How to Govern ERP Project?

As a Project Sponsor, you are responsible for project governance. You ensure that the project is steering in right direction. You are ultimately responsible for the business case and success of the  project.


Typically, more than one vendors, subcontractors, consultants are involved in ERP implementations. These resources may not have worked together before. There are strong changes that they following different project methodology/approach. Hence, there is strong need of alignment.

Project Sponsor has a very important role to play!

Before getting to detail, let use review definition of governance according to APM:

“Governance refers to the set of policies, regulations, functions, processes, procedures and responsibilities that define the establishment, management and control of projects, programmes and portfolios.”

The following section illustrates four pillars of effective project governance:

Project Monitoring

Governance rely on effective monitoring. Following points must be considered:

  • Project Status Report –  It should be one consolidated report describing all the activity within the project. It must include status update on the tasks, budget information, explanation on delayed/likely to be delayed tasks.
  • Project progress – To ensure consolidated PSR in timely manner, entire project team must report progress by set day/time each week/fortnight.
  • Freqency of PSR – Decide frequency of PSR based on number of resources, project complexity and average effort spend on weekly bases.
  • Types of Tasks – From scope perspective, there are following two types of tasks. While reviewing PSR, ensure ‘actual budget’ spent is proportionally increasing with ‘percentage complete’.
    1. Defined scope
    2. Un-defined scope (Assistance/Support)
  • Critical path – Ensure that there is no suspected delay on the tasks that are on critical path and tasks that are feeding to critical path. The assessment should be based on future planned work. Ensure resources are available and booked for these tasks in advance.
  • Review project – Review existing project risks, actions, variations, decisions and issues. Add notes while reviewing each item. Decide if any escalation is required.
  • Continuous improvement – Review and consult project team for any adjustments required within project based on lessons learnt, things that do/don’t work.
  • Agreed Rules – Ensure the project is executed according to agreed guiding documents (like Statement of Work, project charter, Terms of Engagement etc.). Make sure the team is following agreed process and procedures. They are using agreed system to manage and report their work. Project documentation, invoices, handovers are being managed as per agreed process.


Ensure that team is using best available management tools. If there is nothing available, then team will rely on primitive tools like MS Excel, Word etc. This will give you average results. Important human talent will be wasted. Good tools brings efficiency and transparency. It makes your life easier from governance perspective.

  • Project Management Tools – These tools help project team for project planning, estimating, forecasting work, budget management, resource allocation, task management, project reporting etc.
  • Document Management – These tools help project team to collaborate project documentation, version control, archive documents.
  • Communication – These tools help project team to communicate. Project requires  various types of communication. For example, instant messaging, notifications (when task in allocated or overdue etc.), formal communication, text, voice and video communication.


Communication is key aspect of project governance. Project sponsor must inform and engage stakeholders:

  • Identify Stakeholders – Identify project stakeholders. They are inside as well as outside your organisation. For example, Project Management Office, Business Units, Senior Management, Project board/Steering committee, End Users, Project Team. External stakeholders can be regulatory bodies, suppliers, customers etc.
  • Identify stakeholder needs – Identify stakeholder’ communication needs. Identify types of content (detailed reports, dashboards etc.), frequency, medium (emails, meeting, instant messaging, stand-ups) of the communication.
  • Communication plan – Prepare communication plan considering above two points.
  • Execute plan –  Execute the plan with consistency


Following are some key management concepts that will help you setting foundation of good governance process:

  • Internal resources are not different from external – As budget, tasks and quality expectations are set for vendor’s resources, manage internal project team in the same way. Get internal project team to report time against each task. It may create some over head. However, it will bring accountability. Further, it helps to reporting appropriate cost against the project.
  • Reduce Work in Progress (WIP) – Reduce WIP to increase efficiency. A lot has been written about this under Lean concepts.
  • One owner – Each task must be broken into manageable chunks and must have one owner. Multiple owners means no owner!
  • Manage by Exception – This management technique will empower Project Managers, vendors to take decision as per set tolerance. This helps speeding up the project, remove unnecessary discussions and saves your time. PRINCE2 provide in depth content around this concept.
  • Role and responsibilities are clear –  Ensure team’s responsibility is well understood based on Project charter/ terms of reference.
  • Clear definitions – Ensure that you have spend required effort defining clear KPIs, performance and success criteria for the project
  • Approval gates are set in advance – Your project will obviously have more than one stages (Design, Development, Testing etc.). Set clear expectations for closing each stage. Consider, if you want to invest in the next stage of the project or close the project. Review business case and additional investment, risks to make the decision. PRINCE2 provide in depth content around managing stage boundaries.

Risk Management, Decision making, leadership are important for Project governance. However, they rely on the essential pillars (discussed above) that will elevate you, so you see things clearly – well in advance. All the best!

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