Project Governance: Framework and Best Practices

The combination of a talented workgroup and a suitable budget is a guarantee of positive results for many people. The opposite is true for me. There are so many failed attempts, and the reason for that is the absence of a governance paradigm. Unfortunately, entities are exposed to unprecedented levels of complexity and instability in markets and in their relationships with stakeholders. They have to manage multiple projects simultaneously.

Project governance is more than just control systems and procedures. Project governance is the major that shifts the focus of attention from control systems and procedures to a more positive system, conceptualised as a map that guides from order to control in the execution of a project. For this reason, people participating in PMP training programs and PMP certification training have a growing interest in systems of governance and control that have the capacity to prevent failures in order to capture systems of measurement and control.

The purpose of this document is to introduce an effective project control system, the three basic pillars and the best systems to improve the control of a project, to prevent positive control results from systems that lose positive results.

Project governance is the system of processes, rules and regulations that describes control and management of projects, from start to finish. It is a map that describes control and management of processes, structures and systems, control and management of the streams of governance, control and management of the projects.

To the Project Management Institute, governance refers to the provision of direction, decision-making, and supervision pertaining to the strategic execution of plans. While project management is concerned with the daily activities pertaining to a project, governance is focused on the big picture and, therefore, involves:

• Creating a framework
• Encouraging responsibility at all tiers
• Ensuring consistency with the strategic aims of the organization
• Providing clarity through ongoing communication

The importance of project fundamentals, including understanding what is project governance is, is critical in understanding why governance frameworks are important in the management of complexity in a project.

The core of every governance system is the three pillars, i.e. Structure, People, and Information.

Pillar 1: Structure

The structure pillar delivers to your organization an architectural design depicting the levels of hierarchy, the locus of decision-making power, and the duties of various committees. A well-articulated structure enables all stakeholders to know their responsibilities and sets the limits within which a project manager may operate. This clarity helps in avoiding ambiguity regarding who has the authority to make important decisions when the scope, budget, or timeline of a project changes.

Pillar 2: People

This pillar is concerned with the governance of the key human resources of the organization, i.e. the project staff, other stakeholders, and their competencies. A project is more likely to be successful when the right combination of skills, knowledge, and experience is available, and governance concerns the provision of instructional programs to all those involved in the complexities of a project. Strong project leadership becomes critical for maintaining governance effectiveness.

Pillar 3: Information

Informed decision-making relies on accurate and timely data. There must be efficient and effective data management and reporting systems that capture and track the projects, finances, risk and various performance indicators. This allows decision-makers to manage risks effectively and make real-time data-informed decisions that keep the projects within the established governance frameworks.

There are multiple levels of the organization within which project governance operates:

Strategic governance: concerned with determining the overall direction and alignment of the organization

Operational governance: concerned with the management activities and controllable dimensions, such as resource management and budgeting

Tactical governance: concerned with the execution of activities to deliver the outputs as planned

Technical governance: concerned with the quality control of the project through different phases of the project

Knowing about these types gives you the foundation to tailor the supervision to each of the levels and to increase the overall value and benefits of project management, which contributes to your organization.

Building effective project governance frameworks should be an orderly process. This is my tried and tested seven steps.

Step 1: Establish Governance Goals

Identify what you want the framework to accomplish. Is it to improve efficiency in the delivery of governance, enhance the ability to manage risks better, or improve alignment among the stakeholders? By having a goal, it becomes easier to focus your efforts in governance and measure the outcome.

Step Two: Creating the Governance Structure

One should be able to create a structure that fits the company culture and project management style. I suggest creating a RACI Matrix that defines and clarifies who is Responsible, Accountable, Consulted, and Informed for every output. This removes uncertainty around the specific functions and decision-making power that each person has on the project.

Step Three: Define Governance Policies & Procedures

Policies of governance should encompass everything that has to do with a project from the beginning of the project to the end. Also, make sure that these policies are flexible for change regarding the scope of the project and the complexity. These should also consider the fundamental areas of assessing the organizational needs, stakeholder management, and the need for instructions that are firm, yet still adaptable. Some of the best professionals in this area are those who hold a PMP certification program, as policy making is a specialization in project management.

Step Four: Implement Competency Frameworks

Ensure that all of the people in the project have the required competencies. Also, this should include the project manager, project sponsor, members of the steering committee, and other stakeholders as well. Your competencies should also include training along with continuous professional development to create capabilities that will improve governance.

Step Five: Establish Information Management Systems

Create systems that allow for the continuous monitoring of project activities and the reporting of those activities to the governance structure. Implementing information management systems should be a priority, as these help in efficiently managing project activities and allow for the immediate capture of data that is required to make decisions.

Step 6: Monitor and Evaluate Performance

Measure and document the performance against the baseline and pivot to a different management style to measure improved performance. Create and propose measurable metrics to document progress on the project. Some examples or KPI in project management for improving document performance are budget variance, schedule compliance, resource expenditures, and defect completion. Scheduled document reviews, or audits, will provide a mechanism to document improvement. Understanding the metrics is the basis for improved document performance.

Step 7: Foster a Culture of Continuous Improvement

Create a culture of continuous improvement where processes are changed to improve document performance. This will help organizations disrupt potential improvement documentation to make it proactive. Creating detailed project management plans will help close the ongoing improvement loop documentation.

From my personal experience, some of the most important document improvement best practices are:

Communication and Collaboration Strategies: Document expectations for the stakeholders and communicate them at the beginning of the project and throughout. Periodic communication, or meetings, will document progress and provide a forum for team members to communicate, document improvements or resolve document conflicts.

Proactive Continuous Improvement Initiatives: Document processes and procedures to Identify Improvement Opportunities to document a proactive posture to improve the processes.

Integration of Continuous Improvement Polices: Regular policy reviews assist in quickly adapting changes to policies. It aids in actioning ongoing discussions with teams regarding challenges that have emerged since the last review.

Rationality in Decisions: Governance frameworks facilitate rational systemic thinking regarding decisions. It helps in accountability and transparency. Hence, projects are rationally determined, prioritised, and adequately resourced.

Understanding of Financial Management and Control, including budgeting in project management, improves financial governance.

Proposed governance models usually have a number of challenges in implementation. Solutions to the challenges are:

Absence of Stakeholder Engagement: To gain user accountability and to clearly demonstrate the positive impacts of governance, the benefits of governance, user success stories, and user accountability for maintaining the described principles of governance are essential.

Inconsistency of Application: An inconsistent approach to governance can be remedied by a central governance body to provide oversight and direction to project teams, as well as by a project management office that is a governance body for the entire organization.

Unstructured Data Silos and Inaccessibility: To improve data management and eliminate accessibility and data silos, investment in central electronic systems that provide project documents on a project to all the participants on a project is essential.

Inflexibility: There should be some balance between governance control and flexibility in projects. Governance provisions should give a framework for control; however, project teams should have the freedom to make adjustments.

Identifying specific types of project risk and understanding the causes of project failure aids in recognizing and avoiding common pitfalls in governance.

There are evident benefits of implementing strong project governance.

Improved Project Delivery: Effective and informed project execution is achievable with the right structure, skilled personnel, and clear decision-making, thus reducing the chances of scope creep, budget and schedule overruns.

Increased Stakeholder Satisfaction: Strong project governance includes active participation of stakeholders at all project phases, which fosters a high degree of satisfaction and a positive attitude toward the project.

Risk Mitigation: The inclusion of strong project governance provides frameworks and adaptable mechanisms which assist in the identification, evaluation, and compliance of risks in all aspects of the project.

Greater Ownership: Accountability is achieved with the establishment of role definitions, assignment of responsibilities, and reporting frameworks in governance structures.

Informed Decision Making: Governance frameworks assist in the establishment of processes which ensure that decisions are made with a complete vision of the organization's objectives, risks, and available resources.

In today's intricate business landscape, project governance remains a necessity rather than a choice. It forms the bedrock differentiating the success of projects from the failure of others. By applying the three pillars, the seven-step framework, and established best practices, you will create governance systems that provide predictable outcomes.

Keep in mind that within the domain of governance, effectiveness is derived from a delicate equilibrium between rigidity and adaptability, between supervision and authority, and between control and faith. Begin developing your governance framework today and enjoy extraordinary success in managing your projects.