Summary

Even if you have a set of governance structures in place today you’ll find this Guide essential for aligning them to their true roles and ensuring the different components of the governance structures build on and support each other to achieve the desired results.

Governance structures tend to ‘grow like topsy’ — haphazardly and without coordination. An investment committee exists, a PMO is added, Sponsors are appointed and so on — but the interrelationships and discrete roles and accountabilities are not clear or, often, ever defined.

This “How to establish effective governance structures” Guide enables anyone accountable for establishing or improving any aspect of project governance to understand how each component fits and what its roles and accountabilities are (or should be).

We provide an overall governance framework and then populate it with the detailed roles and accountabilities, operating approaches and performance measures.

You can customize these standards as you wish, or adopt them as defined within your organization knowing that each governance structure’s roles and accountabilities is clearly defined and delineated to ensure maximum value from your project portfolio. One PMO manager likened establishing project governance structures to “herding cats”!

Getting senior management to change their behaviours, to take on additional accountabilities or agree to new disciplines that may ‘cramp their style’ is not an easy task.

The initiative needs to come from the top down. It needs to establish the need for more effective project governance structures, that the existing structures are failing on more than one dimension, that this situation is costing the organization real money in terms of value lost or foregone.

A loss of at least 5% of the organization’s annual project expenditure that could have been prevented by improved project governance is usually not difficult to demonstrate. If you’re a $50m pa project spend organization, this presents $2.5m pa — which will easily pay for an improved governance structure.

Essential guide for every PMO.

Accountabilities
Implementing or upgrading project governance structures has to start with clarity of accountabilities. In some organizations there are no documented accountabilities, in others a few key points are captured, while in others a comprehensive list exists that is wrong! Not a happy state. We provide you with comprehensive accountability and terms of reference statements for all key governance roles

1. project investment committees
2. portfolio management offices
3. project sponsors
4. project steering committees
5. portfolio prioritisation committees.

These terms of reference explain the rationale and need for each governance function, their value contribution, authority and measures of success.

Policies and standards
At the detail project delivery level there are a number of areas where policies need to exist to guide or mandate compliance with approved and accepted practice. The objective of these policies and standards is to remove the angst between project stakeholders, so that everyone knows who is accountable for what and why.

Importantly, these policies come with a four-level compliance model that ensures ‘mandatory’ policies are not discredited by being applied to policy areas that need more flexibility in use.

This Guide, plus supporting materials, covers project and technology set-up, planning, delivery policies plus project monitoring and measurement policies.

Governance structures
Many of the required governance structures will already exist — they just need to be made more effective. We provide the role and establishment approaches for

1. Project Investment Committees (PICs)
2. Portfolio Management Offices (PMOs)
3. Governance Team (Sponsor/Steering Committee).

NB I very much see PMOs as a key governance structure (as opposed to, for example, a project-related structure).

(Development of these roles is enabled by the “How to establish an effective project and value delivery competency learning curriculum guide” available from beingapmo.com.)

Supporting processes
The governance functions and structures cannot operate effectively without a series of key processes being in place and effective.

The business case/approval, risk management, strategic alignment measurement, project reporting, benefits tracking and measurement and other processes need to be operating well for governance to work effectively.

This Guide plus the bonuses and supporting Reference Library will give you a clear basis for establishing an effective (or more effective) governance structure in your organization.

Benefits

This Guide equips you

1. to establish effective, well-designed, consistent and clear governance structures
2. to tailor our standard terms of references and accountabilities matrices to fit your organization and your objectives
3. to put in place the many supporting processes, policies and other structures required to translate a governance structure into an effective one
4. to sell the need for and concepts of project governance structures to senior management so that they can see the value
5. to position the PMO as a governance structure (a sub-component of the Investment Management Committee) so that it has the requisite authority to do its job.

This Guide fast-tracks any governance introduction or governance capability uplift program.

Who should read

This Guide is designed to be read primarily by the PMO or those accountable within your organization for ensuring your governance structures exist, are appropriately structured and have the requisite authority and understanding of their roles. As such it is also of value to Auditors to understand what they should find within their (client) organizations.

Contents

1. Understanding the need for project governance structures
2. Understanding a project governance program’s objectives
3. Understanding the impact of project governance
4. The end-to-end project governance structure establishment process
5. How to identify the need for project governance structures
6. How to assess your existing governance structures
7. How to structure your project governance structure/framework
8. How to approve your project governance structures
9. How to plan your governance structures implementation
10. How to agree project accountabilities
11. How to agree project policies and standards
12. Understanding the role of the ‘Project Investment Committee’ (PIC)
13. How to establish an effective ‘Project Investment Committee’
14. Understanding the role of the Portfolio Management Office (PMO)
15. How to establish an effective ‘Portfolio Management Office’
16. Understanding the role of the project governance team (sponsor/steering committee)
17. How to establish effective project governance teams (sponsor/steering committee)
18. How to establish the project governance supporting processes required
19. How to monitor the governance structures’ effectiveness

Bonus

When you purchase your “How to establish effective project governance structures” you will also receive the following bonuses, valued at well over US$1000 in themselves.

Understanding how projects are ‘condemned to completion’
A podcast based on a real project that tracks its progress through its 30 month lifespan showing how each decision, taken in good faith, progressively destroyed the project’s value. This slide-based podcast is designed to be used to illustrate the senior management how easy it is for projects to be led to failure if the governance structures are not alert to the key issues

How to define your project policies
When there is confusion as to what the rules are in relation to projects, who can do what and how, value disappears through the gaps. This Guide provides a basic set of recommended project-related policies that can be amended and adapted for your organization. It gives you a quick head start.

Project Governance Roles and Responsibilities Matrix
This comprehensive guide to all project governance roles, responsibilities and accountabilities covers the roles of all Project Investment Committees and Portfolio Management Offices (both Enterprise and Business Unit), a Strategic Prioritisation Committee, the CIO, the Project Sponsor and Steering Committee and the Business. Their roles and responsibilities are detailed in terms of seven core processes — investment management, investment allocation, portfolio management, project governance, project management, solution delivery and business outcomes delivery. An essential guide to anyone with accountability for establishing project and governance accountabilities.

Terms of reference for Enterprise and Business Unit Project Investment Committees (PIC)
The PIC approves and prioritises projects, manages the project portfolio and governs the overall capability uplift programs — or at least it should. This Terms of Reference gives you a comprehensive basis for defining your PIC’s rationale, roles, accountabilities, value contribution, authority, modus operandi and measures of success.

Terms of reference for Enterprise and Business unit Portfolio Management Offices (PMOs)
The PMO is a key governance structure in ensuring the value of the portfolio is more than the sum of the parts. This Terms of Reference gives you a comprehensive basis for defining your PMO’s rationale, roles, accountabilities, value contribution, authority and measures of success.

Terms of reference for Project Governance Teams
The Governance Team (Project Sponsor and Steering Committee) is accountable to management for the successful delivery of the project and the associated value— or should be! This Terms of Reference gives you a comprehensive basis for defining your governance team’s rationale, roles, accountabilities, value contribution, authority and measures of success.

Terms of reference for Portfolio Prioritisation Committees (PPCs)
In some organizations a separate committee will meet periodically to specifically review the portfolio and re-prioritise projects as necessary. (In other organizations this is done by the PIC.) This Terms of Reference gives you a comprehensive basis for defining your PPC’s rationale, roles, accountabilities, value contribution, authority and measures of success.