UPGRADE, Vol. XII, issue no. 5, December 2011 - cepis.org

CEPIS UPGRADE is the European Journal Vol. XII, issue No. 5, December 2011
for the Informatics Professional, published bi-
monthly at <http://cepis.org/upgrade> Farewell Edition

Publisher 3 Editorial. CEPIS UPGRADE: A Proud Farewell
CEPIS UPGRADE is published by CEPIS (Council of Euro- — Nello Scarabottolo, President of CEPIS
pean Professional Informatics Societies, <http://www.
cepis.org/>), in cooperation with the Spanish CEPIS society ATI, Novática and CEPIS UPGRADE
ATI (Asociación de Técnicos de Informática, <http:// — Dídac López-Viñas, President of ATI
www.ati.es/>) and its journal Novática
Monograph
CEPIS UPGRADE monographs are published jointly with Risk Management
Novática, that publishes them in Spanish (full version printed; (published jointly with Novática*)
summary, abstracts and some articles online) Guest Editor: Darren Dalcher

CEPIS UPGRADE was created in October 2000 by CEPIS and was 4 Presentation. Trends and Advances in Risk Management
first published by Novática and INFORMATIK/INFORMATIQUE, — Darren Dalcher
bimonthly journal of SVI/FSI (Swiss Federation of Professional
Informatics Societies) 10 The Use of Bayes and Causal Modelling in Decision Making,
Uncertainty and Risk — Norman Fenton and Martin Neil
CEPIS UPGRADE is the anchor point for UPENET (UPGRADE Euro-
pean NETwork), the network of CEPIS member societies’ publications, 22 Event Chain Methodology in Project Management — Michael
that currently includes the following ones: Trumper and Lev Virine
• inforewiew, magazine from the Serbian CEPIS society JISA
• Informatica, journal from the Slovenian CEPIS society SDI 34 Revisiting Managing and Modelling of Project Risk Dynamics -
• Informatik-Spektrum, journal published by Springer Verlag on behalf A System Dynamics-based Framework — Alexandre Rodrigues

of the CEPIS societies GI, Germany, and SI, Switzerland 41 Towards a New Perspective: Balancing Risk, Safety and Danger
• ITNOW, magazine published by Oxford University Press on behalf of — Darren Dalcher

the British CEPIS society BCS 45 Managing Risk in Projects: What’s New? — David Hillson
• Mondo Digitale, digital journal from the Italian CEPIS society AICA
• Novática, journal from the Spanish CEPIS society ATI 48 Our Uncertain Future — David Cleden
• OCG Journal, journal from the Austrian CEPIS society OCG
• Pliroforiki, journal from the Cyprus CEPIS society CCS 55 The application of the ‘New Sciences’ to Risk and Project
• Tölvumál, journal from the Icelandic CEPIS society ISIP Management — David Hancock

Editorial TeamEditorial Team 59 Communicative Project Risk Management in IT Projects
— Karel de Bakker
Chief Editor: Llorenç Pagés-Casas
Deputy Chief Editor: Rafael Fernández Calvo 67 Decision-Making: A Dialogue between Project and Programme
Associate Editor: Fiona Fanning Environments — Manon Deguire

Editorial Board 75 Decisions in an Uncertain World: Strategic Project Risk
Prof. Nello Scarabottolo, CEPIS President Appraisal — Elaine Harris
Prof. Wolffried Stucky, CEPIS Former President
Prof. Vasile Baltac, CEPIS Former President 82 Selection of Project Alternatives while Considering Risks
Prof. Luis Fernández-Sanz, ATI (Spain) — Marta Fernández-Diego and Nolberto Munier
Llorenç Pagés-Casas, ATI (Spain)
François Louis Nicolet, SI (Switzerland) 87 Project Governance — Ralf Müller ./..
Roberto Carniel, ALSI – Tecnoteca (Italy) 91 Five Steps to Enterprise Risk Management — Val Jonas

UPENET Advisory Board * This monograph will be also published in Spanish (full version printed; summary, abstracts, and some
Dubravka Dukic (inforeview, Serbia) articles online) by Novática, journal of the Spanish CEPIS society ATI (Asociación de Técnicos de
Matjaz Gams (Informatica, Slovenia) Informática) at <http://www.ati.es/novatica/>.
Hermann Engesser (Informatik-Spektrum, Germany and Switzerland)
Brian Runciman (ITNOW, United Kingdom)
Franco Filippazzi (Mondo Digitale, Italy)
Llorenç Pagés-Casas (Novática, Spain)
Veith Risak (OCG Journal, Austria)
Panicos Masouras (Pliroforiki, Cyprus)
Thorvardur Kári Ólafsson (Tölvumál, Iceland)
Rafael Fernández Calvo (Coordination)

English Language Editors: Mike Andersson, David Cash, Arthur
Cook, Tracey Darch, Laura Davies, Nick Dunn, Rodney Fennemore,
Hilary Green, Roger Harris, Jim Holder, Pat Moody.

Cover page designed by Concha Arias-Pérez
"Liberty with Risk" / © ATI 2011
Layout Design: François Louis Nicolet
Composition: Jorge Llácer-Gil de Ramales

Editorial correspondence: Llorenç Pagés-Casas <[email protected]>
Advertising correspondence: <[email protected]>
Subscriptions
If you wish to subscribe to CEPIS UPGRADE please send an
email to [email protected] with ‘Subscribe to UPGRADE’ as the
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at <http://www.cepis.org/upgrade>

Copyright
© Novática 2011 (for the monograph)
© CEPIS 2011 (for the sections Editorial, UPENET and CEPIS News)
All rights reserved under otherwise stated. Abstracting is permitted
with credit to the source. For copying, reprint, or republication per-
mission, contact the Editorial Team

The opinions expressed by the authors are their exclusive responsibility

ISSN 1684-5285

Vol. XII, issue No. 5, December 2011

Farewell Edition

Cont.

UPENET (UPGRADE European NETwork)

99 From inforeview (JISA, Serbia)
Information Society
Steve Jobs — Dragana Stojkovic

101 From Informatica (SDI, Slovenia)
Surveillance Systems
An Intelligent Indoor Surveillance System — Rok Piltaver,
Erik Dovgan, and Matjaz Gams

111 From Informatik Spektrum (GI, Germany, and SI, Switzerland)
Knowledge Representation
What’s New in Description Logics — Franz Baader

121 From ITNOW (BCS, United Kingdom)
Computer Science
The Future of Computer Science in Schools — Brian Runciman

124 From Mondo Digitale (AICA, Italy)
IT for Health
Neuroscience and ICT: Current and Future Scenarios
— Gianluca Zaffiro and Fabio Babiloni

135 From Novática (ATI, Spain)
IT for Music
Katmus: Specific Application to support Assisted Music
Transcription — Orlando García-Feal, Silvana Gómez-Meire,
and David Olivieri

145 From Pliroforiki (CCS, Cyprus)
IT Security
Practical IT Security Education with Tele-Lab — Christian
Willems, Orestis Tringides, and Christoph Meinel

CEPIS NEWS

153 Selected CEPIS News — Fiona Fanning

Risk Management

Project Governance1

Ralf Müller

Having a governance structure in organizations provides a framework to guide managers in decision making and action
taking and helps to alleviate the risk of conflicts and inconsistencies between the various means of achieving organiza-
tional goals such as processes and resources. This article introduces project governance, a major area of interest in
organizations, which is intended to guide, direct and lead project work in a more successful setting. To that purpose a new
three step governance model is presented and described.

Keywords: Behaviour Control, Framework for Gov- Author
ernance, Governance Model for Project Management, Gov-
ernance Structures, Outcome Control, Project Governance, Ralf Müller, PhD, is Professor of Business Administration at
Project Management Action, Shareholder Orientation, Umeå University, Sweden, and Professor of Project Management
Stakeholder Orientation. at BI Norwegian Business School, Norway. He lectures and
researches in governance and management of projects, as well
Governance starts at the corporate level and provides a as in research methodologies. He is the (co)author of more than
framework to guide managers in their daily work of deci- 100 publications and received, among others, the Project
sion making and action taking. At the level of projects gov- Management Journal’s 2009 Paper of the Year, 2009 IRNOP’s
ernance is often implemented through defined policies, proc- best conference paper award, and several Emerald Literati
esses, roles and responsibilities, which set the framework Network Awards for outstanding journal papers and referee work.
for peoples’ behaviour, which, in turn, influences the project. He holds an MBA degree from Heriot Watt University and a
Governance sets the boundaries for project management DBA degree from Henley Management College, Brunel
action, by University, U.K. Before joining academia he spent 30 years in
the industry consulting large enterprises and governments in 47
„ Defining the objectives of a project. These should be different countries for their project management and governance.
derived from the organization’s strategy and clearly outline He also held related line management positions, such as the
the specific contribution a project makes to the achieve- Worldwide Director of Project Management at NCR Teradata.
ment of the strategic objectives <[email protected]>

„ Providing the means to achieve those objectives. This ment for their shareholder (i.e. having shareholder orienta-
is the provision of or enabling the access to the resources tion), while others try to balance a wider set of objectives,
required by the project manager including societal goals or recognition as preferred employer
(i.e. having a stakeholder orientation). Within this con-
„ Controlling progress. This is the evaluation of the tinuum, the work in organizations might be controlled
appropriate use of resources, processes, tools, techniques through compliance with existing processes and procedures
and quality standards in the project. (i.e. behaviour control), or by ensuring that work outcomes
meet expectations (i.e. outcome orientation). Four govern-
Without a governance structure, an organization runs ance paradigms derive from that and are shown in Figure 1.
the risk of conflicts and inconsistencies between the vari-
ous means of achieving organizational goals, such as proc- The Conformist paradigm emphasizes compliance with
esses and resources, thereby causing costly inefficiencies existing work procedures to keep costs low. It is appropri-
that negatively impact both smooth running and bottom line ate when the link between specific behaviour and project
profitability. outcome is well known. The Flexible Economist paradigm
is more outcomes-focused requiring a careful selection of
Approaches to governance vary by the particularities of project management methodologies etc. in order to ensure
organizations. Some organizations are more shareholder economic project delivery. Project managers in this para-
oriented than others, thus aim mainly for Return on Invest-
1 This article was previously published online in the “Advances in
“This article introduces Project Management” column of PM World Today (Vol. XII Issue III
project governance, - March 2010), <http://www.pmworldtoday.net/>. It is republished
with all permissions.
a major area of

”interest in organizations

© Novática Farewell Edition CEPIS UPGRADE Vol. XII, No. 5, December 2011 87

Risk Management

Shareholder Stakeholder “ Governance provides a
Orientation Orientation
framework to guide managers
Behaviour Outcom Flexible Versatile
Control e Control economist artist ”in their daily work of decision
making and action taking

Conformist Agile of a lesser and lesser importance to the core functionality,
pragmatist enhance the product in flexibility, sophistication and ease-
of-use. These projects often use Agile/Scrum methods, with
Figure 1: Four Project Governance Paradigms. the sponsor prioritising deliverables by business value over
a given timeframe.
digm must be skilled, experienced and flexible and often
work autonomously to optimize shareholder returns through Larger enterprises often apply different paradigms to
professional management of their projects. The Versatile different parts of their organization. Maintenance organi-
Artist paradigm maximizes benefits by balancing the diverse zations are often governed using the conformist or econo-
set of requirements arising from a number of different mist paradigms, while R&D organizations often use the ver-
stakeholders and their particular needs and desires. These satile artist or agile pragmatist approach to project govern-
project managers are also very skilled, experienced and work ance.
autonomously, but are expected to develop new or tailor
existing methodologies, processes or tools to economically Governance is executed at all layers of the organiza-
balance the diversity of requirements. Organizations using tional hierarchy or in hierarchical relationships in organi-
this governance paradigm posses a very heterogeneous set zational networks. It starts with the Board of Directors,
of projects in high technology or high risk environments. which defines the objectives of the company and the role
The Agile Pragmatist paradigm is found when maximization of projects in achieving these objectives. This implies de-
of technical usability is needed, often through a time-phased cisions about the establishment of steering groups and
approach to the development and product release of func- Project Management Offices (PMOs) as additional govern-
tionality over a period of time. Products developed in projects ance institutions. The former often being responsible for
under this paradigm grow from a core functionality, which the achievement of the project’s business case through di-
is developed first, to ever increasing features, which although rect governance of the project, by setting goals, providing
resources (mainly financial) and controlling progress. The
latter (the PMOs) are set up in a variety of structures and
mandates, in order to solve particular project related issues
within the organization. Some PMOs focus on more tacti-
cal tasks, like ensuring compliance of project managers with
existing methodologies and standards. That supports gov-

Figure 2: Framework for Governance of Project, Program and Portfolio Management.

88 CEPIS UPGRADE Vol. XII, No. 5, December 2011 Farewell Edition © Novática

Risk Management

Figure 3: Model of Project Governance. project management. This determines what should be done;
and,
ernance along the behaviour control paradigms. Other PMOs
are more strategic in nature and perform stewardship roles c) control of project management execution. This
in project portfolio management and foster project manage- shows what is done in an organization in terms of project
ment within the organization thereby supporting governance management.
along the outcome control paradigms. A further governance
task of the Board of Directors is the decision to adopt pro- Companies economize the investments in project man-
gramme and/or portfolio management as a way to manage agement by using a three step process to migrate from proc-
the many projects simultaneously going on in an organiza- ess orientation to project orientation. Depending on their
tion. Programme management is the governing body of the particular needs they stop migration at step 1, 2 or 3 when
projects within its programme, and portfolio management they have found the balance between investments in project
the governing body of the groups of projects and pro- management (and improved project results) in relation to
grammes that make up the organization. They select and the percentage of their business that is based on projects.
prioritize the projects and programmes and with it their staff- Organizations with only a small portion of their business
ing. based on projects should invest less, and project-based or-
ganizations invest more in order to gain higher returns from
How Much Project Management is enough for my their investments. The three steps are (see also Figure 2):
Organization?
Step 1: Basic training in project management, use of
This is addressed through governance of project man- steering groups, and audits of troubled projects. This
agement. Research showed that project-oriented companies relativly small investment yields small returns and is ap-
balance investments and returns in project management propriate for businesses with very little activities in projects
through careful implementation of measures that address the
three forces that make them successful. These forces are Step 2: all of step 1 plus project manager certification,
(see also Figure 2): establishment of PMO, and mentor programs for project
managers. This medium level of investment yields higher
a) educated project managers. This determines what can returns in terms of better project results and is appropriate
be done; for organizations with a reasonable amount of their busi-
ness being dependent on projects.
b) higher management demanding professionalism in

“ ”Approaches to governance vary by the particularities
of organizations

© Novática Farewell Edition CEPIS UPGRADE Vol. XII, No. 5, December 2011 89

Risk Management

Companies economize the investments in project

“ ”management by using a three step process

Step 3: All of step 1 and 2 plus advanced training and
certification, benchmarking of project management capa-
bilities, and use of project management maturity models.
This highest level of investment yields the highest returns
through better project results and is appropriate for project-
based organizations, or organizations whose results are sig-
nificantly determined by their projects

The same concept applies for programme and portfolio
management. This allows the tailoring of efforts for gov-
ernance of project, program and portfolio management to
the needs of the organization. By achieving a balance of
return and investment through the establishment of the three
elements of each step, organizations can become mindful of
their project management needs. Organizations can stop at
each step, after they have reached the appropriate amount
of project management for their business.

How does All that link together in an Organiza-
tion?

The project governance hierarchy from the board of di-
rectors, via portfolio and program management, down to
steering groups is linked with governance of project man-
agement through the project governance paradigm (see Fig-
ure 3).

A paradigm such as the Conformist paradigm supports
project management approaches as described above in Step
1 of the three step governance model for project manage-
ment, that is, methodology compliance, audits and steering
group observation. A Versatile Artist paradigm, on the other
hand, will foster autonomy and trust in the project manager,
and align the organization towards a ‘project-way-of-work-
ing’, where skilled and flexible project managers work au-
tonomously on their projects.

The paradigm is set by management and the nature of
the business the company is in. The project governance para-
digm influences the extent to which an organization imple-
ments steps 1 to 3 of the governance model for project man-
agement. It then synchronizes these project management
capabilities with the level of control and autonomy needed
for projects throughout the organization. This then becomes
the tool for linking capabilities with requirements in accord-
ance with the wider corporate governance approach.

90 CEPIS UPGRADE Vol. XII, No. 5, December 2011 Farewell Edition © Novática