The purpose of the business case is to evaluate the business benefits, cost and risk assessments of alternative options and provides a rationale for the preferred solution.
The Ultimate Guide to Project Assurance
Project Assurance is the process of critically assessing the health and viability of a project (at the risk of over-simplifying it, think of it as an audit function). The independent assessment involves steps that confirm the project complies with regulatory/internal / investment standards and provides comfort to decision makers and senior users that their project is set up for success. Normally adopted for larger scale, capital intensive, technologically advanced and high-risk projects.
The Project Assurance discipline requires the technical, strategic and contractual expertise to undertake a meaningful review and audit of project plans, project personnel, and the competency to develop a forecast of likely technical, economic, safety performance and critical success factors.
Project Assurance professionals are normally engaged by Project Sponsors and Senior Executives and typically serve and report to the Board. All types of organizations and government bodies use project assurance as a supplementary methodology for specific priority projects within their portfolios.
Project assurance is closely linked to the family of project related disciplines of project management, project benchmarking, value assurance or phase–gate approvals and the de-risking of complex projects.
The term Project Assurance was first used in PRojects IN Controlled Environments (PRINCE). Assurance is about ongoing validation of the project in terms of costs and benefits, that the users’ requirements are or will be met, and that the project is delivering the right solution not just a solution.
Normally assurance spans across four areas:
- Business Assurance – validation of benefits
- User Assurance – Will it function the way it should?
- Technical Assurance – Its it built to the right standards
- Risk Assurance – what exposure is there and has it been minimized
PRINCE2 separates the Project Assurance function from the Project Support function. The Project Board as defined in PRINCE2 have responsibility and accountability for Project Assurance.
Depending on the size, scope, risk and profile of the project, and the Project Boards own knowledge, skills and time available, the Project Board may choose to delegate responsibility for Project Assurance to others within the organisation or commonly seen engagement of external specialists.
In saying this the Project Board cannot transfer accountability for Project Assurance, additionally Project Assurance should not be delegated to the Project Manager as it will likely present a conflict.
Over time, the term “Project Assurance” has expanded in its use to a more rounded approach. It is now recognised that not just the outputs of a Project is assessed, but a review of hard disciplines (rhythms and routines, tools, processes) and soft skills (leadership, resourcing, competencies and people management) need to be factored into the broader context, content and complexity of a project and its environment – notwithstanding the requirements that still focus Project detail – in identifying critical success factors and potential risks to the overall projects success.
An eight-step assurance procedure was outlined in a 2013 paper produced by the BT Centre for Major Programme Management at the University of Oxford.
The key features of this approach to project assurance is a critical review of the project plan and personnel by an independent expert organisation with specialisation in benchmarking and project execution. Project assurance is also recognised by PRojects IN Controlled Environments (PRINCE2) –, in an attempt to address the need for monitoring all aspects of the project’s performance and products independently of the project manager.
According to the Office of Government Commerce, Project Assurance helped manage risk and improved delivery confidence. Project Assurance supported SROs (Senior Responsible Owner) and others responsible for successful delivery whilst providing funders and other stakeholders with the confidence that the project could deliver to time, budget and quality. This they called the Project Assurance Function. The UK Government has also set up a project assurance organisation called the Major Projects Authority that works with the Treasury to grow project assurance capabilities in Government and deliver project assurance services for high risk Government-sponsored projects.
Like most industries there is a suite of acronyms and terms which make sense to the practitioner but mean nothing to others. Here we have included some reference material where you can get all Project Management terms.
Unsurprisingly not all stakeholders see Project Assurance as a necessity or a methodology that adds value. Whilst others have strict mandated processes and timeframes where Project Assurance activity MUST be carried out. Overall Project Assurance has its place and offers pros and cons.
Project Assurance Pro’s
- A project is reviewed objectively with no Bias
- Specialised Expertise will provide project insights
- Provides confidence to Key Stakeholders
- Picks up potential exposure and issues early
- Can be flexible on when an Assurance review is run
- Clear set of recommendations to improve delivery
Project Assurance Con’s
- Lack of Organisational Maturity
- Adds costs to the Project
As previously mentioned, normally carried out by an external agency, the review is objective, and this helps to identify strengths, weaknesses and opportunities that might be missed by those so intimately involved with the business.
In its complete form, Project Assurance should provide three lines of defence:
- Line 1: Project team conducts day to day monitoring, control and risk review.
- Line 2: Management – Specialist functions that oversee risk
- Line 3: Independent assurance outside the project team and manager, either internal or external
These lines of defence typically focus on risk or de-risking the project across the various project disciplines. Taking a closer look at Line 1 defence Project Assurance is inherently part of everyday project management from planning right through execution. It is at certain points within the project where Line 2 and Line 3 play a part. These additional lines of defence are there to ensure the project remain objective and report unbiased results.
More information of the three lines of defence can be found here
Prior to 2020 but now even more so post COVID, globally, efforts are being made to build resilience at every level of society (in healthcare, governance, socio-economic support, educational continuity, and togetherness management). Countries have been primarily focusing these efforts in two areas:
- containment of the current crisis, and
- planning future social and economic security once the intensity of the pandemic subsides.
For business to recover, a stimulus and investment into larger scale projects will need to be a priority! It is unlikely that businesses will have the appetite to throw large amounts of capital at projects just on a payback return. It is now more critical than ever that fundamental considerations will need to provide confidence and assurance to decision-makers on the vulnerability, exposure and assurance of project success. Decision-makers will need:
- a willingness to recalibrate and adapt based on what has been learned
- reiterative de-risking of projects and capturing emerging risks
- to ensure readiness for project success through critical analysis
Whilst each industry sector and indeed individual organisations will approach this need in various ways the fundamental approach to undertaking a project assurance review will remain the same. The following list outlines what we see as the 7 critical factors in running a successful project assurance review.
- Choosing the place and time for application
- Project Assurance Independence
- Project Assurance Experience
- Articulated Assurance Scope
- Defined Timeline and Project Assurance Milestones
- Communication through the Project Assurance Process
- Project Assurance Outcomes Accountability
The following link will go into detail on each of the critical factors and explain exactly what you need to be doing to get it right.
In summary a Project Assurance Review has broad application and is a key methodology in providing stakeholders the needed confidence on a project’s likely success. In a new world of economic recovery and uncertainty for some time yet, reliance on these methodologies will only increase. It will be up to senior executives and Governments to champion this approach. As a reader what you can take away from this is that there are simple steps that you can implement to begin the assurance of projects you may be involved in.
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