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Project governance is the organizational institutionalization of a project management methodology.

Quick reference

Project Governance

Project governance is the organizational institutionalization of a project management methodology.

When to use

An organization that has created a project management methodology will normally need project governance to implement the methodology and ensure it becomes part of the organizational culture.

Instructions

Large organizations with many projects find a need for governance to improve communication and project performance.  Project governance ensures that all project teams and stakeholders are following the project management methodology.  This standardization simplifies some aspects of project management (planning and reporting) although it can become bureaucratic and burdensome if the methodology is not flexible and responsive to the unique needs of each project.  Effective organizational project governance requires a Project Management Office (PMO) to maintain the methodology and ensure compliance.

A small organization with only a few projects maintains governance as part of project planning, control and stakeholder communication.  Each project can be unique and still be adequately supervised by senior management. 

 A PMO is normally used for project governance.  This can be a formal function within an organization structure, or it can be an additional duty of a subject matter expert.  There is no standard for what a PMO is or does, but they typically can be characterized as one of three types.  Your organization needs to decide which type is best suited to your organizational culture and business needs.

Subject Matter Expert (SME) PMO

The SME PMO is normally a one person organization.  The SME maintains the procedures and templates that comprise the methodology.  The SME will also act as a coach for a project team or stakeholders if they require it.

Oversight PMO

This PMO is normally a small team of individuals who are project management SMEs.  They maintain the procedures and templates of the project management methodology.  In addition, they often chair or run the management reviews, stage gate meetings and technical reviews.  They do quality audits on the projects to ensure that the project teams are using the methodology correctly.  They often create and maintain dashboards or summary reports for how all projects are progressing.

Leadership PMO

This PMO is really a project department.  In addition to doing everything that the other two types of PMOs do, in this case, the Project Leaders and often the Core Team members are assigned to this organization.  The PMO manages the project resources in addition to managing the project management methodology.

Definitions

Project Governance: “The framework, functions, and processes that guide project management activities in order to create a unique product, service or result to meet organizational, strategic, and operational goals.” PMBOK® Guide

Project Management Office (PMO): “A management structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques.” PMBOK® Guide

These definitions are taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Sixth Edition, Project Management Institute, Inc., 2017.

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  • 00:05 Hello I'm Ray Sheen.
  • 00:06 And I'd like to talk with you now about project governance.
  • 00:12 The Project Management Body of Knowledge, the PMBOK Guide,
  • 00:15 defines project governance as the framework, functions, and processes that
  • 00:20 guide project management activities in order to create a unique product, service,
  • 00:25 or result to meet organizational, strategic, and operational goals.
  • 00:30 That's quite a mouthful, so what does that really mean?
  • 00:33 Well, there are four elements associated with project governance.
  • 00:36 The first, alignment of resources against the approved projects.
  • 00:40 There are no stealth projects going on.
  • 00:43 People and equipment are being used on the projects on which they are assigned.
  • 00:47 The second is risk identification and reduction.
  • 00:51 The organization considers both project and organizational risk and
  • 00:55 implements plans to address it.
  • 00:57 The third is that projects are evaluated against their approved performance goals.
  • 01:02 This means that the project performance is tracked, and that there is a change
  • 01:06 management process in place to update the goals when appropriate.
  • 01:10 Finally, there is a regular meaningful communication between the project team and
  • 01:14 stakeholders.
  • 01:16 Any mode of communication is okay, as long as it works.
  • 01:20 Project governance then, is the way the organization ensures that projects
  • 01:24 will be managed in a way that incorporates approved best practices, and
  • 01:28 increases their probability of meeting the project goals and objectives.
  • 01:33 A good governance approach impacts the way projects are managed.
  • 01:37 One impact is the clear understanding of the expected project activities, and
  • 01:42 the impact those activities will have on the project and the project goals.
  • 01:46 First, by the project core team, they know what's expected of them.
  • 01:50 They understand how they will be measured and monitored, and
  • 01:53 what they need to accomplish.
  • 01:55 Second, by stake holders They know what should be delivered,
  • 01:58 when it should be delivered, and what they should be reviewing and monitoring.
  • 02:03 Third, by the functions providing project objectives and
  • 02:06 often the project resources.
  • 02:08 They understand what is expected of them, what they can change, and what they can't.
  • 02:13 Also, the type of oversight that is required for the resources.
  • 02:18 Another impact of having a project governance,
  • 02:21 is a continuous improvement in the overall project management methodology.
  • 02:25 As the organization finds what works well and
  • 02:27 what does not, changes are made to the methodology.
  • 02:31 Through the governance function, procedures are updated,
  • 02:33 templates improved and personnel are trained in the best practices.
  • 02:37 Another impact is metrics.
  • 02:40 Governance leads to standard metrics and
  • 02:42 a measurement that brings accountability with it.
  • 02:45 You get what you measure.
  • 02:46 By measuring the right things, the organization is likely to see the desired
  • 02:50 project performance and behavior from the project team.
  • 02:54 The last impact may or may not apply to your organization.
  • 02:57 When appropriate, project governance can also be used to ensure compliance with
  • 03:01 industry or organizational standards and requirements.
  • 03:04 Project governance ensures that the appropriate standards has been identified,
  • 03:08 that they are been applied correctly, and
  • 03:10 that they have been audited to ensure that the standards are being followed.
  • 03:14 Governance is commonly implemented in an organization through a project management
  • 03:19 office.
  • 03:20 The Project Management Body Of Knowledge, the PMBOK Guide,
  • 03:22 defines a project management office as, an organizational structure
  • 03:27 that standardizes the project-related governance processes and
  • 03:31 facilitates the sharing of resources, methodologies, tools, and techniques.
  • 03:35 Since the PMO is normally responsible for
  • 03:38 governance, let's consider the three typical purchase used in creating a PMO.
  • 03:43 This description of PMOs is based upon how they operate,
  • 03:47 not necessarily the specific name or title of the organization.
  • 03:51 There are many books and gurus who'll tell you how to set up a PMO, and
  • 03:55 these are the categories that I have seen effectively implemented.
  • 03:59 One type is the SME or subject matter expert, PMO.
  • 04:03 This is typically a single individual.
  • 04:05 Many times the project management governance function
  • 04:08 is an additional duty for an individual who already has another role or
  • 04:12 responsibility within the organization.
  • 04:14 In this PMO, their job is to make sure that the procedures, templates,
  • 04:18 tools and techniques are kept current and up-to-date.
  • 04:21 When either team or stakeholders have problems or
  • 04:24 questions about the project management or the project management methodology,
  • 04:28 they turn to this person for some advice and coaching.
  • 04:31 Another type of PMO is the oversight PMO.
  • 04:34 This is normally a small dedicated team.
  • 04:37 This PMO performs all the same functions that an SME PMO performs.
  • 04:41 In addition, they track project progress based upon inputs from project leaders.
  • 04:46 They often create a dashboard to communicate that progress to
  • 04:49 the stakeholders.
  • 04:50 In many cases, they lead or participate in project reviews, stage gate reviews and
  • 04:55 technical reviews.
  • 04:56 They perform an oversight role, but not an actual implementation role.
  • 05:01 The project leader and project teams are not part of the PMO.
  • 05:05 The third type of PMO is the leadership PMO.
  • 05:09 This PMO performs all the functions of the SME and oversight PMOs.
  • 05:13 But it now has direct responsibility for
  • 05:15 the projects, in addition to project governance of the methodology.
  • 05:19 The PMO includes all the project managers, and
  • 05:22 many times will also include individuals from the functional departments
  • 05:26 who've been assigned to full-time support of projects.
  • 05:30 The PMO is responsible for planning and managing the projects.
  • 05:34 This is often the stand-alone department in the org chart,
  • 05:37 reporting to senior management rather than an individual or a small team.
  • 05:44 Whatever type of PMO you're using, whether it's an SME, oversight, or
  • 05:48 leadership PMO, you still need to provide project governance
  • 05:52 to ensure that the methodology is being applied correctly, and
  • 05:55 is maintaining a level that is consistent with your business goals and objectives.

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