The role of the project sponsor is essentially one of maintaining relationships with stakeholders affected by the initiation, development and completion of projects. At the highest level he/she works with the board of directors in identifying projects that support the needs of the organisation. During project development the sponsor is part of, and often chairs, the steering committee that provides oversight of the project. Close relationships are maintained with the project manager during the development of the project. Figure 5.1 diagrammatically shows these relationships.
Figure 5.1 Relationships of the project sponsor
RELATIONSHIP WITH THE BOARD OF DIRECTORS
An important relationship exists with the board of directors in determining which project from the project portfolio should be approved for development. The project sponsor represents the area in the organisation most affected by the project. He or she develops the business case for the project based on his/ her knowledge of project requirements. Being closely linked to the future operations of the project, the sponsor is able to conceptualise the costs, benefits and risks associated with the project investment. A budget is determined for the project and presented to the board for approval.
During project development, the sponsor oversees the value realisation processes outlined in Chapter 4. Reports are provided to the board on progress made as determined at each of the project milestone meetings. Progress is measured against the budget and project plan and funding is progressively released over the duration of the project. Should progress be judged inadequate, the sponsor may recommend that the board withhold funding and consider trade-off actions as specified in the value realisation process.
To be effective in fulfilling his/her responsibilities, the project sponsor should possess the following organisation-oriented attributes (Mueller 2009). The appointment should be at an appropriate level of seniority and be seen as one of power within the organisation. It is not usual for someone in that position not to have political knowledge of the organisation and not to possess political shrewdness. Yet there should be personal compatibility with other key players to be accepted within the ranks of senior management. Excellent communication skills are needed to articulate the connection between the project and the organisation. To see the project to its conclusion, courage may be required to battle with others in the organisation on behalf of the project.
RELATIONSHIP WITH PROJECTS
The relationship with the project manager should be carefully nurtured and professionally conducted. Among the project sponsor's responsibilities are clarifying business priorities and strategy and the decision-making framework as well as communicating business issues. This should be done in a timely manner and in a trusting relationship in which the project manager can expect to be supported in his role by the sponsor.
Being at a higher level within the organisation, the sponsor represents the interests of stakeholders affected by the project more effectively than the project manager. Hence, the role of the project sponsor counterbalances and complements the decision-making influences of the project manager. First, the project sponsor has an influence in the appointment of the project manager and that person's continuation in that role. Second, when performing the oversight function over the project team, the sponsor has the ability to challenge its conduct and performance, for example in meeting the objectives of the project. Third, a contribution to the project can be made by providing resources outside the authority of or not directly managed by the project manager.
The project sponsor also plays an important role in project activities. Most important is the ability to motivate the project team to deliver the project's vision. He/she would do so by regular contact with the team at such occasions as the project 'kick-off' meeting, at reviews and when critical milestones are reached. The team's esteem for the sponsor rises when the sponsor is willing to provide ad hoc support, as and when required. As indicated above, there is always the ability of the sponsor to provide objectivity and challenges to the project manager should it be in the best interests of the project.
PROJECT RISK GOVERNANCE RESPONSIBILITIES
The key responsibility of the project sponsor is first, to identify and support project investments in strategic areas of the organisation and second, to ensure that project managers deliver the anticipated project benefits. These objectives are not achieved without implementing effective PRG and project risk management. The sponsor is therefore an active participant in determining the overall risk profile of the project portfolio and programmes and monitoring the performance of risk identification, analysis and response at the project level.
The effectiveness of top management's support of projects has not been determined with certainty. It can be intuitively argued that senior managers play an important role in the success or failure of projects, including project risk management, but the project management literature only superficially covers this topic (Young and Jordan 2008). However, few would doubt the need for it and that it is a critical factor in project success.
Checklist: Responsibilities of Project Sponsors for Project Risk Governance
• Does every project have a project sponsor?
• Do project sponsors interact with the board to identify projects for the project portfolio?
• Do project sponsors assist in determining the risk profile of the project portfolio?
• Do project sponsors develop risk strategies for value-protecting?
• Do project sponsors develop risk strategies for value-creating?
• Do project sponsors adequately represent projects throughout the organisation?
• Do project sponsors align the interests of key stakeholders with project success?
• Do project sponsors interact with project managers on project risks during project development?
• Do project sponsors have PRG capabilities?
• Are project sponsors accountable for developing the business cases of project investments?
• Are project sponsors responsible for project value realisation processes?
• Do project sponsors report to the steering committees on the performance of PRG?