What is Project Governance? Part 3

What is governance? What is Project Governance? What is Project Management Governance? Today, we address Project Governance in relation to a sample project.

Governance and the Sample Project

As already stated above, governance is everywhere along the project life span from the idea to closure. Here are a few points:

  1. Governance starts with the documentation of the idea statement and the stage gate (SG1), SG1 is mostly about strategic alignment. Since the Integrated City Project is strategic, it is approved at SG1.
  2. Next, a proper and comprehensive feasibility study is required that addresses multiple aspects from location to sustainability. The Stage Gate 2 is a key decision-making point since even if the project is feasible, it might not be authorized; especially if another project might offer higher strategic value. For ICP, the project is authorized.
  3. Even in the first stage of the project, and before the project is authorized, proper project management is critical and utilized. This is reflected via the various process deliverables[1] and their process gates.
  4. The breakdown of the project life span into discrete – well defined – stages, each with a specific purpose and a stage gate at the end.
  5. Repetition of the process group in every stage – is also vital and help ensure effective and efficient project management processes across the project life span.
  6. The stage gates are vital and their roles is not to advance the project without the proper sequence of the necessary developmental steps. This is necessary to optimize the outcome and minimize over-expenditure.
  7. Requiring formal reviews and complying with the budgeting process when the expenditures are expected to grow rapidly and would be more than normal operating budgets; this is the need for Advance Funding at the completion of the Project Management Plan.
  8. Formal funding at the point of no return after the preliminary engineering and before embarking on engineering-procurement-construction work; which is a huge cash requirement and the bulk of investment.
  9. Requiring reconciliation reports and lessons learned at the close out of every stage and at the end with the project close.
  10. Requiring change management at the stage and project level, even in the early stages of the project where ambiguity is high; even when there are no contracts.
  11. The change control board and two steps approvals process for changes is another form of governance to ensure eliminating un-authorized expenditures.
  12. Making risk management an integral part of every decision, at the process gates, at the stage gates, when awarding contracts, and all else.
  13. The project success dimensions, which starts with setting the criteria for success early on (different than acceptance criteria) and measuring success at the end. Further, the four dimensions allow the clear assessment of success on multiple dimensions to maintain focus on specific areas of accountability. The four dimensions eliminate the illusion of success, which is a result of emotions, ego, and subjective rather scientific.

[1] The Stage Initiation Document, Stage Management Plan, and Stage Detailed Plan.

This article is from our upcoming book. The book is about simulation on the application of a large and complex, capital-intensive project. The article is part 3 of 3, from the Governance Chapter in the book.