The Project Sponsor is critical to the success of a project. Sometimes referred to as the owner or champion, the sponsor is an individual that has the authority, access, and interest to help drive a project to successful completion. Often Project Managers do not have formal authority within an organization nor do they have direct control over resources that may work on the project team.
It’s not always necessary to have an executive or senior level manager as a Project Sponsor. Often priority projects and strategic projects have more senior level sponsors, while less visible, non-priority, or maintenance projects can do very well with sponsors that have the needed authority and are under that senior-level.
While it’s important to have a sponsor with the appropriate amount of authority for a given project, more important is that your organization operates from a mature process, and that the Project Manager is supported and provided with the direction and information needed by the sponsor in order to be successful. This includes trusting the Project Manager’s judgment, maintaining priorities, being available when needed, making optimal business decisions, being aware of project health and progress, and overall having a healthy and positive view of project management.
Responsibilities of the Project Sponsor often include:
- Create or assist in creating the project charter
- Provide information about the business and direction to the project team
- Interpret business policies and goals for the Project Manager
- Lead Organizational Change
- Set clear expectations for the project and team
- Review and approve statements of work
- Review and approve project plans
- Assist the Project Manager in addressing obstacles
- Confirm that the business is using resources optimally and adjust where needed
- Act as the executive level contact for the effort
- Communicate project value and progress to the business
- Validate the project is accomplishing its intended goals
- Help clarify responsibilities where needed
- Monitor project health
Project Health and Questions to Answer
Easy to Ask, Hard to Answer
As a project sponsor you may be asked the following questions, and you may be asking them yourself. Without having the proper tools, data, and relationship with the Project Manager these questions can be difficult to answer accurately and objectively:
- Have we accomplished less/as much/more than we thought we would at this point?
- Have we spent less/as much/more than we thought we would at this point?
- How much will it cost to finish?
- When will we be done?
Monitoring Project Health with Earned Value Analysis
Earned Value Analysis (EVA) is a methodology that collects planned costs, actual costs, and results at specific points in time and uses formulas to determine key indicators of project performance overall. Information collected includes planned value, actual cost, earned value, and budget at completion.
As a sponsor you may not need to know the formulas and minutiae, but being aware of the methodology and what’s possible to ask for from the Project Manager helps communicate status to the business and make recommendations to the Project Manager. It’s also important to note that EVA should not be used as a tool for micromanagement, nor is it always a simple matter to generate, especially for efforts that may not have tangible results at first. If your organization has never done EVA for projects set realistic expectations and grow from there. See details below for questions and their corresponding formulas.
Project Sponsor Self Survey
The following are questions a sponsor can periodically ask themselves to collect information or reinforce responsibilities and effective Project Sponsorship.
- Does the business agree the project accurately addresses the problem to be solved?
- Is the charter in alignment with the project team’s expectations?
- When was the last time I checked how the project was performing?
- When was the last time I let the business know about the project?
- What has the Project Manager asked for help on, and what did I do about it?
- Is the project accomplishing what it said it would?
- Does the team know what’s expected of them?
- Does the team know why they are doing the project?
- How does the rest of the organization view the project?
Earned Value Analysis Formulas
- Planed Value (PV) – what was planned to be done at this point
- Actual Cost (AC) – what has been spent at this point
- Earned Value (EV) – the value of what has been accomplished at this point
- Budget at Completion (BAC) – the planned budget for the entire project
Once this information is collected a project manager can use the following EVA formulas to answer project health and performance questions.
- Are we on budget? Cost variance (CV) = EV-AC
- Are we on schedule? Schedule variance (SV) = EV-PV
- How effectively are we spending money? Cost performance index (CPI) = EV/AC
- How effectively are we spending our time? Schedule performance index (SPI) = EV/PV
- By how much will we be off budget when the project is done? Variance at completion (VAC) = BAC-EAC
- How much do we have to spend yet before we are done? Estimate to complete (ETC) = (BAC-PV)/CPI
- How much will this project cost when it’s all done? Estimate at completion (EAC) = BAC/CPI
- Know what’s expected of you as a sponsor
- Be clear and concise with the Project Manager and team
- Ask questions, trust the answers
- Keep the business informed about the project
- Be available and participate
- Be aware of your project’s health
Verzuh E. The Fast Forward MBA in Project Management. New York: John Wiley & Sons, Inc.; 1999.
Rad P, Anantatmula V. Project Planning Techniques. Vienna, VA: Management Concepts; 2005.
Kerzner H. Project Management: A Systems Approach to Planning Scheduling, and Controlling. New York: John Wiley & Sons, Inc.; 2006.