What is good P3O® governance?
- Methods & frameworks
- Portfolio management
August 1, 2017 |
4 min read
- Methods & frameworks
- Portfolio management
Good P3O governance is about ensuring that all key stakeholders have a clear understanding of the portfolio, programme and project boards that are focused on 'changing the business' and how it aligns to the corporate governance structure that is focused on 'running the business'.
As such, good governance is about understanding the governance structures, processes, escalation routes for effective risk management, tolerance/control limits to enable management by exception, with clear role descriptions and a single individual with overall accountability.
Good decision-making processes, and therefore good governance, share several characteristics.
What are the main characteristics of good governance?
Good governance is accountable
Accountability is a fundamental requirement of good governance. Senior responsible owners (SROs) and project executives must be able to explain and be answerable for the consequences of the decisions they make on behalf of the programme or project, the business, user and supplier interests represented in the broader context of strategic intent and the realization of financial and quantifiable benefits.
Good governance is transparent
People should be able to follow and understand the decision-making process. This means that they will be able to clearly see how and why a decision was made; what information, advice and consultation was considered, and by whom, together with what applicable policies or standards followed, where required.
Good governance follows the rule of law
This means that decisions are consistent with the board's own terms of reference aligned with that of the corporate governance structure for 'run the business' together with the portfolio, programme and project governance structure for 'change the business'. The SRO role exists not only to receive information but to enable checks and balances to occur by being proactive and to probe evidence by asking questions. This is important irrespective of the value of the programme/project. SROs need to continually understand why resources (people, funds, assets, materials and services) are being invested and what the desired outcomes are. Hence why understanding of P3O governance as a whole (from identifying the initial need and strategic alignment, through defining the business case, all the way to ensuring the programme/project is delivered and achieves the required benefits) is so important.
Good governance is responsive
Governance boards at a portfolio, programme and project level should always endeavour to serve the needs of the business, user and supplier interests in a timely, appropriate and responsive manner. It is not only about ensuring the right decision is taken by the right person or group, based on the right level of supporting information. It is also about ensuring those decisions are documented for traceability and communicated to necessary stakeholders, when required.
Good governance is equitable and inclusive
Governance boards at a portfolio, programme and project level keep the interests of the user or customer at the forefront in the decision-making process. It also means those representing those business, user and supplier groups, particularly those with the softest 'voices', have opportunities to participate in the process.
Good governance is effective and efficient
Governance boards at a portfolio, programme and project level implement decisions within their remit and follow processes that make the best use of the available people, resources and time to ensure the best possible results for users and customers.
Good governance is participatory
Stakeholders for business, user and supplier interests are involved in the consultation process prior to seeking a decision. Members representing these groups should ask for their opinion, give the opportunity to make recommendations or, in some cases, be part of the actual decision-making process as an invitee. What is important to remember here is that the approval or decision-making process is not a substitute for consultation. That is, consultation should be conducted prior to seeking a decision.
Lastly P3O governance encompasses the structures, accountabilities and policies, standards and process for decision-making within an organization for business change to answer the key strategic questions of:'Are we doing the right things?', 'Are we doing them in the right way?', 'Are we getting them done well?', and 'Are we getting the benefits?'