Develop a Governance Process

Project approval governance structures ensure that consistent processes are adopted throughout the organization. Governance structures should be tailored to the organizational environment.

Howard Rubin from the Meta Group says that "portfolio management without governance is an empty concept."2 The need for a structured framework that supports decision making is absolutely essential.

Portfolio management implementations without a strong governance structure will struggle to be accepted and are unlikely to yield expected results. There are six critical factors to consider when establishing a governance structure. These are six pillars of governance (see Figure 10.3-1):

• Timing: When are decisions made: annually, quarterly, justin-time, or over multiple years?

• Decision style: How is consensus achieved: in groups, by voting, or through a dictatorship?

• Organizational level: Who is involved in the decisions: the board, a multifunctional steering committee, a project management office?

• Thresholds: What are thresholds defined by: budgets, full-time equivalents (FTE), cross-business unit projects?

• Decision criteria: What other criteria affect decision making: financial impact, strategic impact, risk levels, architectural fit?

• Decisions: How do projects originate and get prioritized? How do they get funded? Who tracks their implementation?

Each of these areas must be understood to develop a governance structure tailored to the organizational environment.

Figure 10.3-1. Six Pillars of Governance

Decisions:

Origination, funding, prioritization, tracking

Decision style:

Consensus, Voting, enforcement

Decision style:

Consensus, Voting, enforcement

Org. Level:

Board, oversight committee

Thresholds:

Type, project size

Decisions:

Origination, funding, prioritization, tracking

Criteria:

Financial, business impact, risk, architectural fit

Criteria:

Financial, business impact, risk, architectural fit

Org. Level:

Board, oversight committee

Thresholds:

Type, project size

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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