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
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
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
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”
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. 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
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