Technical Articles

Project Management in the Public Sector

Editor's Note:
This article is adapted from an address to the Australian Institute of Project Management on October 9, 2007, entitled “Project Management—Some Reflections on the Management of Projects in the Australian Public Sector.”

Managing and implementing projects well are important issues for the public sector. The government tasks the public sector to use public resources to deliver large and complex projects for the benefit of its citizens.

Implementing new government programs presents the same challenges as implementing projects and should be considered in this context. It goes without saying that government programs or policies need to be delivered on time, on budget, and in accordance with expectations—this is no easy task given the complexity of the environment in which public administration is delivered. The same is true for projects that contribute to the delivery of government outcomes.

In recent years, the Australian National Audit Office (ANAO) has reviewed public sector projects ranging from the implementation of major information technology (IT) systems, to the acquisition of defense capability, to the sale of assets. Our reports on these reviews give an important message: while project management may be the centerpiece, other key variables in the equation include governance arrangements, people skills, and stakeholder involvement in systems that give visibility to project status. Not surprisingly, the most disappointing project outcomes demonstrate that the failure to pay close attention to any of these variables puts projects at risk.

As the links between entities, programs, and functions become more complex, our environment continues to become more challenging. This means that project managers need to deal with a greater level of interconnectedness, especially with technological enablers that help support program delivery.

While the fundamentals of project management may not change significantly, risk management is becoming increasingly important. Achieving program outcomes often requires the involvement of many levels of government, other entities, and the private sector. If implementation doesn’t go according to plan, increasing levels of interdependence bring additional risks and costs. Significant interdependencies include partners that play a key role in determining whether or not a project is successful and the effect on partners that rely on projects being delivered on time.

In addition to having the necessary technical skills, successful project managers need to have skills in managing relationships. For example, they need to to be able to handle the pressures that inevitably come with managing larger and more complex projects; they also need to have the skills to interact with stakeholders with technical competence, timeliness, courtesy, and respect.

Keys to Improving Project Management

In view of these trends, the ANAO’s experiences point to the following four factors as key to improving project management in the Australian government.

Greater recognition of the importance of project management in delivering outcomes for government.

Project management is the key to turning government’s policies and aspirations into results. This has been recognized recently in a number of ways. For example, a Cabinet Implementation Unit was established to track the implementation of key new programs and budget measures. Also, the ANAO and the Department of Prime Minister and Cabinet issued a joint better practice guide entitled Implementation of Programme and Policy Initiatives: Making implementation matter.

Methodologies designed to better manage risks to successful delivery.

Project managers need a risk management methodology to assist them in delivering a structured approach to planning risk management. Risks associated with projects have to be treated in a positive and proactive way. Another significant contribution to managing project risks is employing an appropriate project management methodology to plan, record, and monitor project performance.

Increased investment in developing staff project management skills.

It is critical that suitably qualified and experienced staff be available in both the public sector and industry. Entities increasingly recognize the need to have a highly trained workforce to manage projects, and they have implemented a range of initiatives designed to improve the skills of their project managers.

Better understanding of the success factors in managing projects.

There is an increasing body of knowledge about what works best, and the Australian government’s ability to manage projects can be further improved through continuous learning. Two initiatives in this context are worthy of mention: the use of a formal assessment process to measure project maturity and the establishment of project management offices that provide centralized project and management support and services across the entity.

Steps in Project Management

Projects are much more likely to result in successful outcomes when the following project management steps have been taken:

  • Prepare a comprehensive business case. The case should address issues such as the expected benefits, estimated costs, risks to successful outcomes, and proposed governance arrangements. It is important that predicted or estimated project benefits be quantified to the greatest extent possible. The benefits should be factually and objectively based.

  • Complete a formal risk assessment. This assessment should identify risks and outline appropriate mitigation strategies for each risk. Where these judgments are critical to successful program or policy outcomes, they need to be undertaken by senior managers and be subject to intensive scrutiny.

  • Identify internal and external resource requirements and commit the necessary resources.

  • Establish governance arrangements and clearly communicate them to all parties. These arrangements should cover project ownership, approvals, ongoing monitoring, and review and project sign-off. Increasingly, such arrangements will need to address the responsibilities of other entities that have a stake in the project outcome.

  • Follow proper recordkeeping practices. Particular attention should be given to ensuring that key decisions, and the rationale for them, are documented.

  • Establish appropriate probity and quality assurance arrangements.

  • Set up administrative arrangements for the project. In particular, robust financial management of all project costs is required for the life of the project.

ANAO Reports on Project Management

The following ANAO audit reports give additional information about project management in the Australian context. All ANAO publications can be found on the ANAO’s Web site: www.anao.gov.au

  • ANAO Audit Report No. 24, 2006-07, Customs’ Cargo Management Re-engineering Project

  • ANAO Audit Report No. 34 2006-07, High Frequency communication system Modernisation Project

  • ANAO Audit Report No. 11 2007-08, Management of the FFG Capability Upgrade

  • ANAO and Department of Prime Minister and Cabinet, Better Practice Guide, Implementation of Programme and Policy Initiatives: Making implementation matter (October 2006)

For additional information, contact the author at ian.mcphee@anao.gov.au.