The term Project governance is used in industry, especially in the information technology (IT) sector (see Information technology governance), to describe the processes that need to exist for a successful project. Project Governance is an active rather than just a controlling role. While lack of senior management commitment is a consistent cause of project failure, this still occurs when governance structures are in place and operating. This is because Project Governance is not well understood and even less well executed. Formal methodologies do exist such as OGC (UK) Projects in a Controlled Environment (PRINCE2) or by the use other quality standards such as Six Sigma. Formal international accrediting organizations also exist such as PMI or the APM. The formal methodologies provide template structures and Terms of Reference as well as introductions to the more complex areas of Programme management.

Roles

Project Governance can be seen as consisting of nine key roles

• Establish the basis for project governance, approval and measurement ?including defining roles and accountabilities, policies and standards and associated processes

• Evaluate project proposals to select those that are the best investment of funds and scarce resources and are within the firm?s capability and capacity to deliver

• Enable, through resourcing of projects with staff and consultants, harnessing and managing of business support and the provision of the governance resources

• Define the ?desired business outcomes? (end states), benefits and value ? the business measures of success and overall value proposition

• Control the scope, contingency funds, overall project value and so on

• Monitor the project?s progress, stakeholder?s commitment, results achieved and the leading indicators of failure

• Measure the outputs, outcomes, benefits and value ? against both the plan and measurable expectations

• Act to ?steer? the project into the organization, remove obstacles, manage the critical success factors and remediate project or benefit-realization shortfalls

• Develop the organization?s project delivery capability ? continually building and enhancing its ability to deliver more complex and challenging projects in less time and for less cost while generating the maximum value.

Elements

Project governance will:

• Outline the relationships between all internal and external groups involved in the project

• Describe the proper flow of information regarding the project to all stakeholders

• Ensure the appropriate review of issues encountered within each project

• Ensure that required approvals and direction for the project is obtained at each appropriate stage of the project.

Important specific elements of good project governance include:

• A compelling business case, stating the objects of the project and specifying the in-scope and out-of-scope aspects

• A mechanism to assess the compliance of the completed project to its original objectives

• identifying all stakeholders with an interest in the project

• A defined method of communication to each stakeholder

• A set of business-level requirements as agreed by all stakeholders

• An agreed specification for the project deliverables

• The appointment of a project manager

• Clear assignment of project roles and responsibilities

• A current, published project plan that spans all project stages from project initiation through development to the transition to operations.

• A system of accurate upward status- and progress-reporting including time records.

• A central document repository for the project

• A centrally-held glossary of project terms

• A process for the management and resolution of issues that arise during the project

• A process for the recording and communication of risks identified during the project

• A standard for quality review of the key governance documents and of the project deliverables.

See also

• Cost overrun
• Megaproject
• Megaprojects and risk

References

• Patrick S. Renz: "Project Governance: Implementing Corporate Governance and Business Ethics in Nonprofit Organizations." Heidelberg: Physica-Verl., 2007. (Contributions to Economics)