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PPM 101 – Good Project Portfolio Governance Delivers Superior Results

Strong project portfolio governance is the number one success factor for making portfolio management successful. Unfortunately, most companies struggle with governance. In fact, when you hear the word ‘governance’, what comes to mind? Do you think of bureaucracy, lots of meetings with few or no decisions, unclear expectations, poor accountability, strife between decision makers, inconsistent decision making? These issues are really just the symptoms of poor governance. In this post, we are going to focus on what project portfolio governance is and why it is important and provide success factors to help your governance teams improve their governance processes.

“Effective IT governance is the single most important predictor of the value an organization generates from IT”¹

What is Project Portfolio Governance?

At its core, project portfolio governance is about strategic decision making. When we talk about project portfolio governance we are referring to the governance of all projects in the portfolio. The graphic below highlights that all four components of the portfolio management lifecycle depend on good project governance. From a portfolio management perspective many of the critical decisions involve project selection (Defining the Portfolio), prioritization and resource allocation ( Optimizing Portfolio Value ), project performance (Protect Portfolio Value) and realizing project benefits (Delivering Portfolio Value). Portfolio governance is the foundation of project portfolio management.

According to Peter Weill and Jeanne Ross, experts in information technology governance, governance can be defined as “specifying the decision rights and accountability framework to encourage desirable behavior…”. Clearly, this refers to the people making decisions, a process for making decisions, and accountability to help ensure that good decisions are made.

“Portfolio management without governance is an empty concept” ²

In practice, the tension is about how to make project portfolio governance both effective and efficient. Project portfolio governance can be effective but requires a significant amount of time from project teams to collect data, the Portfolio Manager to create reports, and for the governance committee to sift through the reports and data to make better decisions. Project Management Offices (PMO’s) may also take a “lean” approach to project portfolio governance that is apparently efficient that requires little effort from the governance committee, but is inadequate or completely ineffective. Our goal is to balance effectiveness against efficiency to ensure that the portfolio is properly managed and delivering maximum value.

Why is Project Portfolio Governance Important?

Project portfolio governance is important because it is the foundation of all portfolio management activities. According to Howard A. Rubin, a former executive vice president at the Meta Group, “a good governance structure is central to making portfolio management work.” Hence, well-defined and properly structured governance is critical to manage the portfolio. Let’s define good portfolio governance as having the right people making good strategic decisions with the right information at the right time.

• The right people – having the right decision makers means having people at the right level of authority and breadth of knowledge to make decisions. Having the wrong people involved (or missing the right people) means that decision quality is compromised, a decision can’t be made or must be revisited later, or that a decision will be challenged. None of these are desirable outcomes and should be avoided. Empowering the right decision makers within the organization is very important. In addition, different levels of management may participate in different types of portfolio decision making. Identifying which people make certain decisions is part of having the right people for project portfolio governance.
• Good strategic decisions – the goal of portfolio management is to maximize organizational value, and good portfolio management by definition is about making trade-offs, which means not everything can get done. Good strategic decisions include “no” or “no, not right now”. Saying “no” is a critical success factor for project portfolio governance. If the governance committee approves most projects or makes everything a priority, portfolio value is diminished. It is also critical for the governance team to agree on HOW it will make decisions.
• The right information – even if the right decision makers are present and capable of making good portfolio decisions, having too much or too little information frustrates the decision-making process. Not only do decision makers need to know how to use portfolio data, but they need the right data, otherwise they will make sub-optimal portfolio decisions. Governance includes the processes for collecting quality data in a timely way.
• The right time –a governance team needs to meet on the right cadence to address portfolio matters. Project approvals, prioritization, status reviews, capacity planning, all need to be conducted on a consistent cadence. This doesn’t mean that all of these activities have the same cadence, only that they occur on a consistent basis to ensure the portfolio is properly managed.

“Good governance design allows enterprises to deliver superior results on their [project] investments.” ¹

The Portfolio Governance Team

Setting up a portfolio governance team is a critical first step in establishing portfolio governance. Until there is a governance team, there is no governance. The composition of the portfolio governance team is important as the effectiveness of portfolio governance and strategic decision making is directly correlated with the ability of the governance team to make decisions that carry weight and will be respected across the organization. Governance teams composed of junior leaders often need their decisions “blessed” by one or more senior leaders before they are really approved. This is considered weak governance.

Organizations that don’t take this serious will miss the mark on portfolio management – get the right leaders together who can effectively make serious strategic decisions for the organization. After all, we’re talking about making critical strategic decisions that impact the organization’s ability to accomplish strategic goals; it’s worth putting in some time and energy to make it work. Sadly, many organizations go through the motions of governance without ever really getting the benefit of portfolio management. Moreover, it’s easier for everyone to avoid contention by saying ‘yes’ to proposals rather than have a healthy debate over whether projects should be approved and how they should be prioritized.

Effective portfolio governance relies on an effective portfolio governance team. Simply bringing senior leaders together does not automatically constitute a team. The governance team should have limited membership but adequate representation of organizations impacted by projects in the portfolio. Each member should bring something unique to the team to add value to the governance team.

The Accountability Framework

In order to achieve support results on project investments, it is paramount that good strategic decisions are consistently made and then properly executed. In order to ensure that good decisions are made that maximize portfolio value and benefit the organization, accountability mechanisms need to be put in place. Accountability may also be synonymous with fair and equitable processes as well as transparency. ‘Accountability’ and ‘accountable’ have strong positive connotations; they hold promises of fair and equitable governance. It comes close to ‘responsiveness’ and ‘a sense of responsibility’, a willingness to act in a transparent, fair, and equitable way. Governance teams must then demonstrate their accountability for the appropriate, proper and intended use of resources. This is what project portfolio governance is about. Furthermore, it is good leadership that drives accountability. True leaders hold decision makers accountable for their decisions.

The diagram below captures the three elements of the accountability framework.

• Leadership to drive accountability
• Governance as the framework which enables accountability
• A shared vision with strategic goals to demonstrate accountability

The rest of this post will focus on the first two elements and will close with critical success factors for effective and efficient project portfolio governance.

Leadership Drives Project Portfolio Governance Accountability

Leadership is at the heart of governance for it is people who make decisions, but not all decision makers are leaders, and by extension, not everyone on a governance team is a leader. Yet, when the governance council has true leaders and this leadership team truly functions as a team, then strong portfolio management is finally possible.

Because many governance teams do struggle to provide leadership to the organizations they are serving, it is appropriate to bring up Patrick Lencioni’s model on the five dysfunctions of a team . The model is shown below with some brief commentary taken from his book, The Advantage ³.

Five Dysfunctions of a Team

• The absence of trust – “The only way for teams to build real trust is for team members to come clean about who they are, warts and all.” The absence of trust manifests itself in project portfolio governance when team members are afraid to share their points of view about projects. If most of the governance team wants to approve a project, but one person has a different point of view and simply goes along with the rest of the team and doesn’t share their thought, there is an absence of trust on the team. This leads to the second dysfunction.
• The fear of conflict – “When there is trust, conflict becomes nothing but the pursuit of the truth, an attempt to find the best possible answer”. I love Lencioni’s quote here because conflict is not directed toward other individuals but is for the purpose of finding the best possible answer. Portfolio management is a multi-faceted discipline and everyone on a governance team sees things with a different lens, which is why everyone’s input is necessary. Tragically, governance teams compromise decision quality for the sake of maintaining an artificial sense of harmony among the team. Some corporate cultures avoid conflict and pay a price for it or the governance team owner shies away from conflict and ends up avoiding valuable discussion as a result. The fear of conflict stymies people and brings out mediocrity from a governance team.
• The lack of commitment – “When leadership teams wait for consensus before taking action, they usually end up with decisions that are made too late and are mildly disagreeable to everyone. This is a recipe for mediocrity and frustration”. With trust and the pursuit of the truth, governance team members will buy in and decisions are more likely to stick.
• The avoidance of accountability – “To hold someone accountable is to care about them enough to risk having them blame you for pointing out their deficiencies.” The point here is not to point the finger but have the freedom to hold one another accountable. In the context of portfolio management, I have heard governance teams say that they are at maximum resource capacity yet try to squeeze in “one more project”. Don’t say one thing and do another. Another example might be in the context of Phase-Gate where a project does not meet the minimum thresholds for approval yet one or more governance team members feel strongly to approve it any way. If the governance team holds themselves accountable, they can at least have the discussion as to why an exception is being made for the approval.
• Inattention to results – “No matter how good a leadership team feels about itself, and how noble its mission might be, if the organization it leads rarely achieves its goals, then, by definition, it’s simply not a good team.” Enough said – results matter. The portfolio governance team must see the forest (the portfolio) and the trees (the projects) and be successful at both levels.

Governance Framework to Enable Accountability

While strategic decision making is at the heart of project portfolio governance, a number of processes are needed to support and complement decision making. Processes such as work intake , Phase-Gate , prioritization , and capacity planning processes provide the right information to support the governance team. Setting up these processes effectively and efficiently is also very important to make portfolio management work.

By getting agreement on these governance processes among decision makers, the governance team can utilize this framework in a more harmonious and successful manner. “Those [organizations] with effective governance have actively designed a set of [governance] mechanisms (committees, budgeting processes, approvals, and so on) that encourage behavior consistent with the organization’s mission, strategy, values, norms, and culture” (Weill 2). One of the key words in this sentence is ‘actively designed’. Successful organizations actively design their governance processes to align with their vision, mission, strategy, and culture. By extension, those organizations that haphazardly design their governance processes may struggle and even fail to make good investment decisions. Effective governance is the single most important predictor of the value an organization generates from its portfolio.

Minimal Viable Governance

When it comes to developing governance processes, the key is to develop the minimal amount of governance that will help effectively manage your projects and portfolios. We can refer to this as “minimal viable governance”. This is a new term analagous to a minimal viable product (MVP). The idea is to right-size governance to match the size and complexity of your portfolio. Most organizations over-engineer their governance process and it becomes bureaucratic. However, when organizations have little or governance processes in place, it becomes chaotic. One major objection we have heard over the years related to project portfolio management is that it is bureaucratic. The reality is that project portfolio management is only bureaucratic if you have the wrong infrastructure. We can use the diagram below to highlight this.

Small portfolios – For organizations with small portfolios, simple governance is needed. Basic mechanisms about how to approve projects and quickly prioritize them are likely sufficient. This can be likened to a simple stop sign that helps control the flow of traffic.

Medium-sized portfolio – for organizations with a moderate sized portfolio, additional processes may be needed. Specific status reporting and resource management along with Phase-Gate processes may be warranted. This is likened to have traffic lights with additional signage to control the flow of more traffic.

Large portfolio – organizations with a very large portfolio can be likened to a California freeway with multiple lanes of traffic. Stricter processes around Work Intake , Phase-Gate, resource management, portfolio planning and dependency management are warranted in order to protect the portfolio and improve strategic decision-making quality.

Large-scale transformation – in rare cases, large companies take on transformational initiatives that are too big to fail and require a level of rigor not needed for the typical project portfolio. In these cases we see very strict and very prescriptive processes dictate how projects should be run. The air-traffic control analogy is used here because airplanes are controlled in a strict way for safety reasons, a lot of governance and infrastructure is required for airplanes to take off, land, and be maintained. Although some experts like to compare portfolio management with air traffic control, in actuality, very few companies need this level of rigor.

Common Objections to Governance

1) “it will slow us down”.

I have heard companies say that adding governance processes will slow down projects. This is like saying stop signs and stop lights slow down traffic. Yes, in a sense, vehicles need to stop at times to make way for other vehicles, but not having traffic lights and stop signs will not make traffic flow faster; it will make it worse. This is an apt analogy for portfolio governance. Project teams may not have to complete as many governance reviews, but without governance there is no way to prioritize work and manage resource capacity. In fact, without governance, more projects will be authorized than can be reasonably completed and will delay the completion of critical projects, just like having a large flow of vehicle without traffic lights will result in gridlock. This is why organizations need to be deliberate with how much governance is needed.

Too much process becomes bureaucratic, but too little process becomes chaotic. The fact is, project portfolio management is only bureaucratic if you have the wrong infrastructure.

2) “we use agile around here”.

A common area of resistance comes from the notion that governance is contrary to agile principles. This is not accurate. The Scaled Agile Framework (SAFe) refers to “lean governance” and “lightweight governance”. Solution trains, agile release trains, and program increments are examples of a structure (governance) that enables agile delivery. Furthermore, some level of senior leadership decision making is still needed to firstly determine whether a project (waterfall or agile) should even be done. High-level estimates can still be provided during an intake process to help leadership determine whether it is the right project to do. Teams can leverage various project frameworks and methodologies to do the work right.

Project Portfolio Governance Success Factors

We conclude with a short list of success factors to help improve project portfolio governance. Many of these touch on topics covered earlier in the post, but are based on years of consulting experience.

• Active engagement – coming prepared, being present, asking questions, proposing solutions
• Open, honest, transparent discussions – working comfortably through conflict to find the best possible answer
• Ability to make tough trade-off decisions – preventing misaligned projects from draining critical resources
• Shifting from a singular project view to an aggregate portfolio view – always asking ‘how will this impact our portfolio?’
• Focus on optimizing portfolio value – finding the right combination of projects that unlock greater portfolio value
• Balancing long-term and short-term needs – not always choosing the easy projects
• Communicating a consistent message – reinforcing business goals and objectives; demonstrating this through results

Does any of this ring true for you? If you are struggling with project portfolio governance for portfolio management, contact us.

Tim is a project and portfolio management consultant with 15 years of experience working with the Fortune 500. He is an expert in maturity-based PPM and helps PMO Leaders build and improve their PMO to unlock more value for their company. He is one of the original PfMP’s (Portfolio Management Professionals) and a public speaker at business conferences and PMI events.

¹Weill, Peter; Jeanne W Ross. IT Governance. Boston, Massachusetts: Harvard Business School Publishing, 2004. ²Datz, Todd. “ Portfolio Management: How to Do It Right .” CIO.com. Ed. Todd Datz. May 1, 2003. April 26, 2019. ³Lencioni, Patrick. The Advantage. San Fransisco, CA: Jossey-Bass, 2012.

What is portfolio governance.

Project portfolio governance refers to the governance of all projects in the portfolio. Good portfolio governance is about having the right people making good strategic decisions with the right information at the right time. Strong portfolio governance forms the foundation of project portfolio management and is involved in all four components of the portfolio management lifecycle.

Why is portfolio governance important?

Project portfolio governance involves strategic decision making. According to Peter Weill and Jeanne W Ross, effective IT governance is the single most important predictor of the value an organization generates from IT. In fact, it has also been said that portfolio management without governance is an empty concept (Datz). Hence, a well-defined and properly structured governance is critical to manage the portfolio.

What are portfolio governance success factors?

1) Active engagement – coming prepared, being present, asking questions, proposing solutions 2) Open, honest, transparent discussions – working comfortably through conflict to find the best possible answer 3) Ability to make tough trade-off decisions – preventing misaligned projects from draining critical resources 4) Shifting from a singular project view to an aggregate portfolio view – always asking ‘how will this impact our portfolio?’ 5) Focus on optimizing portfolio value – finding the right combination of projects that unlock greater portfolio value 6) Balancing long-term and short-term needs – not always choosing the easy projects 7) Communicating a consistent message – reinforcing business goals and objectives; demonstrating this through results

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Crafting An Effective Project Portfolio Management Governance - A Guide For PMOs

In this article, we provide you with a standard definition, recommendations and best practice approaches on how to establish a meaningful governance that is in line with your strategic objectives.

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Understanding the Essence of Governance

In the intricate tapestry of project portfolio management, a well-crafted governance is the cornerstone of success. For Project Management Office (PMO) members, creating a governance framework that seamlessly aligns with organizational objectives is both an art and a strategic imperative. This article unveils key insights and recommendations to guide PMO members in the artful creation of a governance framework that resonates with and propels strategic organizational goals.

Why have a Governance Framework at all? And who is responsible for creating it?

Governance in project portfolio management refers to the set of policies, procedures, and decision-making processes that dictate how projects - and the entire portfolio - are managed within an organization. It serves as the compass that ensures projects align with overarching organizational objectives, values, and standards. The latter is a key part of governance manuals - and for quite a simple reason: only if you follow some set of standards, you can compare projects against each other sensefully. That in turn, is the prerequisite of a purposeful aggregation of projects to a portfolio.

As custodians of project portfolio management excellence, PMO members are uniquely positioned to influence and shape the governance framework. However, project variance is vast. Finding a one-size-fits-all governance framework is hence rather challenging for the entire team. Check out what you probably should consider standardizing in the next section.

Key Components of an Effective Governance

A well-crafted governance comprises what you and your organization need to set as standards, to keep your project portfolio aligned and transparent. This may be different for each organization and its respective company culture, depending on the composition of the team. Yet there are a few things that most frameworks have in common.

Establish Strategic Fit

A governance should seamlessly align the project portfolio with the broader organizational strategy. PMO members must actively participate in strategic planning sessions, ensuring that project initiatives directly contribute to and reinforce the organization's objectives. A rather easy way to make sure this happens is to require projects contributing to at least one of the strategic goals.

Define Roles and Responsibilities within the team

Establishing clear roles and responsibilities is the foundation of effective governance. Define the duties of project managers, team members, sponsors, and other stakeholders. This clarity ensures accountability and sets the stage for streamlined decision-making. Make sure your own role - i.e. PMO tasks and responsibilities - are clear, too.

Define The Level Of Detail You Expect

Establishing the level of detail you require - especially when it comes to milestone planning - is paramount. Other than commonly believed, is often not more detail that is sensible, it is less.

Define A Stage Gate Process

This is a pretty broad topic in project portfolio management. But projects are usually in different phases during their lifecycle (e.g. from the idea to the realization phase). Make sure you select a suitable process that fits your needs.

Define A Risk Escalation Channel & Process

What happens if a project does not unfold as intended, and how is this information communicated and, if necessary or if certain risks occur, escalated? Everyone should know the proper channels at all times.

Define A Robust Reporting Cycle

The project cycle helps in establishing a successful routine for project portfolio work and will immediately increase the team's performance. There is hardly anything more important than the quasi-religious pursuit of this cycle. Only with this regularity can the project be well accompanied by the PMO, and issues can be addressed in a timely manner. Experience shows that without a strict cycle, transformations are almost always doomed to failure because they fall asleep. So make sure to choose a cycle and format (e.g. a monthly steering committee with C-Level involvement, PMO, and all project sponsors) that fits your needs. Find more on this very important step here .

Define A Robust Decision-Making Process for your PPM

Crafting a governance framework involves designing robust decision-making processes. Clearly outline how decisions will be made, who the decision-makers are, and the criteria guiding those decisions. This clarity minimizes ambiguity and accelerates the decision-making process.

Tailoring the Governance to Organizational Culture

Embracing organizational culture.

Successful governance is rooted in an understanding of and alignment with the organization's culture. PMO members should tailor the governance to complement the existing cultural fabric, ensuring that it is embraced rather than resisted by the organization.

Communication Strategies

Effective communication is the lifeblood of governance. Establish transparent communication channels to disseminate governance policies, updates, and changes. Open dialogue fosters understanding and buy-in from all stakeholders, promoting a collaborative governance culture. A commonly used point in time to communicate the governance effectively is kick-off meetings. The kick-off is an art in itself - and we happen to have a little free-of-charge resource for you up our sleeves. Check for yourself!

Balancing Flexibility and Control

Adaptable governance structures.

The best governance structures strike a balance between providing structure and allowing flexibility for different processes. PMO members should design governance structures that are adaptable to changes in project portfolio landscapes while maintaining sufficient controls to mitigate risks.

Continuous Monitoring and Improvement

Governance is a dynamic process that requires continuous monitoring and improvement. Implement mechanisms for regular assessments and reviews of the governance. Use feedback loops to identify areas for enhancement and ensure ongoing alignment with organizational objectives and the overall strategy.

Leveraging Technology for Governance Excellence

Implementing project portfolio management (ppm) tools.

Technology, specifically Project Portfolio Management (PPM) tools, can significantly enhance governance efficiency and consequently the performance of your project portfolio. These tools provide a centralized platform for documenting, tracking, and managing projects. Automation streamlines workflows improves reporting accuracy, and facilitates real-time decision-making, even in bigger teams.

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Data-Driven Insights

Leverage data-driven insights from PPM tools to inform governance decisions. Analyze performance metrics, resource utilization, and project outcomes to ensure that the governance remains adaptive and responsive to the evolving needs of the organization. Looking for more? Check out our interesting resource collection!

In Conclusion: A Roadmap to Governance Excellence

In the complex world of project management, the creation of a governance system is not a one-size-fits-all endeavor. PMO members, equipped with strategic vision and a deep understanding of organizational objectives, can sculpt a governance framework that not only enforces rules but also fosters a culture of collaboration and innovation.

By embracing clearly defined roles, aligning the project portfolio with organizational strategy, and balancing flexibility with control, PMO members pave the way for governance excellence. In doing so, they not only navigate the complexities of project portfolio management with finesse but also contribute significantly to the overall success and resilience of the organization. As the architects of effective governance, PMO members hold the key to unlocking the full potential of every project in alignment with the grand tapestry of organizational objectives.

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Table of Contents

More and more companies these days are using the project portfolio management discipline to manage multiple projects in a competitive environment, with only access to finite resources. This contributes to limited success, which calls for the need to develop strategies to improve results. There is a better way to manage multiple projects despite the limited number of resources, and using portfolio governance management can pave the way to success.

But before any organizational strategic objectives are achieved, an organization must have a good understanding of governance as it applies to portfolios, projects and programs. The appropriate portfolio governance management plan is a factor in the success of portfolios and strategic initiative. So the lack thereof, would have the opposite result.

Given the dynamic organizational environment, with portfolio components constantly changing, implementing a framework of effective portfolio governance management can be challenging. There are also other factors in play, such as globalization, regulatory requirements, business complexity, and the rapid changes in business environments and technology. This underlines the importance of governance in PPM. One thing portfolio managers must remember is that portfolio, program, and project governance, must be a consistent approach.

What is portfolio governance management?

Portfolio governance management aims to answer the question how organizations should oversee portfolio management . It is a subset of the activities of corporate governance, and is mainly concerned of areas related to portfolio activities. An effective portfolio governance management ensures that a project portfolio is aligned to an organization’s objectives, is sustainable, and can be delivered efficiently.

It also ensures that a portfolio is defined, optimized and authorized in support of all decision-making activities done by the governance body.

Portfolio governance management will also serve as guide for investment analysis to:

• Identify threats and opportunities
• Assess change, impacts and dependencies
• Achieve performance targets
• Select, schedule and prioritize activities

In addition, portfolio governance management supports how project stakeholders exchange relevant and reliable information in a timely manner.

What are the processes of portfolio governance management?

What goes into the portfolio governance management process will depend on the industry where the PPM will be implemented. In the case of listed companies, for example, governance of portfolio management serves as a guide for board of directors to check their organization against the four main components of project governance management : portfolio direction, project sponsorship, project management capability, and disclosure and reporting.

For portfolio-based organizations, portfolio governance management follows four processes : developing a portfolio management plan, defining a portfolio, optimizing a portfolio, authorizing a portfolio and providing portfolio oversight.

Developing a portfolio management plan

In portfolio governance management, development of a management plan for a particular portfolio is an iterative process that involves a cycle of developing and updating a portfolio management plan. This ensures that the governance of a management plan is aligned with a portfolio’s charter authorization, strategic objectives and roadmap. Portfolio management plans also integrate subsidiary plans, such as those relating to communication, performance and risk management.

Defining a portfolio

The process of defining a portfolio within the context of portfolio governance management involves more than just identifying qualified portfolio component. It also includes key activities, such as categorizing components in a portfolio based on a common set of decision filters and criteria, and evaluating those components using ranking and scoring model.

Through these activities, an updated list of qualified portfolio components will be created, which is necessary in producing an organized portfolio for use in an ongoing process of evaluation, selection and prioritization. This part of the portfolio governance management process will ensure that resources will be allocated to components that provide the most significant value or return of investment, and are strongly aligned with organizational objectives and strategies.

Optimizing a portfolio

Portfolio optimization is vital to portfolio governance management, because it ensures a portfolio is optimized and balanced for value delivery and better performance. Optimization involves key activities performed on portfolio components. These include:

• Evaluate portfolio components
• Perform risk analysis
• Evaluate and determine performance
• Evaluate benefits and expected value
• Determine resource capability, capacity and constraints
• Determine the highest priority portfolio component
• Balance or rebalance activities, depending if their components that need to be re-prioritized, suspended or terminated

Portfolio optimization in portfolio governance management also includes evaluation of trade-offs to ensure portfolio success. How can managers strike a balance between risk and return, or between short-term and long-term goals? If resources are limited, it is also balanced across the platform to ensure strategic priorities.

Other balancing activities involve reviewing portfolio components that have been selected and prioritized. Using several factors, such as desired risk profile, predefined portfolio management criteria, performance metrics, and capacity constraints, a portfolio is balanced to ensure that it supports organizational objectives and strategies.

Authorizing a portfolio

In portfolio governance management, the purpose of authorizing a portfolio is to activate or execute portfolio components through resource allocation. Once a selected portfolio component is authorized, allocation of resources follows. Funding and resources for portfolio components may come from those allocated on deactivated and terminated components.

Part of the process of portfolio authorization is to communicate changes in the portfolio and other related decisions to interested parties, stakeholders, governing bodies, and portfolio, program and project managers.

Providing portfolio oversight

Because the purpose of portfolio governance management is to ensure that portfolio components align with an organization’s strategy and objectives, any oversight must be avoided. Providing portfolio oversight is also geared to making governance decisions in response to performance of a portfolio, proposals and changes of portfolio components, resource capability and capacity, requirements for future investments and funding allocations, and risks and issues.

To provide portfolio oversight, there are key activities involved, which include review about portfolio resources, performance, risks and finance informations; compliance with organizational standards; communicate governance decisions, and reporting of any changes in the portfolio, as well as information on performance, risks, resources and finances.

Project Portfolio Governance

Project portfolio governance is used to identify, select, monitor and prioritize projects within an organization or a line of business. It is often guided by the foundation of the processes previously mentioned. And when the foundation is firm, ongoing portfolio governance management and oversight will reach their strategic destination, or help project portfolio managers to navigate to the reach the same end.

For a portfolio management strategy to succeed, it must have end-to-end framework that will guide organizations throughout the portfolio management process, from selection to execution. Governance is a framework, where decisions on project/program are made. Together, they create a portfolio governance management plan that can cater to a culture in which they are delivered. It has to be well structured as well so it can provide value to PPM.

An effective portfolio governance management results in:

• Accountability of everyone involved, and where clear responsibilities, roles and accountabilities are established.
• Transparency on what the scope is, and who are the stakeholders and financial authorities. This can be achieved with regular meetings.
• Integrity in implementing portfolio governance management, observing ethics and etiquette.
• Protection of concerned parties against disputes, providing conflict resolution as needed, and empowering individuals to do the right thing.
• Compliance to the standards of portfolio governance management, including a clear procurement process, and adherence to legal, regulatory and policy requirements.
• Availability of data provided by clear reporting and unobstructed information flow.
• Flexibility in a dynamic environment, demonstrating the ability to adapt to changing needs at a business and organizational level, and the ability to accommodate any shift in the size and complexity of an organization.
• Retention where applicable, and a clear transition from project or program to operations.

Strategy and guiding principles of portfolio governance management

Before any organization decides to pursue a project, it must first consider numerous factors and compare it against a proposal. Additional variables under strategy, finance, risk , and technology must be taken into account as well. These 4 disciplines will provide insights to the following:

• The benefits and value that will arise from a project. Identify the reasons why your undertaking the project in the first place, and make sure not to overlook business value vs. spend ratio.
• Feasibility or likelihood of a project to be successful. Are the risks worth taking? Is a project simple and easy, but yields great benefits?
• Clarity and availability of solutions, particularly those that align with the current strategic goals, technology roadmap, and organizational culture.
• Positive impact on the stakeholders. This refers to the material impact on customers, and whether or not a project is perceived as high-performing or high quality.

Without losing sight of the requirements of an organization and its strategic goals, the most viable option is then selected.

Structured processes and methodology in portfolio governance management

A methodology refers to the set of rules used in a specific discipline or study. It doesn’t provide a solution, but a guide or a list of best practices to achieve goals, or to come up with a solution. A methodology also allows flexibility in managing efforts to reach a particular objective.

Used in portfolio governance management, a methodology will serve as rules for governance, which will lay out the framework necessary to achieve organizational strategic objective.

• Portfolio ownership and accountability
• Define the committee structure that will steer portfolio governance management in the right direction
• Determine roles and responsibilities that will be assigned to stakeholders and other players. It seeks to answer the question of who will authorize, amend, continue or stop a project, and decide who will control the overall investment budget, and set the standards for project and portfolio management.

Communication and coordination model

One of the reasons that a portfolio underperforms is the lack of effective tools and processes accessible to the team that must provide input, and to the sponsors that must obtain the output. Failure to oversee and manage a portfolio properly translates to failure of portfolio governance management.

Apart from effective tools and processes, coordination also matters. Governance and oversight must be paired with leadership to develop a well-crafted portfolio governance management plan. The best example of this is a PMO aligned with the organization strategy to ensure better management over multiple projects. Without coordination on all aspects, portfolio management could be no management at all.

Communication is also vital to portfolio governance management. It should be grounded in transparency, reliability and fairness, and must be in support of the stakeholders and the organizational strategy. In portfolio governance management, transparent and reliable communication is crucial in escalating and resolving issues, and in mitigating risks more efficiently and timely.

This underlines the importance of proper communication and escalation process in portfolio governance management. The rules must be easy to follow, with stakeholders fully aware of their existence and in complete agreement to follow them.

A good example of a clear and understandable mechanism of escalating issues and concerns must specify the following:

• Stakeholders responsible for making decisions and defining the escalation path.
• Escalation path must be unique to the type of risk and issue at hand.
• Tools, processes and the people necessary to resolve escalated issues must be identified and held accountable.
• Predictability and repeatability should be part of the escalation process, with time frames and proper resolution communications specified.
• Feedback mechanism that support and sustain governance in portfolio management, and organizational operation, competitiveness and regulatory needs.

Portfolio performance and diversification

Portfolio managers must be aware of how governance and financial discipline can improve the performance of a portfolio by asking relevant questions. In most cases, better portfolio management is an outcome of several solutions, including improved performance, lower cost, reduced risk and higher ROI.

Risk should be included as a component of portfolio governance management, simply because there is no such thing as a risk-free portfolio. In fact, an organization must identify its risk tolerance to be able to achieve a tolerable overall risk level, as a means to improve portfolio performance and pave way for diversification. As long as there is a framework for minimizing risk impact, adding risks in portfolio governance management can prove beneficial.

To diversify a portfolio, managers must use governance to better select and prioritize components. They should consider if a portfolio is adequately diversified, and then add other components to achieve the right amount of diversification. They must also take into account taxonomy of project types, risk profiles and ROI.

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Integrated Project Portfolio Management

Portfolio Governance, Ensuring Alignment to Strategy, in a PMI way

What is portfolio governance.

As per  Project Management Institute (PMI) , Portfolio Governance is termed as the framework, functions, and processes that  guide portfolio management  activities to optimize investments and meet organizational strategic and operational goals. These activities determine the actual versus planned aggregate portfolio value ensure that portfolio components (sub-portfolios, programs, projects, and operations) deliver maximum return on investment with an acceptable level of risk.

Generally, portfolio governance ensures the correct strategic alignment of components to achieve organizational strategy . It is responsible for decisions regarding resources (e.g., human, financial, material, equipment), and ensures alignment to the investment decisions and priorities while any significant organizational constraints are being considered. Portfolio governance provides the framework for making decisions, providing oversight, ensuring controls, and overseeing integration within the portfolio components. 

Usually, portfolio governance decisions are made at different levels of the organization based on the established portfolio authority system. They support specific strategies, goals, and objectives as defined by the strategic planning process. Governance guidance, decision making, and processes may cross-organizational and functional management areas of an organization. 

In this way, portfolio governance guidance and oversight may be issued from organizational governance and multiple governing bodies. These governing bodies must be connected to ensure effectiveness and align each decision with the established organizational strategy. Portfolio governance should involve the least authority structure possible as time and costs are associated with governance activities. 

The below diagram provides an example of a Portfolio Governance structure depicting how a portfolio governing body provides governance and oversight to the portfolio components teams.

Decisions made at the Portfolio Governing body level may impact the portfolio’s current and future projects and programs. Such impacts include terminating, canceling, or reprioritizing programs or  projects within the portfolio . The governing body ensures that the decisions, portfolio goals, and investment mix are aligned with organizational strategies. Issues and risks regarding the portfolio performance are escalated to the governing body for required decisions. 

The governance coordinates, when applicable, reporting on portfolio performance and decision-making to corporate and portfolio management offices. Portfolio governance processes and activities enable portfolio performance evaluation and provide resourcing and prioritization decisions when needed. The portfolio manager or portfolio management team makes recommendations to the governing body for decisions and guidance. 

These recommendations may include adding new components, programs, and projects, and suspending or changing existing features. The portfolio governance coordinates portfolio performance reporting and decision-making to organizational governing bodies and portfolio management offices. 

Portfolio Governance Considerations

Governance occurs at various levels of the organization to support the organizational goals, objectives, and strategies. The portfolio governing body reviews the portfolio’s actual versus targeted performance to reach key decisions. This ensures that the portfolio continues to be on track to manage the portfolio risks and deliver business value and benefits to achieve the organization’s strategic objectives. 

As strategic organizational changes occur, governance assesses the impact on the portfolio and determines what adjustments are needed in portfolio goals, plans, and component mix. The organization provides the decision-making mechanism to respond to the proposed strategic changes. 

As strategic changes are being made, continuous strategic alignment may impact the planned and delivered benefits. Portfolio governance activities monitor portfolio risks that may affect the financial value of the portfolio. 

The portfolio component mix is used to achieve the organizational strategy and objectives that impact the organization’s capacities and capabilities. 

Another portfolio governance consideration is the integrated governance processes. This critical component of the governance activities includes strategic alignment, prioritization, authorization of components, and allocation of internal resources to accomplish organizational strategy and objectives. 

Portfolio Governance Roles and Responsibilities

As per the Standard of  Portfolio Management 4th edition , the key roles for portfolio governance are the following: 

• Portfolio Governing Body; 
• Portfolio Sponsor; 
• Portfolio Manager ; 
• Portfolio, Program , 
• Project management Office (PMO); 
• Program Sponsor; 
• Program Manager ; 
• Project Sponsor; 
• Project Manager ; 
• Functional Managers. 

There may be additional roles, depending on the organizational structure.

Portfolio Governing Body:  The portfolio governing body is a collaborative group of executives representing various portfolio components and operational work to support the portfolio by guiding the governance functions. The purpose of the governing body is to authorize and prioritize portfolio work. The governing body ensures that the portfolio is aligned with the organization’s strategy by providing the appropriate oversight, leadership, and decision-making. 

Portfolio Sponsor:  A sponsor is a person or group who provides resources and support for the project, program, or portfolio and is accountable for enabling success. Sponsors champion the approval of portfolio components (projects, programs, and operations). Once the portfolio component is approved, the sponsor helps to ensure that the components perform according to organizational strategy and objectives. Sponsors also recommend portfolio component changes or closures to align with corporate strategic changes.

Portfolio Manager:  The Portfolio manager’s role is to interface with the governing body and manage the portfolio to ensure that the programs, projects, and operational components deliver the intended benefits and meet the organization’s strategic objectives. 

Program Managers:  The Program manager’s role is to interface with the portfolio manager, governing bodies, and program sponsors and manage the program to ensure the delivery of the intended benefits.

Project Managers:  The Project manager’s role is to ensure project conformance to governance policies and processes on the one hand. And to interface with the portfolio manager, program manager, and project sponsor to manage the delivery of the project’s product , service, or result on the other hand.

Portfolio Management Office (PMO):  The role of the PMO may vary depending upon the needs of the organization. The portfolio may have its PMO, or a PMO may support several portfolios. 

Other Key Stakeholders :  Other key stakeholders’ roles are to support portfolio organizational and process changes.

Portfolio Governance Functional Domains and Processes

The related portfolio governance functions and processes are grouped into four domains: 

• governance alignment , 
• governance risk , 
• governance performance , 
• governance communications . 

Processes, activities, and tasks are categorized by the functions of  oversight ,  control ,  integration , and  decision making . These processes are not role-specific and pertain to all activities in the governance domains. 

The generally recognized processes for portfolio governance are categorized by domains and processes, as summarized in the table below. The term “generally recognized processes” does not mean that the processes would be applied uniformly to all portfolios. Instead, the organization’s leadership is responsible for determining what is appropriate for any given portfolio.

Concluding Remarks

Portfolio governance is a bridge between organizational governance, program and project governance, and operations. Governance levels are linked together to ensure that each governance action is ultimately aligned with the defined corporate strategy. It is crucial to assess the current executive and portfolio governance that may exist for a given portfolio. 

The primitive step is to determine the contemporary governance applicable to the portfolio to be applied:

• determine the business need, benefits, and justification; 
• define the portfolio’s governance authority structure and membership. 

If there are no governance practices, the portfolio manager or sponsor should establish them during portfolio definition. This is when the strategic portfolio plan and charter are created.

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Project Governance: How Little Processes Can Have Big Impacts

By Andy Marker | January 23, 2018 (updated October 12, 2021)

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Whether big or small, your projects are important merely for the fact that you spend money and time on them. However, we know that the majority of projects fail, even with stellar project managers and a dedicated staff in place. Project governance, though not well understood, can stack the deck so that projects have a better rate of success. Project governance imposes processes that have a big impact — even when the processes seem small and inconsequential.

Project governance is not your corporate governance, and your business should not run it as such. In this guide, you’ll learn about project governance, how its components relate to the real world, the definition of a governance framework, the difference between governing and managing, and best practices from experts in the field.

What Is Project Governance?

Developed from the larger concept of corporate governance , project governance is the structured system of rules and processes that you use to administer projects. It provides a company with a decision-making framework to ensure accountability and alignment between the project team, executives, and the rest of your company. You can also apply project governance to your portfolio to govern your programs. Project governance differs from daily governance, also known as your organizational governance , since daily organizational rules and procedures cannot provide the structure necessary to successfully deliver a project. This concept is the difference between “business as usual” and “changing your business.”

Further, projects have stakeholders spread throughout an organization. Project governance should help you accomplish projects on time and on budget by bringing together these stakeholders for efficient decision-making. Project governance should also help you choose the right projects by providing the relevant structure, people, and information. The main focus should be on those key decisions that not only shape the project, but the project direction.

Since projects bring in necessary revenue for many industries, their failure or lateness can mean the difference between a company’s failure and success. It is a well-known fact in the project management industry that a high rate of projects fail. According to a 2016 study by PwC, almost 45 percent of capital projects are delayed by six or more months. Of these delayed projects, only eight percent were due to technical reasons, while the remaining 92 percent were late due to management deficiencies. This points to a lack of project governance, with deficiencies in organization, resources, oversight, planning, or unclear goals. The same applies to software projects. The 2016 Standish Group Chaos Report listed 71 percent of software project as failures.

Do not confuse good project management with good project governance, however. Many of the setbacks in a company’s projects are outside the purview of the project manager, but do lie in governance. The distinction between management and governance is in focus and intent, and it is considerable. According to the Project Management Institute (PMI), project management is all about the details. The site defines project management as “the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.” Project governance is about less about the details, and more about the conditions that set up the project and are outside the project’s boundaries. A project manager completes projects within their organization’s framework established by the governing body, (the board). This governance details the project’s needed guidance, oversight, and decision-making.

In the fields of information technology (IT) and data analytics, governance of projects is similar, but has some added elements. The projects you choose should be the right project for your company, and you should be able to support that decision. You can hire the most successful project managers available, but they will not succeed if the company does not have the right conditions in place. For IT projects, this includes IT-specific processes, such as data governance and policy review and approval. For data projects, conditions include data-specific issues such as data ownership questions, data inconsistencies, and how to use big data.

Some companies, especially large ones, have a project management office (PMO) that can support good governance by ensuring its formalization. In some smaller companies, some of the governance functions may actually come from the behest of the project manager. Although this is not ideal, there are ways to ensure that roles and responsibilities are clear and appropriate.

What Is the Governance Structure?

The governance structure is the power structure your company puts in place. Companies develop their governance structures in a multitude of ways to suit their business. Many have a tiered approach that can provide adequate accountability. Many companies also have different committees with defined roles and responsibilities. Further, some combine or share roles as per the project’s needs. Here are some of these roles in project governance:

• The Project Sponsor: Also known as the project executive , this position is responsible for providing cultural leadership, developing the business case, keeping the project aligned with the company’s strategic objectives, and directing the project manager. Stakeholders may also look to the project sponsor as a source of information.  
• The Project Board: Also known as a steering committee , you charge the board with developing the project charter and ensuring that it is in compliance with the business case. The charter should provide direction for decisions that are elevated to them from the project manager, as well as approval of the overall project budget. You should set up your project board at the beginning of your project life cycle and they should operate until the project closes. All of the board members should have some stake in the project. Remember, this board is not the same as your company’s board — it only oversees a particular project. Your chair should be the most senior person responsible for the project, and include members that have a stake in the project’s outcome, such as people who can represent both the project’s users and the project’s suppliers.
• The Project Manager: This person is responsible for managing the project. The project manager performs all of the planning, initiation, execution, monitoring, and closing of a project within the confines of the business case. The person in this role should be detail-oriented and able to control the risk and accomplish the project. Project managers make many decisions, until the decision necessary violates the agreed upon business case. At that point, the project manager must elevate the decision to the board.
• The Project Stakeholders: These are the entities, whether individuals or companies (internal or external), who have an interest in or an influence on a specific project. Their influence can be positive or negative to your project outcomes, so your project manager should identify them at the outset of the project.
• The Project Management Office (PMO): Many large companies have a PMO, which provides a variety of functions within an organization. In project-based companies, the PMO supports the management much closer than in companies that have less frequent projects. Some PMOs are developed for a specific project, while others exist for multiple projects and provide support in a variety of ways.

Elizabeth Harrin, Author of  four project management books  and Blogger at  GirlsGuideToPM.com , sees the PMO as a useful entity within an organization. “As a project manager, if you feel you need a bit of support, you can ask a colleague with more experience or someone in the PMO to review your project. They'll look for how you are managing the work and whether you are following company processes. For example, they might check to see if you are doing adequate project reporting and whether the reports actually reflect reality,” she advises.

• Senior User: This manager is responsible for the final user’s requirements and the interests of those users who will benefit from projects, especially software projects. For example, your product manager may be a good choice as your senior user, since they will be your company’s champion of the final product.
• Senior Supplier: A manager who is responsible for the product quality and the interests of the suppliers.

What is consistent across project governance is that there is no consistency. There is no one approach, mainly because it needs to be tailored to the specific company’s needs. The most important structural elements in project governance:

• It aligns with your organization’s current governance.
• It has longevity.
• It can monitor and control your project effectively.

What Is a Project Governance Framework?

It’s ideal to create a governance framework in which your projects can easily move forward and be fluid. The last thing you want is for a project to be in limbo due to bureaucracy or unnecessary scrutiny. Your governance framework should provide enough visibility and oversight so that the project board understands and manages risks quickly.

Jon McGlothian, Principle and Cofounder of The Mt. Olivet Group , has over 30 years leading and directing various sizes and types of projects. In his experience, he believes it’s best to establish the framework at the beginning of the project. “Project governance is the framework for how we administer the project activities and achieve our project goals,” he says. “The size, nature, and complexity of the project as well as the cultural norms of the entity will determine how robust the framework will need to be.”

Managing projects can be a challenge — that’s why it’s imperative to have a framework at the outset. “Remember, every project and organization is different, so there is not a one-size solution that fits all situations. However, key areas that you should address are risk management and change management . This does not imply that other areas are not important,” says McGlothian. “It is just that if you have a framework for how you deal with the various risks that may arise on the project, you will develop and implement a great plan. Likewise, all projects will change during implementation. The changes will involve different stakeholders. How the project team will work with different constituents throughout the project will determine how successful the project will be. Finally, it is important to understand the ‘rules of the road’ for doing a project within the organization. This includes both the written rules as well as the unwritten rules.”

The framework should encompass structure, people, and information — but it should be the right ones, irrespective of corporate governance. Follow the steps below to develop a governance process for your next project:

Step 1: Appoint One Person Accountable for Your Project’s Success. Assign one person who is a constant over the life of the project. This person is not the project manager, however. They should be from the business unit that the project benefits. You can identify them as either the project owner or project executive.

Step 2: Ensure Your Project Owner Is Independent of the Asset Owner. The goal of a project is to deliver a business outcome. Asset owners are not an appropriate choice to own the project because they not only have different skill sets, but they have bias. The project owner should represent the business unit that will benefit from the project, but also have enough distance to remain unbiased. A desirable choice is the service outcome owner.

Step 3: Develop a Project Board. The project owner needs the support of key stakeholders. These people could be the funders, users of the project’s end-product, and internal or external project suppliers. Aim to have no more than six members on the board (including the project owner) to keep the decision-making efficient. This board should manage by exception, in that they only become involved when the business case parameters are threatened, and decisions must be made.

Step 4: Ensure Separation of Stakeholder Management and Project Decision Makers. Managing your stakeholders is always a possibility. However, do not assign stakeholders as decision makers unless they are part of the board. If you have many stakeholders that want a voice, you may want to form an advisory group and have the project owner chair the group to give it legitimacy.

Step 5: Ensure Separation of Corporate Governance and Project Governance. The project board should not have to report to the same entities as the corporate board, or to someone higher in the company. They should be able to make key project decisions that stand.

Step 6: Empower Your Project Owner. The project owner should be involved and able to make project-related decisions. They must also own the business case (the justification for their project and its benefits).

Step 7: Develop and Maintain the Business Case. Your business case should justify the investment and be the key governance document for the project board. Be sure to well-document the change history, and that the board assesses any changes from the original project intent. The business case should include project drivers, intended outcomes, expected benefits, the scope, the funding source, any assumptions, any interdependencies, and the schedule.

Step 8: Ensure Decision-Making Responsibilities Are Clear. There may be many stakeholders involved, so it is critical that everyone involved in the project is keenly aware of their responsibilities. There should be no overlaps or gaps. For example, your project board approves the business case and anything that potentially changes the business case. Your project manager makes daily decisions, if they do not affect the business case. If the board and other parties own a project, create a formal agreement on the decision-making process and governance before the project kickoff, as well as a dispute resolution process.

Step 9: Documentation. The title of this step says it all. Document everything related to governance. Be sure to include policies on project governance that define your risk-based approach, the decision rights of all parties, roles and responsibilities, and any terms.

Use this free Excel checklist for writing your own project governance plan.

‌ Download Project Governance Plan Checklist - Excel

How Do Governance Components Relate to The Real World?

All of the information on project governance is fine in theory, but reality is often messy, complicated, and does not allow for a one-size-fits-all approach. The following are components found in project governance and how they actually relate to the real world:

• Governance Models: Try to strike a balance when developing a governance model. The project manager (who develops this model) should aim for enough rigor to engage the stakeholders, but not so much that it is restrictive. The project scope, timeline, risks, and complexity should help the project manager create this balance.
• Accountability and Responsibilities: The project manager defines the accountability and responsibilities of the people involved in the project. Without these defined, your plan is less effective. Your meetings will be less valuable because the group will always be hashing it out, and your risk assessment and change control process will not work.
• Stakeholder Engagement: Although it seems like an exercise in futility, identifying all the stakeholders is actually a critical part of the process for understanding your project’s environment. Stakeholders can affect a project positively and negatively. If you leave out an important stakeholder, their influence can disrupt the project. Once you determine the stakeholders, the project manager will develop a communication plan .
• Stakeholder Communication: After identifying stakeholders, develop a communications plan that focuses on getting the right information to the right people in a timely way. A communication plan details how and in what way you will share necessary messages to ensure stakeholders view your project as transparent and specific.

‌ Stakeholder Communication Plan Template - WORD

• Meeting and Reporting: This component involves striking a balance between reporting and having meetings. The information the project manager releases should ensure that all stakeholders know when and how to expect updates. They will want to know when and how they can ask questions, and how they will know the project is on track.
• Risk and Issue Management: Before a project kicks off, a real-world project manager will settle a consensus on how recognize, classify, rank, and possibly handle risks and problems. Every project has problems; preparation can help save some time and heartburn along the way. For more information on risk management, read “ Project Risk Management: Best Practices, Tips, and Expert Advice .”
• Assurance: The easiest way to assure stakeholders is to provide evidence that the project is on time and on budget by sharing metrics and performance measures. It seems like a simple component, but in reality it is quite complex. The metrics provide the checks and balances in black and white. The metrics reveal any deviations and should also be delineated at the start of the project to set a baseline.

For new project managers, Jonathan Zacks, CoFounder of GoReminders , advises, “Come up with a way to measure the value of initiatives. Use that in conjunction with qualitative data, rather than relying solely on it, when making decisions on what to do and not do. A couple of examples:

• Put exact dollar values on projects and tasks when deciding which to prioritize. That will allow you to weigh the tradeoffs between competing initiatives.
• Come up with a formula for deciding priority. For example, we use a formula for planning which features to add to our appointment reminder app. It's adapted from a spreadsheet that Baremetrics founder Josh Pigford shared that calculates "scores" based on Status, Demand, Impact, and Effort. Here's the template, called Feature Framework .

Keep in mind that it's often easy to nudge the numbers to support preconceived ideas, so be careful. Most importantly, use your best judgment after looking at quantitative and qualitative data.”

• Project Management Control Process: In the real world, this is a constant, ongoing process that leads to action in the case of deviations.

What Is Governance Framework?

Governance framework, also called governance structure , is the relationships, influences, and factors that define how you use the resources in your organization. Whether you work for a government agency or a small business, the governance framework decides how the power is wielded and managed. Good governance provides accountability. As such, a process to make the best possible decisions participates in good governance. A company can demonstrate good governance in many other ways, including the following:

• Documenting and communicating the decisions made at approval gates
• Using a lifecycle governance plan
• Ensuring the roles and responsibilities within the company structure are delineated clearly
• Showing alignment between governance and the strategic plan
• Providing oversight and adherence
• Adhering to the business case and making transparent decisions upon deviation

When two or more organizations are involved in a venture or project, good governance looks like formal agreements. All organizations should agree on these arrangements prior to their working relationship or project kickoff, and they should have the ability to re-evaluate their relationships regularly via approval gates. Other key topics in good governance include the following:

• P3 Management: These are the methods that manage projects, programs, and portfolios.

• Knowledge Management: This is how the information and data are handled in a company. Learn more about this topic by reading “ Knowledge Management 101: Knowledge Management Cycle, Processes, Strategies, and Best Practices.”
• Life Cycle: This is your plan to manage your business information or project from beginning to end.
• Maturity: This is the increase of capacity or capability in a business.
• Sponsorship: This is what links corporate governance, a strategic plan, and P3 management.
• Support: Support refers to the environment for your governance managers that helps them accomplish consistency and success.

Airto Zamorano, Founder and CEO of Numana SEO and Numana Medical , says, “I believe there is a process that can be followed, or at least used as a governance framework to be modified to fit a unique set of needs. It is as follows:

• Create a detailed structure for the project from the beginning.
• Tie in company values, priorities, and objectives to work in conjunction with the structure of the project.
• Choose a project leader, empower them, and leave them responsible for the success or failure of the project.
• Allow teams to operate autonomously as much as possible.
• Provide total clarity on decision making responsibilities within the team from the start, and adhere to it throughout the project.”

You may want to consider developing a governance information repository (GIR) for your documentation. A GIR is an accessible source of guidance documents for large or distributed companies, and shows your company that governance is important for the success of any project. A repository gives everyone, regardless of their location, immediate information on best practices and consistent guidelines. If you establish a GIR, experts recommend focusing on defining the responsible, accountable, consulted, and informed (RACI) matrix , the organizational structures, stakeholders, guidelines, and reporting needs. Store the GIR in a place that is easily accessible to your community via the internet or your intranet. Finally, experts also recommend including the ability for group communication, such as a forum for discussion. Include links to relevant documents or host templates and examples. Provide a prepackaged, adaptable toolkit for project managers to help them figure out the following:

• How much governance their project requires
• Who are their key stakeholders
• Where they can find the templates and documents they need
• Who to can contact for governance standards

What Is Governing?

Governing in business varies by organization. Whether discussing your corporation, programs, or projects, you cannot be successful without considering what makes your business unique. One key is not to confuse governance with management: Governance creates the conditions for management, and ensures that it is successful and continuous. Good governance begets good management and a lack of governance begets bad management. Understanding the difference between the two is important, especially since stakeholders have a better understanding of governance failures now.

The following are items that governance functions determine in your organization:

• Governance Framework
• Accountability

Management functions include the following:

• Forecasting and Planning
• Coordinating
• Controlling (Making Necessary Adjustments)

What Are Best Practices in Project Management?

It is a simple thing for a project manager, new or experienced, to look through The Guide to the Project Management Body of Knowledge ( PMBOK Guide) for best practices for the field of project management. Despite being an excellent a resource, though, the PMBOK cannot offer targeted advice like your peers can. Below, find advice from project management experts.

Jon Umstead is the Founder of Plan Canvas and author of Business is ART (Articulate, Revise, Track) , which resulted in the development of a Strategy Execution Management (SEM) software called Plan Canvas. Umstead has led efforts to implement project governance practices based on PMBOK as well as for CMM Assessment (Capability Maturity Model). He advises:

“A key component of SEM is project portfolio management (PPM). At a high level, SEM is what you get when strategic planning, business planning, and PPM meet with actions to achieve measurable results.

I see two main issues with project governance. First, organizations often implement processes simply because a book, methodology, or consultant says they should, especially when they want to achieve some level of formal certification. But so much of it is overkill and becomes process-for-the-sake-of-process with no other real purpose. Use caution when implementing governance procedures. Make sure they add true and measurable value. Secondly, project managers rarely choose to follow disciplined approaches until they become habit.

If your company is struggling with project governance, I would say to start with the company's leadership. They have to own and communicate the initiative. Without that, project governance will go nowhere. Next, take time to interview both the project managers and the customers. Customers in this case may be internal or external, but they are the recipients of the system or product you are developing. Discover what they already do that works, their frustrations, their needs, etc. When drafting a guide, use their terms as opposed to, say, PMBOK's. Make sure you indicate what problem each process solves or what value each brings.

I would tell new project managers not to get too caught up in the theory — it all sounds great on paper. Pay more attention to what is really applicable in practice. The job of governance is to provide predictable, high quality results, not to create an administrative nightmare for those following it. Leadership has to own its implementation and insist on it, making it part of the culture as opposed to something they are going to try out in 2018. Be flexible and make modifications to it as you learn more about how it is actually working within your organization.”

Zamorano adds:

 “If a company is struggling with project governance, I would begin by looking at how they bring people on their team, how they train people within the first 90 days, how well they communicate priorities, and how well they empower their managers to lead their teams. Once I have evaluated and improved those areas, I would evaluate their current project governance structure and its effectiveness, or ineffectiveness. With that information, I would work to customize a structure for each department to help bring on the right people to each team, to train them properly, and to create the necessary trust from leadership to allow their management to operate as autonomously as possible.  

The key to effective project management is to have exceptional communication skills. You need to be able to communicate effectively from the beginning to understand the expectation. You need to communicate with your teammates, whether they work alongside you or report to you. And you need to be able to communicate the results produced throughout the scope of a project from beginning to end. Problem solving is at the heart of project management, and highly-effective communication is the only way to solve any kind of problem.”

Alan Zucker, Founding Principal, Project Management Essentials , has over 25 years of experience managing project organizations in Fortune 100 companies. At one point, he managed an organization of over 150 project managers and project professionals. He has improved organizational and sponsor satisfaction while simultaneously reducing the costs of project management support. Over the course of his career, Zucker’s teams have delivered thousands of successful projects. He is also experienced in both managing traditional Waterfall projects as well as leading an Agile transformation. Zucker explains:

“Many companies that struggle with project governance make the classic management error of trying to micromanage their way out of the bad situation. They create heavy portfolio and project governance processes. They increase the amount of non-value-added paperwork, controls, and oversight. These efforts usually have the opposite of the intended effect: Rather than improving their organizations performance, it only gets worse.

Companies wanting to improve their project and portfolio performance should develop lightweight governance processes that empowers the project and portfolio managers. Empowerment does not mean chaos. Empowerment means that the organization has the minimally sufficient level of oversight and governance needed to be successful. Empowerment means that project managers are both held accountable for their performance and given the resources and decision-making authority to be successful.”

Harrin offers the following advice:

“I've been involved in project governance from a number of angles, including as part of a project board, providing governance to a project, as a project manager, and also as someone advising and coaching other project managers through informal peer reviews.

If you feel like your company or project is struggling with project governance, the first thing to do is to remember that it's really only about oversight. The concept of project governance is to make sure that the project is doing the right things in the right way. More formal governance processes include project audits, and these are really nothing to be worried about. An audit should be constructive. The feedback is designed to help you be more successful and to help your project be more successful. No one is looking to criticize the team for not keeping adequate minutes of meetings. The whole purpose is to give your project the best possible chance of delivering the expected benefits. It’s what everyone wants.”

Here is some advice from Robin Burk, Managing Director at Advanced Analytics2 :

“To improve project governance for companies struggling, I would ask them to recognize that effective project governance must be tailored to your market, business model, and the core technologies involved. One size no longer fits all. Project governance is a tool for business success, not an end in itself. So, I would start by establishing the business problem we want to solve and by scanning what is in place. Ask:

• What has worked with your existing approaches?
• Where have they failed, specifically?
• What business impact do you want as a result of improved project governance and execution?

With respect to using processes, it very much depends on the market, product/service, and company culture within which projects are to be executed. Processes are needed, but you should craft them to serve your objectives, not in a vacuum.

I would tell new project managers that their job is to lead and to help the team succeed.  One way you do that is to set up team habits that ensure you all have a current view of the project's goals, challenges, and status. Tracking tools and reports can be helpful, but it is the process and habits that make them really pay off. Another way you do that is to solicit input from your team and at times, from other stakeholders. And finally, you also do that by making decisions. Ensure your project team spends time brainstorming, evaluating status and recognizing both accomplishments and the most important next steps to take.”

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Book description

Understanding governance as it applies to portfolios, programs, and projects is growing in importance to organizations, because appropriate governance is a factor in the success or failure of strategic initiatives and portfolios, as well as an organization’s programs and projects.

Implementing an effective governance framework can be challenging due to factors such as increasing business complexities, regulatory requirements, globalization, and rapid changes in technology and business environments. Many organizations do not have a consistent approach to portfolio, program, and project governance.

PMI’s Governance of Portfolios, Programs, and Projects: A Practice Guide, developed by leading experts in the field, provides guidance to organizations and practitioners on how to implement or enhance governance on portfolios, programs, and projects. This practice guide provides definitions for governance in an effort to distinguish the different levels of governance and to identify their common elements.

Table of contents

• Copyright Page
• Table of Contents
• List of Tables and Figures
• 1.1 - The Purpose and Need for this Guide
• 1.2 - The Intended Audience
• 1.3 - Overview of the Practice Guide
• 1.4 - Overview of Governance Related to Portfolio, Program, and Project Management
• 1.5.1 - Effective Governance of Portfolios, Programs, and Projects
• 1.5.2 - Governance and Program and Project Complexity
• 1.6 - Governance Domains
• 1.7 - Governance Functions
• 1.8 - Governance Framework Implementation
• 2.1 - Overview
• 2.3.1 - Tailoring the Approach to OPM Governance
• 2.3.2 - OPM and Governance Interactions
• 2.3.3 - OPM Governance Considerations
• 2.4.1 - OPM Governing Body
• 2.4.2 - OPM Sponsor
• 2.4.3 - OPM Project or Program Manager
• 2.4.4 - Portfolio, Program, and Project Manager
• 2.4.5 - PMO (Portfolio, Program, or Project Management Office)
• 2.5.1 - OPM Governance Alignment Domain
• 2.5.2 - OPM Governance Risk Domain
• 2.5.3 - OPM Governance Performance Domain
• 2.5.4 - OPM Governance Communications Domain
• 2.6.1 - Assess
• 2.6.2 - Plan
• 2.6.3 - Implement
• 2.6.4 - Improve
• 2.6.5 - Essential Factors for Implementation
• 3.1 - Overview
• 3.2 - Portfolio and Portfolio Management
• 3.3.1 - What is Portfolio Governance?
• 3.3.2 - Portfolios and Governance Relationships
• 3.3.3 - Portfolio Governance Considerations
• 3.4 - Roles and Responsibilities
• 3.5 - Portfolio Governance Domains, Functions, and Processes
• 3.6 - Portfolio Governance Framework Implementation
• 4.1 - Overview
• 4.2 - Program and Program Management
• 4.3.1 - What is Program Governance?
• 4.3.2 - Program and Governance Relationships
• 4.3.3 - Program Governance Considerations
• 4.4 - Roles and Responsibilities
• 4.5 - Program Governance Domains, Functions, and Processes
• 4.6 - Program Governance Framework Implementation
• 5.1 - Overview
• 5.2 - Project and Project Management
• 5.3.1 - What is Project Governance?
• 5.3.2 - Projects and Governance Relationships
• 5.3.3 - Project Governance Considerations
• 5.4 - Roles and Responsibilities
• 5.5 - Project Governance Domains, Functions, and Processes
• 5.6 - Project Governance Framework Implementation
• Appendix X1
• Appendix X2

Product information

• Title: Governance of Portfolios, Programs, and Projects: A Practice Guide
• Author(s): Project Management Institute
• Release date: January 2016
• Publisher(s): Project Management Institute
• ISBN: 9781628251104

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A Brief Introduction to Project Portfolio Governance

By: Billy Guinan | Published on: Jul 26, 2021 | Categories: Portfolio Management | 0 comments

Trying to run successful project management in an organization without knowing what projects are underway, what projects are planned, and who is doing which work is like flying blind.  

Inevitably, some projects are doomed from the start.

See how to improve project and portfolio management with BrightWork for SharePoint On-Premises [Free video demo]

An article in CIO Magazine shared two interesting anecdotes about poor project visibility:

• A director of information services in one organization estimated that his department had 20 projects in flight. Turns out, they had 60!
• In another organization, three project managers arrived at a planning meeting with project plans that all required 100 percent of available resources.

Situations like this are quite common in project management, making strong project portfolio governance essential.

The rest of this article will explore the importance of project portfolio governance in an organization, including a few ways a tool like BrightWork for SharePoint On-Premises can help!

What is Project Portfolio Governance?

The Association for Project Management defines project portfolio governance as:

“the selection, prioritization, and control of an organization’s projects and programmes in line with its strategic objectives and capacity to deliver. The goal is to balance change initiatives and business-as-usual while optimizing return on investment.”

Governance is tied to the overall strategy of the business and aids effective decision-making.

Project Requests and Strategy 

Just because someone has an idea for a project, it doesn’t mean it should happen regardless of where it came from.

You need to have a process in place for collecting and ranking all potential projects and weighing them up against the stated strategic goals of the organization.

That’s what project portfolio governance is all about: ensuring projects have a strategic fit with the organization. It helps senior executives to informed decisions about projects that can deliver value.

Data-Driven Decisions 

Secondly, project portfolio governance provides a mechanism to track project progress. Strong project portfolio governance will give you the visibility to know how projects are doing and know when projects go off-track.

2 Ways to Establish Project Portfolio Governance with BrightWork

1. project request management.

One of the most important aspects of project portfolio governance is making sure projects are aligned with the strategic objectives of the organization.  This is about picking the project that will deliver the most value and the highest return on investment.

That’s easier said than done!

To achieve this balance in an objective way, you need a project request management process.  Having a process to manage new project requests helps you manage the whole pipeline – from new requests to ranking criteria, and creating a new project site.

BrightWork has a template called the Project Request Manager for SharePoint On-Premises , which provides the tools and structure you need to manage the pipeline of new projects.

The template is split into four different states:  Draft ,  Review ,  Pending Decision,  and  Approved  or  Rejected . At any stage, a request can be sent back to the previous step for more information.

The template ensures stakeholders can track the progress of a project request through the process of drafting, reviewing, ranking, and approval.

All requests are tracked in a ‘command center’.

Once a request is approved, the relevant project manager can use the original request to launch a new site, carrying over key information to the project. This ensures the new project has the best possible start!

The template also includes a Resource Allocation List, allowing project managers to submit an estimate of required resources with the business case. 

Senior executives can review the proposed resources within the context of the project itself and against upcoming or live projects to understand the impact on the entire portfolio.

That way, projects are sequenced in a logical way based on resource availability. 

2. Project Visibility and Reporting

The second aspect of project portfolio governance is having a reporting structure that provides visibility across all projects that are underway.  BrightWork supports a hierarchical project structure in SharePoint.

Projects are managed in individual sites, bringing all project information into one place.

 BrightWork makes it easy to report across all those sites in a single portfolio dashboard.

Portfolio dashboards roll up data from multiple projects for an ‘at-a-glance report on health’ across all projects.

With this data, senior executives can assess if the portfolio is delivering the intended value or starting to slip.

If a particular project is in trouble, users can drill down into the site to check on issues and take action.

Prefer to use Power BI? The BrightWork Power BI includes interactive portfolio dashboards and a portfolio timeline. 

Project portfolio governance is all about making sure approved projects are aligned with strategic goals and deliver value.

With a project portfolio management solution like BrightWork for SharePoint On-Premises, implementing the business processes and reporting structures required for good project portfolio governance is very straightforward. 

In our free video demo , you’ll see how BrightWork will help you to control portfolios with project request management, real-time portfolio dashboards, and resource allocation.

Editor’s Note: This post was originally published in September 2017 and has been updated for freshness, accuracy, and comprehensiveness.

Image credit

Billy Guinan

Working with a range of B2B SaaS project portfolio management software for nearly 15 years, Billy specializes in best practices and methods of how to leverage Microsoft 365, Teams, Power Platform, and SharePoint to make project management easier. His focus areas are Collaborative Project Management and Template-Driven Project Management on the Microsoft platform. Beyond all things BrightWork, Billy enjoys reading, trying to golf, and walking his pug named Nova.

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Optimizing the Governance of Your Project Portfolio

The support of good portfolio governance — which encompasses all the processes used by an organization to oversee the management of its project portfolio — is of vital importance to preserve the value of project activity . It is all about providing the right information to the right people, at the right time and   to empower them to make the right decisions . It also ensures consistency and replicability in Project Portfolio Management activities.

What is Project Portfolio Governance?

Corporate governance is defined as “ the structure of rules, practices, and processes used to direct and manage a company .” Not dissimilar, project portfolio governance refers to the standards and mechanisms that determine decision-making authority and accountability when it comes to managing a project portfolio .

Proper portfolio governance should include provisions and guidelines for managing every phase and aspect of the projects in the portfolio. This includes demand management and project selection , as well as execution monitoring and project tracking. The goal is to support both operational managers and higher-level decision makers in the selection, prioritization, planning, scheduling, and management of their projects. By doing so, you maximize value for the organization.

As an end-to-end framework for project- and portfolio-related decisions, a well-structured governance system also codifies the way project stakeholders communicate, collaborate, and exchange relevant information .

Objectives and Benefits of a Great Portfolio Governance System

An effective portfolio governance management usually translates into:

• Clear definitions of the roles, responsibilities, and accountability of everyone involved
• Compliance to legal, regulatory, ethical, and policy standards and requirements .
• Improved cohesion and alignment across teams and stakeholders, amongst other things thanks to conflict resolution mechanisms
• Enhanced visibility to the project activity thanks to clear reporting
• Greater organizational flexibility and responsiveness , as the governance system also provides guidelines regarding the adaptation of the process to changing needs or requirements

How to Define and Implement a Project Portfolio Governance System

1. determine portfolio ownership and accountability.

Determine the roles and responsibilities that will be assigned to internal and external stakeholders . The idea is to paint a clear picture of:

• who should green-light the launch of a project and its incorporation into a portfolio
• who should have authority over the decision to halt or postpone a project
• who will control the overall budget
• who will ultimately take responsibility for the outcomes of the projects and the technical and financial performance of the portfolio

Key stakeholders in the governance process traditionally include a Project Management Office that is responsible for project oversight and monitoring and for proper application and enforcement of the PPM process . Additionally, a PPM Steering Committee (or Governance Council/Board), usually bringing together senior managers from the operations and strategy side, can be created to aid in establishing priorities and criteria for decision making.

2. Establish a framework for effective communication and collaboration

In order to align all stakeholders and make sure they speak the same language, your portfolio governance should include a set of standard terms and metrics to be used across teams and business units throughout the PPM process .

3. Define formal criteria and procedures for project- and portfolio-related decisions

The selection of any project for your portfolio should be based on a realistic appraisal of its potential value for the company while taking into account the projected use of the organization’s resources . To do so, you need formal processes with clear rules to review, assess (cost and benefits estimates), approve, and prioritize project ideas based on established criteria.

Similarly, you need a set of policies and criteria governing the way your teams manage project execution, monitor progress, and make decisions to adjust the portfolio (e.g. trade-offs, delay or termination of projects).

4. Consolidate your rules and process into a PPM Charter

The purpose of a Project Portfolio Management charter is to get everyone on the same wavelength . Your charter should clarify the mission statement of your PPM and set long-term goals and objectives. It should also detail the sets of policies, standards, procedures, and best practices that you’ve defined as a PPM governance system, so that everyone involved in Project Portfolio Management activities across the enterprise can use it for reference .

More resources about Project Portfolio Management:

• Effectively Monitoring Project Risks
• What Are the Key Activities of Portfolio Management?
• Société Générale Algérie: Strengthening The Project Management Process To Further Improve Internal Stakeholder Satisfaction

Taglines: #sciforma #PPM #PMO #projectmanagementoffice #projectportfolio #projectmanagement #strategy #software #innovation #enterprise #projectportfoliomanagement #spm #success #leadership #awards #agile #waterfall #decisionmaking #scrum #businessagility #pmocorner #portfoliomanagement

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Benoît Boitard

Benoît has multiple professional experiences, working in particular as a digital strategy consultant , both in emerging start-ups and in large companies. These diverse experiences have imbued him with a global vision of project management in traditional and agile working environments.  

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Project governance and portfolio management in government digitalization

Transforming Government: People, Process and Policy

ISSN : 1750-6166

Article publication date: 20 June 2019

Issue publication date: 17 July 2019

This paper aims to increase the current understanding of the connection between operational level information and communication technology (ICT) projects and national level digital transformation by researching how project governance structures and practices are applied in an e-government context.

Design/methodology/approach

An elaborative qualitative study through public documentary analysis and empirical multi-case research on Finnish central government is used.

The study constructs a multi-level governance structure with three main functions and applies this in an empirical setting. The results also describe how different governance practices and processes, focusing on project portfolio management, are applied vertically across different organizational levels to connect the ICT projects with the national digitalization strategy.

Originality/value

This study integrates project governance and portfolio management knowledge into public sector digitalization, thus contributing to project management, e-government and ICT research streams by improving the current understanding on the governance of ICT projects as part of a larger-scale digitalization. This study also highlights perceived gaps between current governance practices and provides implications to managers and practitioners working in the field to address these gaps.

• Project governance
• Public sector
• ICT project
• E-government
• Digitalization
• Project portfolio management

Lappi, T.M. , Aaltonen, K. and Kujala, J. (2019), "Project governance and portfolio management in government digitalization", Transforming Government: People, Process and Policy , Vol. 13 No. 2, pp. 159-196. https://doi.org/10.1108/TG-11-2018-0068

Emerald Publishing Limited

Copyright © 2019, Teemu Mikael Lappi, Kirsi Aaltonen and Jaakko Kujala.

Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and noncommercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

1. Introduction

Digital transformation, or digitalization, is one of the global megatrends that drive private – and public sector – organizations’ reforms through the adoption of information and communication technology (ICT) solutions to optimize operations and provide better services to customers – or citizens. Digitalization challenges institutions’ and individuals’ technological, organizational and cultural mindsets and capabilities, which can be a struggle especially in the public sector, as governments have to also cope with legal, political and public accountability-related issues while aiming towards national level digitalization, or “e-government” ( Cordella and Tempini, 2015 ). However, understanding of the impact of processes behind this reformation connecting different government levels – the strategic governance level (e.g. government, parliament), the middle executive level (e.g. ministries, agencies) and the operational (ICT project) level – is limited. Hence, more exploratory, empirical research is called for ( Snead and Wright, 2014 ). Even though Finland has been recognized internationally as one of the most advanced e-government countries ( OECD, 2015 ), the ICT development projects keep struggling also in Finland. These struggles are due to complexities and uncertainties in related issues, such as governance, organizing and technology ( Omar et al. , 2017 ; Walser, 2013 ).

Public sector digitalization, like any strategic transformation process, is executed eventually through ICT projects ( Anthopoulos and Fitsilis, 2014 ; McElroy, 1996 ), ranging from a simple agency-specific online portal to vast, multi-organizational operations management systems. In both digitalization and ICT project perspectives, it is essential to connect the projects with digitalization strategy by ensuring that the project objectives are correctly aimed and properly conducted. In other words, one must ensure that digitalization and associated ICT projects are governed appropriately ( Crawford and Helm, 2009 ; Marnewick and Labuschagne, 2011 ). One technique to govern projects is project portfolio management (PPM) – a mechanism that on the management level consolidates a group of projects into one entity to ensure the strategic contribution and fit of the projects and maximize the value of the whole portfolio ( Kaiser et al. , 2015 ; Meskendahl, 2010 ; Müller, 2009 ). Though there have been some contextual studies on PPM application in regional governments level ( Hansen and Kræmmergaard, 2013 ; Nielsen and Pedersen, 2014 ), knowledge of the topic in e-government context is still limited. Furthermore, the vertical processes between different central or state government levels, and how PPM can be applied to facilitate these processes and the governance of ICT projects, must be researched ( Jenner, 2010 ; Snead and Wright, 2014 ). The Finnish Ministry of Finance (VM) introduced PPM in 2012 to consolidate central government ICT projects, but its impact and utilization have not been analyzed properly, further empirically motivating this study.

What kind of governance structure is applied to ICT projects in public sector digitalization?

How can PPM facilitate the governance of ICT projects vertically across different levels?

This study integrates project governance and portfolio management knowledge into public sector digitalization context, thus contributing to project management, e-government and ICT research by improving understanding of the governance of ICT projects as part of a larger scale digitalization. By describing and analyzing practices related to the governance of ICT projects, this study provides implications for managers and practitioners working in the field. This paper includes a review of applicable literature on e-government, governance and PPM, followed by the research and methodology of this study and the results and discussion, with suggestions for further research.

2. Theoretical background

2.1 public sector digitalization and e-government.

Public administrations across the world have been striving towards digitalization, enabled by rapidly evolving technology and motivated by cost-efficiency and quality. This transformation mostly centers around developing and applying digital solutions to streamline internal and external processes and providing better services for citizens ( Asgarkhani, 2005 ; Fishenden and Thompson, 2013 ; Janowski, 2015 ). However, to fully use the potential of digital solutions and services, public sector strategies, structures and organizations need to reform accordingly to support renewed solutions and services. This combination has been commonly referred to as e-government ( Layne and Lee, 2001 ; Lee, 2010 ), and it is achieved through a transformation process that consists of phases from strategy formation to project execution ( Anthopoulos and Fitsilis, 2014 ; Pedersen, 2018 ). E-government has strong citizen value and collaboration perspectives, thus sharing common ground with preceding public reformation initiatives, such as the market-lead New Public Management (NPM) ( Arnaboldi et al. , 2004 ) or coordination encouraging Joined-up Government ( Cordella and Bonina, 2012 ). Though the etymology of “e-government” has somewhat suffered from inflation and been complemented with more generic and ambiguous terms, e-government is still widely used to assess the maturity of ongoing digitalization and to benchmark and provide guidelines for future efforts ( OECD, 2015 ; Rorissa et al. , 2011 ; Valdés et al. , 2011 ). The purpose of e-government or public sector digitalization is not only to provide information and services to citizens but also to create strategic connections internally and externally between government layers and agencies, enterprises and citizens. However, digitalization is challenging in many ways ( Pedersen, 2018 ) and may cause resistance, as it requires significant organizational and technological adjustments, such as architecture adoption ( Irani, 2005 ). The primary reasons for e-government struggles include ambiguous mission statements and poor project management (scope, schedule, stakeholders) causing, for example, resource overuse, longer time to market and unmet client expectations, but there are also governance-related remedies to counter these challenges ( Altameem et al. , 2006 ; Kathuria et al. , 2007 ).

2.2 Project governance

Governance is a function of management for establishing policies to oversee the work – and ensure the viability – of an organization. It is a rather ambiguous term that has been perhaps most efficiently defined by McGrath and Whitty in their review article from 2015 as follows: “the system by which an entity is directed and controlled” (p. 774).

Furthermore, from organizational perspective, governance defines the structures used by the organization, allocating rights and responsibilities within those structures, and requiring assurance that management is operating effectively and properly within the defined structures ( Too and Weaver, 2013 ). Governance takes place on different levels of an organization that are most commonly divided into three ( Loorbach, 2010 ; Kathuria et al. , 2007 ; Too and Weaver, 2013 ): the highest level – the strategic, corporate or board of directors and governance system; the middle level – tactical, business or executive and management system; and the lowest level of functional, or operational project delivery system activities. A governance structure is essentially a framework describing the functional roles and responsibilities of these levels within an organizational system, while also identifying the links between them needed for effective and efficient execution ( Müller, 2009 ).

Project governance exists within the corporate governance framework and comprises the value system, responsibilities, processes and policies that allow projects to achieve organizational objectives and foster implementation beneficial to stakeholders and the organization itself ( Müller, 2009 ; Turner, 2006 ). However, the temporary nature of project organizations separates the governance of project organization from that of a permanent organization ( Lundin et al. , 1995 ; McGrath and Whitty, 2015 ). Project governance is a multidimensional concept: it takes place in all levels within an organization by shifting the scope and objectives between ( Biesenthal and Wilden, 2014 ; Brunet, 2018 ), outside the organization and project through stakeholders and networks ( DeFillippi and Sydow, 2016 ; Ruuska et al. , 2011 ; Winch, 2014 ), and also a process with the project life cycle ( Samset and Volden, 2016 ; Sanderson, 2012 ; Stewart, 2008 ). Project governance creates a decision-making framework for project organizations to execute projects ( Joslin and Müller, 2016a ; Oakes, 2008 ). In other words, to ensure that organizations efficiently “Do the projects right.” Besides the how , another important aspect governance of projects is the what , i.e. to ensure that organizations effectively “Do the right projects” ( McGrath and Whitty, 2015 ; Müller, 2009 ). To assure that a project contributes to an organization’s strategic objectives, one must constantly align, revise and communicate long-term and short-term project goals and use motivation and control to make performances comply with goals ( Hrebiniak and Joyce, 1984 ; Srivannaboon and Milosevic, 2006 ).

2.3 Project portfolio management

PPM is a project management technique used to align and control a group of projects according to the objectives and benefits of an organization. There are three central objectives for PPM: strategic alignment (ensure strategic direction of projects); balancing across projects (in terms of strategically important parameters, such as resources or risks); and value maximization (in terms of company objectives) ( Martinsuo and Lehtonen, 2007 ; Petro and Gardiner, 2015 ). Meskendahl (2010) complements these objectives by adding the use of synergies (reduce double work and enhance utilization regarding technologies, marketing, knowledge and resources) to the list. In practice, the managerial activities related to PPM are the initial screening, evaluation and prioritization of project proposals; the concurrent evaluation and reprioritization of individual projects; and the allocation and reallocation of shared resources ( Blichfeldt and Eskerod, 2008 ; Jonas, 2010 ). These managerial practices are conducted through decisions by portfolio owners and managers at certain process gates or portfolio management board meetings and must balance a multitude of conflicting goals within an organization. PPM therefore attempts to answer project-related questions such as: “What should we take on? What should be terminated? What is possible? What is needed ( Dye and Pennypacker, 1999 )?”

With regard to ICT projects, the technological alignment through enterprise architecture and standardized processes and software tools can be applied to PPM ( de Reyck et al. , 2005 ). However, in the public sector, both ICT PPM and project performance can be diminished with rigid decision-making processes, excess requirements of conformity, communication issues and strong organizational regulations ( Mosavi, 2014 ; Walser, 2013 ). These political aspects, if integrated into existing decision-making and corporate management practices to avoid excess bureaucracy, can be reversed to strengthen PPM ( Martinsuo and Dietrich, 2002 ). For example, ICT PPM has been important in managing organizational efforts to digitalize local governments ( Hansen and Kræmmergaard, 2013 ), but in general the trade-off between centralization of power and project autonomy can be considered a prevailing and central challenge in the application of PPM in public sector ICT projects ( Kaiser et al. , 2015 ).

2.4 Synthesis: analysis framework

To synthesize the reviewed literature, an analysis framework based on the research questions was constructed. Project governance consists of the practices that take place through functions within different levels of organizations. The term “practices” encompasses all the different activities, procedures and processes that are applied to align, control and safe-guard the ICT project objectives and performance for the value and strategic targets of the organization. Hence, the first part of the framework builds vertically on the multi-level governance structures ( Too and Weaver, 2013 ; Kathuria et al. , 2007 ; Loorbach, 2010 ) and includes the three organizational levels: strategic (the highest), executive (middle management) and operational (project) with distinguished responsibilities and performance scopes. Horizontally the framework consists of the e-government and project governance-related functions ( Anthopoulos and Fitsilis, 2014 ; Irani, 2005 ) to describe and categorize the types of project governance practices and their subsequent objectives. As the focus of this research is on the application of PPM as a mechanism that connects the ICT projects with the higher level objectives by alignment and assurance, the second part of results describes in more detail the PPM specific goal alignment and performance compliance practices ( Müller, 2009 ; Kaiser et al. , 2015 ; Blichfeldt and Eskerod, 2008 ) that can be associated with the “requiring assurance” function – or vertical alignment ( Hrebiniak and Joyce, 1984 ) of project governance. Even though PPM does have additional purposes and objectives such as balancing and value maximization, these are not included in the analysis framework as the purpose is not to explore the overall utilization of PPM in e-government.

3. Research process

3.1 research approach and empirical settings.

A qualitative research strategy built upon gaining an in-depth understanding of the unique empirical setting was considered most suitable for this study ( Sarker et al. , 2013 ; Yin, 2013 ). As studies on PPM and governance in specific contexts have been requested ( de Haes and van Grembergen, 2009 ; Müller et al. , 2008 ), this research applies an inductive, multi-case method to explore and elaborate ( Eisenhardt, 1989 ; Ketokivi and Choi, 2014 ; Yin, 2013 ) the practices associated with the governance of ICT projects, and how they are perceived vertically on and between different government levels, in this case, public sector digitalization ( Snead and Wright, 2014 ). The framework presented in Figure 1 was used in the inductive analysis. The purpose of this study was not to test the completeness of the proposed framework but to use it as a guide to synchronize the analysis and interpretation of the empirical data among researchers, and as a lens through which the elaboration and refining of the findings with the selected theoretical approaches were processed ( Ketokivi and Choi, 2014 ).

The digitalization of the Finnish public sector is observed through publicly available documentation and four case organizations and projects, described in detail below. The context and setting can provide many research opportunities; therefore, to improve the scope and contribution, some limitations have been made. The study does not focus on the, admittedly important, formation, content or consensus of digitalization strategy ( Bowman and Ambrosini, 1997 ), the horizontal alignment between organizations ( Kathuria et al. , 2007 ), or the alignment between ICT and business functions within organizations ( de Haes and van Grembergen, 2009 ; Papp, 1999 ) and is empirically limited to the central government, as depicted in Figure 2 .

Since the 1980s, Finland has, through the introduction of everyday digital solutions such as mobile phones, steadily driven toward digitalization, led by the VM. Recently, as with many other nations and public administrations, digitalization is characterized by global phenomena, such as artificial intelligence, data security, availability and analytics and virtual reality. The digitalization of the Finnish public sector has focused on providing customer-centric electronic services and establishing platforms and infrastructures, such as national service architecture. Though Finland has managed to perform well in international comparisons of digitalization and e-government ( Vainio et al. , 2017 ), there has also been criticism from external parties about the governance, efficiency, and strategy of the digitalization ( OECD, 2015 ). VM introduced PPM in 2012 to consolidate and align ongoing and coming ICT projects, but its utilization and application are still ambiguous.

VM’s Public ICT Department (JulkICT), as the main governance authority of Finnish public sector digitalization, represents the strategic and executive levels. Under VM, the national architecture program (KaPA) was selected to represent the operational level.

VM’s tax administration (VERO) is responsible for the assessment and collection of taxes for individuals and corporations and providing guidance and service in associated matters. From VERO, a product-based implementation project was selected to represent the executive and operational levels.

The Ministry of Agriculture and Forestry’s National Land Survey of Finland (MML), is responsible for map data material and land surveying, including parceling and reallocating land. MML safeguards land ownership and credit-granting systems by maintaining information. MML has conducted two agile development projects, aiming to digitalize real-time map information utilization, included in the research for executive and operational level insight.

The Finnish Transportation Agency (LIVI), under the Ministry of Transportation and Communications, is responsible for roads, railways, waterways, and the development of the Finnish transport system. LIVI started its first known ICT alliance project in 2016, which was selected to represent the executive and operational levels.

The cases were chosen to provide the most heterogeneous perspective on the project level possible. The availability of data and support material, and the timeliness of the cases – especially the LIVI case – were also considered. Additional information about other organizations, projects and programs was provided through public documentation, such as national audit committee reports examining the governance practices in different ministries (e.g. the Ministry of Labor and Economy), and in selected programs and projects.

3.2 Data acquisition and analysis

The acquired data consists of three main categories: case-specific empirical data collected by the authors ( RQ1 , RQ2 ); public documentation related directly to digitalization, governance and projects ( RQ1 ); public documentation indirectly related to the topic ( RQ1 ). Supporting the qualitative research agenda, eleven semi-structured interviews with open-ended questions were conducted between 2015 and 2017 to provide in-depth descriptive input from respondents. The respondents were carefully selected from each case due to their knowledge and competence on the subject matter as they were either owners of or key stakeholders in their respective projects. The respondents also held senior managerial or specialist positions in different levels of their organizations, thus supporting the level-based dichotomy applied in this study. Further information could have been acquired by interviewing also the managing executives, team members, or other project stakeholders, but as the additional material provided already extensive amount of objective, supporting data, this was not seen mandatory. The interviews focused on the practices within the organization, projects associated with the governance of digitalization and ICT projects and the use of PPM. The interviews were documented and accompanied by rich supporting material from the interviewees. The interview documents were examined between researchers to interpret the findings and to reduce personal biases. The first category of public documentation consisted of laws, decrees, instructions, manuals, guidelines and tools and templates directly associated with digitalization and ICT projects. The second category included different reports, reviews and benchmarking guidelines providing insight into the topic. Over 1,500 pages of public documentation were acquired from public administration websites and other public data repositories. The details of the research data are provided in Appendix .

The data analysis began with thoroughly reading the materials and constructing rough case descriptions with interesting findings and themes. Then the raw data were imported and categorized in NVivo software. The coding criteria and interpretation rules for the project governance practices were drawn from the analysis framework, initially reviewed and agreed upon, and updated throughout the process among the researchers. The governance structure analysis ( RQ1 ) was conducted in two parts: public documentation (Categories 2 and 3 in Appendix ), and empirical case documents (Category 1) to provide rich, within-case insights. Both datasets were analyzed in two phases. First, the evidence of practices was reviewed and coded against the theoretical lens to determine the appropriate governance function. In the second phase, the applicable organizational levels of the coded practices were determined. Finally, the results of the coded findings were iterated among researchers to construct aggregated practices per organizational level under each framework dimension. A similar process was then applied for PPM practices ( RQ2 ) in different organizational levels in the empirical cases and PPM-related public documentation (Category 1 and 2).

The findings – the project governance structure ( RQ1 ) and PPM-related assurance practices ( RQ2 ) – are presented in the Section 4, complemented by within and cross-case analyses. Evidence supporting the reliability of the research, presented in the accompanying tables, refers to data in Appendix by stating the category and index; for example, [2.1] refers to the first item in Category 2 (“Act on Information Management Governance in Public Administration”).

As the research aim and questions imply, the results describe the perceived governance structure and PPM practices in two respective sections. The governance subsection explores and aggregates the digitalization and project governance practices, as shown in Tables I and II . The elaboration of the found practices is conducted according to the earlier introduced theoretical lens ( Figure 1 ), and it elaborates the perceived commonalities, peculiarities and gaps within and between governance functions and different organizational levels. Similarly, the following PPM analysis explores and aggregates the findings on PPM practices related to assurance from the empirical cases and public documents, as seen in Table III .

The most interesting finding is evidence in the public documents on the “should be” practices, such as laws, regulations, decrees and instructions, and an equal amount of evidence, coming mostly from the empirical cases, on the “are not” – practices that are not in place or have failed, such as audit reports pointing out the lack of control or structural complexities. This discrepancy somewhat restricted the analysis of what actually takes place and the possibility of drawing explicit implications on how practices affect governance. Hence, it would have been almost tempting to deduce propositions through negative assertions ( Johnson-Laird, 1999 ), but a critically realistic inductive analysis was still applied.

4.1 Governance structure of information and communication technology projects in digitalization

The primary objectives for public sector digilization in Finland are set through government agendas and high-level proclamations about general principles. These goals were not well connected to levels below, as all administrative sectors (ministries and the agencies under them) should create their own strategies, which they have already been doing for some time. The most concrete objective mentioned in the digitalization guidelines is “to ensure that digital services are prioritized”, which is difficult to measure. The same document also emphasizes the characteristic difference between governing digitalization and public sector administration. The former requires a cross-administrative, process-oriented approach to meet the central purpose of providing better services to citizens more efficiently, whereas the latter is based on regulatory, organizational and financial procedures that are limited by hierarchal and jurisdictive settings.

As Table I suggests, laws are considered central governance mechanisms, especially in Finland (where obedience is a considered a national virtue), but the terminology used especially in the higher level ICT governance act [2.1] is ambiguous: “follows,” “participates,” “suggests,” “enables” leave room for subjective interpretation. Respondents [1.6] have criticized the particular act: “The biggest challenge in executing the law has been that there is no clear understanding and consensus within the administration about the descriptions and specifications.” Multiple overlapping laws and regulations – namely the ICT governance act (ICT-specific, under VM), sourcing act (sourcing process-specific, under the Ministry of Labor and Economy) and administrative sector-specific (for example, social and health) acts – may also create strong tensions and complexity for ICT sourcing and project management and require special competences from the participants and responsible authorities. The general approach is to reform the decrees and laws instead of focusing on the problems related to the processes and compliance, as reported by National Audit Office of Finland (VTV) when describing the status of statement processes related to ICT system sourcing. On the operational level, the main ICT governance act [2.1] is regarded as a “dead letter” with more hype than actions. The national service architecture defines the overall picture of digital infrastructure but does not yield support to an interoperability analysis of project deliverables or support the empowerment of technical and project actors. “It is a nice PowerPoint” [1.10] was a common reference on the project level. ICT projects, sourcing, and systems are also governed by various technical factors, such as recommendations from JUHTA (The Advisory Committee on Information Management in Public Administration) and VAHTI (The Government Information Security Management Board), rendering the ICT development as a separate entity from operative process development, as seen by VTV. Most tangible governance models associated with digitalization and projects are left on the executive level. Project manuals and supporting tools and constructs seem to be agency specific, and no formal consolidation or integration takes place. VM aims to construct an explicit governance model (through the Ministerial Committee of Economic Policy) for digitalization, but the draft model seems to follow the same passive mode as the laws above [1.7].

The main responsibility of public sector digitalization in Finland lies on JulkICT, but in practice, they rarely possess any authority over agencies or projects. Money, namely, budgeting, is the strongest governance practice, and the most concrete way to govern organizations and projects. From a project perspective there are three ways to allocate money: the default, “business as usual” method by allocating funds from the agency’s annual budget; the government spearheads projects derived directly from government initiatives (such as KaPA, or VERO’s income register project); and the special budgets, namely, the 100 M€one-off digitalization launch pool. A fourth way to gain financial resources is the productivity fund under VM budgeting committee authority, but this is not systematic, as it also involves non-ICT projects. However, on the operational level, like LIVI, the second and third methods are considered more confusing than supporting, as the money cannot provide long-term capabilities, so the “business as usual” method prevails.

At least one document [2.22] clearly described the roles and responsibilities regarding ICT projects: the owner (the ministry of the administrative sector and its sub-agencies) manages the project from pre-project to post-project and is responsible for statement request process, reporting to the master portfolio, and other compliance practices. On operational level, the roles and responsibilities can be determined by tools such as project manuals, which do not, however, well support non-traditional project delivery models or methods, such as agile development or project alliances. All projects and programs have at least one steering group, and the decision-making power and authority for steering groups are from organizational (agency) level positions. For example, the KaPA program steering group head could make decisions over the program as he was also the ICT director of VRK. The role of stakeholders was identified at executive and operational levels, as seen in Table II . For example, the hierarchal structure of stakeholders in the SaDE program [3.5] was described as Political decision makers > Developer communities > Early adapters > End users. This structure seems to contradict the customer-centric approach of digitalization strategy. However, though the structural complexity of roles and responsibilities was recognized by respondents, and the general principles wove the simplification of administration and reduction of norms, the activities seemed to lead toward further complexity – as seen in [1.7], where the introduction of an investment approach came with yet another informative steering group (the digitalization investment steering group). Also, organizations without any formal authority or governance authority, namely, the D9 digitalization team and DigiNYT committee, were involved in digitalization and ICT projects. External members from non-governmental organizations and the private sector were included in these two groups, but curiously – and maybe unfortunately – no research institutions were represented. Finally, JulkICT supervision, as stated by VTV, does not affect project or program (SaDE and KaPA) execution, as they are not included in the formal project or program structures.

The assurance requirement is conducted on strategic level mainly through reports and statements by direct supervising bodies such as government and committees under parliament or audit organizations. However, the tone of these statements is passive: “needs to be considered,” and the corrective actions are only “proposed” or “suggested” instead of allocated or empowered to specific, responsible authorities. A practical assurance platform for this level, introduced by JulkICT, is the master portfolio aiming to consolidate “most projects [>1M€] across central government.” This platform, along with the decree-mandated statement process for “significant projects” [>5M€] using the VM business case template, includes the only consolidated and shared ICT project assurance practices that reach across levels. JulkICT uses the master portfolio to consolidate status reports for TIETOKEKO, which is the organization coordinating ICT development across the ministries of administrative sectors. TIETOKEKO also receives consolidated reports of ICT projects and, if necessary, makes statements on them but does not conduct any steering activities. Interestingly, JUHTA is not mentioned in this control process description, though it is recognized elsewhere as a significant actor [1.6].

On operational level, assurance equals reporting and documentation, but informal communication is used too. The reporting procedures and structures vary within cases, but all were characterized by complexity: the same or similar information about project and program progress must be reported in multiple directions and irregular intervals. Additionally, as with LIVI, that reporting content plays a role: “Too much information and too many details will backfire.” The capability of JulkICT controllers to assess forecasts and benefits and their tendency to anchor themselves with given numbers is perceived as burdensome, seeming to imply issues with data integrity – a fact that JulkICT also recognized, as “The traffic lights are nicely on green all the time” even though there were known issues [1.3]. Generally, the assurance and authority seem to be characterized by goodwill and assumptions. The applied project measurements were agency-specific, not connected with any results-based incentives, nor were there any sanctions from the owner organization, JulkICT, or TIETOKEKO for exceeding a budget. Post-project benefits realization was supposed to be applied systematically but was not, even among the significant projects.

The segmentation of projects combined with structural complexities made pre- and post-project assessment difficult, as described in the LIVI and MML cases. Finally, different project types require different approaches to assurance as seen in the LIVI and MML cases. However, the formal and rigid assurance processes and procedures do not necessarily support this, which leaves, for example, the agile project level control and steering on “clerical civil disobedience” [1.6]. From a technical perspective, a curious control element is the project’s deliverable validation. ICT projects, especially agile ones, as in the MML case, tend to have a vague concept of a deliverable target, so validating and measuring the outcomes against predetermined targets is challenging. Also, as in the LIVI case, the formal compliance processes and structures, namely, project contracts, need to support flexibility and constant acceptance instead of a fixed stage-gate type of process.

To synthesize the current governance of Finnish public sector digitalization and ICT projects, an external audit report [3.7] identified following issues: strategy formation, target setting, reporting, results-based management and the preparation of regulations. This report is consistent with the findings of this study, which also illustrate how the project governance functions – the application of structures, allocation of roles and responsibilities and requiring assurance – have multiple, vague and ambiguous interfaces between elements and levels, and thus yield to the complexity of the governance structure, as described in Figure 3 .

4.2 Project portfolio management assurance requirement practices

The pre-project business case analysis was conducted in all cases as an initial goal alignment practice, but only the significant projects are subject to a more rigorous JulkICT statement process. The strategy toward which a project’s fit is reviewed is in “default” projects the agency’s or ministry’s own strategy. The national digitalization strategy, which is perceived to be impractically vague, is not introduced or applied. The “special” projects reflect the strategic objectives of the government, as they are derived directly from government initiatives. The statement process and master portfolio have a mixed reception at the operational level, as seen in Table III , where they are considered either unnecessary bureaucracy or the de facto practices.

Architectural review in the business case template is mostly superficial and does not receive a formal review from a dedicated technological authority under JulkICT, though the resources and competence do exist. The master portfolio could be used to prioritize and categorize projects but presently is not, though development initiatives have been taken. At the executive level, the applied portfolios are a good start for goal alignment, but, if accompanied by a roadmap that sets program-like mechanisms, the result is more structured. However, it seems lucrative, especially in digitalization, to focus on luxury items like artificial intelligence, but mandatory, hardware-related issues, namely, legacy systems and infrastructure, cannot be neglected either. Deriving projects merely from the technological trends is not feasible. An important factor regarding goal alignment at the executive level is the allocation of resources, especially budget, directly to the portfolio that empowers the owner and increases motivation and delivery capability. However, increased organizational complexity is an imminent risk if the portfolio also allocates fixed human resources and operative process responsibilities, as for example in VERO’s robotics portfolio, turning the portfolio into a new matrix organization. If the portfolio and organizational structures conflict, the governance chain clarity may be endangered. At the operational level, the communication during the prospect phase is actually supported by strict, bureaucratic structures. Project actors can easily determine the responsibilities of administrative sectors and agencies and clearly understand what triggers the inclusion of certain substance specialists. However, this clarity seems to apply only to organizational and administrative aspects, not to the technological or economic sides of pre-project planning. The business case template by VM does not, however, coordinate any formal procedures that would ensure inter-organizational co-operation; it merely asks actors to “describe connections.” Therefore, it seems that besides the formal mechanisms, a lot of communication and coordination within and between levels and organizations is left to the individual’s responsibility. The pre-project phase can extend over a year if the project owner must ensure all elements that are not included in the business case template but needed to secure all practical and technological aspects.

Performance compliance in PPM includes formal review, control and motivation. The motivation from incentives or rewards encouraging either project-level performance, reporting and compliance, and aligning with higher level objectives through portfolios did not take place in any cases, nor is there a formal process describing it. These practices are based on managerial competences and leadership capabilities within organizations, or, to a very limited extent, the remuneration packages of project-level actors, which in Finnish public sector organizations are quite restricted.

The results indicate that there is a control gap at the executive level. Despite having the highest possible legitimate authority, JulkICT considers themselves mostly a quality control and support mechanism for project- and (master) portfolio-related control activities that “Should take place anyway” [1.2-3, 1.6]. This declaration implies a discrepancy between the understanding of actors’ roles and purposes and the mechanisms of digitalization and related ICT projects. As discussed, the control of projects and portfolios are mostly connected to complex reporting and merely informative measurements. Measurements were applied to projects directly or through agency and master portfolios, but there were no consolidated metrics or objectives on any portfolio level. The complexity also characterizes many projects reaching over several areas of organizational responsibility, or, as in the VERO case, the newly introduced sub-portfolio scopes. Besides challenging project ownership, this complexity impedes control by and toward the steering group, consisting of process owners and the VERO-level ICT department. However, control is not just about reporting but also includes steering and planning, which do not come from (master) portfolios or the organizations associated with them but from the owner organization’s chain of command, i.e. steering group and agency line management. The master portfolio is currently only a visual platform yielding a public consolidation report, not otherwise used for formal review or communication. It does possibly enable planning, balancing and optimizing resources, but only one review report [3.4] recognized and suggested this option. This report also gave explicit suggestions on how to develop a master portfolio toward successful PPM. The master portfolio reformation must consider governance and technical ownership, obligations and motivations for budgeting, the comprehensiveness of most ICT projects, the transparency and confidentiality of information and the consolidation and development of project culture.

5. Discussion

In this section, both the project governance and subsequent PPM assurance practices are elaborated through the main organizational levels, the highest strategic, the middle executive and operational project levels. The discussion presents the main empirical findings in respect to the inherent objectives of project governance and PPM on these levels to identify the emerging gaps between findings and current knowledge.

5.1 Strategic level governance and project portfolio management

Instead of building a foundation and purpose for digitalization, the results of this study indicate that strategic level governance is dictated by politically driven, abstract digitalization strategy (or a lack thereof) and different laws and regulations are used mostly for legitimization. The biggest gaps identified were related to the content and formation of digitalization strategy. The strategy consists of various intermittent statements and agendas that do not yield a tangible goal statement, obscuring a consensus or shared understanding of the goals and priorities ( Bowman and Ambrosini, 1997 ). This obscurity creates tension between the project and digitalization strategy, as a project is already a temporary organization that should connect with permanent settings rather than a temporary, short-term political ambitions ( Jonas, 2010 ; Lundin et al. , 1995 ). A feasible policy could be to establish a permanent strategy process and a tangible artefact, in which the political impact from temporary government agendas could be used to establish priorities and principles for vision setting, but a process aimed toward a prioritized, scheduled roadmap of digitalization could be sustained over government terms.

In the parliamentary and democratic public sectors, laws are the most evident mechanism for establishing norms and policies at a strategic level. However, the results of this study indicate two imminent, yet even somewhat paradoxical, issues with the laws: some of them legitimize but do not give authority and at the same time many cause governance overlaps. First, as discussed in Section 4.1, the ambiguity and interpretation challenges of the main ICT governance acts cause distractions. Second, the laws applicable to project processes and technological elements tend to be too detailed in Finland, per a respondent in the MML case. Excessive detail leads to a narrower scope for a single law, restricting its applicability and comprehensiveness. For example, digitalization project processes must comply with at least four different laws, depending on the scope of the project. Updating laws is a time-consuming parliamentary process seriously restricting the rapid evolution of digitalization and flexible ICT projects ( Lappi and Aaltonen, 2017 ). It would still be reasonable to revise and reform the applicable laws from governance perspective into a comprehensive entity that empowers clearly the responsible authorities, reduces the overlap and leaves the functional details out of legal scope.

The aim of assurance at the strategic level is to derive development plans and prioritized objectives from corporate strategy, based on a shared understanding of common goals ( Hrebiniak and Joyce, 1984 ; Kathuria et al. , 2007 ), establishing a subject for goal alignment. In this research and PPM context, this would mean a portfolio on the highest organizational level that interacts with a strategic roadmap to get and enable prioritized objectives. However, therein lies the most current issue of vertical alignment of this multi-case study: no strategy or roadmap is connected with the existing VM master portfolio. The VM master portfolio could be used more effectively to update digitalization internally and externally to provide improved political and public compliance evidence and communication ( Mosavi, 2014 ). Simultaneously, if the digitalization strategy, roadmap and master portfolio were integrated, the target setting and the connections to lower levels (executive level ministries and agencies) would be more feasible.

5.2 Executive level governance and project portfolio management

Based on the empirical findings, the two dominant governance gaps in the executive level could be synthesized into excess amounts of structural complexity, as seen in Figure 3 , and an absence of authority. The topic and context itself are so complex that adding structural confusion by adding permanent (D9, DigiNYT) or temporary (Spearhead investment steering group) organizations with an ambiguous purpose and authority will not reduce challenges such as control integrity due to burdensome reporting ( Joslin and Müller, 2016a ; Walser, 2013 ). For example, JulkICT’s sense of ownership and authority contradicts any ownership perspectives discussed in project governance literature and can restrict decision-making efficiency, especially in ICT projects ( Andersen, 2015 ; Drury et al. , 2012 ; Olsson et al. , 2008 ). The lack of authority has led to the emerging application of goodwill as an assurance approach, which could be mended with law reformation or by streamlining the budget process so that it flows through the ministries and agencies that actually have the legitimacy and power to govern ICT projects. Emphasizing and clarifying ownership structure would also mitigate the prevailing satisfaction for less mentality but would impose a balancing issue between the centralization and decentralization of power ( Janssen and van der Voort, 2016 ). As JulkICT saw, the organizations conducting projects know the best way to manage them. However, the overall digitalization project delivery capability of central government could be managed as a whole even if the execution and substance-specific knowledge were left in the agencies. Shared and common practices related to project delivery, such as sourcing and choosing the appropriate delivery model, could be included in the discussed governance model, under a project management office (PMO), for example ( Mosavi, 2014 ; Unger et al. , 2012 ). Equally important aspects of more central governance are the common technological elements of digitalization and ICT projects, namely, architecture, interoperability and data ( Irani, 2005 ; Janssen and Klievink, 2012 ).

Executive-level PPM assurance aims to establish a formal review process for the continuous balance and value maximization of a portfolio and prioritizing projects and their resources according to aligned objectives ( Müller et al. , 2008 ; de Reyck et al. , 2005 ). Based on the evidence, the capabilities and motivation to achieve these goals exist, but the lack of authority has rendered the VM master portfolio a mere reporting template. This notion resonates with how institutions gain legitimacy, or through what mechanisms central government constitutes power in digitalization ( Scott, 2013 ). To improve this, the JulkICT and master portfolio legitimacy might be worth re-establishing, along with the content of the actual portfolio for a more complete picture of all central government ICT projects and sub-portfolios (Project Management Institute, 2013) of different agencies and a formal, stage-gate process ( Cooper, 2008 ) to facilitate the steering and control of portfolios.

5.3 Operational level governance and project portfolio management

The implications from the results were that the operational level assurance of related to ICT projects is characterized by a low amount of metrics and a high amount of reporting, both by the project managers and by external auditors within the public sector administration. The external audits do not yield any corrective actions if they do not include a motivational element for the project owner, such as sanctions ( Müller, 2009 ). The amount of project documentation and reporting shown in the empirical data is currently both a burden and source of confusion for project managers due to the complex governance structure, a fact that especially detracts from the performance of agile ICT projects ( Lappi and Aaltonen, 2017 ; Nuottila et al. , 2016 ). Different project types, namely, agile, and delivery models, such as alliance, have varying approaches to project deliverables and measurements ( Love et al. , 2010 ; Vlietland et al. , 2016 ); therefore, the applied governance structure should recognize and support these models and the established assurance practices. The deliverables also connect to another governance aspect of assurance – the post-project benefits realization ( Marnewick, 2016 ; Serra and Kunc, 2014 ). According to JulkICT, this aspect is already challenging, as they cannot demand the analyses afterward and have difficulties establishing determinants for the benefit or impact of ICT project results, systems, and services. Benefits cannot be realized if the users, either personnel of public administration or the customers, the citizens, do not use them.

Assurance has a strong motivational aspect ( Hrebiniak and Joyce, 1984 ). Controlling and measuring through portfolios does take place, but it is conducted either at agency-level portfolios, or in “special” or significant projects, toward the master portfolio. There was no evidence that either of these control modes provided any steering constituting feedback, which partly caused poor motivation among project managers to report properly. In the personal perspective of project and portfolio actors, the application of project and portfolio results-based incentives could support motivation – not to mention the possibility of sharing project benefits and risks similar to an alliance model ( Lahdenperä, 2012 ; MacDonald et al. , 2012 ). Finally, an important aspect concerning the operational level assurance through PPM is the selection of projects during pre-screening ( Archer and Ghasemzadeh, 1999 ; Bridges, 1999 ). Currently, each case organization conducts their project evaluation to the best of their knowledge, applying either the business case tool by VM or some other template. To support the higher, executive-level, portfolio control process, the operational level project evaluation tool and review process could be scaled to fit all project sizes and types, though the formal statement process still applies only to the significant (>5m €) projects.

6. Conclusions

This research explored the governance of public sector ICT projects in a complex and high-impact phenomenon – government digitalization. The research describes the project governance and PPM practices of government ICT projects through five thematic focus areas and proposes a three-leveled project governance model for digitalization and ICT projects. This provides the managers and practitioners working in the public sector digitalization context means to better understand how the project governance practices impact ICT projects from e-government perspective. By illustrating and elaborating how these practices are conducted on and between different levels within central government organizations, this research provides new understanding on the sought-after vertical process explorations ( Snead and Wright, 2014 ), thus contributing to e-government research. Similarly, project management academics benefit from this research, as it brings a contextual stream into the PPM discussion, which has so far received limited attention ( Müller et al. , 2008 ). Prior research on public sector digitalization and e-government transformation has focused primarily on the macro-level, social phenomenon and the factors that enable or distract from the transformation progress ( Gil-Garcia and Martinez-Moyano, 2007 ). Not until recently the connections between the e-government transformation process and the individual ICT projects and acts of project management have been distinguished and elaborated ( Melin and Wihlborg, 2018 ). This research draws on this initiative and enhances understanding of how the ICT project management and e-government transformation can be integrated through project governance practices. The targets set for government digitalization can be connected to ICT projects through forming a concrete digitalization strategy to align and prioritize projects within portfolios, which can also enable the control and balancing functions. This study also highlights the gaps between current academic discussions on governance mechanisms in a specific contextual setting, thus providing new insights into both e-government and governance research. The findings of this research suggest that governance can also be perceived from technical and delivery method standpoints, besides the commonly used organizational and process perspectives, thus bridging the current gap between ICT and project management research ( Joslin and Müller, 2016b ; Müller and Martinsuo, 2015 ).

The governance of public sector digitalization and projects seem to struggle with one underlying dilemma: To govern and align individual ICT projects with the national digitalization effort would require more than just operational level technological and mechanical ICT project governance practices. There is also a need for capability and willingness to govern also the higher-level social, economic and political elements such as processes and organization structures towards citizen and service centric transformation, as proposed for example in the classical NPM models ( Cordella and Bonina, 2012 ). Instead of relying on governance through the traditional organizational silos, the focus should change toward governing the more effective citizen or entrepreneur service processes – bearing in mind of course the administrative restrictions or substance contextualities, such as in the defense sector, for example ( Gilchrist et al. , 2018 ). To synthesize the findings of this particular research, the following policy implications on governance and PMM on different organizational levels are proposed in Table IV .

Besides the addressed research scope limitations, this research has several more limitations to discuss. First, as a qualitative case study, drawing generalizable implications is impossible; however, this was not an aim of this research. Second, the data were limited to four public cases and publicly accessible documents; drawing reliable conclusions on such a sample is limited. Third, the research was subject to both respondent and researcher bias; the former were mitigated with supportive material and multiple respondents’ presence when possible and the latter through rigorous triangulation among research and respondents ( Yin, 2013 ). Fourth, as Finland is regarded as one of the most advanced nations in the utilization of digital solutions, the managerial implications provided in this study should be considered restricted and without international comparison; no definite conclusions should be made.

This research opened doors for many interesting research opportunities. First, an interesting topic for future research would be to assess how governable the public sector digitalization and the key actors in it are ( Müller et al. , 2014 ) and how this could be perceived in maturity aspects of e-government ( Andersen and Henriksen, 2006 ; Esteves and Joseph, 2008 ). Second, as discussed, a comparative study of the synthesized findings between similar studies from other countries or through a literature review would reveal how broadly applicable or specific to Finland the results are. Third, a longitudinal participation or observation research – simultaneously, by multiple cross-disciplinary researchers, if possible – through different cases (organizations, projects) would validate the findings of this research and bring insight into underlying institutional mechanisms this study did not address thoroughly. Fourth, drawing further from institution theory, specifically institutional entrepreneurship ( Maguire et al. , 2004 ; Wijen and Ansari, 2007 ), an interesting research topic would be to study the performance and activities of the central actor as the active agent or “institutional entrepreneur hero” ( Micelotta et al. , 2017 ) of institutional change: digitalization. Finally, studying the processes of transitioning from strategic alignment to social alignment ( Gilchrist et al. , 2018 ) and forming and building a consensus of the national digitalization strategy ( Bowman and Ambrosini, 1997 ; Floyd and Wooldridge, 1992 ; OECD, 2014 ) could also provide valuable insight into the topic.

Analysis framework of the study

Finnish public administration chart and research focus

Finnish central government digitalization and ICT project governance structure

Governance structure, public document analysis

Governance structure, empirical case analysis

PPM Assurance practices

Acquired research data details

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Corresponding author

About the authors.

Teemu Mikael Lappi (M.Sc) is a doctoral student, researcher and a Lecturer in the Industrial Engineering and Management research unit at University of Oulu, Finland. Lappi received his master’s degree in Industrial Engineering and Management at University of Oulu in 2004. He has worked for 13 years in various specialist and management positions in manufacturing and software industries, most recently as Business Development Director in a multinational software solution company. Lappi’s dissertation topic and research interests include project governance, project business management, information systems, agile and e-government.

Dr Kirsi Aaltonen is an Associate Professor of Project Management at University of Oulu, Industrial Engineering and Management research unit and Docent of Project Business at Aalto University, Industrial Engineering and Management. Her current research interests are in areas of governance, stakeholder and uncertainty management in large and complex projects. Her publication list includes more than 50 academic papers and book chapters in the area of project business. Aaltonen has published for example in Scandinavian Journal of Management , International Journal of Project Management , International Journal of Production and Operations Management , Project Management Journal and International Journal of Managing Projects in Business .

Dr Jaakko Kujala is a Professor in Industrial Engineering and Management research unit at the University of Oulu, Finland. He has over 10 years' experience in industry while working in international automation system project business before his career in the academia. His publications include more than 100 academic papers, book chapters and books on project business and on the management of project-based firms. His current research interests include coordination of complex project networks, stakeholder management and simulation as a research method.

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Areas Of Work Select Administrative Operations Auxiliary Services Faculty Human Resources Information Technology Keck Medicine of USC

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Keck Medicine of USC

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Project Manager - IS Portfolio Governance - Full Time 8 Hour Days (Exempt) (Non-Union)

The Project Manager provides a wide range of project management and operational support including in the assistance in the administration and coordination of a variety of project management functions including planning, budgeting, organizing, research and delivery of services. The Information Technology Project Manager will provide project management and implementation oversight for healthcare related systems, applications implementations and process development based upon the policies and procedures set forth by the Project Management Office. This person will provide management on jobs within a healthcare environment which integrate both the physician and facility aspect of business. Could be required to supervise other employees or contract labor specific to a project.

Essential Duties:

• Anticipate how technology enhancements will affect operational workflows.
• Understand the business impact of different solutions, and can assess the tradeoffs between business needs, technology requirements and costs.
• Help customers define requirements, clarify their current and future technology needs, and determine how to best meet their needs including determining the resources required.
• Analyze cross-technology and cross platform issues. Evaluate the technical and economic feasibility of proposed solutions. Conceive and implements projects that may require systems integration, small teams and multiple technical platforms.
• Participate in the development and management of project budget.
• Provide project assignments to the project team, manage project scope and ensure the quality of deliverables.
• Maintain ongoing communication with customer(s) during the course of the project ensuring that they are up to date on progress.
• Manage vendors in the context of the project.
• Develop and manage project success metrics.
• Able to clearly communicate expectations, plans, and requirements for a project to stakeholders.
• Adhere to PMO processes and practices.
• Performs other duties as assigned.

Required Qualifications:

• High school or equivalent
• Bachelor's degree In a related field.
• Bachelors Degree for this department preferred only (Not required).
• 2 years IT Project Management experience is required
• Conduct complex analysis of administrative organization, policies, procedures, practices, and cost-benefit studies.
• Provide administrative reports and analysis in support of the overall efficiency and effectiveness of operation as appropriate.
• Advanced skill in computer programs, Word, Excel, Powerpoint, Outlook, etc.
• Demonstrated ability to handle confidential material with discretion.
• Ability to communicate effectively and diplomatically with a wide variety of constituents to include: patient and family, staff, faculty, alumni, business, political and community leaders and the general public is essential.

Preferred Qualifications:

• Experience with implementing Business and Practice Management or an Electronic Medical Record (EMR) in either a physician office or hospital is preferred
• Prior experience with any of the following applications are preferred: Kronos, Lawson, McKesson, Cerner, IDX.
• Certification - Job Relevant Sigma qualitfication

Required Licenses/Certifications:

• Fire Life Safety Training (LA City) If no card upon hire, one must be obtained within 30 days of hire and maintained by renewal before expiration date. (Required within LA City only)
• Project Management Professional (PMP) Project Management Institute Training and/or PMP Certification required. If not available upon hire, one must be obtained within six months of start date.

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