Plan and manage project compliance

Concepts

Managing project compliance is a key aspect of project management, and it plays a significant role in passing the Project Management Professional (PMP) exam. The PMP exam requires a comprehensive understanding of regulatory, legal, and organizational compliance requirements and how they apply to project management.

Understanding Project Compliance

Project compliance refers to how well a project aligns with the applicable standards, policies, regulations, and laws. It involves guaranteeing that your projects follow the practices and quality requirements set by regulatory bodies and internal organization policies. For example, a project in the construction industry will need to follow specific safety regulations, building codes, and environmental laws. Without compliance, such a project may face legal issues, financial penalties, or even shutdowns.

In project management, compliance generally covers:

Legal Compliance: Meeting laws and regulations from local, state, or national governments.
Regulatory Compliance: Adhering to industry-specific regulations.
Organizational Compliance: Sticking to the internal policies, rules, and standards within an organization.

Planning Project Compliance

Planning for project compliance begins in the initial stages of a project. Project managers should identify all the relevant laws, regulations, and standards that apply to the project. This information is often included in the project charter or project governance document.

For example, if a project involves the development of a new software application, the project manager must ensure it is compliant with a variety of regulations, such as data privacy laws and software design standards.

An effective compliance plan should consider:

Identifying applicable regulations, standards, and laws
Understanding the impact of non-compliance
Listing out the activities required to maintain compliance

Assigning responsibility for compliance activities
Establishing a process for monitoring compliance throughout the project

Managing Project Compliance

Managing project compliance is an ongoing task that continues throughout the life of a project. Project managers need to keep track of changes in regulations and incorporate them into the project’s processes. Regular audits and compliance reviews should be performed to check for any non-compliance issues.

Risk management plays a crucial role in managing project compliance. Potential compliance risks should be identified early and treated as part of the project risk management plan. For instance, the risk of non-compliance with a new data privacy law may be mitigated by training the development team on this law and incorporating strict data controls into the software design.

Conclusion

Compliance keeps a project from straying into legal and ethical grey areas, reducing risks and potential delays in project delivery. It is a critical area of focus for any project manager planning to take the PMP exam. As part of the PMP study guide, understanding and managing project compliance forms a cornerstone of successful project management.

Answer the Questions in Comment Section

True or False: The project manager is not responsible for ensuring project compliance.

True

False

Answer: False

Explanation: The project manager plays a crucial role in ensuring project compliance. They are responsible for ensuring that a project adheres to all regulations, laws, and company standards.

When working on project compliance, the project manager should:

a) Ensure that all aspects of the project follow company standards, laws and regulations
b) Ignore minor non-compliant activities as they will not impact the final project.
c) Only focus on the compliance of the final product

Answer: a) Ensure that all aspects of the project follow company standards, laws and regulations

Explanation: It is the project manager’s responsibility to ensure every aspect of the project, from initiation till closing, complies with all applicable regulations, laws, and company standards.

True or False: Ethics play no substantial role in project compliance.

True

False

Answer: False

Explanation: Ethics are integral in a project’s compliance. It is critical to maintain honesty, transparency and integrity in a project to ensure compliance with project standards and policies.

Which of these documents are integral in managing project compliance?

a) Project Charter
b) Legal Contracts
c) Stakeholder Register

d) All of the above

Answer: d) All of the above

Explanation: All these documents are part of managing project compliance. They reflect the legally binding aspects of the project, stakeholders’ interests, and serve as the formal authorization for the project respectively.

True or False: The project compliance process does not require regular audits.

True
False

Answer: False

Explanation: Regular audits are required in the project compliance process as they ensure that the project stays on track and subject to the required laws, regulations, and standards.

Project managers should ignore some non-compliant activities if they speed up project completion:

a) True
b) False

Answer: b) False

Explanation: Non-compliance, even if it speeds up project completion, could lead to legal issues, financial penalties, or reputational damage. It is important to ensure that all activities are in line with company, legal, and ethical standards.

The purpose of a compliance management plan is to:

a) Document the project’s budget

b) Establish guidelines for managing project risks
c) Establish guidelines to ensure the project adheres to laws, regulations, and corporate policies
d) None of the above

Answer: c) Establish guidelines to ensure the project adheres to laws, regulations, and corporate policies

Explanation: A compliance management plan’s main purpose is to guide the project manager and team in adhering to the necessary regulatory, legal, and company policies.

True or False: External compliance audits are always expensive and are not recommended for small projects.

True

False

Answer: False

Explanation: The cost and requirement of external compliance audits can vary based on the nature of the project, its scope, and its context. It’s not always related to the size of the project.

Who is responsible for ensuring that a project is in compliance with environmental laws and regulations?

a) Project manager
b) Environmental consultant
c) Both a and b

Answer: c) Both a and b

Explanation: A project manager has the responsibility to ensure project compliance including environmental laws. An environmental consultant would assist in understanding specific environmental regulations.

True or False: Non-compliance risk is part of project risk management.

True

False

Answer: True

Explanation: Non-compliance risk is indeed a part of project risk management. This risk relates to the potential negative consequences of not adhering to laws, regulations, and standards within a project.