Organisations have always evolved with changing market conditions. But with markets no longer so constrained by geographical boundaries, and new technologies changing the way we work and collaborate, large transformation programs have become both more common and more complex. Additionally, more empowered and more demanding consumers, and greater scrutiny by shareholders and regulators increases the pressure on businesses to get these transformation projects right.
Typically, these programs are large scale and take place over long periods of time. Most involve multiple projects or workstreams. While not limited to technology projects many aim to retire ageing legacy systems without compromising existing operations. And all are expected to deliver benefits to a wide range of stakeholders, without putting customer service or compliance standards at risk.
Risk committees can play an important role in looking at the end-to-end program life cycle and implementing a risk-driven approach to project assurance.
The challenge for the risk committee is to ensure the integrity of the project governance framework, while overseeing the risk profile of the organisation’s project portfolio as a whole. Its role is to maintain oversight and initiate additional assurance activities whenever a program or project represents a significant risk to the organisation.
Committee members need a thorough understanding of the relative risk profile of major projects – not only those involving a high level of expenditure, but also those with the potential to significantly impact the organisation’s ability to carry on business as usual. By understanding the risk profile across the project portfolio, the risk committee can identify emerging operational risks to the organisation as a whole.
There are a number of warning signs that may indicate that the project is not progressing as it should. Directors should be prepared to challenge steering committees and, if necessary, make hard decisions to avoid costly mistakes.
These warning signs can include:
Having alignment across the project portfolio is critical to ensure the various workstreams complement rather than compromise one another, putting a strain on the organisation's financial and human capital resources. This level of insight requires accurate information to understand exactly how each project is tracking, and where the potential risks to delivery lie.
Key questions risk committees should be asking are:
Is there a detailed business case identifying the benefits of the project and the business owners of each benefit? Have the risks to achieving each benefit been defined?
Is there a Project Management Office (PMO) overseeing the project portfolio and acting to disseminate expertise, project tools and best-practice methodologies across the organisation?
Does each project have a strong and effective steering committee responsible for the project’s business plan and the achievement of project outcomes?
Is there a comprehensive change management plan in place?
How engaged do people feel in the change?
Does the risk management strategy set out the organisation’s approach to identifying, assessing and managing emerging strategic and operational risks?
More than ever, organisations need to be able to provide shareholders and customers with a coherent and authentic narrative about who they are and what they will be in the future. This is only possible if they have control over their transformation portfolio.
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