A mature organisation ensures that their project frameworks are designed to keep the quality high, delivery on time, and expenditure within budgets. Governance is a term that often has different connotations for different organisations. In the context of projects, programmes and portfolios, governance is all about creating structures and foundations.

We work with a huge range of organisations on their project portfolios, providing assurance that their practices are giving them the best possible chance of success. Through our work, we’ve helped clients connect the governance of individual projects to centralised governance practices in which the leadership team can get a birds-eye view of the business’ progress to a set strategy.

In this guide, we take a deeper look at governance when it comes to a portfolio of projects. We’ll explain why this is important and we’ll identify the key elements that will help make a governance framework successful for the leadership team.

Guide to portfolio governance IQANZ

Importance of good governance at the portfolio level

Governance, which includes roles and responsibilities, reporting practices, stakeholder engagement, communication frameworks, risk management and a number of other elements, needs to exist. When a business does not have thorough governance in place, there are fewer checks and balances to identify problems.

Now expand this to 5-10 individual projects and you can see why there’s a big risk without governance. Governance at the project level is similar to governance at the portfolio level – ie. both concern the visibility of progress and status. However, the portfolio level may take on a more strategic lens, such as reporting on the overall progress of each project.

Having governance in place at the portfolio level helps senior leaders:

  • understand how well the business is tracking against the business strategy and plan
  • see any problems across the organisations’ project delivery practices (e.g. is a particular stakeholder slowing things down across the board)
  • discover any risks or threats that warrant discussion and decision-making to mitigate
  • ensure that the business is not too reliant on any one business unit for the portfolio to progress
  • determine where the budget is being allocated and whether a reallocation of funds is needed.

It’s also important as a time-saving function for busy senior leaders to get a temperature check of the project activity without having to read multiple reports at once.

How project and programme governance supports the portfolio level

The relationship between governance at the individual programme or project level and the portfolio is reasonably straightforward.

  • Projects and programmes have risks, reporting and success measures that pertain to their own scope. The governance should ensure that these operate the way that they’re meant to.
  • A portfolio’s governance demands the management of multiple projects ensuring that the right budget, priority, and timeframes are in place to bring about the desired strategic outcome.

Whilst project governance is very detailed, the governance around a portfolio should pull top-level information from each project as required. A well-designed reporting framework will have mapped functional delivery KPIs up to the more strategic portfolio-level KPIs. The time spent to get this right is a major advantage later down the track.

This centralised or top-level governance for a project portfolio is, therefore, a valuable tool to use.

Reporting functions within a portfolio

Many of the project management platforms organisations use will allow for portfolio-level management and reporting. These platforms pull together key metrics from all projects into a centralised dashboard. This can be a very efficient way of gathering the quantitative data needed to assess the performance of the portfolio.
But reporting is not all about the metrics – there should also be ongoing commentary and insights provided by each programme and project. This should then be summarised at regular intervals into a portfolio status report. Whilst leadership teams may want access to each individual project update, the business can provide far more efficient reporting by having a process of pulling out key facts and trends to analyse the portfolio.

Roles and responsibilities in a portfolio

The portfolio will need to have its own personnel to ensure it meets its objectives. At the project level, there will be project managers, delivery teams and stakeholders, and at the programme level there will be programme directors, owners etc. But, the portfolio’s roles and responsibilities will sit at the strategic level giving it close ties to the business strategy and goals.

The portfolio governance framework should expressly identify responsibilities, such as, sign off of projects, gathering data for reporting, leading risk mitigation and so on. There may be one or more roles involved with the day to day ‘managing’ of the project portfolio. They will likely spend a lot of their week meeting with programme and project leaders to build a clear understanding of progress. They may also be tasked with providing directives such as reprioritising the budget.

These roles are just as critical as those at the delivery level. Good governance should record this and make it accessible for reference later.

Governance to support high stakes decision making

Organisations that have governance, as the rule book for decision making, will greatly benefit from these practices. Whilst there’s no way nor reason to eliminate open discussion and common sense, the complexity of large organisations often requires greater guidance. There may be some commonalities between a leadership team’s individual roles and those set out in a governance framework for the portfolio, but these are worth expressly stating regardless. Removing ambiguity is never a negative thing with project management, and this includes portfolios.

A valuable function for measuring strategic progress

How is the portfolio going? This may sound like a massive question to answer, but that’s more reflective of the nature of most organisations’ governance practices. The portfolio’s governance structure should outline the measures of success and ensure that these are implemented early. Work will need to be done to connect large, long-term strategic imperatives and tangible project delivery milestones, but the connection does need to be made.

Perhaps the measures will need to include external KPIs, such as customer feedback or market research. That measure will depend on the business and project, but there should be a measure.

Governance is about making hard questions easier – something that will be welcomed by busy leadership teams when trying to ascertain if the portfolio is taking the business in the right direction.

Guide to portfolio governance IQANZ

Communication to the wider organisation

Another important element of governance is communication. This includes the initial buy-in and definition of the project’s benefits. But it should be present throughout the project, including progress updates, sharing success and ultimately celebrating completion. For a portfolio, the communication may not be expressed as ‘a portfolio’ as such, but more the business strategy. The portfolio of projects may be better illustrated as a ‘series of initiatives’ or other language that means something to the entire business.

The governance framework should lay out how often updates are provided to certain stakeholders and what will be shared.

Framework to manage risks that affect multiple projects

Once things get underway, the portfolio’s governance framework is going to determine how well issues are brought to the leadership team’s attention. Reporting of risks will happen at the project level, but those responsible for maintaining the portfolio will also need to identify and mitigate risks to the portfolio as a whole.

Portfolio risks can come from the underlying programmes and projects, or they can present themselves from other sources – such as market changes, financial issues, technological developments or otherwise. Either way, the governance around your portfolio should ensure that these risks are captured, rated for severity and prioritised for action.

Often the benefit of good risk governance is that trends can be highlighted and addressed at once. One such example might be a bottleneck in security testing for multiple technology projects. A portfolio risk assessment may help to provide a compelling business case for hiring more resources to remove this.

Discuss your portfolio with us

We know first-hand that when organisations implement good governance at all appropriate levels, the machine runs much more effectively. Our team doesn’t just provide recommendations on delivering projects better, but we help you establish practices that make your organisation inherently better at standing up projects and managing multiple initiatives in a portfolio. We’ll provide an assessment and guidance on the practices you need to implement and support you with embedding these. We’d love to chat about your needs with governance and portfolio management, so get in touch with us to discuss more.

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