What is Project Governance and Why is it Important?
Why is Project Governance Important?
It has become increasingly recognised on an international level that many projects fail not (only) because of insufficient project management knowledge, but also because they overlook the topic of project governance. This awareness has, however, not yet filtered down to the vast majority of managers in small and medium-sized enterprises and organisations.
In fact, it is especially in small and medium-sized organisations that the topic of project governance is hardly given any attention. Yet project governance, i.e., the ongoing monitoring of how projects contribute to the strategic goals of an organisation, is particularly essential for smaller organisations. This is because their small size results in a much smaller margin for error than in large organisations with a large number of projects. Sometimes all it takes is one poorly managed project to plunge a small organisation into crisis.
Project governance is therefore not a luxury that you should only focus on once you have successfully established project management standards. It is a basic prerequisite if your project work is to succeed. After all, every project needs to be clearly aligned with the overarching strategic goals of the organisation, otherwise it cannot be called a successful project. When it comes to your Europeanisation, this means that you should also review each of your current and future projects in terms of how they will contribute to the success of your process of Europeanisation.
What Exactly is Project Governance? ISO Norm and Definition
The most important internationally valid standard in the area of project governance is ISO 21505 from the year 2017. This and other standards are based on ISO 21500 ‘Guidance on project management’, which was first published in 2012. ISO 21500 ‘Guidance on project management’ provides over 40 pages of important definitions and basic principles for the field of project management.
ISO 21500 defines project governance as follows: ‘Governance is the framework by which an organisation is directed and controlled. Project governance includes, but is not limited to, those areas of organisational governance that are specifically related to project activities. Project governance may include subjects such as the following:- defining the management structure;
- the policies, processes and methodologies to be used;
- limits of authority for decision-making;
- stakeholder responsibilities and accountabilities;
- interactions such as reporting and the escalation of issues or risks.’
At its core, project governance in small and medium-sized organisations means deciding which projects should or should not be carried out and why this is. Good project governance also ensures that decision-makers are always aware of whether a project is (still) making its planned contribution to the success of the enterprise or organisation.
Useful Links and Further Information
We hope that this information will inspire you to look more closely at the topic of Project Governance. If you want to dive further into the topic, we recommend the free ‘Project Governance’ learning unit from the EU project GRCEssentials (you will need to register for the GRCEssentials learning platform). Among other things, you will learn how to implement sensible project governance within a smaller organisation.
You can find further helpful articles and tips in this upgrade2europe learning tool, in our learning videos and in our upgrade2europe handbook. This handbook also provides you with an introduction to the P3.express project management method, which includes a ‘Go/No-Go’ decision once a month, for example. Although it does not explicitly mention the topic of project governance, this project management method gives you the opportunity to regularly check whether your project is still making a meaningful contribution to your organisational goals or whether you are ‘flogging a dead horse’. If you wish, you can use our self-analysis tool to find out immediately online to what extent your organisation is ready for Europe.