussion of

Governance
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What do we mean when we say

“governance?”
!  gov⋅ern⋅ance [guhv-er-nuh ns] – noun
!  government; exercise of authority; control.
!  a method or system of government or management

!  gov⋅ern [guhv-ern] – verb
!  to rule over by right of authority: to govern a nation.
!  to exercise a directing or restraining influence over; guide: the
motives governing a decision.
!  to hold in check; control: to govern one’s temper.
!  to serve as or constitute a law for: the principles governing a case.
+ 5

What is Business Governance?

Governance is the set of decisions that defines

expectations, grants power, or verifies
performance.
It consists either of a separate process or of a
specific part of management or leadership
processes.
+ 6

Project Governance

Project governance is the framework which ensures the project has been
correctly conceived and is being executed in accordance with best project
management practice within the wider framework of the firms of
organizations governance processes.
Effective project governance ensures projects deliver the value expected of
them. An appropriate governance framework ensures that all expenditure is
appropriate for the risks being tackled.
Project governance is not about micro–management, it is about setting the
terms of reference and operating framework, defining the boundaries and
ensuring that planning and execution are carried out in a way which ensures
that the project delivers benefits.
+ 7

Five Core Outcomes of Project

Governance
!  Strategic alignment of projects within the portfolio with business
strategy to support organizational objectives

!  Risk management by executing appropriate measures to

manage and mitigate risks and reduce potential impacts
on projects and programs to an acceptable level

!  Resource management by utilizing available resources and

skills efficiently and effectively

!  Performance measurement by measuring, monitoring and

reporting on project governance metrics to ensure that
organizational objectives are achieved

!  Value delivery by optimizing the project portfolio in support of

organizational objectives
+ 8

Five Core Outcomes of Project

Governance – Applicable to GPMO

!  Strategic alignment of projects within the portfolio with business

strategy to support organizational objectives

!  Risk management by executing appropriate measures to

manage and mitigate risks and reduce potential impacts
on projects and programs to an acceptable level

!  Resource management by utilizing available resources and

skills efficiently and effectively

!  Performance measurement by measuring, monitoring and

reporting on project governance metrics to ensure that
organizational objectives are achieved

!  Value delivery by optimizing the project portfolio in support of

organizational objectives
 + Three Elements of Project 9

Governance

Project  Governance  
3.  How  do  we  know  we  are  being  successful  at  what  we’re  supposed  to  be  doing?  
2.  How  are  we  going  to  do  what  we  said  we  would  do?  
1.  What  do  we  want  to  do?  
" Business  and  Technical   " Deliverables  Based   " Measures  of  Performance  
Strategy   Planning   (MoP)  
" CapaciCes  Based  Planning   " Assessment  of  increasing   " Measures  of  EffecCveness  
maturity   (MoE)  
" ConnecCons  to  the   " DefiniCons  of  physical   " Measures  of  Physical  
delivery  of  business  value   progress  of  plans   Percent  Complete  
Project Governance is the Primary Role of the Program Management Office
(PMO)
+ What’s the difference between 10

Business Governance & Project

Governance?
!  Business Governance is the organizational control of the
business’s ability to deliver value

!  Project Governance is the centralized control of the projects

that produce this value

Governance reduces the asymmetric information exchange

between the providers and consumers of project
information.
Governance assures the providers of products or services
have the full consent of the consumers that continuously
increases visibility, maturity, and value of these products and
services.
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What’s the Real Problem Here?

!  Corporate Governance is well defined

!  Project Management methodologies are mature and

generally applicable to a wide variety of business domain

!  There are gaps in the “governance” of projects through …

!  Applying Project Management methods is not governance, it is
project execution controls
!  Having document artifacts is necessary but not sufficient for
successful project work
!  Consumption of time and budget is never a measure of progress
+ 12

What are the activities of Project

Governance?
!  Establishing the basis for project !  Controlling the scope, contingency
governance, approval, and funds, overall project value, and
measurement with roles, other project performance attributes
!  Monitoring the project’s progress,
accountabilities, policies, standards,
stakeholder’s commitment, results
and associated processes achieved and the leading indicators
!  Evaluating project proposals to of failure
select those that are the best !  Measuring of outputs, outcomes,
investment of funds and scarce benefits and value — against both
resources and are within the firm’s the plan and measurable
capability and capacity to deliver expectations
!  Enabling resourcing of projects with !  “Steering” the project into the
staff and consultants, harness and organization, remove obstacles,
manage the critical success factors
manage of business support and the and remediate project or benefit-
provision of the governance realization shortfalls
resources !  Developing the organization’s
!  Defining the “desired business project delivery capability —
outcomes”, benefits, and value — continually building and enhancing
the business measures of success its ability to deliver more complex
and overall value proposition and challenging projects in less time
and for less cost while generating
the maximum value.
 + 13

Good Project Governance

Elements
Elements Project Governance Physical Artifact
A compelling business case, stating the objectives of the project and specifying the
Risk Adjusted Business Case
in-scope and out-of-scope elements

A mechanism to assess the compliance of the completed project to its original Deliverables Plan connected to
objectives identifying all stakeholders with an interest in the project business case

A defined method of communication to each stakeholder Communications Plan

A set of business-level requirements as agreed by all stakeholders Master deliverables
An agreed specification for the project deliverables and their measures of Capabilities, features, functions,
effectiveness and measures of performance and testable requirements
Responsibility Assignment
Clear assignment of project roles and responsibilities
Matrix
A current, published project plan that spans all project stages from project Integrated Master Plan
initiation through development to the transition to operations Integrated Master Schedule
Measures of physical percent
A system of accurate upward promoting status and progress-reporting including
complete and delivered
connections between cost, schedule, and technical performance
business value
A central information repository for the project Enterprise PM System

A process for the management and resolution of issues that arise during the project Issue tracking system

A process for the recording and communication of risks identified during the
Risk management system
project
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3 Simple Steps to Governing the

Project Management Processes
!  Define what Project Governance means for the enterprise in
terms of its artifacts

!  Understand “governance” does not replace actionable

beneficial outcomes of a Project Management method

!  Initiate the cultural introduction of “governing” as well as

“managing”
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A Project Governance Framework

!  OGC P3M3
The OGC P3M3
V2.0 defines 5 !  Maturity model for Project, Program, Portfolio
levels of maturity Management Maturity Model
for project,
program, and !  This framework is simple, well formed and in
portfolio
use in the UK for council, township, county and
management
processes. regional governments for IT management
P3M3 is “owned”
by the same !  It is a maturity model in the same way CMMI is
organization that a maturity model
“owns” ITIL

www.ogc.gov.uk
+ 16

Universal Process Maturity Levels

Each maturity level is a layer in the foundation

for continuous process improvement
Level 5:
Focus is on continuous process improvement through Optimizing
assessment, feedback and preemptive corrective actions
Level 4:
Process measured and controlled through formal data Quantitatively
gathering and assessment processes Managed

Level 3: Defined
Process characterized for the organization and
is proactive

Level 2: Managed
Process characterized for projects
and is often reactive
Level 1: Performed
Process unpredictable, poorly
controlled and reactive
 + 17

Characteristics of Each Maturity

Model Level
Maturity Level Attributes found in the organization
"  Project, Program, Portfolio management improvement environment is actively encouraged
Level 5 "  Built on a flexible PMO centered organizational structure
Optimized "  Career path for project and program managers
"  Project, program, and portfolio management training is a component in staff development
"  Active senior management support for integration of business planning and execution
Level 4
"  Organization efficiently plans, manages, integrates and controls multiple projects
Managed
"  Database of previous project data maintained and utilized
"  Senior management support for project, program, and portfolio management
"  Organization efficiently plans, manages, integrates, and controls single projects
Level 3
"  Repository of previous project experience maintained and utilized
Defined
"  Team members and project managers trained in project management
"  Consistent use of tools and techniques for project management processes
"  Managed support for project management
Level 2 "  Repeatable processes are applied to basic project management steps
Repeatable "  Project and program outcomes are more predictable
"  Use of common tools and techniques for key project management processes
"  Many, incomplete, informal approaches – each project handled differently
"  Highly dependent on Project Manager
Level 1
"  Project and program outcomes unpredictable
Initial
"  Little organizational support for project management
"  Lesson learned are not gathered and passed on to other projects
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What sets high maturity

organizations apart from the rest?
!  High performing organizations are significantly more mature
in their project management practices than organizations in
general

!  The most significant difference between high and low

performing organizations is in allocating resources optimally
and in estimating accurately

!  High-performing organizations are very good at satisfying

project customers and in completing projects on schedule,
on budget

!  A significant percentage (23%) of high-performing

organizations are at Level 5 maturity in quality management

Project Management Maturity: A Benchmark of Current Best Practices, CBP

+

Governing Projects by
Getting to Level 3 of the
OGC P3M3
A mature organization has the ability to
manage portfolios, programs, and projects
based on standard, defined processes.
+ Project, Program, and Portfolio 20

Management Maturity Model

Level 5 – Optimizing
The entire organization runs a continuous process improvement process with
proactive problem and technology management

Level 4 – Managed
Each organizational element obtains and retains specific measures on its
project performance. These measures used to improve the quality of projects

Level 3 – Defined
Each organizational element has a centrally controlled project processes.
Individual projects flex within these processes to suit a particular project

Level 2 – Repeatable
Ensure that each project is run on its own processes and procedures to a
minimum specified standard

Level 1 – Initial
Recognize projects and run them differently from the ongoing business
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The Program Management Office

Governance Structure using the
OGC P3M3 Framework

Program Office Governance

Portfolio Program Project

Management Management Management

Management Benefits Financial Stakeholder Risk Organizational Resource

Control Management Management Management Management Governance Management
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Key Performance Improvements

!  Understand the key practices that are part of effective

portfolio, program, and project management processes

!  Identify the key practices that must be embedded within the

organization to achieve the next maturity level

!  Understand and improve the capability to manage programs

and projects more effectively in the future
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P3M3

The 25 (2+11+12)
Process areas of
OGC P3M3 include
all core Knowledge
Areas of PMBOK
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Assessment of the Path to OGC

P3M3 Level 3
!  Where are we today?

!  Where do we want to be?

!  How can we get there?

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Benefits to reaching Level 3

!  Improved budget and schedule predictability

!  Reduced cycle time

!  Increased productivity

!  Improved quality

!  Increased customer satisfaction

!  Increased return on investment

!  Decreased cost of quality

TeraQuest / Gartner 2006 Maturity ROI

+ 26

Measureable Improvements by
moving between the Maturity
Model Levels
Moving from One Level to the Next
L1 to L2 L2 to L3 L3 to L4
Reduced SW Defects 12% 40% 85%
Reduced Cycle Time 10% 38% 63%
Reduced Costs 8% 35% 75%
Schedule Variance 145% 24% 15%
Data presented at 5th Annual CMMI technology Conference & User Group,
Denver Colorado, November 2005
+ 27

Benefits to Deploying a Project

Governance Process at Level 3
!  Substantial ROI improvements (from historical SEI data)

!  Identified strengths and weakness by Key Process Area (KPA)

with improvement plans for weaknesses

!  Prioritized roadmap to Level 3 with actionable outcomes

connected to business strategies
+ 28

Steps to get to OGC P3M3 Level 3

!  Competency Assessment of Project Managers

!  OGC P3M3 assessment criteria
!  PMI – PMBOK process areas for project execution details

!  OGC P3M3 Deployment

!  Level 3 process areas

!  Deployment of PPM Business processes against Level 3

Process Areas
 + 29

Failure Modes along the way to

Process Maturity
Failure Mode Failure Description Mitigation
Design and Scope and outcomes not Deliverables Based Planning (DBP)
Definition clearly defined with physical % complete measures
of progress
Decision Inadequate levels of Scorecard based mission and vision
making sponsorship defined up front with maturity
assessment units of measure
Risk Discipline Weak arrangements for risk Embedded risk management,
management retirement and mitigation in the
Master Plan
Supplier Lack of shared Deliverables based plan with risk
management understanding between adjusted measures of performance
suppliers
People Disconnects between Deliverables focus with
program and stakeholders measureable value to stakeholders
+ 30

Beneficial Outcomes using a

Project Governance Approach
!  Change initiatives address and achieve strategic objectives

!  Business value realized earlier

!  Risks retired or managed

!  Total change investment is coherent, prioritized, and visible

!  Allocation of resources optimized

!  New initiatives evaluated for operational effectiveness

+ 31

Characteristics that must be in place

for successful Project Governance

!  Focus on leadership and alignment with strategy

!  Vision covers entire organization

!  Risk visible from a strategic perspective

!  Integrity of business transformation managed through

programs in a Project Portfolio Management system

!  Benefits oriented to organization not just technology

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What’s the 1st Step to Level 3?

!  Perform a gap analysis between “As Is” and “To Be” at

Level 3

!  With these gaps, build the gap closure plan

!  Execute the closure plan with measurable beneficial

outcomes to the organization