Project Offices Are Key Components of IT Governance

Matt Light

One function of a governance board is to direct and review the project office, which can provide analysis of project portfolio issues, with prioritization, remediation, and other recommendations.

Most business initiatives result in related projects being grouped into programs, many with substantial information technology (IT) components. As the project office has become a widespread organizational approach, we have noted some IS organizations struggling with their role in IT governance. Unfortunately, the experience of enterprises that have governance structures that are ill defined or dysfunctional has driven the prioritization process for projects with strong IT components into the IS organization, and even into the project office, which can be a serious error.

In some cases, the project office, often called the project management office (PMO), has performed well in this role—or at least more effectively than an absent or dysfunctional process. However, this is an approach to prioritization that is fraught with risks. Although the PMO is involved with planning and controlling strategic projects, it is charged with the tactical execution of those projects rather than specifically with strategy (including prioritization) as such.

Nevertheless, the project office can play an important support role in IT project prioritization and governance. When the delay of a key project can doom an entire initiative or when those chartered and funded are insufficient to realize the strategic initiative, a PMO can provide an early warning system, as well as recommend alternative solutions to the governance board (sometimes known as an investment council or project review board) at its regular (perhaps monthly) meetings.

With most enterprises, business units compete during annual budget periods, when conflicting priorities can be resolved at the executive level with reference to strategies driving the budget. However, during the rest of the year, conflicts involving specific resources and budget allocations will occur. Only in small enterprises can a CEO referee a majority of budget conflicts, monitor projects' progress against budget, and adjust priorities. In most other enterprises, the PMO lacks the necessary membership and neutrality to manage budget conflicts. A PMO in the IS organization may itself hoard resources for too many nonaligned pet projects. Furthermore, a project office established outside any specific functional area will lack sufficient executive authority to provide governance.

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