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Project Training and Governing Rules

02 December 2007

Project Management Training and Governing Rules

Many specific benefits arise from implementing governance. They fall into three broad categories. Those categories, and some specific examples of each, are provided in this list:

  • Increase Revenue
  • Governance helps ensure that project managers follow best practices. Best practices are designed to assure the highest quality project definition and project delivery. When new opportunities are realized in the best possible way, and problems are solved in the best possible way, revenue goes up.
  • Decrease Cost
  • Governance ensures that, when a best practice should be applied, it is applied. Best practices provide optimal results at lowest cost.
  • Governance minimizes duplication of effort by ensuring that only one person is responsible for each possible change to an organization. Reduction of duplicate effort reduces costs.
  • Reduce exposure to corporate, regulatory, and legal risk
  • Governance defines stakeholders and the project manager in advance of a project. Missing a stakeholder is a risk to on-time delivery of acceptable project results within budget. Governance reduces this risk.
  • Governance informs specific managers of their individual accountability for ensuring compliance with standards and regulations. It can even require that individual managers sign on a statement certifying that they are responsible for effective project management, or for ensuring regulatory compliance. If this is done, individual managers know that their own job is at risk if standards and regulations are not followed, and they are much more likely to include compliance in their core job definitions and make sure it gets done. The result is a significant reduction in non-compliance. That reduction in non-compliance translates into several benefits, such as:
  • Reduced exposure to regulatory penalties or delays in regulatory approval
  • Reduced exposure to poor quality project results, and therefore to loss of customers
  • Reduced exposure to damages from lawsuits or criminal actions

The United States Federal government passed a regulation known as Sarbanes-Oxley (SOX), requiring governance and accountability for many corporate functions, including executive confirmation that major projects were under control and being managed properly. SOX applies to publicly-traded US companies; and it is being imitated around the world and applied to governmental agencies as well. Some companies, therefore, must implement governance or face stringent penalties, including risk of criminal prosecution. At the same time, some companies are realizing the benefits of governance aside from compliance issues. These companies are proactively implementing governance for the increased revenue, decreased cost, and reduced risk that it offers.


 
 


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