What you are Lacking is a Sound Project Governance Team
By Randy Rayess, Co-founder, VenturePact
Modern businesses are more likely to experiment with new technologies than established companies, but they must ensure that projects are properly managed. In today’s innovation-driven business environment, there is a big difference in the way senior leaders and executives go about project execution. Project management has grown on to encompass a wide range of functions, processes, and responsibilities within the organization. However, companies also need to look into the new concept of project governance, which has shown to improve IT investments by about 40 percent
The key aspect of the role is that they are responsible for the overall administration of the project. The Project Governor in an outsourced software engagement is usually a third party, not part of the client team or the development team but acts to help ensure a successful fair outcome in line with the agreed upon contract. The project governor has a holistic view of the project and must understand the underlying objectives and incentives of each party.
The role starts with oversight of all key terms in the contract including features, team, IP ownership, timelines, and pricing. These terms are usually set forth between the project managers of each party with the help of the project governor who helps structure the contract, ensure that the key business objectives are clearly explained and mediates any issues that might come up.
Another unique facet of this profile is it understands the client’s preferences. The project governor makes sure that all key client preferences regarding styling, documentation, timing of calls are communicated sooner rather than later. Gaps in coordination result in surprises down the road and can cost a company large sums of money and long delays if not identified and addressed early on. This ability to prevent common pitfalls is where the key ROI of a project governor comes in.
What do you Lose without a Project Governor
The state of California implemented a Payroll system without a project governor in place and the project took 10 years, cost over $370M, failed and was terminated in 2013. They not only wasted a lot of money but also lost a significant amount of time and the project still failed. One possible reason for this could be a lack of efficient project governors.
What do you Gain with a Project Governor
Georgia Technical Authority (GTA) spends about $200-450M each year on critical projects and all of them follow proper governance processes. Their goal behind incorporating governance was to understand what’s really going on “behind the numbers that are typically reported by Project Managers”, as stated by the Director of Enterprise Governance Tom Fruman. They focused right from the beginning on creating a governance process that they would follow and that would allow them to predict what would happen, identify issues that might come up in the future and reduce risk.
Most companies have hired project managers to manage their outsourced development work. To increase their chance of a successful engagement, businesses must have a great project governor who can help identify issues, streamline communication, ensure project delivery and provide an unbiased perspective on problems that come up down the road. This will ensure that you avoid the problem California state and many other organizations have faced with cost overruns, long delays and failed projects.