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9. Project Risk Governance Maturity

Introduction

Organisations can use a framework or model to guide them in achieving effective and efficient PRG. They are able not only to determine their current strengths and weaknesses but also to identify the scope for improvements. The model itself contains dimensions against which maturity is measured at each stage of development, from an early to a mature stage. It is commonly referred to as a maturity model since it provides a roadmap for achieving governance sophistication.

Project Management Maturity Models

The emergence of maturity models can be attributed to the increasing number of project managers in the 1990s, when organisations recognised that they would best be managed in project mode (Outperform 2012). Just relying on the performance of project managers, however, did not assure the longterm and consistent performance of project activities. It was recognised that in addition to project management activities at the individual project level, attention to projects at the corporate level was required. Hence, a number of models emerged indicating that project management had achieved a new level of maturity.

SCOPE AND EXAMPLES OF MODELS

Outperform (2012) defined a maturity model as follows: 'A maturity model is a structured collection of elements that describe characteristics of effective processes.' A more holistic definition was offered by Schlichter et al. (2010): 'Maturity models are standards that shape institutional designs and management practices as well as social norms and expectations about behaviour [and] defines excellence in a particular domain and steps to achieve it.' In essence, a maturity model provides a starting point for determining organisational maturity. Its design and content is based on a community's prior experiences with what constitutes maturity. It uses a common language and aims to provide a shared vision for improvements that are necessary and the prioritisation of actions.

The Capability Maturity Model (CMM) is often regarded as the foundation on which subsequent maturity models are based. Yeo and Ren (2009: 276) recognised its broad scope: CMM 'has been applied to many aspects of organizational, human resource, people, and product development as a means of assessment and as part of a framework for continuous improvement.' Among project management professionals, two models are popular: the UK Government's Portfolio, Programme and Project Management Maturity Model (P3M3®) and PMI's Organisational Project Management Maturity Model (OPM3®). They are briefly outlined below.

Portfolio, Programme and Project Management Maturity Model (P3M3®)

The Portfolio, Programme and Project Management Maturity Model is offered by the Office of Government Commerce, a department within the UK Government. It was described by Outperform (2012) as

a reference guide for structured best practice. It breaks down the broad disciplines of portfolio, programme and project management into a hierarchy of Key Process Areas (KPAs). The hierarchical approach enables organisations to assess their current capability and then plot a roadmap for improvement prioritised by those KPAs which will make the biggest impact on performance.

The hierarchical structure of KPAs is important since it enables the organisation to move from a low, immature level to a high, mature level. Thirty-two KPAs are distributed across five levels defined from 'initial' to 'optimised'. In the first level, some recognition is given to the role of projects within the organisation. At the 'repeatable' stage, each project is managed to a specified minimum standard. When the organisation has its own centralised controlled project processes it has reached the 'defined' level. Projects become 'managed' when specific measurements for project performance are applied. Finally, during the 'optimised' level, continuous process improvement with proactive problem and technology management takes place.

The 32 KPAs cover functional achievement/process goals, approach, deployment, review, perception and performance measures. Outperform (2012) provide examples of KPAs found in a business case, which is part of the 'repeatable' stage:

• Goal. Establish a framework to support planning and management of a change and benefits realisation.

• Approach. Appoint a senior person to be responsible for the business case.

• Deployment. Complete a business justification and align the case with strategic objectives.

• Review. Monitor and review the progress at the project programme and project levels.

• Perception. Seek views of stakeholders about the desirability and achievability of the project.

• Performance measures. Obtain ongoing information about the project's value for money and achievability.

Improvements are brought about by breaking down the project goals into manageable tasks. Four generic steps are involved (Outperform 2012): 'where are you today?' (the baseline assessment); 'where do you want to be?' (applying KPAs); 'how will you get there?' (the improvement roadmap); and 'how will you know?' (the maturity assessment).

Organisational Project Management Maturity Model (OPM3®)

As ameasure of effective project governance, PMI developed OPM3®. Its purpose is described at Wikipedia (2013) as providing 'a method for organizations to understand their Organizational Project Management processes and measure their capabilities in preparation for improvement'. It integrates the three domains of organisational project management, namely portfolio, programme and project management, into one maturity model. Maturity is equated to improvements across a wide range of activities including developing business strategy, estimating project costs and benefits, and managing technology.

Schlichter et al. (2010) identified the strength of OPM3® as identifying specific capabilities which make up best practices and the dependencies between them. For this reason they refer to OPM3® as a CMM: capability statements are regarded as essential because without them the model does not work. Each capability statement is 'elaborated by an outcome statement [and] each outcome statement is assigned a KPI'. Dependencies between capabilities result in a capability network with identified subsets grouped as 'best practices'. Schlichter et al. (2010) maintain that 'the term "best practice" was chosen for marketing purposes but denotes nothing but a container of capability statements'.

Unlike the hierarchical approach of P3M3®, OPM3® is implemented in a life cycle of assessment, improvement, and re-assessment.

OPM3® offers guidelines rather than prescriptions by focusing on three elements (Wikipedia 2013): knowledge, assessment and improvement. Knowledge is required to plan for the large numbers of best practices for organisational projectmanagement-Assessmentguides the evaluation of current capabilities and identifies areas in need of improvement, while improvement lays out the steps to be followed to achieve performance improvement goals.

OPM3® life cycle

Figure 9.1 OPM3® life cycle

The challenge for the organisation is to adapt the models to support PRG principles. Because they are broadly designed it allows practices to be developed relevant to the needs of PRG.

 
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