5 Core Benefits of Project Governance

What is project governance? The Project Management Institute (PMI) defines it as the following:

”Governance is the framework, functions and processes that guide activities in project, program and portfolio management. In organizational project management (OPM), governance provides guidance, decision making and oversight for the OPM strategic execution framework.”

In other words, governance is the management framework within which project decisions are made by the right people, at the right time. In practical terms, highlights of governance include the following:

• A portfolio board (or a similarly named entity) with authority to approve projects to start or move through stage gates.
• A clearly defined change request & approval process.
• Clear definitions of roles and responsibilities, as well as escalation routes.

Is this an anathema to modern, agile ways of working? If executed correctly with an eye for practical benefit, absolutely not. So, what are the 5 core benefits of good project governance?

1) The right projects are approved

Every organization has limited resources, money, and people. It is imperative that this resource is focused on those projects that contribute best to corporate goals, delivering the highest return on investment.

A formal approval process ensures each project idea is objectively evaluated by the right people, against competing priorities (and other project ideas) with only the best moving forward into detail planning. Managers should not busy themselves with pet projects at the expense of the wider organization.

2) Better scope management

The number one reason why projects fail to deliver defined benefits is scope creep or lack of scope definition.

Documenting and agreeing upon scope is critical to any organization looking to achieve some sort of project management maturity. This is usually a scoping document like a PID (PRINCE2 term) or PMP (APM term), or whatever you want to label it.

Good governance ensures project managers, sponsors, and project teams follow an established approach. This approach includes completing appropriate project documentation. Near the top of that list is the scoping document.

Good governance ensures the appropriate people review and sign off the proposed project scope. For a local or departmental project, this could be the assigned project sponsor. For large corporate investments, this could be the portfolio board or several senior executives.

Without a scoping document, we’re likely to fail. Without good governance, we’re at risk of scoping documents being an afterthought or unseen by appropriate decision-makers.

3. Better change control

The organization is not static. Project scope and goals are also not static. Senior people do tend to change their minds. There are many reasons why we might need to change something on an approved project.

We might look to add scope, request more funding, or move to a revised deadline.

These significant changes should not fall on the project manager. Rather, the project manager should ensure an appropriate change control process is followed enabling decisions at the appropriate level.

If a task is going to be delayed by 5 days, then maybe the project team manages this themselves. If the go-live date is going to shift by 2 months, then it’s probably something for review by the portfolio board. The project team should capture and evaluate any requests for change.

Those with significant impact (as defined by the governance process) should then be escalated to the appropriate decision-maker(s). The sponsor may be the appropriate reviewer of the change, or perhaps it needs to be escalated further.

Good governance provides a clear change control decision-making process.

4. Stage Gates

We’ve planned the project, now let’s move forward. We’ve completed the work, now let’s close the project.

Project teams may look to move through project stages (planning, implementation, and closure) with little regard for the process; they just want to get to the end as quickly as possible to claim victory.

Stage gates ensure projects are reviewed formally at key points through the project journey. They ensure project teams have completed the agreed defined processes to the right standard and are correctly prepared for the next phase.

On approval, the project team is allowed through the gate into the next stage. The number of stage gates and the rigor of the approval process should reflect the scale, complexity, risk, and cost of each project.

Good governance ensures projects and project teams can demonstrate they have completed each stage correctly and are ready to progress to the next.

5. Clarity of roles and responsibilities

Governance provides the framework for projects. Good governance includes clear guidance on the role of the project team, project manager, sponsor, and decision-making entities such as the portfolio board.

It ensures we have a common understanding of roles and level of responsibility. This provides the foundation for clear escalation of risks and issues, as well as proposed changes.

Clarity of who does what and the agreed approach to selecting, planning, running, and closing projects is fundamental to project success in the long term. This can only happen if there’s a clear governance framework.

This framework needs to be fit for purpose, not fit to burst with bureaucracy. If the right information is presented at the right time, then decision making can not only be quick, it can also be well informed. Good governance is the key.

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