How Emerging PMO Trends Can Change the

BusinessMichael Cooch

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The emerging importance of ‘intelligent’ PMOsHow Emerging PMO Trends Can Change the Business

Michael CoochThe PMO Conference, 11th June 2015

Objectives for the session…

• Identified challenges for our PMOs

• Discuss how the PMO should evolve to become a trusted advisor

Challenges for the PMO

What are the key challenges facing PMOs?

*Source: The State of the PMO, A Benchmark of Current Business Practices, Center for Business Practices (CBP) Report

**Source: The State of the PMO, A Benchmark of Current Business Practices Center for Business Practices (CBP) Report

***Source: Software Engineering Economics, Prentice Hall, Englewood Cliffs, NJ, p431,Boehm B

In low-performing organisations executive sponsorship is approximately 60% less likely to have an appreciation of the strategic value of a PMO.

In low-performing organisations project management performance (and PMO performance) is not measured nor is appropriate accountability for outputs assigned.

In low-performing organisations PMOs face much greater difficulty in being accepted as a real value-adding proposition, at all levels of their organisation, when compared to high-performers.

A project staffed with uniformly very low-rated personnel on all capability and experience factors would require 11 times as much effort to complete the project as would a project team with the highest rating in all the above factors.***

In low-performing organisations PMO staff are much less likely to have formal project management qualifications, hands-on-experience and extensive project management knowledge.**

What is our collective experience?

How would you characterise the maturity of your PMO?

Our own programme data shows that less than 1% programmes are optimised.

Organisations could substantially benefit from improving the maturity of their PMO.

Optimised; 0% Mature; 14%

Estab-lished; 37%

Immature; 26%

Ad-Hoc; 11%

Absent; 11%

Emergent themes from our Global PPM Survey…

Source: 4th Global PPM Survey, PwC

Our Global Survey revealed that senior executives are struggling to balance their ‘run’ and ‘change’ responsibilities and there is a missed opportunity for PMOs to provide more insight to these time-poor, information-overloaded stakeholders.

Focus area for today

Focus area for today

“…to be honest it often feels like

we’re nothing more than a rubber-

stamping body for giving more

budget”

“surely we all recognise that

unethical behaviour is abundant on the topic of managing and reporting on

change”

“Our level of confidence in non-financial

data is generally low”

“If we don’t get control over CTB soon we may not have a business that can fight for its place in the

market”

“The ‘end-of-the-line’ reporting [at

Board level] is too abstract to

confidently make decisions”

“..the irony is that our RTB reporting is

cross-industry leading which makes the

issue low quality of CTB reporting even

starker”

“…the information is already there – our board has no idea what to do

with it”

“We suffer from an affliction … overly

qualitative reporting which is notoriously difficult

to challenge

“a culture of transparency is not in place – we’re all terrified to report

bad news”

Measure and address the harsh facts…

Linkage of benefits definition and realisation is

generally poor

“I’m continually frustrated by

reports which look great but say

nothing”

Strategic

Tactical

Organisation-orientated

Board-orientated

“We’ll all continue to ‘play the game’

until the game changes”

“Accountability for outcomes seems to be a ‘Teflon-coated’ idea”

“Look, the reality is that divisional

politics still, typically, trump achievement of central strategic

goals “

Key 2

Culture

Process

Quality

Insight

Education

Emergent theme

Strong theme

Key 1

Beyond core Financial reporting the confidence in management information of executive boards is not high. This is exacerbated by multiple cases of unwieldy reports (multiple examples of 100+ page reports) which remove the ability for boards to make targeted, and informed, decisions

“In our sector [construction] poor quality decision-support reporting

would kill us”

“Our supporting technology

architecture is more like a bowl of

spaghetti”

Connect the Executive to Delivery Teams…

Don't know

I have no direct involvement in change activities currently

I have been seconded full time to a change programme

I have delegated most of my core tasks and focus on change activities

I have delegated some of my core tasks in order to take on project responsibilities

I have full time core task responsibilities and fit change activity commitments in as an addition to that workload

1

5

4

10

36

45

Source: 4th Global PPM Survey, PwC

Our Global Survey revealed that senior executives are struggling to balance their ‘run’ and ‘change’ responsibilities and there is a missed opportunity for PMOs to provide more insight to these time-poor, information-overloaded stakeholders.

Case study: the role of the PMO during Change

About:

The National Programme for IT in the NHS (NPfIT) is the largest public sector IT programme ever attempted in the UK, budgeted to cost c.£6bn but terminated after a spend of c. £3bn. The aim of the programme was to digitalise the NHS’ way of working and introduce electronic care record for every patient by 2010.

After delays, stakeholder opposition & implementation issues, the programme was dismantled in 2011, almost ten years after its initiation in 2002.

“Another example of underestimating the scale & complexity of a major IT-enabled change programme.”Amyas Morse, Head of the National Audit Office

At the time of NPfIT’s launch, what proportion of IT healthcare projects ended in failure?

Future state of the PMO?

How are CEOs increasingly viewing their business?

Ch

an

geR

un

Deliver

Deployment and acceptance

Change programmes and projects

Business & Operating

Model

Enterprise Portfolio

Direct

Alignment and prioritisationStrategy &

Governance

Measurement and

refinement

Measurement and

re-balancing

External factors(e.g. geopolitical movement, economic change, technological advancement)

External factors(e.g. geopolitical movement, economic change, technological advancement)

In your experience, what are the attributes of a mature PMO?

A mature PMO needs to balance multiple elements……intelligence or insight doesn’t come for ‘free’. Significant investment in portfolio/programme/project alignment, controls and efficiency is needed as the platform for success.

4 steps to improved insight and decision-makingThe maturity of Executive Board reporting varies greatly across industry.

1 2 3 4Governance

and reporting alignment

Insights and metrics

Reporting delivery model (data, process,

systems, people)

Reporting use, education and

behaviours

…understanding the audience for the

reporting…

…defining what is important to that

audience…

…defining the decisions for each

audience…

...defining what the audience will

receive…

…how the data and analysis will be

created…

…how reporting is presented…

…understanding where education is

needed…

…and which behaviours need to

change…

0 25 50 75 1000

5

10

15

20

25

Budget variance as % of total

Dev

iati

on f

rom

fo

reca

sted

cos

ts (

£m

)

Forecast and actual costs

Original Budget

In progress CRs

Signed-off CRs

Current Budget

Budget Variance

Actual Spend to Date (A)

Estimate to Complete

(ETC)

Estimate at Complete

(EAC)

Variance at Complete

(VAC)VAC (%)

Division 1

Workstream 1.1 21.2  22.58 -7% 10.20 - 20.46 -2.12 -9%

Workstream 1.2  10.4 8.48 18% 0.07   0.75 0.27 56%

Workstream 1.3  5.7 6.15 -8% 2.24   4.72 -1.43 -23%

Division 2

Workstream 2.1 12.0 0.7 21.1 76% 15.59 - 29.82 -1.13 -4%

Workstream 2.2  4.7 6.1 -30% 8.75   15.38 0.88 6%

Workstream 2.3 8.9 7.2 19%

Workstream 2.4  4.2 5.6 -33% 6.84   14.44 -2.01 -12%

Division 3

Workstream 3.1  13.6 1.5  15.4 -13% 17.62 - 33.17 4.14 14%

Workstream 3.2  7.3 6.3 14% 16.56   31.74 5.14 19%

Workstream 3.3 8.2 5.7 30%

Division 4Workstream 4.1 30.0 6.7    49.10 64% 23.75 - 47.50 -1.60 -3%

Workstream 4.2  2.6 2.8 -8% 15.00   32.50 -1.60 -5%

Division 5

Workstream 5.1  4.5  0.5 5.7 -27%     - -

Workstream 5.2  16.4 15.7 4%       -

Workstream 5.3  13.2 0.2 13.6 -3%       -

Workstream 5.4  9.3 8.3 11%       -

Cross Divisional

Workstream X.1 23.6 22.3 6%

Workstream X.2 11.2 0.2 11.7 -4%

Workstream X.3 16.5 16.1 2%

Workstream X.4 3.5 0.2 3.7 -6%

Workstream X.5 6.8 6.9 -1%

Corporate

Workstream Corp.1 15.3 0.4 15.3 0%

Workstream Corp.2 11.4 10.8 5%

Workstream Corp.3 3.6 3.8 -6%

Workstream Corp.4 8.3 1.5 8.5 -2%

Workstream Corp.5 2.4 1.5 38%

Workstream Corp.6 5.8 4.5 22%

Workstream Corp.7 9.2 1.1 8.2 11%

Workstream Corp.8 4.6 2.2 52%

TOTAL 122.2 10.8 2.2 315.31 7% 116.62 0 230.48 -0.71 -1%

Large variances

Highlights and decisions required

• Currently 2 initiatives have significant budget issues and exceed the board reporting threshold:o The [2.1] initiative in [Division 2] is

significantly over budget due to scope changes and an uplift in supplier costs which were not originally planned. Additional benefits will also result and these are currently being calculated – these will be presented at the next board meeting.

o The [4.1] initiative in [Division 4] has unapproved change requests amounting to around 20% of the original budget. This is due to having to incorporate additional changes to comply with [regulation] requirements.

• A large proportion of initiatives remain within at least 10% of original budget. • Changes to regulatory deadlines have increased the amount of change requests in progress change

requests. • 2 initiatives are significantly over budget due to scope change and regulatory impact.

F

G

F

G

Sample

outputInsights and metrics

G

F

…and there are clear benefits to ‘getting it right’

Ch

an

geR

un

Deliver

Deployment and acceptance

Change programmes and projects

Business & Operating

Model

Enterprise Portfolio

Direct

Alignment and prioritisationStrategy &

Governance

Measurement and

refinement

Measurement and

re-balancing

Strategy executed to plan Organisation works

on the right projects

Projects on schedule & budget

Project customers satisfied

Source: The State of the PMO, A benchmark of current business practices. Centre for Business Practices (CBP) Report.

A global survey demonstrates a 24% improvement in customer satisfaction between Immature and Mature programmes and a 65% improvement in the optimal allocation of resources.

Michael CoochPartner, PPMmichael.c.cooch@uk.pwc.com

Download our 2014 PPM Global Survey at

www.pwc.com/ppmsurvey

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Thanks for your time

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