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Governance of Project
Management – SW Branch
1
APM Governance SIG
3 June 2015
Martin Samphire and Joan Langley
2
Martin Samphire
Owner and MD – 3pmxl Ltd
MAPM, MIoD
Chairman of Governance SIG
Sectors –Central Civil Government,
Police, Defence, Energy, Financial
Services, Construction
Jo Langley
BMT Hi-Q Sigma
Principal Consultant and
Head of Training
Governance SIG Committee
Member
3
Agenda
 APM Governance SIG
 What is Governance of PM and why is it important?
 Core principles of Governance
 Governance structure & key roles
 Where does Good Governance start?
 Case studies
 How to get involved
 Discussion
APM Governance SIG
4
Governance SIG
Objectives
 Be the UK focus
 Advance understanding
 Contribute to good practice
 Influence national and
international standard making
authorities
 Influence those operationally
responsible
 Develop ambassadors and
exemplars of excellence
5
….in the governance of project management (change)
Activities
 Engagement – CxO level
as well as APM members
 Conferences and Seminars
 Publications
 Influence of, and
contribution to, standards
Directing Change
2nd edition 2011
6
Co-Directing Change
2007 (being updated)
Sponsoring Change
2009
Free to APM members at www.apm.org.uk/memberdownloads
Gov SIG Publications
Agile Governance
(being developed)
To get involved
http://bit.ly/apm-agile-governance-preregister
What is Governance of
Project Management /
Change?
7
The silver bullet……?
Project success
Portfolio success
8
Good
Governance
Of projects
Of project management
Definitions
‘Corporate governance involves a set of relationships between a company’s
management, its board, its shareholders and other stakeholders.
Corporate governance also provides the structure through which the objectives of
the company are set, and the means of attaining those objectives and monitoring
performance are determined’
Organisation for Economic Co-operation and Development
OECD Principles of Corporate Governance 2004
www.oecd.org
9
“Governance of project management refers to the
set of policies, functions, processes, procedures
and responsibilities that define the establishment,
management and control of projects, programmes
and portfolios”
APM BoK 6th Edition
Linked but separate from Project
Governance!
(management framework within which project decisions are made and accounted for)
Overall Context
10
10
Mission
Strategy &
Objectives
Portfolio Mgmt –
Definition &
Monitoring
Operational
Planning & Mgmt
Programme and Project
Mgmt of authorised
P&Ps
Operational Mgmt
of on-going operations
(BAU)
Organisational and External Resources delivering tasks
Vision
10
Why is Good Governance important?
 The key success factor for project outcomes - #1 in APM’s
Project Success Factors research
 Competitive advantage for businesses
 Provides for internal controls
 Externally, it reassures stakeholders that their money is
being invested well
 Good governance is increasingly demanded by
shareholders, government and regulators
 To comply with external regulations and legislation (e.g.
the UK Corporate Governance Code and Sarbanes-Oxley
in the USA).
11
UK Code ….“comply or explain”
Purpose of Effective Governance
Ensure that an organisation’s project/change portfolio is
aligned to the organisation’s objectives and is delivered
efficiently (maximising value)
Ensure that the organisation is aware of risks, minimises
project failures and maximises the beneficial outcomes (value)
from their overall portfolio of projects in a sustainable and
transparent manner
It also supports the means by which the corporate board and
other major project stakeholders are provided with timely,
relevant and reliable information.
13
“No such thing as failed projects, only failed governance”
Andrew Bragg – Former CEO APM
Case Study 1
Universal Credit Project
14
Key governance issues raised
Programme strategy
SRO longevity
Actions from assurance reviews
“Overambitious” timescale
End state and interim Blueprints
Use of Agile
Governance culture - “fortress mentality”
Matching spend to progress
Lack of a clear link between the project and the organisation’s key
strategic priorities, including agreed measures of success.
1.
Lack of clear senior management and ministerial ownership and
leadership
2.
Lack of effective engagement with Stakeholders3.
Lack of skills and proven approach to project management and risk
management.
4.
Lack of understanding of and contact with the supply industry at senior
levels within the organisation.
5.
Evaluation of proposals driven by initial price rather than long-term
value for money (especially securing delivery of benefits).
6.
Too little attention to breaking development and implementation into
manageable steps.
7.
Inadequate resources and skill to deliver the total delivery portfolio.8.
Factors in project failures (OGC)
16
17
18
Recent Research
19
“poor performance results in organisations
wasting $109m in every $1bn invested in
projects”
“high performing organisations
successfully complete 89% of their
projects, while low performers complete
only 36% successfully”
“Fit-for-purpose governance strongly
influences project and programme
success”
“higher performance is correlated with
higher maturity”.
“there is a highly
visible disconnect
between Executive
Teams and Project
Managers”
“C-Suite are often
missing in action”.
Misalignment of ‘Run the
business’ and ‘Change
the business’ results in
‘wastage’ of resources
“only 62% of programmes have an established
or mature link between programme objectives
and organisational strategy and only 50% of the
respondents felt that the boundaries of their
organisations portfolio were clearly defined and
decision making well supported”
“Just 42% of companies reported having high alignment of
projects and organisational strategy”
“Companies with high degrees of alignment have more
successful projects (69%) compares with companies with low
alignment (45%)”
“80% of the projects
with active sponsors
reported a success rate
of 75%, which is much
higher than the
average”
“actively engaged
sponsors is the top
driver of project
success”
Sources:
2014 PMI Pulse Survey
PwC 2104 Global Survey
PwC 2012 Global Survey
APM Factors for Project Success 2014
GovSIG Benchmarking
“only 38% of programmes
had established processes
to identify benefits at the
outset”
“only 20% had robust
benefits measurement
processes in place during
implementation”
“lower value projects
are more successful
than large more
complicated projects”
“of the success factors, ‘delivery to
time’ showed the least success”
“62% of portfolios do not have
benefits in the sponsor’s personal
performance targets”
“Only 57% of sponsors had
received sponsor training”
Core Principles of Good
Governance
20
Directing Change from APM
1. Portfolio direction
2. Sponsorship
3. PM Capability
4. Disclosure and reporting
21
Directing Change Principles - 1
22
Directing Change Principles - 2
23
Governance Structure
& key roles
25
The crucial role of the Board
26
“Governance
…depends crucially on culture…..
….Boards have responsibility for shaping the
culture, both within the boardroom and across the
organisation…..
……requires constant vigilance”
Developments in Corporate Governance
and Stewardship 2014
27
Board
Sub-committee
Board
Sponsor
Sponsor
Sponsor
Sponsor
Supported
by Project
Boards /
Steering
Committees
Portfolio
Manager
Review
Panels
ProjectManagement
capability/
ExcellenceandCapacity
Shareholders and Stakeholders
Funders Audit
Committee
Programme /
Project
Managers
Programme /
Project
Managers
Programme /
Project
Managers
Programme /
Project Manager
External
Teams
Internal
Teams
Strategy
Delivery
Key Governance Bodies
Competent people in every
project role
29
Even if we have “good people” are they fully competent in
the project role and “game” that we expect them to “play”?
30
Sponsoring Change:
A Guide to the Governance Aspects of Project Sponsorship, APM 2009
What would you expect from the project
sponsor?
Attributes of Successful Project Sponsorship
31
 Project Sponsor effectiveness = best single predicator of
project success or failure
 Appoint a named Sponsor early in the project lifecycle
 Critical success attributes:
1. Support
2. Continuity
3. Alignment
 Personal Attributes:
1. Understanding
2. Competence
3. Credibility
4. Commitment
5. Engagement
Case Study 2
BBC Digital Media Initiative (DMI)
33
BBC DMI Project
 The BBC was "far too complacent" in its handling of a
failed IT project that cost licence fee payers £98.4m.
 The Digital Media Initiative (DMI) was intended to move
the BBC away from using and storing video tape.
 But it was scrapped, with almost no results, after five
years of development.
 After investigating the demise of the project, the Public
Accounts Committee (PAC) has branded the programme
"a complete failure". Chairman Margaret Hodge said the
BBC needed to "overhaul" its approach to such
projects, to "safeguard licence fee payers' money".
34
BBC DMI Project
Where the money went
Contractors - £46.7m
IT - £37.2m
Siemens costs - £24.9m
Consultancy - £8.4m
BBC staff - £6.4m
Other - £2.3m
35
BBC DMI Project Failures
 After a series of delays, the project was brought in-house, There it floundered
until May 13, when the BBC's incoming director general, Tony Hall, admitted
it had "wasted a huge amount of licence fee payers' money".
 The gross estimate of the amount spent on DMI was £125.9m, although
the BBC claims to have recouped £27.5m of that.
 The BBC's technology chief, John Linwood, was sacked in July 2013 over the
project's demise.
 A previous report, by the National Audit Office (NAO), blamed "confusion and
a lack of planning" for the failure.
 It said that senior executives failed to take control of the project when it
ran into trouble and "did not appear to appreciate the extent of the
problems until a late stage".
 "The BBC was far too complacent about the high risks involved in taking
it in-house. No single individual had overall responsibility or
accountability for delivering the DMI and achieving the benefits, or took
ownership of problems when they arose."
36
Where does good
governance start?
37
Good governance has to
start at the top
The Board – the apex
Set the culture, ethics and ‘rules’
Best able to influence appropriate
behaviours
Can ask the difficult questions
38
Case Study 3
CrossRail)
41
Crossrail Route
(£14
.8bn
Other
Funding
(£2.45bn)
Networ
k RailOthers
DfT
(£5.20bn)
TfL
(£7.15bn)
GLA
BRS &
Direct
Contributi
on
Communi
ty
Infrastruc
ture Levy
TfL
Direct
Contributi
on
Develope
rs
Contributi
on
Land and
Property
BAA plc
City of
London
Direct
Contributi
on
(4.7bn)
42
Integrated Team
TfLDfT
Project
Partners
Crossrail
Ltd
Sponsors’ Agreement
Project Development
Agreement (PDA)
Shareholder
Agreement
Design
Consultant
s
London Underground
NR (on-network works)
Docklands Light
Railway
Canary Wharf Group
Berkeley Homes
Contractor
s
CTOC
Rolling
Stock /
Depot
Industry
Partner
Agreements
Delivery
Contracts
‘Crossrail Project’
Executive
Team
Operator
RfL
P Rep
Operating
Contracts
Framework
Contracts
JST
CrossRail Governance Model
Lessons from CrossRail
 Be clear of the importance of governance for project
success
 Ensure clarity of governance structure and roles
 Use Sponsorship Agreements to build relationships and
commitment
 Provide funding certainty
 Allow autonomy and delegation of power to manage risk
and take decisions – but allow it to mature over time
 Provide project champions both political and financial
 Ensure disclosure and transparency.
43
Gov SIG
Getting Involved
44
Getting Involved with GovSIG
 APM GovSIG
 Blogging
 Research
 Committee
45
How to make contact:
Apm – Catherine.bowles@apm.org.uk
Martin – msamphire@3pmxl.com
Joan – joan.Langley@hiqsigma.com

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Does your Board exhibit good governance of project/change management?

  • 1. Governance of Project Management – SW Branch 1 APM Governance SIG 3 June 2015 Martin Samphire and Joan Langley
  • 2. 2 Martin Samphire Owner and MD – 3pmxl Ltd MAPM, MIoD Chairman of Governance SIG Sectors –Central Civil Government, Police, Defence, Energy, Financial Services, Construction Jo Langley BMT Hi-Q Sigma Principal Consultant and Head of Training Governance SIG Committee Member
  • 3. 3 Agenda  APM Governance SIG  What is Governance of PM and why is it important?  Core principles of Governance  Governance structure & key roles  Where does Good Governance start?  Case studies  How to get involved  Discussion
  • 5. Governance SIG Objectives  Be the UK focus  Advance understanding  Contribute to good practice  Influence national and international standard making authorities  Influence those operationally responsible  Develop ambassadors and exemplars of excellence 5 ….in the governance of project management (change) Activities  Engagement – CxO level as well as APM members  Conferences and Seminars  Publications  Influence of, and contribution to, standards
  • 6. Directing Change 2nd edition 2011 6 Co-Directing Change 2007 (being updated) Sponsoring Change 2009 Free to APM members at www.apm.org.uk/memberdownloads Gov SIG Publications Agile Governance (being developed) To get involved http://bit.ly/apm-agile-governance-preregister
  • 7. What is Governance of Project Management / Change? 7
  • 8. The silver bullet……? Project success Portfolio success 8 Good Governance Of projects Of project management
  • 9. Definitions ‘Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined’ Organisation for Economic Co-operation and Development OECD Principles of Corporate Governance 2004 www.oecd.org 9 “Governance of project management refers to the set of policies, functions, processes, procedures and responsibilities that define the establishment, management and control of projects, programmes and portfolios” APM BoK 6th Edition Linked but separate from Project Governance! (management framework within which project decisions are made and accounted for)
  • 10. Overall Context 10 10 Mission Strategy & Objectives Portfolio Mgmt – Definition & Monitoring Operational Planning & Mgmt Programme and Project Mgmt of authorised P&Ps Operational Mgmt of on-going operations (BAU) Organisational and External Resources delivering tasks Vision 10
  • 11. Why is Good Governance important?  The key success factor for project outcomes - #1 in APM’s Project Success Factors research  Competitive advantage for businesses  Provides for internal controls  Externally, it reassures stakeholders that their money is being invested well  Good governance is increasingly demanded by shareholders, government and regulators  To comply with external regulations and legislation (e.g. the UK Corporate Governance Code and Sarbanes-Oxley in the USA). 11 UK Code ….“comply or explain”
  • 12. Purpose of Effective Governance Ensure that an organisation’s project/change portfolio is aligned to the organisation’s objectives and is delivered efficiently (maximising value) Ensure that the organisation is aware of risks, minimises project failures and maximises the beneficial outcomes (value) from their overall portfolio of projects in a sustainable and transparent manner It also supports the means by which the corporate board and other major project stakeholders are provided with timely, relevant and reliable information.
  • 13. 13 “No such thing as failed projects, only failed governance” Andrew Bragg – Former CEO APM
  • 14. Case Study 1 Universal Credit Project 14
  • 15. Key governance issues raised Programme strategy SRO longevity Actions from assurance reviews “Overambitious” timescale End state and interim Blueprints Use of Agile Governance culture - “fortress mentality” Matching spend to progress
  • 16. Lack of a clear link between the project and the organisation’s key strategic priorities, including agreed measures of success. 1. Lack of clear senior management and ministerial ownership and leadership 2. Lack of effective engagement with Stakeholders3. Lack of skills and proven approach to project management and risk management. 4. Lack of understanding of and contact with the supply industry at senior levels within the organisation. 5. Evaluation of proposals driven by initial price rather than long-term value for money (especially securing delivery of benefits). 6. Too little attention to breaking development and implementation into manageable steps. 7. Inadequate resources and skill to deliver the total delivery portfolio.8. Factors in project failures (OGC) 16
  • 17. 17
  • 18. 18
  • 19. Recent Research 19 “poor performance results in organisations wasting $109m in every $1bn invested in projects” “high performing organisations successfully complete 89% of their projects, while low performers complete only 36% successfully” “Fit-for-purpose governance strongly influences project and programme success” “higher performance is correlated with higher maturity”. “there is a highly visible disconnect between Executive Teams and Project Managers” “C-Suite are often missing in action”. Misalignment of ‘Run the business’ and ‘Change the business’ results in ‘wastage’ of resources “only 62% of programmes have an established or mature link between programme objectives and organisational strategy and only 50% of the respondents felt that the boundaries of their organisations portfolio were clearly defined and decision making well supported” “Just 42% of companies reported having high alignment of projects and organisational strategy” “Companies with high degrees of alignment have more successful projects (69%) compares with companies with low alignment (45%)” “80% of the projects with active sponsors reported a success rate of 75%, which is much higher than the average” “actively engaged sponsors is the top driver of project success” Sources: 2014 PMI Pulse Survey PwC 2104 Global Survey PwC 2012 Global Survey APM Factors for Project Success 2014 GovSIG Benchmarking “only 38% of programmes had established processes to identify benefits at the outset” “only 20% had robust benefits measurement processes in place during implementation” “lower value projects are more successful than large more complicated projects” “of the success factors, ‘delivery to time’ showed the least success” “62% of portfolios do not have benefits in the sponsor’s personal performance targets” “Only 57% of sponsors had received sponsor training”
  • 20. Core Principles of Good Governance 20
  • 21. Directing Change from APM 1. Portfolio direction 2. Sponsorship 3. PM Capability 4. Disclosure and reporting 21
  • 25. The crucial role of the Board 26 “Governance …depends crucially on culture….. ….Boards have responsibility for shaping the culture, both within the boardroom and across the organisation….. ……requires constant vigilance” Developments in Corporate Governance and Stewardship 2014
  • 26. 27 Board Sub-committee Board Sponsor Sponsor Sponsor Sponsor Supported by Project Boards / Steering Committees Portfolio Manager Review Panels ProjectManagement capability/ ExcellenceandCapacity Shareholders and Stakeholders Funders Audit Committee Programme / Project Managers Programme / Project Managers Programme / Project Managers Programme / Project Manager External Teams Internal Teams Strategy Delivery Key Governance Bodies
  • 27. Competent people in every project role 29 Even if we have “good people” are they fully competent in the project role and “game” that we expect them to “play”?
  • 28. 30 Sponsoring Change: A Guide to the Governance Aspects of Project Sponsorship, APM 2009 What would you expect from the project sponsor?
  • 29. Attributes of Successful Project Sponsorship 31  Project Sponsor effectiveness = best single predicator of project success or failure  Appoint a named Sponsor early in the project lifecycle  Critical success attributes: 1. Support 2. Continuity 3. Alignment  Personal Attributes: 1. Understanding 2. Competence 3. Credibility 4. Commitment 5. Engagement
  • 30. Case Study 2 BBC Digital Media Initiative (DMI) 33
  • 31. BBC DMI Project  The BBC was "far too complacent" in its handling of a failed IT project that cost licence fee payers £98.4m.  The Digital Media Initiative (DMI) was intended to move the BBC away from using and storing video tape.  But it was scrapped, with almost no results, after five years of development.  After investigating the demise of the project, the Public Accounts Committee (PAC) has branded the programme "a complete failure". Chairman Margaret Hodge said the BBC needed to "overhaul" its approach to such projects, to "safeguard licence fee payers' money". 34
  • 32. BBC DMI Project Where the money went Contractors - £46.7m IT - £37.2m Siemens costs - £24.9m Consultancy - £8.4m BBC staff - £6.4m Other - £2.3m 35
  • 33. BBC DMI Project Failures  After a series of delays, the project was brought in-house, There it floundered until May 13, when the BBC's incoming director general, Tony Hall, admitted it had "wasted a huge amount of licence fee payers' money".  The gross estimate of the amount spent on DMI was £125.9m, although the BBC claims to have recouped £27.5m of that.  The BBC's technology chief, John Linwood, was sacked in July 2013 over the project's demise.  A previous report, by the National Audit Office (NAO), blamed "confusion and a lack of planning" for the failure.  It said that senior executives failed to take control of the project when it ran into trouble and "did not appear to appreciate the extent of the problems until a late stage".  "The BBC was far too complacent about the high risks involved in taking it in-house. No single individual had overall responsibility or accountability for delivering the DMI and achieving the benefits, or took ownership of problems when they arose." 36
  • 35. Good governance has to start at the top The Board – the apex Set the culture, ethics and ‘rules’ Best able to influence appropriate behaviours Can ask the difficult questions 38
  • 36. Case Study 3 CrossRail) 41 Crossrail Route (£14 .8bn Other Funding (£2.45bn) Networ k RailOthers DfT (£5.20bn) TfL (£7.15bn) GLA BRS & Direct Contributi on Communi ty Infrastruc ture Levy TfL Direct Contributi on Develope rs Contributi on Land and Property BAA plc City of London Direct Contributi on (4.7bn)
  • 37. 42 Integrated Team TfLDfT Project Partners Crossrail Ltd Sponsors’ Agreement Project Development Agreement (PDA) Shareholder Agreement Design Consultant s London Underground NR (on-network works) Docklands Light Railway Canary Wharf Group Berkeley Homes Contractor s CTOC Rolling Stock / Depot Industry Partner Agreements Delivery Contracts ‘Crossrail Project’ Executive Team Operator RfL P Rep Operating Contracts Framework Contracts JST CrossRail Governance Model
  • 38. Lessons from CrossRail  Be clear of the importance of governance for project success  Ensure clarity of governance structure and roles  Use Sponsorship Agreements to build relationships and commitment  Provide funding certainty  Allow autonomy and delegation of power to manage risk and take decisions – but allow it to mature over time  Provide project champions both political and financial  Ensure disclosure and transparency. 43
  • 40. Getting Involved with GovSIG  APM GovSIG  Blogging  Research  Committee 45 How to make contact: Apm – Catherine.bowles@apm.org.uk Martin – msamphire@3pmxl.com Joan – joan.Langley@hiqsigma.com