Business Environment – Project Governance and Governance Board
Project governance serves as a guiding framework for project management activities, ensuring alignment with organizational goals. It provides the structure through which strategies and objectives are set, and monitors and steers initiatives to success.
Project governance is typically established by a PMO or aligns with an organization’s overall governance policies. For PMP candidates, it’s crucial to recognize that while project governance frameworks may be in place at the outset of a project, the project manager might need to fine-tune the governance structure to align with specific project constraints and oversight requirements.
One of the central components overseen by a governance board is the project budget, especially when costs exceed benefits or predefined tolerances outlined in subsidiary management plans. The project manager’s role extends to presenting budget statuses and adjustments as needed, ensuring accountability at every stage of the project life cycle.
Typical Components of Project Governance:
- Change Management: Key in adapting to evolving project requirements and strategic shifts.
- Communication: Ensuring all stakeholders are aligned and informed throughout the project.
- Documentation: Maintaining robust and accessible project records, like the project management plan.
- Decision-making: Establishing clear processes for making timely and effective project decisions.
- Stakeholder Alignment: Aligning internal stakeholders with project process requirements.
- Review and Approval: Establishing thresholds for changes that exceed the project manager’s authority.
- Risk and Issue Management: Creating procedures for the escalation and resolution of risks and issues.
In general all aspects of Projects are governed at some extend.
Governance Board Roles:
Also known as a Project Board or Steering Committee, the Governance Board provides oversight and may comprise the project sponsor, senior managers, and PMO resources. Their responsibilities can include reviewing key deliverables, change control and guiding project decisions, with a keen focus on strategic alignment.
Escalation Procedures Defined by Governance:
Project governance also lays out clear escalation procedures for when project variables exceed thresholds or tolerance levels. This ensures that issues are directed to stakeholders with the authority to take action, while maintaining the project manager’s focus on manageable concerns.
A project manager should handle problems independently where possible. However, if an issue exceeds the project’s predetermined thresholds or tolerance levels, the manager must escalate it to the responsible stakeholder or governance group. It’s essential to have an agreement on when and how to escalate issues. For instance, budget variances within a certain contingency are manageable, but anything exceeding that requires immediate escalation to the governance group. PMP candidates must remember not to consider escalation unless it’s clear that the project’s thresholds for such action have been breached .
Threshold and Tolerance:
Understanding the concepts of threshold and tolerance is crucial for project governance. A threshold is a predetermined value of a measurable project variable that, when reached, necessitates action. Tolerance is the quantified acceptable variation for a project’s quality, risk, budget, or other requirements. Escalation is the action of seeking intervention when a threat falls outside the project’s scope or the project manager’s authority .
Governance Throughout the Project Lifecycle:
Project governance is not a one-time event but a continuous process that takes place throughout the project’s lifecycle. In a predictive lifecycle, milestones or phase ends are governance points. In an agile or adaptive lifecycle, it is the iteration or sprint ends. As part of governance, project managers need to report periodically to stakeholders and escalate issues when necessary, ensuring that governance keeps the project on track and aligned with strategic goals .
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