Good governance of the project portfolio


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A presentation by Jo Langley & Martin Samphire for the APM South Wales & West of England branch on 18th June 2013

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Good governance of the project portfolio

  1. 1. Effective Governanceof
  2. 2. APM Presenters2Jo LangleyBMT Hi-Q Sigmas Principal Consultant in programme managementand training. An experienced programme manager with roots inengineering and key skills in the defence, rail and constructionservices domains.APM member, a member of the APM Governance SIG committee,MSP Advanced Practitioner and member of the Institute of RiskManagement.Martin SamphireMartin is the owner and Managing Director of 3pmxl Ltd, a consultancythat specialises in helping clients to transform their business usingstructured PPPM approaches. He has over 30 years managementconsulting and change / project/ programme / portfolio implementationexperience in both the private and public sectors.Martin is Chairman of the APM SIG on Governance as well as being acommittee member for the APM SIG on Portfolio Management.
  3. 3. Governance is topical3
  4. 4. West coast mainline refranchising“Irresponsible decisions, compounded by civil service failures, led to thecollapse of the West Coast Main Line rail franchise competition” saysTransport Committee"This episode revealed substantial problems of governance, assurance, policyand resources inside the Department for Transport. Embarking on an ambitious -perhaps unachievable - reform of franchising, in haste, on the UK’s mostcomplex piece of railway was an irresponsible decision for which ministers wereultimately responsible. This was compounded by major failures by civil servants,some of whom misled ministers.4 4
  5. 5. Content APM Governance SIG Introduction What is Governance of ProjectManagement Effective Governance of Change Summary & Questions5
  6. 6. APM missionWorking collaboratively, create new standards andknowledge and enhance their application amongstindividuals and organisations, such that all projectssucceed.6
  7. 7. Governance SIG objectives Be the UK focus Advance understanding Contribute to good practice Influence national and international standardmaking authorities Influence those operationally responsible Develop ambassadors and exemplars ofexcellence7….in the governance of project management (change)
  8. 8. Governance SIG activities Engagement – CxO level and APMmembers Governance Benchmarking Group Conferences and Seminars Publications Development (of Governance material) Influence of and contribution to standards8
  9. 9. Directing Change2nd edition 20119Co-Directing Change2007Sponsoring Change2009Free to APM members at – Publications to date
  10. 10. Content APM Governance SIG Introduction What is Governance of ProjectManagement Effective Governance of Change Summary & Questions10
  11. 11. Project Management Governance – APMThe governance of project management concernsthose areas of corporate governance that arespecifically related to project activities.Effective governance of project managementensures that an organization’s project portfolio isaligned to the organization’s objectives, isdelivered efficiently, and is sustainable.Governance of project management also supportsthe means by which the board and other majorproject stakeholders exchange timely, relevant andreliable information.PM Governance definitionsProjectGovernance - ISO21500Governance is theframework by whichan organization isdirected andcontrolled. Projectgovernance includesbut is not limited tothose areas oforganizationalgovernance that arespecifically related toproject activities.11
  12. 12. 12Change in contextMissionStrategy &ObjectivesPortfolio Mgmt –Definition &MonitoringOperationalPlanning & MgmtProgramme and ProjectMgmt of authorisedP&PsOperational Mgmtof on-going operations(BAU)Organisational and External Resources delivering tasksVision Portfolio Management“Doing the rightprojects”Programme & ProjectManagement“Doing the projectsright”12
  13. 13. Project Governance and GoPMProject/Programme Level Organisational LevelProject board regularly chaired by a sponsor Individuals stay in sponsor role throughout eachproject lifecycleGovernance structure for a project defined Sponsors are accredited and accountableProgress reporting for a project is accurate andtimelyProjects report against a common template.Exception reports available at executive levelThere is a coherent project plan Projects are prioritised in line with strategicobjectivesProject stakeholders are involved in thedirection of a projectThe board directs the change agendaThere is an integrated assurance and approvalsplan for a projectThe board has oversight of the gate reviewprogramme – individual executives areintimately involved in reviewsThe project management team is competentand fully resourcedAll project players are trained, assessed againsta competency framework, accredited?Capacity is balanced against demand13
  14. 14. Examples of poor governance14
  15. 15. Consistent failures: need for a new focus Heavy investment in changedelivery framework, tools andskills (PM focus) Success rate for projects notimproved Need new “medicine” Could that be more focus onExec / Directors / Sponsorroles? Successful Governanceleading to more successfulDelivery? 15
  16. 16. Lack of a clear link between the project and the organisation’s keystrategic priorities, including agreed measures of success.1.Lack of clear senior management and ministerial ownership andleadership2.Lack of effective engagement with Stakeholders3.Lack of skills and proven approach to project management and riskmanagement.4.Lack of understanding of and contact with the supply industry at seniorlevels within the organisation.5.Evaluation of proposals driven by initial price rather than long-termvalue for money (especially securing the delivery of business benefits).6.Too little attention to breaking development and implementation intomanageable steps.7.Inadequate resources and skill to deliver the total delivery portfolio.8.Factors in project failures (OGC)16
  17. 17. Measures of success1. Project management – did project meet time,cost, quality objectives? Project Mgr measure2. Project – were business benefits realised?Project Sponsor / Programme Mgr measure3. Business – was business strategy delivered andfor best value? Portfolio Mgr / Investment director/ CEO measure4. Was future value created? CEO / Shareholdermeasure17Governance success– kill projects early and quickly
  18. 18. Content APM Governance SIG Introduction What is Governance of ProjectManagement Effective Governance of Change Summary & Questions18
  19. 19. Directing Change from APM• Portfolio direction• Sponsorship• PM Capability• Disclosure andreporting 19
  20. 20. APM Governance principles1. The board has overall responsibility for governance of projectmanagement.2. The organisation differentiates between the projects and non-projectbased activities3. The roles, responsibilities and performance criteria for the governanceof project management are clearly defined.4. Disciplined governance arrangements, supported by appropriatemethods, resources and controls, are applied throughout the projectlifecycle.5. Every project has a sponsor.6. There is a demonstrably coherent relationship between the overallbusiness strategy and the project portfolio.7. All projects have an approved plan containing authorisation points atwhich the business case is reviewed and approved. Decisions made atauthorisation points are recorded and communicated. 20
  21. 21. APM Governance principles8. Members of delegated authorisation bodies have sufficient representation,competence, authority and resources to enable them to make appropriatedecisions.9. The project business case is supported by relevant and realistic informationthat provides a reliable basis for making authorisation decisions.10. The board or its delegated agents decide when independent scrutiny ofprojects and project management systems is required, and implement suchscrutiny accordingly.11. There are clearly defined criteria for reporting project status and for theescalation of risks and issues to the levels required by the organisation.12. The organisation fosters a culture of frank internal disclosure of projectinformation.13. Project stakeholders are engaged at a level that is commensurate with theirimportance to the organisation and in a manner that fosters trust14. Projects are closed when they are no longer justified as part of theorganisation’s portfolio 21
  22. 22. Number 1 principle organisationsstruggle with – poll result0 5 10 15 20 25 30 351.Board responsibility2.projects and non-project differentiation3.Governance responsibilities clearly defined.4. Project lifecycle control5.Project sponsorship6. Portfolio alignment7.Authorisation points8. Competence, authority and resources of decision-makers9. Project business case10. independent scrutiny11. Reporting project status12. Culture of frank internal disclosure13. Stakeholders engagement and trust14. Stopping Projects22
  23. 23. Governance of projectmanagement involves… Engaging with stakeholders to ensure change supportsorganisational objectives (alignment) Defining where what type of change decisions can be mosteffectively made (golden thread of delegation) Defining when critical change decisions need to be madeand those involved in making them (decision gates) Ensuring transparency of change decisions/actions andcommunicating their outcome (reporting) Ensuring appropriate resources are in place (competence) Corroborating through independent review (assurance) Demonstrating the right behaviours from the top (leadershipand culture) 23
  24. 24. BoardGovernance isn’t just what the projectboard does!CEODirectorsNEDPortfolioMgrsProgrammeMgrsProjectMgrsSponsorsFunctionalMgrsSuppliersPartnersStakeholdersAssuranceMgrsRiskMgrsThey all need to be competent in their change role24
  25. 25. In practice….Alignment(objectives)Delegation(authority)Competence DecisionGatesReporting AssuranceShareholdersCompany BoardProgrammeBoard (+SRO)ProgrammeManagerProject BoardProject Manager25
  26. 26. Improving governance of change Do a governance audit– Use the ‘Directing Change’ principles– Understand your governance metrics(time taken to make decisions, recycling rates for decisionrequests, number of layers between requestor and decision-maker, number of poor decisions, cost of poor decisions)– Benchmark your metrics Target to improve both effectiveness and efficiency Treat governance as a system starting at the top and flowingdown (how are board decisions made and accounted for?) Integrate Governance of Change with Corporate Governance (itis not an add on) Drive competence and performance at all layers and allelements26
  27. 27. GovSIG Benchmarking Group –some metrics Project termination and ‘churn’ in the portfolio Project alignment to business strategicobjectives Existence of, competency and longevity ofProject Sponsor Formal responsibility for benefits realisation Formality of project reviews Head of PM profession Unwelcome surprises at Board level 27
  28. 28. Content APM Governance SIG Introduction What is Governance of ProjectManagement Effective Governance Summary & Questions28
  29. 29. Benefits of adopting a formalapproach Assurance that robust governance requirements are appliedacross the projects managed in their organisation Optimisation of the portfolio of projects Avoid many of the common failures in project andprogramme performance Improve relationships with staff, customers and suppliers Minimise risks to the organisation arising from projects Maximise the benefits to be realised from projects Assure the continued development of the organisation29
  30. 30. Supporting the right behavioursResponsible and Effective CorporateGovernanceLeads to…Responsible and Effective Governance ofProject and Programme ManagementLeads to…The right behaviours – The right cultureDriving the right behaviours from the top
  31. 31. Thank YouThe Governance SIG is always seeking new members.See the SIG pages on APM website for questions?31
  32. 32. For follow-up 7798 7834 254294