Governing Portfolios and Projects

Portfolio and Project Governance

Project Governance is changing. While the “should we” questions remain the same, conventional command and control approaches to governance are being replaced with more localised models that rely on personal accountability and shorter-term proof points.

Conventional Project Governance has often centralised key decisions such as should we spend effort investigating the viability of a project, should we fund and execute the project, should we go with this (particular) plan and the project solution is ready – should we implement it? This has provided organisations with a clear sense of control and fostered specific approaches of Risk Management.  

Lean Portfolio Management is changing where and how these decisions are made, driving more decentralised and timely decisions and accountability and shorter periods between “proof points” to support more active “realignment” to strategy.

Regardless of the model, governance exists within a project or initiative and between projects and initiatives. The key to governance is making sure the model is clearly understood, is able to be applied across the group and that the right people are making the necessary decisions at the right time. If your organisation is changing Governance Models, or not sure which one is right for them, we can assist.

PMO or VMO?

A PMO can exist at the Project level, Program level or at the Enterprise or Portfolio level.  The role of the PMO will differ from organisation to organisation depending on it’s need.  A common theme however is that a PMO exists to assist the efficiency and effectiveness of planning and delivery.

Value Management Offices (VMO) are also beginning to appear in Lean Portfolio Management and Scaled Agile environments. These provide similar value in assisting the efficiency and effectiveness of planning and delivery and will often incorporate value management.

Portfolio Governance

Portfolio Governance assists the organisation in governing investment against strategy. In conventional approaches this includes decision making about a project’s merit, relative to other projects and relative to the capacity. Lean Portfolio Management leverages Game Plans and Objectives & Key Results (OKR’s) to align to strategy and support should we decisions. Portfolio governance works in conjunction with other levels of governance and often includes the existence of an Enterprise Portfolio Management Office (EPMO).

Project Governance

Project governance, which ties in with other areas of governance, is best served by a consistent and clear model, regardless of delivery approach. A body – sometimes called a Steerco, PSG or PWG  – that is chaired by the sponsor and includes senior user and supplier (not to be confused with vendor) representatives is a proven well-founded model. In an Agile Project, it is more common to reduce the number of times a body need to make a decision and delegate the decision rights to a specific person allowing them to escalate as required. 

Program and Major Change Initiative governance

Program governance, major change initiative governance and project governance are closely related. The key difference is the strategic focus of program and change initiative governance with the inclusion of the change and adoption aspects of delivery beyond projects. Program and change initiative management involves decisions relating to dependencies between projects and, by their nature, multiple delivery managers.  Governance follows a similar model to projects, with decision making by the Sponsor, key user representatives and key suppliers.

Further Reading