When it comes to project oversight, there are two areas on which executives should focus. Executives should focus on ensuring the project organizations have the systems, personnel, and resources needed to perform and manage the assigned projects, ensure the projects have appropriate plans and focus on the Key Performance Indicators (KPIs) that indicate the project is meeting the approved plan.
Executives have a responsibility to build an organization that can support projects, including systems and people. The systems required to manage projects would include a standardized work breakdown structure, scheduling system, standardized cost system, consistent reporting, and change management system at a minimum. Additional systems that can support the management of projects are the risk management system, decision management, and resource management. These systems should be developed by an experienced leader in project management to ensure they are consistent, connected, and flexible. This leader needs executive support.
Project oversight areas
The organization needs personnel with the appropriate experience in their support function. Each should receive training in the organization’s systems and procedures. To ensure the appropriately trained personnel, the executive again needs to provide support to the project organization leader.
The resources required to perform projects are provided from various areas of the company, requiring executive support. This support ensures the leaders of the various areas of the company understand the priority and support the project with experienced resources. This is an important role for the executives to fill. Managers and project personnel do not generally have the authority to draw resources from other areas of the company. They need executive support.
Executives have a responsibility to set the project teams up for success for all projects they approve. Due to this obligation, executives need to provide their support to build a sufficient project organization, including systems, personnel, and resources. If they cannot provide these things, the project should not be approved.
Executives should build a project organization that they know is capable of delivering the projects they approve. The responsibility to build the capable project organization should result in a level of trust. The project organization that is trusted to perform will meet those obligations. However, to ensure the project organization is meeting that obligation, the executive needs to monitor the organization and the project teams.
Monitoring projects and the organization is accomplished through initial approval and appropriately selected KPIs. Approval for a project should not be provided until the project plan is sufficiently developed to ensure a clear path to success. Every project is different, resulting in a different expectations from the plan. Having the project manager and/or the business analyst sell the project plan to the executives allows the opportunity to validate the plan prior to approval.
Key Performance Indicators (KPIs)
KPIs play a key role in Project oversight. After the project is approved, there are some basic project KPIs that will provide some assurance that the project is following the plan, however, each type of project and each industry will have unique KPIs to support in these assurances. Some of the basic KPIs are schedule variance, cost variance, and revisions to the scope. In addition, any significant risks identified for the project should be included. These KPIs cover the basic goals of project management. There are additional KPIs that should be considered, as those listed are focused solely on the expense side of the company financials.
A KPI associated with the expected returned value should be included in the monitoring. Consider the Return on Investment (ROI) or Return on Equity (ROE) that would have been calculated to justify the original project approval. Return calculations updated with revisions, changes in the market, additional costs, or delays provides powerful information in the health of a project. This financial KPI will be dictated by the standard financial analysis conducted within the overall company.
KPIs related to the project organization’s performance will ensure the capabilities of the organization and add to the trust the executive has in the project organization. The goal of the project organization KPIs focuses on the goals of the company to shorten deliveries, reduce costs, increase throughput, reduce inefficiencies in resource usage, and reduce variabilities. These KPIs will be unique to the organization and the projects involved.
Overseeing projects from the executive level requires an understanding of the organization and its goals, a high-level knowledge of project management, and restraint. Building a project organization that is capable with systems, personnel, and resources, provides the trust allowing the executive to pull back. Using proper KPIs, the executive can hold the appropriate control to oversee and govern projects throughout their lifecycle. Executives can and should seek support from their project organizational leader to assist in setting up this governance system.