Governance of Project

Management – SW Branch

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APM Governance SIG

3 June 2015

Martin Samphire and Joan Langley

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Martin Samphire

Owner and MD – 3pmxl Ltd

MAPM, MIoD

Chairman of Governance SIG

Sectors –Central Civil Government,

Police, Defence, Energy, Financial

Services, Construction

Jo Langley

BMT Hi-Q Sigma

Principal Consultant and

Head of Training

Governance SIG Committee

Member

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Agenda

APM Governance SIG

What is Governance of PM and why is it important?

Core principles of Governance

Governance structure & key roles

Where does Good Governance start?

Case studies

How to get involved

Discussion

APM Governance SIG

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Governance SIG

Objectives

Be the UK focus

Advance understanding

Contribute to good practice

Influence national and

international standard making

authorities

Influence those operationally

responsible

Develop ambassadors and

exemplars of excellence

5 ….in the governance of project management (change)

Activities

Engagement – CxO level

as well as APM members

Conferences and Seminars

Publications

Influence of, and

contribution to, standards

Directing Change

2nd edition 2011

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Co-Directing Change

2007 (being updated)

Sponsoring Change

2009

Free to APM members at www.apm.org.uk/memberdownloads

Gov SIG Publications

Agile Governance

(being developed)

To get involved

http://bit.ly/apm-agile-governance-preregister

What is Governance of

Project Management /

Change?

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The silver bullet……?

Project success

Portfolio success

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Good

Governance

Of projects

Of project management

Definitions

‘Corporate governance involves a set of relationships between a company’s

management, its board, its shareholders and other stakeholders.

Corporate governance also provides the structure through which the objectives of

the company are set, and the means of attaining those objectives and monitoring

performance are determined’ Organisation for Economic Co-operation and Development

OECD Principles of Corporate Governance 2004

www.oecd.org

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“Governance of project management refers to the

set of policies, functions, processes, procedures

and responsibilities that define the establishment,

management and control of projects, programmes

and portfolios” APM BoK 6th Edition

Linked but separate from Project

Governance! (management framework within which project decisions are made and accounted for)

Overall Context

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10

Mission

Strategy & Objectives

Portfolio Mgmt –

Definition &

Monitoring

Operational

Planning & Mgmt

Programme and Project

Mgmt of authorised

P&Ps

Operational Mgmt

of on-going operations

(BAU)

Organisational and External Resources delivering tasks

Vision

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Why is Good Governance important?

The key success factor for project outcomes - #1 in APM’s

Project Success Factors research

Competitive advantage for businesses

Provides for internal controls

Externally, it reassures stakeholders that their money is

being invested well

Good governance is increasingly demanded by

shareholders, government and regulators

To comply with external regulations and legislation (e.g.

the UK Corporate Governance Code and Sarbanes-Oxley

in the USA). 11 UK Code ….“comply or explain”

Purpose of Effective Governance

Ensure that an organisation’s project/change portfolio is

aligned to the organisation’s objectives and is delivered

efficiently (maximising value)

Ensure that the organisation is aware of risks, minimises

project failures and maximises the beneficial outcomes (value)

from their overall portfolio of projects in a sustainable and

transparent manner

It also supports the means by which the corporate board and

other major project stakeholders are provided with timely,

relevant and reliable information.

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“No such thing as failed projects, only failed governance” Andrew Bragg – Former CEO APM

Case Study 1

Universal Credit Project

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Key governance issues raised

Programme strategy

SRO longevity

Actions from assurance reviews

“Overambitious” timescale

End state and interim Blueprints

Use of Agile

Governance culture - “fortress mentality”

Matching spend to progress

Lack of a clear link between the project and the organisation’s key

strategic priorities, including agreed measures of success.

1.

Lack of clear senior management and ministerial ownership and

leadership

2.

Lack of effective engagement with Stakeholders 3.

Lack of skills and proven approach to project management and risk

management.

4.

Lack of understanding of and contact with the supply industry at senior

levels within the organisation.

5.

Evaluation of proposals driven by initial price rather than long-term

value for money (especially securing delivery of benefits).

6.

Too little attention to breaking development and implementation into

manageable steps.

7.

Inadequate resources and skill to deliver the total delivery portfolio. 8.

Factors in project failures (OGC)

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17

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Recent Research

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“poor performance results in organisations

wasting $109m in every $1bn invested in

projects”

“high performing organisations

successfully complete 89% of their

projects, while low performers complete

only 36% successfully”

“Fit-for-purpose governance strongly

influences project and programme

success”

“higher performance is correlated with

higher maturity”.

“there is a highly

visible disconnect

between Executive

Teams and Project

Managers”

“C-Suite are often

missing in action”.

Misalignment of ‘Run the

business’ and ‘Change

the business’ results in

‘wastage’ of resources

“only 62% of programmes have an established

or mature link between programme objectives

and organisational strategy and only 50% of the

respondents felt that the boundaries of their

organisations portfolio were clearly defined and

decision making well supported”

“Just 42% of companies reported having high alignment of

projects and organisational strategy”

“Companies with high degrees of alignment have more

successful projects (69%) compares with companies with low

alignment (45%)”

“80% of the projects

with active sponsors

reported a success rate

of 75%, which is much

higher than the

average”

“actively engaged

sponsors is the top

driver of project

success”

Sources:

2014 PMI Pulse Survey

PwC 2104 Global Survey

PwC 2012 Global Survey

APM Factors for Project Success 2014

GovSIG Benchmarking

“only 38% of programmes

had established processes

to identify benefits at the

outset”

“only 20% had robust

benefits measurement

processes in place during

implementation”

“lower value projects

are more successful

than large more

complicated projects”

“of the success factors, ‘delivery to

time’ showed the least success”

“62% of portfolios do not have

benefits in the sponsor’s personal

performance targets”

“Only 57% of sponsors had

received sponsor training”

Core Principles of Good

Governance

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Directing Change from APM

1. Portfolio direction

2. Sponsorship

3. PM Capability

4. Disclosure and reporting

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Directing Change Principles - 1

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Directing Change Principles - 2

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Governance Structure

& key roles

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The crucial role of the Board

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“Governance

…depends crucially on culture…..

….Boards have responsibility for shaping the

culture, both within the boardroom and across the

organisation…..

……requires constant vigilance”

Developments in Corporate Governance

and Stewardship 2014

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Board

Sub-committee

Board

Sponsor Sponsor

Sponsor Sponsor

Supported

by Project

Boards /

Steering

Committees

Portfolio

Manager

Review

Panels

Pro

ject M

anagem

ent

capabili

ty /

Excelle

nce a

nd C

apacity

Shareholders and Stakeholders

Funders Audit

Committee

Programme /

Project

Managers

Programme /

Project

Managers

Programme /

Project

Managers

Programme /

Project Manager

External

Teams

Internal

Teams

Strategy

Delivery

Key Governance Bodies

Competent people in every

project role

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Even if we have “good people” are they fully competent in

the project role and “game” that we expect them to “play”?

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Sponsoring Change:

A Guide to the Governance Aspects of Project Sponsorship, APM 2009

What would you expect from the project

sponsor?

Attributes of Successful Project Sponsorship

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Project Sponsor effectiveness = best single predicator of

project success or failure

Appoint a named Sponsor early in the project lifecycle

Critical success attributes:

1. Support

2. Continuity

3. Alignment

Personal Attributes:

1. Understanding

2. Competence

3. Credibility

4. Commitment

5. Engagement

Case Study 2

BBC Digital Media Initiative (DMI)

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BBC DMI Project The BBC was "far too complacent" in its handling of a

failed IT project that cost licence fee payers £98.4m.

The Digital Media Initiative (DMI) was intended to move

the BBC away from using and storing video tape.

But it was scrapped, with almost no results, after five

years of development.

After investigating the demise of the project, the Public

Accounts Committee (PAC) has branded the programme

"a complete failure". Chairman Margaret Hodge said the

BBC needed to "overhaul" its approach to such

projects, to "safeguard licence fee payers' money".

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BBC DMI Project

Where the money went

Contractors - £46.7m

IT - £37.2m

Siemens costs - £24.9m

Consultancy - £8.4m

BBC staff - £6.4m

Other - £2.3m

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BBC DMI Project Failures After a series of delays, the project was brought in-house, There it floundered

until May 13, when the BBC's incoming director general, Tony Hall, admitted

it had "wasted a huge amount of licence fee payers' money".

The gross estimate of the amount spent on DMI was £125.9m, although

the BBC claims to have recouped £27.5m of that.

The BBC's technology chief, John Linwood, was sacked in July 2013 over the

project's demise.

A previous report, by the National Audit Office (NAO), blamed "confusion and

a lack of planning" for the failure.

It said that senior executives failed to take control of the project when it

ran into trouble and "did not appear to appreciate the extent of the

problems until a late stage".

"The BBC was far too complacent about the high risks involved in taking

it in-house. No single individual had overall responsibility or

accountability for delivering the DMI and achieving the benefits, or took

ownership of problems when they arose."

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Where does good

governance start?

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Good governance has to

start at the top

The Board – the apex

Set the culture, ethics and ‘rules’

Best able to influence appropriate

behaviours

Can ask the difficult questions

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Case Study 3

CrossRail)

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Crossrail Route

(£14

.8bn

)

Other

Funding

(£2.45bn)

Networ

k Rail Others

DfT (£5.20bn)

TfL (£7.15bn)

GLA

BRS &

Direct

Contributi

on

Communi

ty

Infrastruc

ture Levy

TfL

Direct

Contributi

on

Develope

rs

Contributi

on Land and

Property

BAA plc

City of

London

Direct

Contributi

on

(4.7bn)

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Integrated Team

TfL DfT

Project

Partners

Crossrail

Ltd

Sponsors’ Agreement

Project Development

Agreement (PDA)

Shareholder

Agreement

Design

Consultant

s

London Underground

NR (on-network works)

Docklands Light

Railway

Canary Wharf Group

Berkeley Homes

Contractor

s

CTOC

Rolling

Stock /

Depot

Industry

Partner

Agreements

Delivery

Contracts

‘Crossrail Project’ Executive

Team

Operator

RfL

P Rep

Operating

Contracts Framework

Contracts

JST

CrossRail Governance Model

Lessons from CrossRail

Be clear of the importance of governance for project

success

Ensure clarity of governance structure and roles

Use Sponsorship Agreements to build relationships and

commitment

Provide funding certainty

Allow autonomy and delegation of power to manage risk

and take decisions – but allow it to mature over time

Provide project champions both political and financial

Ensure disclosure and transparency.

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Gov SIG

Getting Involved

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Getting Involved with GovSIG

APM GovSIG

Blogging

Research

Committee

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How to make contact:

Apm – Catherine.bowles@apm.org.uk

Martin – msamphire@3pmxl.com

Joan – joan.Langley@hiqsigma.com