Q1: ‘What is meant by the term project governance?’
Q2: ‘Explain four effects there might be on the organisation’s projects if project governance is not implemented properly.’
A1: Project governance represents the arrangements an organisation puts in place to ensure projects are managed effectively, within the organisation’s structure. It describes the relationship between the organisation’s board, project sponsor and project manager. It includes accountability arrangements (i.e. responsibility for the success or failure of the project), risk management, span of control, gate/stage reviews, disclosure and reporting, portfolio direction and the organisations project management capability.
A2: (i) If there is a failure in ensuring the capability of project managers, then projects would be at a higher risk of non-delivery or delivering poorly or partially in a way which exposes the organisation to unacceptable risk. Ensuring that project managers are adequately trained, skilled and supported in the organisation’s project management methodology will mitigate this risk.
(ii) If there was a failure to exercise good project governance in either disclosure or reporting would mean that serious, or potentially serious, risks, threats or project compliance issues would go unreported to senior management/the Board and appropriate action would not be taken. This could place the organisation at serious risk. For example, if procurement rules were breached, and this was not reported, then the failure may not be rectified in time and the company would be at risk of regulatory or legal action.
(iii) Portfolio direction is a key element of project governance, ensuring that all projects are relevant and directly contributing to organisational strategy, and the change it wants to deliver. If there was a failure in portfolio direction, then it might result in individual projects being executed which are not relevant to the overall strategy and might divert strategic direction, introduce unwanted change or re-direct precious resources and time away from more important work.
(iv) Good project governance includes effective project sponsorship. This means exercising responsible oversight over project progress, risk, quality and scope. If this was not done effectively, then project delivery would be put at risk, risks could go unmitigated and not disclosed more widely within the business. Changes to the scope would not be authorised, and therefore may be unwanted, and could lead to conflicts between other projects in the organisation’s portfolio. A lack of control over deliverables could result in poor quality, late or not fit-for-purpose products.