ERP and digital transformation projects are one of the most significant change initiatives an organisation will undertake. When executed well, they streamline operations, modernise systems, and create long-term value. But they can sometimes miss the mark. McKinsey reports that 70% of digital transformations fail to meet their goals.
Projects drift, priorities clash, and delivery teams lose focus. Leaders lose visibility. Strategy and execution fall out of sync. However, the problem is not always about the technology; it can be the absence of strong governance.
What Is Project Governance in ERP and Digital Transformation?
Project governance is the structured framework that ensures an ERP or digital transformation project stays aligned with business objectives and integrates into your organisation sustainably and effectively. Without governance, even the most well-planned projects can spiral into budget overruns, missed deadlines, and failed implementations.
It’s important to note that project governance is not the same as project management. While project managers execute the plan, governance ensures that the plan still aligns with evolving business priorities. It’s a layer of leadership that steers rather than controls the work.
How to Develop Effective Project Governance
Strong governance ensures that technology investments translate into tangible business improvements rather than becoming costly missteps. It is an essential ingredient in delivering a transformation that meets its stated goals.
1. Align Leadership Around a Shared Vision
Successful ERP projects start with leadership unity. Executive sponsors and key decision-makers must be aligned on both the organisational objectives and the strategic outcomes of the project.
Without this alignment, mixed signals at the top can lead to fragmentation throughout the organisation. Clarity around the project’s purpose should be clearly articulated and embedded in your change management approach, ensuring consistent communication with all stakeholders from day one.
2. Establish Clear Governance for Decision-Making
ERP projects demand fast, well-informed decisions. But without an agreed structure, decision-making can become slow and disjointed.
Invest time early to define how major decisions will be made, who holds authority, and how risks and escalations will be handled. A clearly defined framework reduces uncertainty, avoids bottlenecks, and ensures everyone understands their role in moving the project forward.
3. Set Up a Senior Steering Group
Rather than allowing decisions to be made in silos or ad hoc by different teams, create a senior governance body. This is often in the form of a steering group. This group should be responsible for strategic oversight, making high-level decisions, and keeping the project aligned with business priorities.
This steering group should typically include senior leaders, executive sponsors, and, where appropriate, board-level input. Their role is not day-to-day management, but to provide guidance, challenge, and direction at the right level.
4. Use the Business Case to Anchor Decisions
A strong Project Definition Document is the reference point for every major decision throughout the project lifecycle. It should articulate the project’s intended benefits and clearly define what success looks like. We create this up front in our Project Definition Workshop.
Good governance will always keep the business objectives front and centre. It should clearly define goals and quantify the benefits. Referencing it regularly keeps the project purposeful and strategically aligned.
Best Practices for Effective ERP Project Governance
Governance should be an active, engaged leadership function that represents the voice of the business, not just the delivery team. Good governance brings a strategic mindset with members understanding the ‘why’ behind the project – not just the ‘what’ and ‘how’. Effective governance groups share key qualities:
- Strategic mindset – They think beyond milestones and stay focused on impact.
- Challenging voice – They don’t accept updates at face value.
- Diverse input – Governance should reflect the whole organisation, not just IT.
- Speed and confidence – Timely decisions, not endless debate.
- Supportive stance – Governance backs the team, clears obstacles, and builds belief.
How We Help: Independent Governance Support
Optimum PPS brings deep experience in governance design and delivery. We’ve seen what works, and what doesn’t, across many different ERP and transformation programmes. Our approach is practical, tailored, and grounded in the realities of actual projects. We help organisations build governance that works. This means:
- Designing governance frameworks tailored to your own organisation and culture.
- Facilitating strategic conversations, not just status reviews.
- Providing independent assurance and risk insight.
- Coaching leaders to ask the right questions and make better decisions.
We also support the operational side, facilitating effective governance meetings, framing strategic conversations, and ensuring that decision-making is evidence-based and outcome-focused. We’re not there to manage; we’re there to guide, challenge, and strengthen. Our role is to strengthen your leadership, not replace it.
Conclusion: The Benefits of Good Governance in ERP and Digital Transformation Projects
Too often, governance is misunderstood as a bureaucratic hurdle. But in truth, effective governance is a project’s most important asset. It creates clarity, brings confidence, and drives commitment.
When governance is strong, project teams feel empowered. Leaders stay engaged. The business stays aligned. Issues are addressed early, not buried. And the project is far more likely to succeed, not just in delivering outputs but in achieving outcomes.
In ERP and digital transformation projects, governance is often the difference between success and stagnation. Get in touch with Optimum PPS to explore how expert governance support can keep your programme on track and delivering lasting value.