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PROJECT MANAGEMENT INSTITUTE - AGC
06 10 February 2010
Crowne Plaza Hotel
Jeddah, Saudi Arabia
Building & Managing the Right
PMO
By
Ibrahim Mahmoud Ibrahim, PMP, MBA
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Introduction
The Instructor
The Participants
Name
Job Information
Seminar Expectations
Starting Time, Breaks, and Adjourn
Class Rules
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Course Objectives
Learn the key concepts related to Project Management Offices asper the PMI standards
Understand the different PMO Models
Determine the right PMO model based on your organizationalneeds
Understand where the PMO fits in the organizational context
Design the right PMO Organization
Learn how to define the PMO value proposition & PMO services
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Course Objectives
Understand the concepts of portfolio management and programmanagement as per the PMI standards
Discuss and learn in a workshop environment how to build theright PMO (Case Study)
Understand the Organizational Project Management MaturityModel
Learn the secrets for maintaining a successful PMO
Get an overview of the current PMO tools in the market
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Course Contents at a Glance
Understanding Key PMO Concepts1
The PMO Environment2
Implementing the Right PMO3
Conclusion
4 Understanding Program Management
Conclusion
5 Understanding Portfolio Management
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Course Contents at a Glance
Conclusion
6 Introduction to OPM3
PMO Software Tools
7
Sustaining a Successful PMO8
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Chapter 1
UNDERSTANDING KEY PMOCONCEPTS
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What is a PMO?
Pfor Project or Program
M for Management
O for Office
Other interpretations
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What is a Project?
PMI PMBOK defines a project as a temporary endeavorundertaken to create a unique product, service, or result
Temporary means have definite time frame
Unique means the deliverables are somehow unique
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Characteristics of Projects
What are the general characteristics of a project?
Projects are non-routine (one-time)
Have specific products (physical or intangible)
Normally used as instrument of change
Have limited time frame
Involves a sequence of activities demanding different resources andskills
Resources are grouped to achieve a particular aim
Requires professional commitment (some one/agency is fullyresponsible for the project single point of responsibility)
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What is Project Management?
Project management is the application of knowledge, skills,tools, and techniques to project activities to meet projectrequirements
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Project Management Process Groups
Initiating Planning
Monitoring&
Controlling
Executing
Closing
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Project ManagementKnowledge Areas
TimeManagement
HRManagement
ScopeManagement
Communication
Management
RiskManagement
IntegrationManagement
CostManagement
QualityManagement
ProcurementManagement
AS per the PMI PMBOK(2004)
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SEQ SCOPE MANAGEMENT
PROCESSES
PM PROCESS GROUP
1 Collect Requirements Planning
2 Define Scope Planning
3 Create WBS Planning
4 Verify Scope Monitoring & Controlling
5 Control Scope Monitoring & Controlling
PROJECT SCOPE MANAGEMENT
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SEQ TIME MANAGEMENT PROCESSES PM PROCESS GROUP
1 Define Activities Planning
2 Sequence Activities Planning
3 Estimate Activity Resources Planning
4 Estimate Activity Duration Planning
5 Develop Schedule Planning
6 Control Schedule Monitoring & Controlling
PROJECT TIME MANAGEMENT
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PROJECT COST MANAGEMENT
SEQ COST MANAGEMENT PROCESSES PM PROCESS GROUP
1 Estimate Cost Planning
2 Determine Budget Planning
3 Control Cost Monitoring & Controlling
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PROJECT QUALITY MANAGEMENT
SEQ QUALITY MANAGEMENT
PROCESSES
PM PROCESS GROUP
1 Plan Quality Planning
2 Perform Quality Assurance Executing
3 Perform Quality Control Monitoring & Controlling
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PROJECT HR MANAGEMENT
SEQ HR MANAGEMENT PROCESSES PM PROCESS GROUP
1 Develop Human Resource Plan Planning
2 Acquire Project Team Executing
3 Develop Project Team Executing
4 Manage Project Team Executing
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PROJECT COMMUNICATION MANAGEMENT
SEQ COMMUNICATION MANAGEMENT
PROCESSES
PM PROCESS GROUP
1 Identify Stakeholders Initiating
2 Plan Communications Planning
3 Distribute Information Executing
4 Manage Stakeholders Executing
5 Report Performance Monitoring & Controlling
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PROJECT RISK MANAGEMENT
SEQ RISK MANAGEMENT PROCESSES PM PROCESS GROUP
1 Plan Risk Management Planning
2 Identify Risks Planning
3 Perform Qualitative Risk Analysis Planning
4 Perform Quantitative Risk Analysis Planning
5 Plan Risk Responses Planning
6 Monitor & Control Risks Monitoring & Controlling
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PROJECT PROCUREMENT MANAGEMENT
SEQ PROCUREMENT MANAGEMENT
PROCESSES
PM PROCESS GROUP
1 Plan Procurements Planning
2 Conduct Procurements Executing
3 Administer Procurements Monitoring & Controlling
4 Close Procurements Closing
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SEQ INTEGRATION MANAGEMENT
PROCESSES
PM PROCESS GROUP
1 Develop Project Charter Initiating
2 Develop Project Management Plan Planning
3 Direct and Manage Project Execution Executing
4 Monitor & Control Project Work Monitoring & Controlling
5 Perform Integrated Change Control Monitoring & Controlling
6 Close Project or Phase Closing
PROJECT INTEGRATION MANAGEMENT
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Defining Project Management Office
Project Management Office (PMO) is an organizational body orentity assigned various responsibilities related to the centralized andcoordinated management of those projects under its domain
The responsibilities of a PMO can range from providing projectmanagement support functions to actually being responsible for thedirect management of a project
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What is a Program?
A programs is a group ofrelated projects managed in acoordinated way to obtainbenefits and control notavailable from managing them
individually. Programs mayinclude elements of related
work outside the scope of thediscrete projects in theprogram.
Examples of other Work?
Program
Programs Projects Other Work
Project Projects
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What is Program Management?
Program Management is the centralized coordinatedmanagement of a program to achieve the programs strategic
objectives and benefits
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What is Program Management Office?
Program Management Office (PMO) is the centralizedmanagement of a particular program or programs such thatcorporate benefit is realized by the sharing of resources,methodologies, tools & techniques, and related high-level project
management focus.
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Dont Judge a Book by its Title
Other names given to the PMO entity includes: Project Support Office
Project Office
Enterprise Project Office
Project Management Center of Excellence
Strategic Project Office
Project Management Competency Center
Studies show that existing PMOs vary significantly in theirstructure, roles assumed, and the perceived value
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When Do We Need a PMO?
Large number of projects performed but few are completed
Projects are not aligned with business strategy
We celebrate project completion and reward project teammembers even if the project did not deliver the full scope,exceeded the budget, exceeded the deadlines, and compromisedthe quality
Same problems recur in most projects
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When Do We Need a PMO?
Difficulty in tracking project progress
Poor project documentation
Lack of unified project management methodology
Fire fighting mode and management by crisis approach (i.e.urgent issues takes priority over important issues)
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Is PMO a Panacea?
According to a Forrester report (2003), PMOs are on the rise buttheir effectiveness is dubious
Studies show that departmental PMOs has little acceptanceoutside their span of influence
A PWC survey (2004) conducted on 10640 projects valued at $7.2 billion across a range of industries showed that only 2.5% ofglobal businesses achieved 100% project success and over 50% of
the projects fail
The relevance or even the existence of the PMO has beenseriously questioned in recent years in 42% of organizationssurveyed by PMI in 2006
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PMO Models
Models allow us to envision, in advance, what the final outcomewill be. It also allow us to exchange ideas, conversations, anddebate if the model is suitable for usage or not
The PMO literature is full of high level PMO classifications orcategorizations called PMO models
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PMO Models
Full Control PMO
PM reports to PMO
Full responsibility of
deliverables Assign resources
Enforce discipline
Advisory PMO
Awareness
Training
NewslettersGuidelines
Full Control
versusAdvisory Board
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PMO Models
The easy to visualize model Control Tower
Establish standards
Educate Standards
Enforce Standards
Improve Standards
Weather StationReport progress status to the executives (budget, risk, issues,progress)
Track events without influencing them
Resource PoolSupply of project managers
Experts are hired in the pool
Internal clients normally pay for the service
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PMO Models
The How Good Can We Be ModelBased on number of project management processes applied and level of
sophistication
Basic PMO
Advanced PMO
Center of Excellence PMO
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PMO Models
The Where to Focus Model Strategic
Tactical
How We Do Things Model Supportive: Train, Coach, and Rescue
Controlling: Monitor, Audit, and Report
Directive: Share some responsibility (plan, manage, and provideresources)
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PMO Models
The Organizational Chart Model Enterprise Level PMO
Departmental PMO
Project Control Office
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Gartner PMO Models
The Repository Model Serves as a repository for information on project management
methodology and standards
Some staff are assigned formal, part-time roles for maintaining therepository
Suitable for organizations with weak central governance orempower distributed, business-centric project ownership
Does not provide project oversight within organization
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Gartner PMO Models
The Coach Approach Builds on the repository approach
Best practices are documented and shared by the PMO
Project performance is actively monitored. Poor performing projectmanagers are trained and coached
The office is permanently staffed.
The office has some supervisory & reporting responsibility for mostof the projects
The office act as a trainer, consultant, and information provider onproject processes
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Gartner PMO Models
The Enterprise Approach (Manager Model) Builds on the repository and coach models
Concentrates project management capabilities and responsibilitieswithin the PMO. Project managers are staffed within the sharedservices and assigned to projects as needed
May provide direct management of selected projects (act as acontracted project manager)
Sometimes called PM Center of Excellence
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Gartner PMO Models
What are the perceived advantages & disadvantages of each ofthe three Gartner PMO models?
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PMO Competency Continuum
Stage 1Project Office
Achieve projectdeliverables andobjectives for cost,schedule &
resources. 1 or moreprojects 1 ProjectManager
Stage 2Basic PMO
Provide standardand repeatable PMmethodology Multiple Projects Multiple ProjectManagers Program Manager Part time PMOSupport Staff
Stage 3Standard PMO
Establish capabilityand infrastructureto support andgovern a cohesiveprojectenvironment Multiple Projects Multiple PMs Program Mngrs Full time& parttime PMO SupportStaff
Stage 4Advanced PMO
Apply integrated &
comprehensiveproject managementcapabilities toachieve businessobjectives PMO Director Dedicated PMOtechnical & supportstaff
Stage 5Center of
Excellence
Manage continuousimprovement andcross departmentalcollaboration toachieve strategicbusiness goals Multiple programs VP or Director ofProject Management Enterprise widesupport staff
Project Oversight
Process Control
Process Support
Business Maturity
Strategic Alignment
Source: Hill (2008)
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PMO Models
Which is the best model for your organization?
What are the factors that help in deciding the right PMO model?
What if my organizational needs are not covered by the generalPMO models?
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Which Model is the Best?
Model Selection tips Who is the main customer of the PMO?
What is the maturity level of the project management community?
What is the level of cooperation and teamwork at the executiveslevel?
Where is the greatest pain?
Will the PMO be funded and sourced sufficiently by the executivesto address opportunities and threats?
What is the level of support for a strong PMO role?
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Chapter 2
THE PMO ENVIRONMENT
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The PMO Stakeholders
A stakeholder is any one whose interests may be positively ornegatively impacted by the PMO establishment project (i.e. hassomething to gain or lose by implementing the PMO)
Key stakeholders include CEO, CIO, CFO and other corporateexecutives, project managers, customers, PMO project sponsor,PMO team members, project team members, vendors, owners,fund providers, and sellers
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The PMO Stakeholder Expectations
Stakeholder Expectations
Executives
Accurate, relevant & timely reports and views on projects andportfolios to support the decision making process and to facilitatethe selection of the right investments (projects) that give sustainedcompetitive advantage or improve the market share
ProjectManagers
More advanced and stable processes for planning and managingprojects.
Team MembersImproved methods to track their project participation and lower
conflict between projects & their operational duties.
BusinessManagers
Enhanced project delivery, improved quality, lower project budgets,and gain competitive advantage
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PMO & the Organizational Context
CEO
CIO COOVP
Marketing
GM ITSolutions
GMProduction
MarketingPMO
Operation Mgr Logistics Mgr
EPMO
Product APMO
Product BPMO
GM ITOperations
IT PMO
ERP PMOMission CriticalProject Level
Golden Rule: The PMO should be located nearthe main customer of the PMO
Corporate Level
Business Unit orRegional Office
Level
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PMO & the Organizational Context
The closer the PMO to the top, the higher its level of autonomy,authority, and responsibility
Lower resistance
Strategic nature
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Exercise 1
Who are the major stakeholders in your organization?
Where should the PMO be placed in your organization? Why?
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Important Environmental Factors
Sponsorship
CultureOrganization Structure
Personalities
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Factors to Consider: Sponsorship
Dont start a PMO initiative without executive sponsorship
Does management provide tangible support or just some lip-services? (talk the talk but do not walk the walk)
The higher the level of the sponsor, the less work required toovercome obstacles
Again: Dont start a PMO without a strong executive
sponsorship
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Factors to Consider: Culture
What is the organizational culture? How success is defined in theorganization?
Does it reward team work or the super heroes?
Does it promote cooperation? Or does it encouragecompetition?
Does it support process-oriented initiatives?
dont tell me how to do my job environment requires extracommunication effort from the PMO
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Factors to Consider: Culture
The culture the PMO should promote is one of Cooperation
Teamwork
Shared success
Process orientation
Doing it right the first time, rather than doing it over
A research by BIA conducted on 750 PMO organizations showed
that 60% of the PMOs are not supported by their corporateculture
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Factors to Consider: Organization
What is the organizational structure? Weak Matrix or Functional
Strong Matrix
Projectized
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PROJECTIZED
FUNCTIONAL
STRONG
MATRIX
BALANCED
MATRIX
WEAK
MATRIX
PROJECTMAN
AGER
FUNCT
IONAL
MANAGER
AUTHORITY
AUTHORITYORGANIZATION STRUCTURE TYPE
Factors to Consider: Organization
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Factors to Consider: Organization
PMO placement
PMO leadership
Project management maturity of the organization
Where do all the project managers go?
Ability to move towards a strong matrix or projectized
organization
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Factors to Consider: Personalities
What are some of the dominant personalities of both thepeople leading the effort of creating the PMO and of the keystakeholders?
Start with your self
Diversity is not only dealing with people of different cultures,ethnic backgrounds, religions, but also with people withdifferent styles, skills and strengths
If you want to get out of the box thinking, you might need tohave people who are not in the box
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The Purpose of the PMO
Speed up project deliverytime without impactingquality (doing projects right)
Facilitate choosing the right
project mix (doing the rightprojects)
Track & report progress tothe executives
Provide project managementmethodology
Provide technical support forproject management tools
Focus efforts on correctiveactions
Provide or manage projectmanagement training
Manage project portfolios
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The Purpose of the PMO
Mentor project managers
Help projects in trouble
Keep project archives in one place (i.e. maintains lessons learned)
Help desk services
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The Purpose of the PMO
Asurvey on PMO implementation varieties - Hobbs (2006) -published at PMI website revealed the following:
PMO Function % of PMOs where
important
Report status to upper management 83%
Develop & implement standard methodology 76%
Monitor & control project performance 65%
Develop competency of personnel including training 65%
Implement & operate Project Information System 60%
Provide advice to upper management 60%Coordinate between projects 59%
Develop & maintain project scorecard 58%
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The Purpose of the PMO
PMO Function % of PMOs whereimportant
Promote PM within organization 55%
Monitor & control performance of PMO 50%
Participate in strategic planning 49%
Provide mentoring for project managers 49%
Manage one or more portfolios 49%
Identify, select & prioritize new projects 48%
Manage archives of project documentations 48%
Manage one or more programs 48%
Conduct project audits 45%
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Exercise 2
What are the main purposes of the PMO in your organization &why?
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The PMO Environment
ProjectPortfolio
Processes /Methodologies
ResourcePortfolio
AssetPortfolio
Scorecards /Dashboards
Knowledge /Change Mgmt
VendorManagement
ProjectDelivery
Support FunctionsHR Legal
Purchase Training
Admin Program / ProjectManagers
SolutionVendors
GovernanceBoard
SeniorManagement
Data
Feedback/Direction
InformationInformation Direction(Strategy)
Direction(Governance)
MentoringData
FeedbackRequest
Support
PMO
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The PMO Environment
What information the PMO delivers to the Governance Board?
What type of support Legal, Purchasing, and HR provide toPMO?
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Chapter 3
IMPLEMENTING THE RIGHT
PMO
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High Level Implementation Roadmap
Business Case
Project Selection
Project Charter
Assess Current Situation
PMO Value Proposition
PMO Services
PMO Team Setup
PMO Tool ImplementationBuild the PMO (phase 1)
PMO Organization
Operate to achieve the
required maturity level
Specify Priorities
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Maturity Takes Time
Manage
Enhance
TransitionManage
Manage
PMO: Stage 4
PMO: Stage 3
PMO: Stage 2
PMO: Stage 1
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Example: Phased Implementation
High Level Implementation Plan
PMProcesses
ToolSupport
SkillsDevelopment
PortfolioManagement
Stage
1
Stage2
- Define standardmethodology tomanage scope,
time, HR,communications,and risk
- Install MS EPM
- Automate forms,
templates, andsome processes
- Define standardmethodology tomanage
procurement,quality, cost, andintegration
- Conduct ProjectmanagementConcepts
Training
- Conduct PMOawarenesssessions
- Conduct ProjectmanagementConceptsTraining
- Conduct PMOawarenesssessions
- Conducts MSEPM Training
- MS EPMCoaching
- MS EPM first levelSupport
- Establish electronicproject repository
- Design initial
dashboard & web-based reporting
- Design repositoryupdate mechanism
- Maintain projectrepository
- Finalize dashboard& web-basedreporting
- Design resourceportfolio analysis &reporting
GovernanceSetup&Proj
ect
Manag
ementMaturityPla
ns
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Phased PMO Implementation
Q: Which approach is better: implement the PMO tool beforeoperating the first phase of the PMO or at a later stage when thePMO role is accepted by all parties and automation requirementsare more precise?
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The PMO Project Charter
The charter should include the following elements: PMO objectives
High level business justification
High Level Business Requirements
High level deliverables
Major Stakeholders
Assumptions & Constraints
Summary Milestones
Summary Budget
Name of the Assigned Project Manager
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Assess the Current Situation
Where are the major pain areas?
Assess the project environment
Organization & People Assessment
Process Assessment Delivery Assessment
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Organizational assessment
Organization type (projectized, strong matrix, weak matrix,functional)
What resources are working in what projects?
Which business unit has more projects, which region, & whichtime of the year?
What resources can work as PMO champions?
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Process Assessment
Identify the organizational processes that are in place for projectselection, initiation, planning, monitoring & controlling, andcloseout
Identify gaps in project management knowledge areas
Plan to achieve targeted project management maturity usingphased approach
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Process Assessment
Statement 1 2 3 4 5
1 A Project Scope Statement is created for every project.
2 Project Scope Statements are prepared with customer
input throughout the development process.
3 Management and the customer reviews all projectprogression alternatives and recommendations.
4 Potential changes to the SOWs are processed accordingto a documented Change Control Procedure.
5 Approved changes to the Scope Statement arecommunicated to the project team and the customer.
6 The Statement of Work (SOW) contains all deliverablesand is reflected in the Project Plan.
Example: Assessing Scope Management Processes
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Process Assessment
Statement 1 2 3 4 5
1 The projects WBS and resource estimate areused to develop the projects baseline schedule.
2 The project schedule identifies scheduleconstraints driven by the customer, technology,
suppliers, or management.3 Project schedules are updated on a regular basis
with progress status updates, which are measuredagainst the baseline plan.
4 All project schedule work elements havedependencies, effort, and resources assigned.
5 A critical path analysis is performed on theproject schedule during each progress updatecycle.
6 Schedules are optimized to conform to contractrequirements.
Example: Assessing Time Management Processes
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Delivery Assessment
CostAre we delivering on budget?
TimeAre we delivering on time?
Customer SatisfactionHow satisfied are our customers? Are wemeasuring their satisfaction level regularly? How?
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Getting Executive Approval
Face to Face presentation Distribute the slides a head of time to allow for constructivediscussions
Set the right expectations The PMO Setup will follow a phased implementation approach
All deliverables & business objectives will not be delivered in phase- 1
Explain current project management challenges
Present the PMO opportunities
What resources required to do the job & when do you need them (high level)
Initial Budget
High level milestones and project duration
Present the PMO value proposition
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The PMO Value Proposition
Clearly specify the expected benefits by establishing the PMO Life before and after the PMO
What problems and pain areas will be addressed by the PMO
How the PMO will expedite the delivery process
Be realistic, show how the PMO will function to meet its obligation Specify the timeframe required for building the PMO
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PMO Services: Defining the Right Mix
Provide Standardization Develop a unified project management methodology based on PMI
PMBOK
Process Standardization (templates, policies, procedures)
Document best business practices
Benchmarking
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PMO Services: Defining the Right Mix
Report Status to Management Provide insight / analysis on resource utilization , availability, and
performance in all projects
Project Scorecards at periodic executive meetings
Detailed performance analysis at major milestones
Monthly Resource Utilization Analysis Report
Project Health Check
O S i fi i h i h i
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PMO Services: Defining the Right Mix
Participate in Resource Management Monitor resource performance
Ensure proper staffing in all projects
Re-assignment
External Scanning / Sourcing
Outsourcing versus In-sourcing criteria
Project selection and project funding
PMO S i D fi i th Ri ht Mi
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PMO Services: Defining the Right Mix
Participate in Cost Management Vendor Management
Purchasing
Monitor and report on project cost performance
PMO S i D fi i th Ri ht Mi
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PMO Services: Defining the Right Mix
Project Portfolio Management Participate in project selection process to ensure alignment with
business strategy
Provide key stakeholders with timely assessment of portfolio andcomponents performance
Participate in program and project reviews
Measure the value of the portfolio through ROI, NPV, or any otherquantitative or qualitative technique
PMO S i D fi i th Ri ht Mi
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PMO Services: Defining the Right Mix
Training & Mentoring - Leverage the skills of the staff in projectmanagement through
Training
Coaching
Certification Project Reviews
PMO S i D fi i th Ri ht Mi
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PMO Services: Defining the Right Mix
PMO Tools Support Ensures the integrity of all data captured through the PMO tool
Ensures that all staff involved in project management are capable ofutilizing the PMO tool to the maximum through coaching and formaltraining
Trouble-shooting (first level support) Dashboard & Reporting Support
Maintain corporate-wide project repository (project documentation)
Tool Administrator
Th PMO T
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The PMO Team
PMO Director
Project Portfolio Administrator
Project Management MethodologyConsultant
Project planners/Schedulers
Project Administrators/Coordinators
Technical PMO Tool Support
Resource Analyst
Th PMO T
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The PMO Team
Project Management Training
Officer
Contract Management Administrator
Legal Advisor
Financial Analyst
Librarian / Documentation Specialist
S lli th PMO V l P iti
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Selling the PMO Value Proposition
Awareness & Marketing Sessions (why should everybody supportthe PMO?)
Which group should be addressed first & Why?
Executives
Project ManagersTeam Members
Business Managers
Be a spokesman
Selling the PMO Val e Proposition
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Selling the PMO Value Proposition
Be passionate about the potential
Engage upper level management
Show examples of successful PMO implementations
Exercise 3
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Exercise 3
Read the case study then work on groups to identify thefollowing:
The most suitable PMO model
The PMO value proposition
PMO position in the organization structure The PMO organization structure (roles & responsibilities)
The PMO Services to be delivered
Implementation Phases (PMO stages) and what to be delivered ineach phase
Do we need more than one PMO? Where?
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Chapter 4
Program Management
Role of the Program Manager
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Role of the Program Manager
Responsible for the coordinated planning, management, and execution of aprogram which is defined as multiple, related projects directed towards strategicbusiness benefits & objectives
Ensure program management processes enable the component teams tosuccessfully complete their work
Ensure proper integration of project deliverables into programs end product.
Ensure projects are organized and executed in a consistent manner fulfilling
established standards
Important Program Management Themes
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Important Program Management Themes
Benefits Management
Program Stakeholder Management
Program Governance
Benefits Management
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Benefits Management
The definition and formalization of the expected benefits aprogram is intended to deliver
The benefits are normally identified & formalized at portfolio level beforebeing delegated to the program for realization
Some programs deliver incremental benefits to the organization. Others
deliver all of the benefits at the very end of the program. Examples?
Benefits Management includes
Definition of each benefit and how to realize it
Mapping of benefits to program outcomes
Metrics and procedures to measure benefits
Roles, responsibilities, and Communication plan for benefit management
How to sustain the benefit at the end of the program (on-going operation)
Program Stakeholders Management
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Program Stakeholders Management
Defines the individuals and organizations whose interests may beaffected by the program outcome
Stakeholders can either help or hinder the program depending onthe opportunity or threat they see
Proper communication skills are required to manage stakeholders
Stakeholders include Program Director, Program Managers,Program Sponsor, PMO, Program Team Members, ProgramGovernance Board, Suppliers, and Consumers
Program Governance
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Program Governance
The process of developing, communicating, implementing,monitoring, and assuring the policies, procedures, organizationalstructures, and practices associated with a specific program
Program governance should fit within the wider picture
(corporate governance)
A governance board (or Steering Committee) is the forum whereissues related to the program are discussed.
The Governance Board controls the investment and monitor thedelivery of benefits as the program progresses
Program Governance
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Program Governance
Functions of the Governance Board include: Initiating the program
Approvals of program plans and authorizes deviation from the plans(when needed)
Review programs progress, benefits delivery, and cost
Problem solving in issues the Program Manager cannot solve.
Ensure compliance with corporate and legal policies, procedures,and requirements
Program Lifecycle
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Program Lifecycle
1.Pre-
ProgramPreparation
2.ProgramInitiation
3.Program
Setup
4.Delivery ofProgramBenefits
GR1 GR2 GR3
GR45.
ProgramClosure
GR: Gate Review
Program Lifecycle & Benefits Management
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Program Lifecycle & Benefits Management
Pre-Program
Preparation
ProgramInitiation
ProgramSetup
Delivery ofProgramBenefits
ProgramClosure
BenefitIdentification
BenefitsAnalysis &Planning
BenefitRealization
BenefitsTransition
Identify &qualify business
benefits
Derive & prioritizecomponents
Define benefit metrics Define benefitrealization plan &monitoring Map benefits toprogram plan
Monitorcomponents
Maintainbenefits register Report benefits
Consolidatebenefits
Transfer theongoingresponsibilities
Program Governance
Phase 1: Pre-Program Preparations
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Phase 1: Pre-Program Preparations
The main objective of this phase is to establish a firm foundationof support and approval for the program
Activities include:
Understanding the strategic value of the proposed business change
Study expectations of the key decision makers and stakeholders
Define program objectives and their alignment with business strategicobjectives
Conduct feasibility / justification study (also answer the question: whyprogram approach is better than individual projects)
Passing the selection process by the portfolio review board
Developing Program initial Plan including check points to ensure theprogram is on track
Phase 2: Program Initiation
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Phase 2: Program Initiation
Defines detailed program roadmap on how the program is to bestructured & managed and defines program key deliverablesi.e.the focus is on program-level planning processes
The main outcome is an approval authorizing execution of the
program charter
Justification Vision Strategic Fit Outcomes Scope Benefit Strategy Assumptions & Constraints
Components Risks & Issues Timeframe Resources Stakeholders Program Governance High-level Roadmap
Phase 3: Program Setup
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Phase 3: Program Setup
The purpose of this phase is to progressively elaborate theprogram charter and establish an infrastructure that will supportthe program and its constituent projects
The desired outcome is approval authorizing execution of the
program plan
The program management plan should answer the following:
What are the deliverables and when they will be ready
How much will it cost? What are the risks and issues?
What are the dependencies, assumptions, and constraintsincluded?
How will the program be managed? What are the other servicesrequired?
Phase 4: Delivery of Program Benefits
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Phase 4: Delivery of Program Benefits
The purpose of this phase is to initiate the component projects ofthe program and manage the development of program benefits
This phase is iterative in natureends only when all plannedbenefits of the program have been achieved
Activities at this phase include:
Ensure program governance is in action
Initiate projects
Ensure project deliverables meet the program requirement
Measure benefits realization Analyze progress to the plan
Phase 4: Delivery of Program Benefits
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Phase 4: Delivery of Program Benefits
Activities at this phase include (Cont.): Communicate with stakeholders
Manage dependencies and shared resources
Manage program level risks and issues
Ensure adherence to methodologies, polices, and procedures
Manage transition from current as-is state to required to-be state
Review change requests and approve as appropriate
Phase 5: Program Closure
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Phase 5: Program Closure
Ensure proper closing of program organization and infrastructurewhen all work is completed and benefits are realized.
Activities include:
Document lessons learned
Archive program repository
Manage transition to operations
Disband the program organization
Provide feedback and recommendations on changes identifiedduring the program lifecycle
Program Management Knowledge Areas
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Program Management Knowledge Areas
Program IntegrationManagement
Program Scope Management
Program Time Management
Program Cost Management
Program Quality Management
Program Human ResourceManagement
Program CommunicationManagement
Program Risk Management
Program Procurement
Management
Program Financial Management
Program Stakeholder
Management
Program Governance
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Initiating Process Group
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Initiating Process Group
Initiate Program
Establish Program FinancialFramework
Planning ProcessGroup
Planning Process Group
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g p
Initiate Program
Define Goals & Objectives
Develop Management Plan
Plan for Audits
Plan Program Quality
Plan Risk Management
Identify Program Risks
Analyze Risks
Plan Risk Responses
Plan Program ProcurementDevelop Program Schedule
Estimate Program Costs Budget Program Costs
Plan & Establish GovernanceStructure Identify Program Stakeholders
Develop Program Infrastructure
Develop Program Requirements
Develop Program Architecture
Develop Program WBS
Develop Program Financial Plan
Plan Stakeholders Management
Plan Communications
Initiating Process Group
Executing Process Group
Closing Process Group
Monitoring & ControllingProcess Group
Executing Process Group
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Executing Process Group
Direct & Manage ProgramExecution
Planning Process Group
Manage ProgramResources
Manage ProgramArchitecture
Manage ComponentInterfaces
Engage ProgramStakeholders
Distributeinformation
Conduct ProgramProcurements
ApproveComponent
Initiation
Monitoring & ControllingProcess Group
Monitoring & Controlling Process Group
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o o g & Co o g ocess G oup
Initiating ProcessGroup
Monitor & ControlProgram Performance
Monitor & ControlProgram Scope
Monitor & ControlProgram Schedule
Closing Process Group
Monitor & ControlProgram Financials
Manage StakeholderExpectations
Monitor & ControlProgram Risks
Administer ProgramProcurement
Report ProgramPerformance
Monitor & ControlProgram Changes
Manage Program Issues
Provide GovernanceOversight
Manage ProgramBenefits
Planning ProcessGroup
Executing ProcessGroup
Closing Process Group
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Close Program
Planning Process Group
Executing Process Group
Approve ComponentTransition
Close ProgramProcurements
Monitoring & ControllingProcess Group
Skills of the Effective Program Manager
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High communication and relationship-building skills
Excellent risk and conflict management
Has strategic vision and broad organizational management skills
Political
People
Leadership
Has excellent project management skills
Ability to conduct effective questioning
Project Management & Program Management
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What are the similarities and differences between programmanagement and project management?
Program Management Project Management
Business & Technical in nature Technical in nature
Aligned to strategic objectives of thebusiness Aligned to program objectives
Focuses on interdependencies amongprojects and feasibility of delivery
Focus on milestone, deliverables of asingle project
Handle program level risks Focus on project level risks
Broad range of business, leadership,and management skills required
In-depth project management skillsrequired
Focus on consistent usage of commonprocesses among projects
Focus on effective usage of processesin a single project
Role of the PMO in Program Management
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The role of the PMO in program management variesdepending on several factors. What are these factors?
A standard PMO supports the Program Manager by
Providing the Program Manager with accurate and timelyinformation to make the right decisions
Providing administrative support in managing schedules, budgets,risks, issues, procurement and human resource
Exercise 4
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Q: What type of services a Program Management Office (PMO)can provide to the Program Manager?
Define the program management processes that will be followed
Manage schedule and budget at the program level
Define the quality standards for the program and its components Provide document configuration management
Provide centralized support for managing changes and tracking risks andissues
Provide central repository for all program deliverables
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Chapter 5
Project Portfolio Management
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Q: Have you ever cancelled a project that is on-timeand on-budget? Why?
Defining Project Portfolio
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A collection of projects and/or programs and other work that aregrouped together to facilitate the effective management of thatwork to meet strategic business objectives.
The projects and programs within a portfolio may not be
interdependent or directly related
Defining Project Portfolio
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A portfolio represents a view the organizations set of activeprograms, projects, sub-portfolios, and other work at a specificpoint of time
A portfolio represents the work selected to be done, but not
necessarily the work that should be done
Common features of portfolio components include:
They represent investments made or planned by the organization
They are aligned with the strategic goals of the organization
They can be measured, ranked, and prioritized
Are portfolios temporary like projects and programs?
Defining Project Portfolio
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Portfolio
Portfolio Projects Programs
Program Projects Program Projects Other Work
Projects Projects Projects
Defining Project Portfolio
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PortfolioName
Give an exampleof a portfolio ?
Defining Project Portfolio Management
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The centralized management of one or more portfolios, whichincludes identifying, prioritizing, authorizing, managing, andcontrolling projects, programs, and other related work to achievespecific strategic business objectives.
The focus of portfolio management is to ensure that theorganization is doing the right work rather than doing work
right
The Organizational Context of PPM
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Management of AuthorizedPrograms & Projects
(Increasing value production capabilities)
Management ofOn-going Operations
(Producing Value)
Project PortfolioPlanning & Management
High-Level OperationsPlanning & Management
Organizational Strategy & Objectives
Mission
Vision
Organizational Resources
The Organizational Context of PPM
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Vision, Mission, Strategy, and Objectives help definingorganizations performance targets
Portfolio Planning & Management establishdistinctinitiatives required to achieve the organizations
performance targets
PPM ensures that the critical organizational resourcesare consumed in achieving high priority initiatives.
PPM & Organizational resources
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Some project managers are frustrated by lack of resources or byother groups stealing their resources
These frustrations are symptoms of an unbalanced (orunacknowledged) project portfolio.
The frequent complaint of "not enough resources," is simply anotherway of saying that there are too many projects!
Someone should be sorting them out, prioritizing them, and "killing"the projects that aren't high priority.
PPM can help project managers have enough resources toaccomplish projects that are perceived to be valuable and enjoyplenty of support throughout the organization
Exercise 5
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Compare project management, program management, andportfolio management.
Portfolio Management Process Groups
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Aligning ProcessGroup
1. Identify components2. Categorize components3. Evaluate components4. Select components
5. Identify portfolio risks6. Analyze portfolio risks7. Prioritize components8. Develop portfolio risk
responses9. Balance portfolio10. Communicate portfolio
adjustment11. Authorize components
Monitoring &Controlling
Process Group
1. Monitor & control portfoliorisks
2. Review & report portfolioperformance
3. Monitor business strategychanges
Portfolio Management Process Groups
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StrategicChange
No
Yes
Current strategicPlan
Goals Definition Key performancecriteria CapacityDefinition
Strategic PlanningProcess Output
Aligning Process Group
IdentifyComponents
CategorizeComponents
EvaluateComponents
SelectComponents
PortfolioReporting &
Review
Monitoring &Controlling Process
Group
ComponentExecution &Reporting
ComponentProcesses
Identify
Portfolio Risks
AnalyzePortfolio Risks
PrioritizeComponents
DevelopPortfolio Risk
Responses
BalancePortfolio
CommunicatePortfolio
Adjustment
AuthorizeComponents
Monitor Bus.StrategyChanges
Monitor &Control
Portfolio Risks
Aligning Process Group
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Identify ComponentsTo create an up-to-date list, withsufficient information, of ongoing and new components that willbe managed through portfolio management
Categorize ComponentsTo group identified components
into relevant business groups to which a common set of decisionfilters and criteria can be applied for evaluation, selection,prioritization, and balancing.
Hint: Components in each group relate to a common strategic goal
Aligning Process Group
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Evaluate ComponentsTo gather necessary information toevaluate components with the purpose of comparing them inorder to facilitate the selection process
Qualitative & quantitative information
Iterative process until you reach the required accuracy and
coverage level Graphs, charts, documents, and recommendations are produced to
support the selection process
Aligning Process Group
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Select ComponentsTo select components based on theevaluation process. Produces a list of categorized, evaluated, andselected components. Also recommendation report of acceptedand rejected components is produced
Identify Portfolio RisksTo identify portfolio risks anddetermine which risks could affect the portfolio and documenttheir characteristics. The impact of a risk on different portfoliocategories vary
Analyze Portfolio RisksTo prioritize the identified risks forfurther action based on their probability of occurrence and theirimpact on portfolio performance or objectives such as ROI
Aligning Process Group
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Prioritize ComponentsRank components within eachstrategic or funding category, investment time frame, risk versusreturn, and organizational focus according to established criteria
Develop Portfolio Risk ResponsesTo develop options and
determine action to enhance the opportunities and reduce threatsto the portfolio objectives. Risk response planning includesassigning risk owners and inserting resources and activities intothe budget, schedule, and portfolio management plan.
Aligning Process Group
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Portfolio BalancingDevelop the portfolio component mixwith the greatest potential to collectively support the strategicinitiatives and achieve strategic objectives
includes the following activities:
Add new components that have been selected and prioritizedfor authorization
Eliminating components to be suspended, reprioritized, orterminated based on the review process
Identifying components that are not authorized based on thereview process
Selecting the right mix to achieve the desired returns should take into
consideration: interdependencies, similarities, and synergies that existbetween components
Aligning Process Group
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Communicate Portfolio AdjustmentsCommunicateportfolio changes to the stakeholders to provide clearunderstanding of the impact of the change on portfolioperformance goals and the larger business strategies
AuthorizationTo formally allocate financial and humanresources to either develop business case or execute selectedcomponents and to formally communicate portfolio-balancingdecisions to stakeholders
Starting and / or terminating decisions Budget and resource reallocation for inactive and terminated
components
Monitoring & Controlling Process Group
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Monitor & Control Portfolio RisksTo determine if:
Portfolio assumptions are still valid
Risk, as assessed, has changed from its prior state
Proper risk management policies and procedures are beingfollowed
Contingency reserves of cost or schedule are modified in line withthe risks
Monitoring & Controlling Process Group
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Review & Report Portfolio PerformanceGather and reportperformance indicators and review the portfolio at an appropriatepredetermined frequency to ensure alignment with theorganizations strategy and effective resource utilization
Each review cycle may contain several reviews with a different
focus and depth of analysis.
What is the ultimate purpose of the reviews?
Portfolio contains only the components required to supportachieving the strategic objectives
What elements to be reviewed?
Scope, Risks, Resource Utilization, Financial Performance,policies &Standards, etc.
Monitoring & Controlling Process Group
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Monitor Business Strategy ChangesTo enable portfoliomanagement to respond to changes in business strategy. Asignificant change in business strategic direction will impactcomponent categorization or prioritization and this will require re-
balancing the portfolio
Portfolio Management Knowledge Areas
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PORTFOLIO MANAGEMENT PROCESS GROUPS
Monitoring & Controlling
Process GroupAligning Process
GroupProcess Knowledge
Area
Review & Report PortfolioPerformance
Identify Components
PortfolioGovernance
Monitor Business Strategy ChangesCategorize Components
Communicate Portfolio AdjustmentsEvaluate Components
Select Components
Prioritize Components
Authorize Components
Monitor & Control Portfolio RisksIdentify Portfolio RisksPortfolio RiskManagement
Analyze Portfolio Risks
Develop Portfolio RiskResponses
Pipeline Management
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The process of determining if and how a set of projects in theportfolio can be executed by a company in a specified time, givenfinite development resources in the company.
The organization should have the tools to estimate the efforts planned foreach project
Role of the Portfolio Manager
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Typically a senior manager or senior management team
Provide stakeholders with timely assessment & timelycommunication of portfolio and component performance
Participate in program and project support to reflect senior levelsupport and leadership
Re-evaluate portfolio components on regular basis
Performance review
Benefit realization
Strategic direction & priorities
The PMO as a Portfolio Manager
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Project Portfolio Management is the responsibility of senior executives in the
organization. PMO facilitates and coordinates the involvement of theexecutives in the project oversight
Develop and implement processes and procedures for each project portfoliomanagement activity based on the organizational maturity level
Furnish executive management with reports indicating the organizationportfolio overall health
How each component is performing against predefined KPIs
Level of contribution of each component to achieving strategic objectives
Composite risk level of the portfolio
Resource capabilities and utilization
Financial Performance
Example: Defining Business Priorities
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Defining Business Priorities
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Assess Competing Investments
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Measure Strategic fit (how?)
Financial Return (how?)
Risks (how?)
Architectural fit (how?)
Operational Performance (how?)
Example: Measuring the Strategic Fit
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Portfolio Management Success Factors
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Does your organization have clear, communicated strategic goals& objectives?
Does your organizations have the following symptoms?
No formal process to define goals & objectives
Long-term planning is not as important as fire-fighting
There is no measurement process to validate status
Only those at the top know about the goals & objectives
Goals & objectives are not qualified or quantifiable
Accountability to achieve the goals doesnt exist
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Chapter 6
INTRODUCTION TO OPM3
Maturity Models
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The term Maturity Model has become widely recognized withthe advent of CMM (Capability Maturity Model) for softwareengineering in the late 1980s
Maturity indicates capabilities grow over time to produce
repeatable success
Without existence of mature processes, organizations are forcedto use talent and heroic efforts alone to accomplish tasks
Defining OPM3
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Organizational Project Management (OPM) is the alignment of
an organizations projects, programs, and portfolios to its stated
strategic goals
Organizational Project Management Maturity Model (OPM3)is a
standard developed by PMI designed to help organizations translatestrategy into successful outcomes, consistently and predictably(PMI, 2003,p. ix)
Defining OPM3
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OPM3 standard has three key elements:
Knowledge: Describes the organizational project managementmaturity
Assessment: Methods, processes, & procedures that anorganization can use to self-assess its maturity
Improvement: A process for moving from current maturity toincreased maturity
Defining OPM3
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OPM3 focuses on alignment of projects, programs, andportfolio resultswith the organizational strategicobjectivesachieved by continuous improvement through the adoption andenhancement ofbest practices
Other maturity models such as CMM focus on producingconsistent products and consistent support for products
OPM3 defines a continuum of maturity as opposed to discrete
maturity levels
The OPM3 Cycle
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1
The OPM3 Cycle
2 3 4 5
OPM3 Vs CMM
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CMM model has five levels
Level 1: Initial ad-hoc processes employed based on the strengthof individual team leaders
Level 2: Repeatable basic processes are informally established
Level 3: Defined documented processes are standardized and
integrated into daily operations
OPM3 Vs CMM
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Level 4: Managed process adherence is measured through
established metrics and evolutions are based on these metrics Level 5: Optimizing continuous process improvement is
practiced and documented; organization culture is continuousimprovement
OPM3 Domains
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OPM3 model has three different domains
Project Domain
Program Domain
Portfolio Domain
Project Domain
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The main responsibilities of the project manager in the projectdomain are:
Managing stakeholder expectations at a project level
Managing project constraints
Identifying inter-project contentions
Prioritizing Tasks
Ensure project objectives support program strategies
Program Domain
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The main responsibilities of the program manager in the programdomain are:
Managing stakeholder expectations at a program level
Coordinating activities of multiple project managers & teams
Managing conflicts among projects to achieve organizational goals
Prioritizing projects
Ensure program objectives support portfolio strategies
Portfolio Domain
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The main responsibilities of the portfolio manager in theportfolio domain are:
Translating organizational strategies into specific initiatives orbusiness cases that become the foundation for programs & projects
Identifying and initiating programs and projects
Providing, allocating, and reallocating resources to programs,projects, and other activities
Maintaining a balanced project portfolio
Supporting the OPM environment
Process Improvement Stages
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S = Standardize: The organization uses the process acrossfunctional boundaries
M = Measure: The process is standardized and measurements aretaken
C = Control: A process is in control if all measurements arewithin the upper and lower boundaries
I = Improved: If the process is controlled and data is collected &used to improve the process
Best Practices
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An optimal way currently recognized by industry to achieve a stated goal or
objective. Best practices are incorporated into mature project managementcapabilities in organizations
All BPs are categorized by stage & domain dimensions. OPM3 has around 586OPM BPs
BP
Number
BP Name BP
Description
Domain Stage Process Process
Group
1030
Project Scope
Planning
ProcessStandardization
Project Standardize 5.1 Planning
Capability
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CapabilityA specific competency that must exist in anorganization in order to execute project management processesand deliver project management services and products.
Capability is an element of BP. Every BP has several Caps.
OPM3 has around 3000 capabilities
Best Practices & Capabilities
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BP 1030 with constituent and pre-requisiteCapsBP Diagram with constituent and pre-requisite Caps
Best Practice 1030 Project ScopePlanning Standardization
Constituent Cap 1030.10 ProcessManagement Governing Body
Prerequisite Cap 1000.10 EstablishedStandardization Policies
Constituent Cap 1030.20 Project ScopePlanning Process Development
Constituent Cap 1030.30 StandardizedProject Scope Planning Process
BP 1030 BP 1000
Cap1030.030
Cap1000.030
Cap1000.020Cap
1030.020
Cap1030.010
Cap1000.010
Other Important OPM3 Terms
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OutcomeA tangible or intangible result of applying a capability.
A capability may have one or more outcomes
Key Performance Indicator (KPI)A criterion by which anorganization can determine, quantitatively or qualitatively, whetherthe outcome associated with the Capability exists or the degree to
which it exists.
The difference between a Cap and an Outcome of a Cap is ademonstrated competency in the organization
Other Important OPM3 Terms
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BP 1030 Caps & OutcomesBP Diagram with Outcome and KPI
Best Practice 1030 Project ScopePlanning Standardization
Constituent Cap 1030.020 ProjectScope Planning Process Development
Outcome 1030.020.10 DocumentedProject Scope Planning Process
BP 1030
Cap1030.030
Cap1030.020
Cap1030.010
Outcome1030.020.10 KPI
How Does OPM3 Work?
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1. Standardize
2. Measure
3. Control
4. Improve
Standardize
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The process is implemented and standardized in the organization
Documented (Caps, outcomes, policies, checklist, templates, guidelines,tools, etc.)
Communicated
Implemented consistently
Governing body established
Use a formal process model for documentation such as:
SIPOC (Suppliers-Inputs-Process-Outputs-Customers)
ETVX (Entry Criteria, Task, Verification, and Exit Criteria)
IDEF (Integrated Definition) CIMOSA (Computer Integrated Manufacturing Open System Architecture)
Measure
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Critical steps of the process and all inputs to the process are identified,
mapped, and measured
Variations are identified
Quality Audit group measures performance of the process (attributemeasurement & variable measurement)
Did the project team conduct kick-off meeting? Did the kick-off meeting had a clear agenda and minutes?
Number of scope changes
Cost Performance Index
QA produces Non Compliance Report (NCR) that PMO will investigate
Metrics dashboards might be used in some organizations to highlight vitalmeasurements
Control
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A process is controlled when it stays within process specifications
A controlled process has predictable future performance basedon past performance
A process is controlled in the organization if acontrol plan for the process has been developed, in action, and
describes how it address variations
The process has upper and lower limitations
Control tools include: control charts, Standard deviations
Who controls the processes?
Improve
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A series of actions taken to identify, analyze, and improve existingprocesses within an organization to meet new goals and objectives
A process in control is the primary target for improvement
An improved process has the following characteristics Root causes for problems within the process are documented
All parties participate in the improvement process
The improvement is sustainable (enforced by PMO, training,