|
Best Practices in Project Governance—Setting Up for Success
by Patti Dismukes
Today’s environment increasingly requires that IT demonstrate tangible benefits and ROI for every project. And this is not surprising given a recent estimate that more than 25% of the $255 billion spent per year on IT is wasted on failed projects and costs overruns. In response, a movement to apply stricter discipline to IT expenditures has arisen, with detailed processes and highly skilled project managers becoming a high priority. Formal governance structures are being established, often under the aegis of a project management office (PMO).
But not all project governance is created equally, and it is up to corporate leadership to make sure that practices being established are state-of-the-art and will deliver the expected results for the organization. While firmly believing that reliable project management practices are a prerequisite to realizing better returns, the reality is that establishing effective project governance must go beyond merely signing a charter establishing a PMO structure.
Establishing an effective project governance structure extends beyond one office. It must apply across all disciplines within the organization in order to succeed. In fact, we’ve found that three simple steps can make the difference between project governance initiatives that succeed and those that fail.
The 3 Steps for Action
The biggest factor determining the success or failure of any project governance practice is its leadership and corporate sponsorship. If the leaders of the organization are committed to building a robust project governance discipline, then it will be much more likely to fly. But high level support alone is not enough to sustain the move to formalized governance. It takes a commitment to incorporate Project Governance into the culture of the organization, which generally occurs when following these steps.
Step 1. Set the right expectations
Just a few years ago, the experts preached that aligning the IT with overall corporate objectives would substantially improve the performance of IT projects. As a result, many scrambled to set up PMOs and project governance functions in the belief that this would solve a lot of their IT performance issues. While many experienced increased alignment between the goals of the corporation and IT as a result, they did not see the expected increase in efficiency of the IT process. A recent report published by MIT Sloan Management Review concluded that IT projects still fail to meet expectations, despite close alignment because of the complexity of systems, applications and infrastructures. This phenomenon should not surprise anyone in IT who’s been asked to make a “simple software change” only to find the small task morph into a highly complex project when all the various applications and systems involved are considered.
Therefore, rule number one is to set the correct expectations for project governance. It cannot single handedly solve the problems that accumulate as increasingly complex IT infrastructures are allowed to grow unchecked in an organization. What a good project governance system can do is help identify these complexities and raise them as issues much earlier in the process. It can present management with the trade-offs that must be made like that of continuing to install patches versus making the necessary investment to overhaul the platform.
Step 2. Right-size the model
Employing project governance in any organization will shake things up. It requires defining roles and accountability structures, aligning the right people, adopting value-added processes and sensible tools. It is not business as usual and it will take time for it to make its way across the organization. Yet too many businesses see it as an all or nothing proposition that requires changing the organization almost overnight.
A better approach is having a strategy for deploying project governance in manageable increments. Start by identifying the areas that are causing the most pain for the organization where adopting project governance can have the most impact. Recruit champions to roll out the methodology and manage it closely to ensure success. Then celebrate successes realized and use the opportunity to whet the appetite of the rest of the organization for rolling out these methodologies and practices.
Step 3. Promote a PG culture
Introducing project governance has profound cultural implications as mechanisms are put in place promoting accountability and transparency. Suddenly, team members that have carried their entire team and those that have skated through their careers, taking few risks and making minimal contributions are exposed. The organization’s culture must adapt to support team members as they adjust to the new paradigm, continually promoting a project mindset. Fostering horizontal trust and encouraging cross functional cooperation is essential to project governance success.
This culture has to come from the top. If it doesn’t have the full support of the executive team it is doomed to failure. And more importantly, in addition to their support, the executive team has got to walk the talk. They cannot expect their subordinates to respect processes that they occasionally bend to suit their priorities. And they have to instill and support accountability to realize the real benefits of project governance—and not just among the IT group. Accountability for projects has to span the entire organization, from the senior executives originating the strategies that necessitate projects to the business units and teams that must work with IT to write the business case and manage it through to completion.
In conclusion, project management is a discipline that must arise from the entire organization in order for its full benefits to be realized. It must go beyond creating a PMO office to realize the change required in order for project governance to become a core competency. Best practices include setting the right expectations, tailoring the discipline to your organization and establishing a culture in which project governance can thrive. These competencies are central in organizations that manage projects to realize added value and create competitive advantage.
back...
|
