Many enterprises never achieve true project portfolio governance. While Project Portfolio Management, or PPM, may be the heart of governance, other factors must be taken into consideration when supervising a portfolio. If you can ascertain a way to manage and oversee your projects at the portfolio-level, as opposed to project-by-project, your company will receive the knowledge it needs to guide it into a profitable future.
What does governance do?
Project portfolio governance is defined by how your company controls, manages, and establishes authority over its portfolio – or portfolios. Legitimate governance:
- Keeps the portfolio aligned with the strategic goals and objectives of your enterprise
- Ensures the portfolio’s viability
- Improves the portfolio’s efficiency and effectiveness
- Creates an honest internal dialogue between the PMOs and the rest of the organization
- Gives key stakeholders and decision makers the timely and accurate information they need to take action
Who’s in charge of portfolio governance?
Although your board is ultimately responsible for the management of each portfolio, the task of governing is typically handled by Portfolio Managers and other decision makers. Whoever takes part in governance must have a clearly-defined position that delineates their responsibilities and authority. When a project hits a point where something must be approved, there should be a system in place for the governing body to review the project’s business case for the resource – and then approve or deny it.
How do I govern effectively?
The Association of Project Management, UK, divides project portfolio governance into four core areas:
- Portfolio Direction
- Project Sponsorship
- Project Management
- Disclosure and Reporting
There is no secret equation when it comes to governing. Every business is unique, so governing must be tailored to fit the needs of your particular portfolio. Within each area, though, there are universal questions that you can ask yourself that will let you know if you are administering your portfolio in the right direction. If you don’t like the answer to one of the questions, then it’s time to act in that area until the answer is positive.
Portfolio Direction Questions:
- Are you aligned with the strategic goals and objectives of your enterprise as a whole?
- Do you continuously assess your portfolio to keep it prioritized?
- Do you evaluate risks and take them into consideration when making decisions?
- Are there financial controls on the portfolio? On each project?
- Does your company fully understand the impact of the portfolio on its business?
Project Sponsorship Questions:
- Does each project have its own sponsor?
- Are the interests of sponsors aligned with project successes?
- Do sponsors track their projects, manage resources, and report to stakeholders in a timely manner?
- Are sponsors accountable for their project’s business case? Are they in charge of attaining project benefits?
- Are projects evaluated via independent sources?
Project Management Questions:
- Do your Project Managers (PMs) have the resources and skills necessary for their projects to thrive?
- Do your key project stakeholders and decision makers delegate authority to increase productivity and efficiency?
- Does each project have clear-cut goals and achievement milestones?
- Are the differing roles and responsibilities of management and governance clearly outlined?
- Are suppliers willing to customize resources based on the unique needs of every project?
Disclosure and Reporting Questions:
- Is the progress of every project reported accurately and in a timely fashion?
- Has your enterprise established criteria for determining issues and successes?
- Are risks highlighted for decision makers and discussed? Do you have a plan in place to quickly address issues?
- Does your business culture praise honesty and integrity – and support independent authentication of project information (as needed)?
- Is reporting tailored to each audience effectively?
Governance and Your Portfolio
Keeping your portfolio productive and valuable may seem like an insurmountable task at times, but it doesn’t have to be. It is crucial to align your portfolio and its successes to the goals of your enterprise. If you don’t, you’ll never meet the needs of your business. Put the right PMs and project sponsors in the right places, clearly define roles and responsibilities, and constantly ask yourself pertinent questions – and your portfolio can be both dynamic and profitable.
Projility provides expert solutions for effective change. We offer enterprise portfolio and project management solutions based on Microsoft Project Server and Project Online, with tailored dashboard reporting, analytics, and decision-making tools via our Hammerhead technology. Projility also implements professional services automation systems established on Microsoft Dynamics CRM Project Service, and presents cloud-based strategies, migrations, and hosting solutions through Microsoft Azure. Contact us for more information.