Governance

Project governance

Governance is generally understood to mean "responsible corporate management and control". It must be implemented in particular by the management of the core organization.

Project governance is part of corporate governance. The following characteristics of good project governance represent requirements for project steering and project management:

1. Effective and functional project planning, project steering, and project management
2. Constructive cooperation between project organization and core organization
3. Consideration of stakeholder interests
4. Alignment of the set objectives with requirements of the core organization
5. Solid basis for correct, efficient, and transparent decisions
6. Institutionalized and timely flow of information, transparency in project communication
7. Comprehensibility of project implementation and any changes of objectives
8. Appropriate approach to risks
9. Functional and adequate project organization and infrastructure
10. Efficient and sustainable use of resources

HERMES project management is designed to ensure good project governance.

Implementation of significant changes

Creation of the solution

In the implementation of corporate planning supported by HERMES project management, significant changes are realized by means of projects.

During the initiation phase, more depth is provided for the business planning outlines. At the end of the phase, an execution order is drawn up so that the project sponsor, in coordination with the core organization, can decide whether to approve continuation of the project and how to approach solution development.

The core organization appoints and fills the decisive roles of the project from its own ranks or from the user partner group: first the project sponsor and then, through the project sponsor, the project management, and the user representative. The executive board and the controlling and compliance bodies are involved in the project through decision-making tasks and reporting. The project sponsor is responsible for continuous communication between the core and project organization; the project management is responsible for identifying and possibly for gaining stakeholders for the project and informing them; and the user representative is responsible for involving them in project execution. Within the project, the project sponsor is the highest decision-making authority.

Utilization of the solution

Utilization

1. of the created product or service begins with activation of the product and the organization,
2. of the created system with the activation of the operation, and
3. of the created organization with the activation of the organization.

The prerequisites for sustainable utilization are created in the project. The project is closed once the operation is stable, the solution has been accepted, and all necessary final tasks have been performed. During the transition from project to application organization, it is ensured that the roles required for utilization are assigned. These often include the roles of user representative and operations manager. The project is transformed into the application. If the core organization maintains the same portfolio for both projects and applications, as indeed is envisaged in the HERMES portfolio management, only the status changes from project to application. However, it should be taken into account that the project and the application overlap in the portfolio. This is particularly the case in the development of agile solutions. The executive board of the user and that of the developer or operator remain in contact also during the utilization period. The check to see whether the originally set objectives have been achieved is carried out during the utilization stage.

Comprehensibility of the selected approach

Responsible project execution also involves choosing the appropriate approach. The decision as to whether the project approach is traditional or agile must be made at the project level, given that each project has its own characteristics. This also applies to projects within a program. Even several IT projects that are being handled in parallel may have different framework conditions that require different approaches.

Different methods and techniques can be used for the choice of approach. The requirements of controlling and compliance bodies must be met. The choice of approach must be comprehensible.

Self-determination of users over the project

In some cases, it has become customary for the service providers or the partner groups of developers or operators to have a significant influence on the project, even to the extent of dominating them. Firstly, this contradicts the understanding of roles and partners in HERMES. Secondly, the users cannot fully assume their responsibility in the project and are accordingly unable to protect their interests.

The core organization/user partner group - as the owner of the project and user of the solution - provides the financial resources for the project. This gives it the right to decide freely and without limitation by the other partner groups on the project structure, the management method applied, as well as the approach, and to fill the minimum number of roles with its own staff or staff employed by them. However, it must also make use of these rights and consistently assert them/itself. This in turn is part of its obligation.

With respect to the self-determination of users over the project, the following project roles are especially relevant:

1. Project sponsor
2. 1. Defines the framework for project initiation and for solution development.
   2. Determines the assignment of roles, especially the user partner group.
   3. Decides on the type of development approach.
   4. Asserts the interests of the project sponsor's core organization.
3. Project management
4. 1. Prepares the steering decisions.
   2. Safeguards the interests of the core organization.
   3. Manages the roles of all partner groups.
   4. Enforces the selected approach.
   5. Ensures reporting.
5. User representative
6. 1. Prepares the steering and management decisions.
   2. Evaluates options in the interest of the core organization.
   3. Supports the project management in safeguarding the interests of the core organization and in reporting.

In the core organization, the following role groups in particular deal with self-determination:

1. Controlling and compliance bodies
2. 1. Evaluate compliance with the requirements with respect to the approach set out in the execution order.
3. Executive board
4. 1. Checks whether the core organization's requirements and objectives with respect to the project are being met.

Integration into the portfolio

Figure 30 shows a possible subordination of the portfolio within the core organization. The project portfolio is often located

1. in the project management competence center or
2. in the controlling and compliance bodies.

As a rule, however, responsibility lies with the executive board.

The governance requirement concerning efficient and sustainable use of resources means that an assessment is carried out to ascertain whether a project should be initiated and its execution should later be released. One task of the core organization is to steer and control all of the organization's projects on an overarching basis. This is done with project portfolio management. It includes the overarching prioritization and coordination of projects, the allocation of resources to projects, and decisions on which projects are initiated, executed, halted, and terminated. From the company's perspective, it is advantageous to merge the project portfolio and the application portfolio into a superordinate product portfolio.

One of the ways in which HERMES supports the integration of projects - and of applications - into portfolio management is with the phase model (consistent project structure), phases and releases, milestones, and reporting.

Reporting

The project governance requirement concerning transparent communication necessitates reporting. Reporting also supports the project governance requirement concerning traceability and comprehensibility of the project. Reporting is carried out periodically along the phases according to the requirements of the core organization.

Reporting formally regulates the flow of information within the project organization and vis-à-vis the core organization. Timely reporting is a prerequisite to enable the competent bodies in the project organization and core organization to carry out their tasks responsibly.

The transparency achieved with reporting is of benefit not only for the core organization and the project sponsor, but also for the project manager, given that it documents the quality of project execution:

1. Project status report
   Project status reports are prepared periodically from the beginning of a project until its closure. In time frames defined by the core organization, the project manager uses the project status report to inform the project sponsor and the core organization about the project status (plan/actual comparison) and the expected next steps (forecast).
2. Phase report
   At the end of the concept, implementation, deployment, and execution phases, the phase outcomes and the planning of the further course of the project are prepared for the project sponsor in such a way that the project sponsor can decide on how to proceed (usually on phase release).
3. Release report  ( agile )
   During the execution phase, the outcomes of the release are prepared for the project sponsor at the end of each release in such a way that the sponsor is informed about the success of the release as well as progress and overall development. If it was determined in the initiation phase that decisions on release must be made, the release report serves as a decision-making tool.
4. Final project evaluation
   At the end of the closure phase, the final project evaluation is created. It provides the basis for continual improvement in the core organization based on the lessons learned.

As Figure 31 shows, reporting stays uniform within the project organization and in relation to the core organization, regardless of which development approach is selected. This ensures that governance is maintained in reporting for both the traditional and the agile development approach.

Supplementing reporting, defined specialist outcomes are forwarded to the controlling and compliance bodies for review (e.g. solution architecture).

Meeting the project governance requirements

Review subject matter

When assessing a project, one of the checks is whether the project meets the requirements for good project governance.

The following list describes for each requirement how the individual HERMES method components support the meeting of the requirements.

Effective project steering and management

1. Roles
   Roles are a key method component for meeting the requirements for effective project steering and management:
2. 1. Responsibility for tasks and outcomes is assigned to the defined roles in the project.
   2. The roles are assigned to the hierarchy levels of steering, management, and execution. This further highlights the responsibility of the roles.
   3. The roles are fleshed out with role descriptions. They describe the tasks, powers, and responsibility, as well as the skills required to perform the role.
   4. A role of quality and risk manager is defined to support the role of the project sponsor. The quality and risk manager carries out independent assessments of project execution and makes recommendations.
   5. A role group of project committee is defined to support the role of the project sponsor. The project committee enables the stakeholders to be integrated into the project organization at the steering hierarchy level.
   6. In the traditional approach, a role group of technical committee is defined to support the role of the project management. This enables the stakeholders to be included in the project organization both in the management area and at the technical level.
   7. The project organization section describes which aspects are to be taken into account when assigning roles in order to ensure effective project steering and management.
3. Modules and tasks
   The steering and management tasks are described in detail. They are grouped in the project steering and project management modules and are therefore clearly visible for the project sponsor, project management, and other project participants.

This ensures a high degree of transparency with regard to tasks and outcomes for which the project sponsor and project management are responsible.

1. Outcomes
   Every project has certain outcomes - the minimum required documents - that have to be achieved to enable it to be steered and managed. These include the execution order and the project management plan, for example. The minimum required documents from a governance perspective are defined in the outcomes section.
2. Reporting
   Project steering requires reliable information on planning, project status, and forecasts. These are provided via reporting.

Consideration of stakeholder interests

1. Roles
   The roles of project steering (project sponsor), project management, and specialist product development (user representative) are responsible for the corresponding tasks.
2. Tasks
3. 1. The manage and inform stakeholders task ensures that stakeholders are identified and their interests are analyzed.
   2. The advocate stakeholder interests task ensures that stakeholders can contribute their ideas and demands to the project and are involved in the development process as needed.
4. Outcomes
   The stakeholder list and stakeholder interests are first established in the initiation phase and are continuously pursued over the course of the project.

Cooperation between the project organization and core organization

1. HERMES and portfolio management
   HERMES supports the integration of projects into portfolio management.
2. Phases and milestones
   The phases and milestones (with quality gates) support cooperation (e.g. with regard to clear interfaces).
3. Roles
   The role model establishes a clear link between the project organization and the core organization with its controlling and compliance bodies.
4. Tasks
   Several tasks support cooperation between the project organization and core organization. For example:
5. 1. the decision-making tasks for project initiation release, execution release, phase release, release, und project closure;
   2. the agree on and steer goods/services task;
   3. the decide on solution architecture task;
   4. the decide on ISDP concept task.

Alignment of the set objectives with requirements of the core organization

1. Phases/releases
   Before the execution release at the end of the initiation phase and the respective release or phase release, the objectives are aligned with the strategies and objectives of the core organization within the framework of the relevant decision-making tasks.

Transparency in project communication

1. Tasks
   Communication planning is created with the manage and inform stakeholders task. Communication is target-group-oriented.
2. Reporting
   Reporting ensures project-internal communication between the project management and the project sponsor, and also provides a realistic and timely overview and holistic evaluation for the core organization.

Comprehensibility of the course of the project

1. Outcomes
   The outcomes achieved as the project progresses document the course of the project.
2. 1. Periodic reporting, which includes the project status report and the phase report, documents the progress of the project.
   2. Project decisions are recorded and minutes are taken of meetings.
   3. The lessons learned are continuously recorded.
   4. the final project evaluation, planned and actual comparisons are carried out (target/actual comparison), and key findings are recorded.
   5. The project management plan is continuously updated and documents the respective planning status.
   6. Procurements are documented with an evaluation report.
   7. Changes are managed and recorded in the change status list.

Appropriate approach to risks

1. Outcomes
   The project status report contains the current risk assessment and informs the recipients about the project management's assessment.
2. Tasks
   Risk management is continuously managed with the manage risks task.
3. Roles
   At the project steering hierarchy level, the role of quality and risk manager supports the project sponsor with an independent assessment of the project.
4. Phases/releases
   If, at the end of a phase or release, the risks are deemed unacceptable, a decision on next steps must be made, and the project may have to be terminated.
5. Modules and scenarios
   Modules and scenarios support all project participants and the core organization with a common understanding of how a project with a specific characteristic is handled. In this way, misunderstandings can be prevented and project risks can be reduced overall.

Efficient and sustainable use of resources

1. Modules and scenarios
   Modules and scenarios enable efficient project planning.
2. Initiation phase
   At the end of the initiation phase, a check is carried out to see whether it is wise to continue the project by means of an execution order. Possible reasons for not doing so are lack of economic efficiency, excessive risks, infeasibility, and lack of alignment with the objectives and strategies of the organization.
3. Phases, releases, and milestones
   At the end of the phases or at the end of the release, a check is carried out within the framework of solution development to see whether it is wise to continue the project. Possible reasons for discontinuation include excessive risks, lack of benefits, escalating costs, etc.
4. User information
   The sustainability section describes how projects are implemented sustainably, how sustainable outcomes are achieved and which criteria are used to assess sustainability.