Update from the chairman
Welcome to the summer 2014 newsletter. I look forward to meeting
many of you at our Governance SIG events during the rest of the year. Please do persuade your colleagues to join the SIG so they can get a copy of this newsletter and advice of events.
It now seems ages since earlier in 2014 we were wincing about the amount of rain and asking “how much is enough” to spend on flood defences? How our focus changes quickly – UKIP are the talk of the town and the Commonwealth Games have been and gone - but again another major project has hit the headlines for the wrong reason – SNCF has bought 2,000 new trains that are too wide for many station platforms in France.
So governance is still topical.
In this edition you will discover the findings of a major survey into the state of governanace in projects and programmes by PwC. There is also a report from Brian Wernham on his trip to the Baltic project management conference, an update on the North West branch meeting that we co-hosted in April, an update on
changes to the Co-Directing Change Guide, an outline of our exciting new project to develop a guide for Agile Governance and a report on the introduction of accredited training for the HM Treasury Green Book.
I hope you enjoy this newsletter - please do keep your feedback coming via the editor
Martin Samphire, Chairman
PwC PPM global survey: ‘Insights and trends into current project, programme and portfolio management’
PwC kindly hosted the Governance SIG event on 12 February – thanks again go to James Lowe and his colleagues for organising, facilitating and providing great facilities – and to Michael Cooch for an excellent presentation. It was really good to see the positive engagement we’ve had with PwC over the past year or two continue to develop.
PwC carry out a bi-annual survey on the current state of project management. PwC’s third global PPPM survey contained 146 questions focused on project performance indicators with 1,524 respondents across 38 countries and 30 industry sectors. The objectives were to assess project, programme and portfolio management correlation to organisational success; review current trends in project, programme and portfolio management; and identify organisational gaps in these areas with a focus on areas for improvement.
In his presentation, Michael highlighted the key six insights concerning governance out of this study, which dates back to early
2012:
- Misalignment of ‘run the business’ and ‘change the business’- results in ‘wastage’ of resources. However there is an emerging trend towards strategic portfolio management functions
- Portfolio management is a competitive differentiator
- Fit-for-purpose governance strongly influences project and programme success – organisations have not mastered the ability to design it effectively resulting in it being cited as a top contributor to programme and project failure. Business resources still do not see or feel the benefit of working on change programmes (often on top of their ‘day job’) resulting in a lack of motivation
- Higher performance is correlated with higher maturity but there is a pronounced disconnect between ‘self-diagnosed’ programme and project management maturity and the reality (as measured by industry CMMI/PMI methods)
- Project and programme delivery performance is not improving. However some lower margin, industries (e.g. construction) are statistically better at delivery than others (e.g. banking) where margins are typically higher
- People, tools and methodologies are under-utilised. These provide ‘low hanging fruit’ for improving programme and project execution through training, standardisation and automation.
 Having spoken around these key findings and some of the related
conclusions, Michael took questions from the audience, before the event split into groups to consider and challenge some of the major conclusions, in relation to the experiences of those in attendance. The outputs of this discussion are captured in this diagram:
The results of the PwC survey support the concept that good governance is the core requirement to improve project outcomes and success. Organisations should adopt the principles in Directing Change, the APM Governance SIG guidance on governance of project management. The PwC research specifically aligns with the following principles:
- The board has overall responsibility for the governance of project management and establishing a commercial portfolio that best meets the organisation’s strategic objectives
- The organisation differentiates between projects and non project-based activities and puts in place governance and management approaches that best meet their different requirements
- Roles and responsibilities for the governance of project management are defined clearly.
- Disciplined governance arrangements supported by appropriate methods, resources and controls are applied throughout the project life cycle. Every project has a sponsor
- There is a demonstrably coherent and supporting relationship between the overall business strategy and the project portfolio
effective portfolio direction and management
- Members of delegated authorisation bodies have sufficient representation, competence, authority and resources to enable them to make appropriate decisions.
- Project business cases are supported by relevant and realistic information that provides a reliable basis for making authorisation decisions.
- The board or its delegated agents decide when independent scrutiny of projects or project management systems is required and implement such assurance accordingly.
- There are clearly defined criteria for reporting project status and for the escalation of risks and issues to the levels required by the organisation.
- The organisation fosters a culture of improvement and of frank internal disclosure of project management information.
The current environment is already highly pressurised with indications that more challenges are ahead. Positioning for organisations is critical i.e. Definition of strategy and the change necessary to achieve it using sound project, programme and portfolio management principles is even more compelling.
However there are lessons that the Governance SIG will take on board regarding Directing Change. For example organisations don’t always know what ‘fit for purpose governance’ should look like when it’s done well. The SIG needs to do more to help to educate and advise boards on this point. We subsequently published some guidance on what good governance looks like in the May issue of Project Magazine.
Amongst the conclusions of PwC’s 3rd global PPPM survey, were the following seven things organisations should do tomorrow to become more mature:
- Undertake unambiguous definition of organisational objectives, derived from strategy, which can be quantified. Projects should then clearly state how they will align and drive achievement of those objectives
- Focus more on the interaction between running the business (RTB) and changing the business (CTB). Ensure resources who do both activities have clearly defined performance criteria to ensure motivations are aligned to the right outcomes and they employ the appropriate management approaches
- Assess the number/size/impact of cross divisional projects and consider designing an enterprise portfolio management function if significant
- Ensure project sponsors and stakeholders are actively engaged throughout the individual project lifecycle
- Embed formalised portfolio and programme maturity assessments, as standard, to identify ongoing opportunities for improvement and maturity improvement, e.g, every 6 months
- Consider, if not already in place: A formalised PM training curriculum, enterprise PM software, creation of a standardised / consistent delivery methodology (including estimating tools)
- Hire proven PM talent (with a strong track record) to drive delivery excellence. Not just in project delivery roles but in other roles, e.g project sponsor
Subsequently PwC were able to provide an update based upon their latest 2014 suvey at the 9 July event. We will report on that event in the next newsletter.
Martin Samphire (APM) and James Lowe (PwC)
Out and about...
I was invited to give a key-note speech at the Baltic States annual project management conference in Lithuania. Last year it was held in Latvia, next year in Estonia.
It has been nearly 25 years since I rode into Vilnius, the capital of Lithuania, on my Yamaha 1200 motorcycle on a very experimental tour of Eastern Europe the year after the collapse of the Soviet Union. It was an independent country then but still using Soviet Roubles – I changed $100 into one rouble notes at the border – and carried away a cardboard case of notes stapled in packs of one hundred notes! I had to strap the box to the back of the motorcycle!
What a difference a quarter of a century has made. The old town is still, well,
old! Very historical, but now full of boutiques and trendy cafes and bars.
The conference was in a communist era hotel with a grand (and I mean grand) ballroom, but with slow lifts that could only take 3 people at a time!
Vilinius is a very green and pleasant city - I enjoyed a run in the gigantic city park (more like a forest) and took time off to see the famous bust of Frank Zappa that was erected in place of that of Lenin in the town square.
What better way of underlining the freedoms they now enjoy being part of the EU (Farage take note!)
The turnout was magnificent - over 250 people over two days, with the chairs of the three country project management associations giving welcome speeches, together with the leader of the City Council and the Director of the Vilnius Business School.
The APM President, Tom Taylor was there acting as master of ceremonies, and livened things up with jokes and anecdotes from his vast experience of project management.
"Look into my eyes, you are
feeling sleepy, you will use
Agile project management..." |
The Nordic countries were very well represented there under the banner of NORDNET, which is an alliance of the 5 Scandanavian project management associations. So including the UK, there were 9 national associations being represented, covering subjects as diverse as school building projects, to my own talk on “Agile Project Management”.
Details of the full programme can be found here
Brian Wernham
HM Treasury Green Book - Better business cases - launch of accredited training
Background
In May a joint public forum was held in Westminster between HM Treasury and APMG to launch accredited training for those involved in the application of the Green Book Business Caseprocess.
Business cases are broken down into
5 different aspects which are interconnected but distinct. The business case should enable stakeholders to ascertain the proposals:
- are supported by a robust case for change – the strategic case;
- optimise value for money – the economic case;
- are commercially viable – the commercial case;
- are financially affordable – the financial case; and,
- can be delivered successfully – the management case.
All of these aspects are important; however, their relative importance will vary from proposal to proposal depending upon its nature and complexity.
The need for accredited training
APMG were fronting a number of training organisations, who offer accredited courses to government departments and other users. Although targeted at those involved in the preparation of business cases, a further accredited course was being established for senior managers who have to review business cases.
Sharon White (2nd Permanent Secretary at the Treasury) stressed that better financial management across Government and the Civil Service was required, especially in the area of reviewing business cases. Business cases need to comply to process, but if no one in senior management can understand or use the information, it’s pretty useless.
Comments by Lord Browne, in his report to Government entitled “Getting a grip”, expressed that using the Green Book was only one, but a key, step in the management decision making process.
It is clear that the Treasury feels there is a need to introduce accredited training for senior Whitehall managers. This training will focus on the review of business cases, not in the sense that it is “joined up” but of using the information and understanding the drivers and sensitivities on policy issues - in a similar way to what senior managers and directors in the private sector are doing, but on a more formal footing.
HM Treasury is also concerned about the on-going maintenance of business cases by departments, and drew attention to Section 6.29 in the Green Book guidance which covers definition, ownership, alignment, reporting, and review of costs and benefits and section 6.30 which covers putting in place effective monitoring and controls.
More details of the 3 courses available are on the APMG website - www.apmgroupltd.com
Andrew Spiers
British Computer Society master classes in governance
During March Martin Samphire, Andy Murray and Miles Dixon contributed to a series of successful evening master classes run by the BCS. Martin input on overall governance of project management, Andy on governance of projects a la Prince2 and Miles on the final panel discussion. Some of the key issues that were raised and discussed included
- Measures of success and the sponsor needing to take more accountability – “no such thing as project failure, just failure of governance”
- The different nature of management / gate reviews on agile projects
- How boards can be made to take more responsibility
- Sponsors giving enough time to their role and having a personal contract with the project manager
The chair of the BCS project management SIG (Proms-G) said he was very pleased with the event – it had a good turnout and was well received by the participants. We look forward to further collaboration with Proms-G
.Co-directing change guide update - key questions for the boardrooms
The project to update “Co-Directing Change” has flagged a little with varying views on structure and detail. However, a new, shorter and better focussed set of principles has been developed.
We are now developing key questions - around 100 of them - that board members need to attend to. These need to avoid duplication of Directing Change and Sponsoring Change but link to other
key governance requirements such as the UK Governance code, BS 13500, ISO 11000, etc. Volunteers to help work on this stage please contact Hartley Millar.
Hartley Millar
APM North West Branch conference - major projects and
change governance
Phil Hardy, the North West branch chairman welcomed the audience to the “Major projects and change governance” conference at the AstraZeneca Conference Centre, Alderley Park. He started the conference with a few examples about some of the famous governance failures across the world such as Macondo Well Blowout on Gulf of Mexico on 2010 and Toyota Recall fiasco between 2009 and 2011. He recapped his opening by stating
“Good governance is required from the project start-up. If you don’t have it the project will likely end up in tears!”
Andy Murray, speaking on behalf of the APM Governance SIG, then set the scene for the conference. He highlighted the work of the SIG in “achieving change successfully with confidence and control” and described the main elements of effective governance of project management emphasising the importance of executive leadership and the Board’s key role in ensuring good practice.
The running order for the conference was as follows:
- Project sponsorship - Peter Taylor focused on the project sponsor’s key leadership role in successful project governance
- Academic view - Rick Wylie emphasised “under developed governance mechanisms” as one of the top three project performance problems. He was very strong about “Partnership”. He said the majority of the work that university of Central Lancashire did was mainly focused on “Sellafield” who was working for partners and with partners.
- Leadership, behaviour and culture – Andrew Ingleby talked about their importance in effective change Governance
- A simple governance model – presented by Andrew Ingleby.
- Whistle blowing - Kevin Kane argued that if used correctly, whistle-blowers have a significantly important part in setting up governance processes.
- Benchmarking - Andy Murray presented the findings from a group of 23 organisations which had participated in developing and sharing governance benchmarking survey data. Amongst other findings, they discovered that 60% of portfolios don’t have benefits associated with them.
- There were two different interactive game sessions after lunch designed to assess the level of governance maturity represented by the attendees.
- Case studies:
- BAE Systems - Erik Johannesen shared BAE System’s experience from its 10-year project governance journey. In a fascinating presentation Erik showed how the company governed, organised and managed its portfolio and indicated some of the core business processes it used. He then showed how this aligned to the 13 principles enshrined in Directing Change and shared some lessons learned from the journey.
- AstraZeneca - Chris Day gave a fascinating presentation on his experiences. He spoke about his two-year journey with AstraZeneca implementing new and solid portfolio governance on the company’s IT projects. In his view, good portfolio governance results in better and more efficient control of the portfolio: analyzing and prioritizing the demands and selecting the projects according to strategic alignment rather than a personal view. Transparency and having single point of truth at all times for the portfolio are very powerful forces which provide a clear base for better strategic decision making.
- Closing remarks - Andrew Bragg, APM’s Chief Executive concluded the conference by emphasising the key elements of the presentations during the day. He expressed his gratitude to all of the Specific Interest Groups (SIG) and specifically the “Governance SIG”, who are a dedicated group of professionals “who do take knowledge forward. Thanks to their efforts, governance has gone from being a low-priority to being recognised as a key factor in project success."
Andrew Ingelby
Agile governance guide – interview with Brian
Wernham
Q: What is proposed?
A: We are developing a brief guide on ‘Agile governance’ . The guide will be sector and technology agnostic though equally applicable to private, public and 3rd sector organisations. It will be aimed at organisations with a mixed portfolio of technology innovation change initiatives and traditional programmes/projects. An underlying assumption is that ‘technology innovation’ is not necessarily IT/software based.
Q: Why is this guide needed?
A: There has been a great deal of work on Agile methods at the developer/team level. But little debate or discussion on the governance of agile projects, how to govern ‘hybrid’ programmes that have a mix of agile and waterfall sub- projects, or how the board applies ‘agile’ concepts to a portfolio of change. Universal Credit programme is an example of a major organisation not having a framework within which to govern a major programme that was using Agile methods.
Q: How will the project to produce the guide be run?
A: Using an Agile approach which has already started - our 3rd
'Sprint' was at HSBC in July. We are spreading a wide net and gathering lots of ideas and perspectives, starting “hot” as it were. As the process matures we will begin to “cool” the process, focusing on the most relevant material and refining it.
As editor I am leading the project, organising work in one month
‘Sprints’:
- Week 1: The editor refactors the content and makes the emerging guide available to the participants to collaborate on.
- Week 2: The editor presents status and briefs the
GovSIG Committee who then help refine the 'Backlog’
- Week 3: The editor sends out agenda & reading materials
- Week 4: The editor leads an evening meeting
- Week 5: Release videos of the presentations on YouTube. Volunteers then caption in English and other languages
Q: How can people get involved?
A: All GovSIG members will receive invites to the monthly events – please do come along and contribute or just to learn more. We also need people to edit and review the emerging guide, and caption the videos on YouTube – do contact me.
Dates for the diary
Comments and feedback
The Governance SIG would appreciate any comments or feedback you have on our newsletter – let us know whether it was useful, and what you’d like to see in future editions. Email the newsletter editor.
Miles Dixon and Colin Parker
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