The Golden Thread APM Research Report 2019 indicated that the successful delivery of programmes and projects has a major impact on modern economies, organisations and people’s lives. Projects are also becoming increasingly complex due to a multiplicity of dimensions: interrelated projects, long time horizons, project scale, more dispersed and diverse project teams, diverse stakeholder expectation, working across organisational and national boundaries, extended supply chains and more.
The latest UK Government Annual Report into the Government Major Projects Portfolio (GMPP) provides for 235 projects at an estimated whole-life cost of £678bn with monetised benefits of £726bn. These reports reflect the significant investment of money, time, capital equipment, people and other to deliver ambitious projects. As a result, projects deserve our focus and desire to set them up to succeed, monitor their progress, recognise inherent risk and make timely decisions. Assurance management is one of the ways to safeguard this investment acting as an early-warning mechanism and helping to identify and understand inherent challenges; providing information for decision-making; and providing a degree of confidence to governance bodies. After all, the success or otherwise of a project is ultimately linked with organisational success.
Assurance is very much an outlier to project studies literature and research. It’s a relative newcomer amid more mature areas of project studies; it has attracted much less attention and focus than other project-related activities and there’s limited literature and research associated with it. This was the motivation behind our research and subsequent report Value of assurance management practices, supported by the APM Research Fund to understand how project assurance is used and its perceived value. The subsequent podcast also explored the use of assurance management practices in projects.
Why is assurance fundamentally important to the success of projects?
Assurance provides scrutiny, insight and confidence that the project is being well managed and that the anticipated outcomes identified for the business case are on track. It’s forward-looking, acting as an early-warning mechanism helping to uncover current and potential problems. Additionally, it forms an important component of project governance inherently considering risk and impact, and informing decision-making.
Set against our two research questions (‘What distinctive practices are being used to develop and delivery assurance management in project-based organisations?’ and ‘How do organisations determine the level and type of investment they will make in assurance management practices?’) the research identified a range of assurance practices, attitudes to project assurance and its perceived value. Typically across organisations, there’s a spectrum of assurance practices ranging from light-touch (for example, a discrete project-based ‘health check’ or ‘critical friend’ review) to more in-depth approaches with Project Representative teams on major and mega infrastructure projects providing ‘progressive’ real-time and on-the-ground insight.
This spectrum recognises proportionality and that context matters; that there is no one-size-fits-all approach. It also recognises that we must consider assurance in relation to the project – its risks, anticipated benefits, complexity, innovation and impact on reputation among others – so providing a balance with the availability of budget, time and capability. In this way, assurance efforts don’t cripple or strangle projects nor understate the breadth and depth of issues. Here, the consideration is around appropriate design of assurance and the link to organisational strategy for assurance ensuring timely and relevant information is being provided. Certainly, the five participating organisations to our research recognised that they were on a journey to understand how to make their assurance management practices more impactful.
Value of assurance management
We’ve had many conversations with project communities as a result of the research. One of the often-asked questions is about how to value assurance. The research considered how the ‘value’ of assurance is perceived and concluded there is no single view of ‘value’: it is a multi-faceted term impacted by the perception of those who receive it, and certainly stakeholders interpret the concept of ‘value’ in different ways. We tend to think of ‘value’ in financial terms (for example, return on investment, internal rate of return, net present value within a business case), but the connotations range much wider since the ultimate focus of assurance is the avoidance of failure. As such, we recognise the need to come at this question from a different perspective and our research concluded that the value of assurance is determined according to the variation in the level of risk facing and the quality of insight required by programme and project practitioners and by the executive. There is no single, deterministic formula so that the level of investment in effort and resource is approached empirically, and project assurance practices need to be integrated into a wider enterprise-level perspective of assurance, performance and evaluation. It’s also a highly collaborative process integrating effort across different but relevant specialisms and experience, representing an activity that spans organisational boundaries; it aggregates and integrates in-house expertise as well as commissioning external expertise where necessary.
The primary focus of project assurance management practices is in supporting decision-making within the sponsoring group, project and enterprise, and in providing transparency and confidence that the project will meets its objectives. In doing so, it offers the opportunity for reflection, review and professional development not just for assurance practitioners and for project practitioners, but also for the wider in-house project community, project governance bodies and delivery organisation. Projects are increasingly complex and multi-dimensional, involving multiple organisations and multiple boundaries; assurance provides the support to help project success and protect investment.
A key take-away from our research is the need to deliberately plan assurance activities and strategy, ensuring project-level assurance also integrates with organisational assurance, performance and evaluation. Assurance provides value because it is active and forward-looking rather than passive and forensic. Its value to project governance and the enterprise executive lies in acting as an early-warning system and in helping decision makers to allow the future of the project to be better than it otherwise would have been.
This blog was co-written by Sarah Coleman and Dr Andrew Schuster
Dr Andrew Schuster is a director in PwC's Risk Assurance practice. He has a national responsibility for the development of PwC Canada's Transformation Risk and Advisory practice and the delivery of solutions to key clients. He has over 30 years international experience researching, designing, delivering and reviewing major organizational transformation.