Project Governance Explained: Key Components and Common Misconceptions

The most successful businesses are known primarily for providing the highest quality products/services at a scale that meets market demand and, most importantly, with high consistency. To do this, they operate on standards that apply to every corner of their business—how they think and act all serve a common vision. This is called project governance.

In this article, we discuss the concept of project governance, outline its key components, and address a common misconception about project governance and project management. Read below for a handy guide to building a project governance model tailored to your company’s needs.

What is Project Governance?

In its simplest form, project governance is a set of guidelines to ensure project success. These guidelines are centered around processes, tools, and systems that allow teams to effectively plan, execute, and monitor projects so that they align with an organization’s strategic goals.

When looking at guidelines from a bird’s-eye view, it can be easy to mistake governance for a much more familiar term: project management.
While the two are inseparable, they are distinct by being:

Strategic vs tactical, General vs Specific

Project governance is a strategic tool that defines how an organization works on projects, while project management is more tactical. It deals with the day-to-day demands of the individual project while aligning with the project governance framework.

This is best seen when defining stakeholders, roles, and responsibilities: Governance outlines the different departments or areas of expertise available, while management selects specific team members who best fit a project's needs.

Think of project governance models as a blueprint for project management.

Pillars of project governance

An effective project governance model stands on three key pillars:

• Structure

A project’s success relies on the support of the entire organization, not just the project team, and this can be easy to forget when not all teams have a direct hand in the day-to-day work. Structure helps define the unique teams involved in running the business, from the highest levels of management down to the individual employees. It also defines the roles and responsibilities that make these teams unique and how they contribute to the organization's success. An organizational chart is the essential building block of this pillar.

• Process 

Process defines how the company works. It ensures clear standards for how projects are initiated, executed, monitored, and completed. This includes documents for planning, scheduling, and budgeting projects. It outlines guidelines for task tracking, change and risk management, quality assurance, and progress reporting, among many others. This is supported by best practices, which are constantly updated to ensure that future projects are executed better each time.

• Performance

The performance pillar combines the first two; an effective process is useless without a qualified team to implement it. Additionally, performance illustrates what success looks like, which means setting appropriate metrics against the company's goals and objectives. This and the actual conduct of progress tracking, quality control, and lessons learned make up the final pillar of project governance.

Together, these three pillars create a governance framework designed to add value to an organization by delivering projects on time, within scope, and within budget.

What is the Importance of Project Governance?

Building on our blueprint analogy, project governance acts as a plan for ensuring that the end product is built to appropriate standards set by qualified decision-makers. An effective project governance plan provides the following benefits: 

• Provides clear direction

Alignment is critical to project success, which starts by selecting projects that directly contribute to a company’s goals. This also means having clarity on decision-making authorities within a project or team at all levels. That clarity then cycles back up to ensure stakeholder satisfaction and buy-in, which paves the way for better investment into projects.

• Minimizes or eliminates risk

An effective project governance plan allows for optimal visibility into the work being done—people see what they need to see, when they need to see it, and how. This includes identifying where things might go wrong in the business so they can be addressed as early and as smoothly as possible.

• Improves decision-making

Clear direction and risk reduction help eliminate distractions from getting good work done. Coupled with streamlined processes, decision-makers have only the best and essential information they need to steer a project to success. Data-driven insight reduces room for error, especially as projects grow in scale and complexity.

• Enables transparency and accountability

Alignment on a solid structure allows the team to focus on their unique responsibilities. This gives them increased ownership of and accountability to the project, making it easier for other team members to access information as needed. Not only does this make for effective project management, but it also aids in creating productive and supportive working environments. In contrast, companies with weak project governance suffer from having unhappy employees.

How to Build an Effective Project Governance Framework

Now that we understand the concept and importance of project governance, what actions should a project manager and other managers take to ensure effective project governance?

For starters, that means building company-wide guidelines, such as a company handbook. Naturally, every company is comprised of different people, which means effective governance will look different across companies. However, there is a baseline set of guide questions that apply nearly universally to any business, which we have compiled for you below.

Structure

1. What are your company’s goals and objectives?
2. What are the areas of expertise (departments) in your company? An organizational chart is the most common way to answer this— learn more about them here.
3. What are the departments’ unique functions/what are they responsible for?
4. Who leads each of these departments?
5. Who reports to who within your company, and who reports to clients and other external collaborators?
6. Who vets and approves projects for the company? Note that this can be an individual, but it is often a committee with representatives from most if not all, departments.
7. Who are the go-to persons for planning and managing individual projects?

Process

1. What tools does your company use to communicate? At a minimum, this would include email and chat.
2. What tools does your company use to track tasks and issues, if any?
3. What documentation tools does your company use, especially for company-wide SOPs?
4. What templates do you use to outline the scope, timeline, and budget for projects?
5. How are project status and progress reported?
6. What methods are in place to test for product or service quality?

Performance

1. What metrics are relevant to our company and/or the project’s success?
2. What metrics are relevant for measuring employee performance?
3. Where can employees go to learn about these metrics?
4. Who should conduct these measurements/evaluations?
5. Who should be informed of the results of these evaluations?
6. How often should these evaluations happen?

By answering these initial guide questions, you can get a head start on building a project governance framework that works for your organization.

Apply Project Governance to Your Company with Workamajig

Having the right tools to document and implement your project governance framework will be key to your success, and one that can scale with your business as it grows is essential.

With Workamajig, the premier project management software, you have an all-in-one solution for creating your project timeline and seamlessly transitioning into task and resource management. Easily adjust your schedule or modify task requirements and assignees to ensure efficiency, and use native reporting tools to measure your progress and identify and address roadblocks along the way.