Would Your PMO Pass a Project Management Audit?
With the future growth of many companies depending on the successful strategic investments in core projects, effective project management governance is becoming a key shareholder focus.
As witnessed many times in the news, project failures can have a major significant negative impact on a company’s bottom line and share price.
As a result, project management offices (PMOs) are increasingly being subjected to Project Management Audits, usually by external auditors on behalf of a company to ensure effective governance and compliance is in place.
The Purpose of a Project Management Audit
The purpose of a Project Management Audit is to determine the likelihood of risk to the overall quality and timelines within the current project portfolio.
Project Management Audits are an independent objective review and examination of project management records and activities to assess the adequacy of governance controls, and to ensure compliance with industry and company regulations and policies.
The Role of the Project Management Office
A major benefit for companies now is that their project management office can play a centralized role in managing the governance of projects and ensuring that projects meet company audit requirements.
As always, a key theme to project management is there are ‘no surprises.”
A PMO can drive the importance of risk management so risks can be assessed and contingency plans can be developed to avoid project failures.
It is always a fine balance for a PMO to have adequate governance to meet audit requirements and not overburden project managers with too much bureaucracy and control.
The Role of a Project Management Information Reporting Tool
In my experience, an easy way for a PMO to strike a good balance between having satisfactory project visibility and transparency is for a company to adopt a project management information reporting tool that aligns project management best practices such as issue and risk management with milestone reporting, and stage-gate governance. BrightWork, a project portfolio management solution for SharePoint, is one such tool.
Project Management Audits
Some companies audit requirements may be more stringent depending on their industry sector but all projects should meet some, if not all, of the following audit questions.
- What is the level of visibility and transparency of the issues, dependencies and status of programmes and projects within the organization?
- Is there a documented, best practice project management framework in place?
- Is the project management framework translated into basic PM deliverables?
- Is there a documented governance structure in place?
- Is all project documentation centralized in one place?
- Are all project management meeting minutes and decisions recorded and stored centrally?
- Is there a Project Management Information tool facilitating project transparency, monitoring, and reporting?
- Are projects checked throughout the delivery cycle for the following:
- Valid business case
- Project Mandate
- Project Approach
- Project plan
- Realistic Schedule
- Change Control
- Weekly project status reports
- Is there a Resource Management process in place to ensure adequate, skilled PM resources are available for the delivery of the project portfolio?
- Is there a Portfolio Management process in place to ensure project prioritization and that projects are aligned with business objectives and priorities?
- Is there a development programme in place for PMs to upgrade their skills and knowledge as part of improving project delivery productivity?
- Where there is a mix of waterfall and agile development projects, has the agile project environment sufficient governance and best practices in place?
- Is there a formal process for documenting lessons learned?
- Is there a formal benefits plans and realization process in place to make sure the expected benefits from projects are realized as planned?
- Has the PMO a set of effective performance KPIs to ensure maximum project management quality and delivery of programmes and projects?
The benefits of an Agile development environment should not be at the cost of standard project management best practices or governance processes and in turn should be able to meet compliance with a company’s regulations and policies.
The Project Management Audit Process
- Obtain the Project Management Organisation Structure.
- Identify which key players should be interviewed and conduct the interviews.
- Obtain all relevant project management documentation and review for compliance.
- Review all project management governance processes for robustness.
- Produce a report of findings to senior management.
The findings of a Project Management Audit can recommend changes in controls, policies, and procedures. They can be also used to develop success criteria for future projects within a company and identify what it needs to be done so mistakes are not repeated in future projects.