Critical Insights (9) - When you define the project's value equation you enable the Project Governance team to fulfil their true role



When You Define The Project's Value Equation You Enable The  Project Governance Team To Fulfill Their True Role

When your project plans bear no relation to your business case and its benefits, the Project Governance team (Sponsor/Steering Committee/Project Board) can only oversight the project delivery, management and its dimensions.

When, however, the Value Equation™ is used to link the project’s activities to the desired business outcomes, benefits and value, the role of the Project Governance team changes.

They can now focus on protecting and then delivering the value.

  • Scope changes can be viewed in terms of how they impact the project’s net value.
  • Key decisions can be made with the overall long-term value impacts considered rather than just the project cost impacts.
  • Risks, issues and alike can all be viewed in terms of their impacts on the value.
  • Cost and time overruns can be quantified in terms of their impact on the value. Often it is may be valuable, in the longer run, to go over-cost and deliver all of the benefits rather than to cut the project to fit the budget and forego the ongoing benefits.
  • The importance of change management as the means of value realization increases the focus on and commitment to the change activities (which too often are slashed to "save" costs).

The TOP Value Equation makes sense of the Project Governance role 

Previously Project Governance teams have lacked this ability to effectively and easily track their project’s business value. Now they can. Now they can relate each aspect of the project to its value impact.

In Conclusion

At last, the Project Governance team’s role makes sense — not to be super-project managers or just overseers of the project manager’s actions, but as owners, protectors and deliverers of the business value (defined as the business outcomes, benefits and financial value).

It’s time for Project Governance teams to fulfil their true role.

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Learn more about the Project Governance role

The TOP 26 Dimensions of Project Governance

© Jed Simms, Australia, 2009

Topics: Fifteen Critical Insights, Project Governance




Footnotes

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Revision History

First published: Simms, J. (mmm yyyy) as "insert Original Title"

Updated: Chapman, A. (March 2020), Revisions and corrections