Copyright to Francis Hooke, © 2013 Quality Project Delivery Ltd. All rights reserved.
Originally published as a blog on qualityprojectdelivery October 2013 and adapted for publication here April 2014.

Editor's Note | Introduction | A Case Study 
The REAL Financial Position | Direct and Indirect Costs 
Causes and Symptoms of Hidden Costs | Conclusion | Postscript


Editor's Note

In this paper under Causes and Symptoms of Hidden Costs, author Francis Hooke touches on the issue of "governance". In general, so-called governance applies at different levels of an organization and varies accordingly. Nevertheless, the issue of governance can have a significant impact on the cost of a project, and hence its success. That is because it determines the degrees of freedom of management, i.e. decision-making, given to the project manager and to the project's sponsor. More freedom, properly applied, will likely improve the chances of project success, while the reverse is true in the case of less freedom.

But what is governance exactly? Thanks to a contribution by Dr. Mihail Sadeanu[1] in a related blog, the following are useful descriptive references:

  1. In ISO 21500:2012 Standard - Guidance on project management: "Governance is the framework by which an organization is directed and controlled. Project governance includes, but is not limited to, those areas of organizational governance that are specifically related to project activities.

    Project governance may include subjects such as the following:
    • Defining the management structure;
    • The policies, processes and methodologies to be used;
    • Limits of authority for decision-making;
    • Stakeholder responsibilities and accountabilities;
    • Interactions such as reporting and the escalation of issues or risks.
    The responsibility for maintaining the appropriate governance of a project is usually assigned either to the project sponsor or to a project steering committee".
  2. In PMI PMBOK ANSI Standard 99-001-2013, 5th Edition: "Project Governance is the alignment of project objectives with the strategy of the larger organization by the project sponsor and project team. A project's governance is defined by and is required to fit within the larger context of the program or organization sponsoring it, but is separate from organizational governance".
  3. In ASAPM/IPMA, a PRO - Standard for Assessing Organizational Project Management Performance 2010: "Project governance is the combination of principles, rules, and structures implemented by management to inform, direct, manage, and monitor the activities of projects. Project governance is a subset of corporate governance. Policy statements provide guidance to support the development of more detailed methods and procedures".
  4. In PRINCE2 2009, Managing Successful Projects with PRINCE2, Project Management Methodology: "Governance (project) refers to those areas of corporate governance that are specifically related to project activities. Effective governance of project management ensures that an organization's project portfolio is aligned to the organization's objectives, is delivered efficiently and is sustainable".
  5. In APM Body of Knowledge 6-edition, Definitions: "Governance refers to the set of policies, regulations, functions, processes, procedures and responsibilities that define the establishment, management and control of projects, programmes and portfolios".
Conclusion  Conclusion

1. From an entry by Dr. Mihail Sadeanu in the same blog on LinkedIn by Francis titled "The HIDDEN Cost of Poor Project Management".
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