For as long as humans have organized into complex societies, we’ve relied on governing systems to maintain order and provide guidance or support. Managing projects and portfolios is an infamously complicated undertaking. So much so that most organizations have entire teams or departments dedicated to these priorities. However, this means that the support of a strong portfolio governance system is of vital importance to preserve the value of project activity.
A governance system in this context is all about providing the right information to the right people and empowering them to make the right decisions. By ensuring consistency and replicability across all project portfolio management processes, a governance system keeps things running smoothly.
What is Project Portfolio Governance?
Project portfolio governance refers to the standards and mechanisms that determine decision-making authority and accountability in managing a project portfolio. In other words, it describes the “rules” and procedures a project portfolio management team must follow.
Proper portfolio governance should include provisions and guidelines for managing every phase and aspect of the projects in the portfolio. This includes demand management and project selection as well as execution monitoring and project tracking.
The goal of governance is to support operational managers and higher-level decision-makers by allowing them to engage in project selection, prioritization, planning, scheduling, and management.
As an end-to-end framework for project- and portfolio-related decisions, a well-structured governance system also codifies how project stakeholders communicate, collaborate, and exchange relevant information.
Key Objectives of a Great Portfolio Governance System
An effective portfolio governance system strives to:
- Create clear definitions of the roles, responsibilities, and accountability of everyone involved in project portfolio management (PPM)
- Ensure compliance with legal, regulatory, ethical, and policy standards and requirements.
- Improve cohesion and alignment across teams and stakeholders
- Enhance the visibility of project activity through clear and consistent reporting
- Support greater organizational flexibility and responsiveness
How to Define and Implement a Project Portfolio Governance System
If you have an existing project management office (PMO) or a PPM team within your organization, creating a governance system will make its efforts even more successful. Think of a PPM governance system not as a means to control or limit the impact of your teams, but as a way to ensure that their work reaches the entire organization from end to end.
So, how can you go about creating a project portfolio governance system? Regardless of your starting point, use the following basic steps to start bringing your governance plan to life.
1. Determine portfolio ownership and accountability.
Before you start shaping your governance system’s roles and structure, you’ll have to decide who you’d like on the team. Determine the roles and responsibilities to assign to internal and external stakeholders. The idea is to paint a clear picture of:
- Who should green-light the launch of a project and its incorporation into a portfolio
- Who should have authority over the decision to halt or postpone a project
- Who will control the overall budget
- Who will ultimately take responsibility for the outcomes of the projects and the technical and financial performance of the portfolio
Key stakeholders in the governance process traditionally include a PMO, usually in charge of overseeing projects and enforcing standards. You may also want to involve members of a PPM Steering Committee (or Governance Council/Board). This usually includes senior managers, department heads, and other leaders.
Anyone in your organization who needs to be involved in establishing priorities and criteria for decision-making around projects should likely play a role in your new governance system. But that doesn’t mean they all have to be equally involved.
2. Establish a framework for effective communication and collaboration.
In order to align all stakeholders and make sure they speak the same language, your portfolio governance should include a set of standard terms and metrics to be used across teams throughout the PPM process. Think of this step as creating a sort of dictionary or reference that your governance system will be built on.
3. Define formal criteria and procedures for project- and portfolio-related decisions.
To select the most valuable and strategic projects, you need formal processes that clearly outline how to review, assess, approve, and prioritize ideas based on established criteria.
Similarly, you need a set of policies and criteria governing the way your teams manage project execution, monitor progress, and make decisions to adjust the portfolio (e.g. trade-offs, delay or termination of projects).
Imagine these policies as the “by-laws” of your governance system or the rules that the system exists to create and protect. Not only will your governance system rely on them, but the rest of your organization will, too.
4. Consolidate your rules and processes into a PPM charter.
The purpose of a project portfolio management charter is to create a document that anyone can reference, ensuring that all team members understand what’s expected of them (and their peers).
Your charter should clarify the mission statement of your PPM processes and set long-term goals and objectives. It should also detail the sets of policies, standards, procedures, and best practices that you’ve defined as a PPM governance system.
Take everything you’ve decided on so far for your governance system and get it into writing. Once you’ve developed a charter, be sure to share it with relevant stakeholders and make adjustments to it as needed.
Final Thoughts
Congratulations – you now have what you need to get your PPM governance system up and running! Of course, these basic steps are only the tip of the iceberg; you’ll likely find that creating your system is a long-term process. Building up an effective set of procedures and ensuring the governance system operates as intended can take some time.
One way to speed things up and ensure that everyone has access to the same information is to utilize a PPM software solution from Sciforma. Our platform allows your team to track and record project data, view resources, model what-if scenarios, assess potential risks, and more. You can even use our PPM software to store your charter and other key resources for your new governance system. Now, get out there and start planning!
