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Why You Need a Project Governor for Your Outsourced Tech Team?

By Randy Rayess, Co-founder, VenturePact

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Randy Rayess, Co-founder, VenturePact

Project management is regularly discussed in business publications. A simple Google search will reveal a plethora of articles with suggestions for improving one’s project management skills. It is therefore surprising that a very closely related topic – project governance gets limited press from industry experts.

The Project governor’s role is critical to the success of a project. Research signals that IT governance can improve the returns on IT investment by about 40 percent.

 What Does the Project Governor Do?

The key aspect of the role is that they are responsible for the overall administration of the project. The Project Governor in an outsourced software engagement is usually a third party, not part of the client team or the development team but acts to help ensure a successful fair outcome in line with the agreed upon contract. The project governor has a holistic view of the project and must understand the underlying objectives and incentives of each party.

The role starts with oversight of all key terms in the contract including features, team, IP ownership, timelines, and pricing. These terms are usually set forth between the project managers of each party with the help of the project governor who helps structure the contract, ensure that the key business objectives are clearly explained and mediates any issues that might come up.

“ Gaps in coordination result in surprises down the road and can cost a company large sums of money and long delays if not identified and addressed early on ”

Another unique facet of this profile is it understands the client’s preferences. The project governor makes sure that all key client preferences regarding styling,     documentation, timing of calls are communicated sooner rather than later. Gaps in coordination result in surprises down the road and can cost a company large sums of money and long delays if not identified and addressed early on. This ability to prevent common pitfalls is where the  key ROI of a Projects governor comes in. 

Failing Without a Project Governor

The state of California implemented a Payroll system without a project governor in place and the project took 10 years, cost over $370M, failed and was terminated in   2013. They not only wasted a lot of money but also lost a significant amount of time and the project still failed.  The reason given to why this all happened was that     there  was no project governor who oversaw the project throughout the implementation.

Succeeding with a Project Governor

Georgia Technical Authority (GTA) spends about $200-450M each year on critical projects and all of them follow proper governance processes. Their goal behind incorporating governance was to understand what’s really going on “behind the numbers that are typically reported by Project Managers”, as stated by the Director of Enterprise Governance Tom Fruman. They focused right from the beginning on creating a governance process that they would follow and that would allow them to predict what would happen, identify issues that might come up in the future and reduce risk.

Most companies have hired project managers to manage their outsourced development work. To increase their chance of a successful engagement, businesses must have a great project governor who can help identify issues, streamline communication, ensure project delivery and provide an unbiased perspective on problems that come up down the road. This will ensure that you avoid the problem California state and many other organizations have faced with cost overruns, long delays and failed projects.