Most business case governance 'lip service': KPMG

They may seem genuine, but a recent survey suggests many corporate governance initiatives are quickly abandoned once the projects they relate to are up and running, a KPMG business consultant has reported.

They may seem genuine, but a recent survey suggests many corporate governance initiatives are quickly abandoned once the projects they relate to are up and running, a KPMG business consultant has reported.

Speaking at the myPrimavera06 project management conference, Mark Tims, Asia-Pacific leader within the IT Project Advisory Service Group of management consultancy KPMG, reported on the findings of company interviews with CIOs at 600 companies in 22 countries.

While many organisations are increasing their IT spend and commitment, Tims said the justification behind those investments is often based on proposed governance models that rarely make it to the end of the project.

Australian companies ranked ahead of the global mean in areas related to staffing and preparing business cases: for example, formal qualification of project managers was 5 percent ahead of the mean. Also ahead of the pack were use of project reviews (15 percent ahead), formal policies for business cases (11 percent), and use of business cases for every project (8 percent).

Howevever, Australian companies were sorely lacking when it came to tracking the project's performance and using incentives to improve outcomes. Board visibility of key initiatives was 12 percent below the global mean; project performance was linked to executive performance in 11 percent fewer companies; project management professionals were considered to be of strategic importance by 9 percent fewer companies than the mean; and 8 percent fewer companies used independent reviews to evaluate business case assumptions.

The findings of the survey point to one unavoidable conclusion: IT strategists are effectively engaging with executives to get projects off the ground, but executive interest quickly tapers off as the project continues through its lifecycle. And that, of course, is when problems can start.

"We found a lot of governance tends to be focused on getting projects up and running in the first instance," Tims said. "As the project goes on, there's less focus on execution in the back end. Organisations appeared to be going through the motions and giving lip service to the governance processes they had established. The business case often appears to be a one-time document."

Such a finding, which is encapsulated within KPMG's Global IT Project Management Survey (PDF here), should worry executives for whom governance has become a major factor in the shaping of corporate strategy. While 86 percent of the surveyed companies have formal processes for business case approval, for example, only 41 percent required a business case for all projects.

Furthermore, most projects were progressing without the ongoing support of a formal project management officer (PMO): only 21 percent of respondents said PMOs had a mandate to monitor all IT projects, while 61 percent of companies used home-grown methods to track projects and 22 percent did no monitoring at all.

Effective and standardised project management, Tims said, is critical to ensuring that corporate governance initiatives remain relevant and enforced throughout the lifecycle of the project. "When you boil it down, project management is really about commitment," he explained.

"Project management isn't a subject that tends to be up in lights in front of the CEOs, but ultimately those CEOs will be judged by their ability to deliver. In this context, this core capability for project management becomes key: visibility will aid earlier corrective action. Project management needs to be recognised as a whole-of-organisation responsibility and capability rather than saying project management boffins are available when you need the capability."

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