Today, governance in project management — part of corporate governance — is a pressing concern for organizations, considering projects are becoming the main vehicle to help businesses achieve their goals.
Project management governance provides company management with control and visibility over the activities of the project portfolio and the performance of each project towards the business goals. In other words, it’s the governance that ensures a project stays “on track” — on time, on budget, and aligned with stakeholder expectations.
Below, we’ll explain what governance in project management is, what benefits it brings and how to use it to ensure success in your projects!
What is Project Management Governance?
To talk about governance in project management first we need to talk about corporate governance.
There are several definitions of corporate governance. According to the OECD (Organization for Economic Cooperation and Development), “Corporate governance involves a set of relationships between the management of a company, its board, its shareholders and other interested parties. It provides the framework through which the company’s goals are defined, the means to achieve those goals, and how performance will be measured.”
In other words, corporate governance is the structure that allows, based on the goals of an organization, to define the means to achieve these goals and the process to monitor progress until these goals are achieved.
For this, corporate governance is concerned with:
- Disclosure and transparency
- Roles and accountability
- Risk management
- Decision making
- Performance and effectiveness
Likewise, just as corporate governance is what ensures that business objectives are achieved, respecting all the areas listed above, governance in project management is what ensures the achievement of goals within the company’s project portfolio.
The Components of Governance in Project Management
Project management governance involves all of the elements that make a project successful. However, these elements are not the same for every organization.
Governance must be built from the specific needs of each business. However, the PMI (Project Management Institute) defines eight components that must be considered when identifying the elements that impact the success of your projects. These eight components are:
- Governance Models: This is a baseline of the critical elements necessary for project governance based on the project scope, schedule, complexity, risk, stakeholders, and on its importance to the organization.
- Accountability & Roles: Defining accountability and roles is one of the main tasks of a project manager. The proper distribution will have a great impact on the effectiveness of an organization’s operations, and it will help to define who will be consulted and notified for each of the project’s deliverables.
- Stakeholder Engagement: When laying the foundations of the governance plan in project management, it is mandatory to have a holistic view of the project ecosystem. It will be necessary to identify all stakeholders and then to define what their interests and perspectives are and, most importantly, how to communicate with them.
- Stakeholder Communication: After recognizing all stakeholders and their interests, it is the role of the project manager to develop a concise and efficient communication plan. This plan should also deliver timely information to all stakeholders.
- Meeting & Reporting: The project manager must ensure the right balance between meetings and reporting, assuring that communications are brief, precise, and direct.
- Risk Management: Projects are fraught with risks and problems due to their own nature. It is difficult to predict what will happen, but it is necessary because a lack of preparation could lead to even more problems. Therefore, at the beginning of any project, the project manager should establish how to identify, categorize, and prioritize risks.
- Assurance: One of the most essential components here is to define the metrics that generate a view of project performance so risks and problems are managed effectively.
- Control Process: This involves monitoring and controlling tasks and processes, and project-related metrics. This assessment should take place on an ongoing basis so that corrective measures are taken as soon as deviations are identified.
Why is Project Management Governance Important?
Establishing good governance in project management is not an easy task, however, it will provide the company with a robust and replicable framework for managing any project. This structure brings the following benefits for the business:
- Project governance provides a single point of accountability. This requires clarity and promotes consistency of decision making for the project lifecycle.
- Project governance defines and articulates roles and responsibilities. This is critical so that the project manager can identify the right causes of any deviation in scope, budget, time, or resources.
- Project governance defines how to handle problems in a project. The governance structure details the mechanisms for dealing with problems. It ensures that proper review of issues is done so they don’t happen again.
- Project governance defines metrics to validate project impacts. This is what allows the project team to meet requirements. It also creates a space to solve a problem in a timely manner, in case a deviation is identified.
- Project governance standardizes information for all stakeholders. It ensures that the communication plan is well-defined, updated, and executed and that reporting is transparent and standardized.
For your projects to be successful, it is essential that they include innovative techniques and ideas. However, no innovation is effective without good governance behind it. The way projects are managed evolves over time to ensure that project management maturity evolves together.
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