What PMOs can achieve and how to get the most out of it

Thomas Walentathwalenta@online.de+49 171 3358938

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Agenda

Ø What is a Project Management Office (PMO)q Status of PMOsq Success storiesq How to build a PMOq Potential Value of PMOs

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What is a PMO: there are lots of concepts and names- there seems to be a need for PMOs - but standardization is still to be achievedSupporting projects, programs or portfolios and reporting to themq Project Support Office (PSO)q Project Office (PO)q Program Management Office (PMO)

Supporting implementation of strategic goalsq Program Management q Portfolio Management

Supporting Organizations / Unitsq Center of Excellence (COE / PMCOE)q Project Management Office (PMO)q Enterprise PMO (EPMO) 12%Other (all less 1%)

4%Contains ‚project‘

2%No name

2%Center of Excellence

2%Project Office

7%Project Support Office

12%Program Management Office

59%Project Management Office

Name

(PMO Whitepaper Hobbs 2007, PMI)

4

What is a PMO: definitions and names

q PMI PMBoK Guide: A PMO is an organizational … entity assigned various responsibilities to the centralized and coordinated management of those projects under its domain.

Some responsibilities are, according to PMBoK Guide q Managing shared resourcesq PM methodology, best practices, standardsq Project policies, processes, templates q Training, coaching, mentoringq Project audits monitor compliance with PM standards, policies etcq Communication across projects

qWikipedia: A PMO is the department or group that defines and maintains the standards of process, generally related to project management, within the organization.

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What is a PMO: example of UK OGC‘s P3O approach (Portfolio, Programme and Project Offices)

P3O® provides a universally applicable guidance for establishing, developing and maintaining appropriate business support structures.

A P3O model provides the structure, governance, functions and services required for defining a balanced portfolio of change and ensuring consistent delivery of programmesand projects across an organization or department.

http://www.ogc.gov.uk/portfolio,_programme_and_project_offices_p3o.asp

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What is a PMO: 27 functions in 5 groups found by PMI survey (PMO Whitepaper Prof. Brian Hobbs, PMI 2007)

Monitoring & Controlling Project Performance§ Report to upper management§ Monitor & control project performance§ PM information system§ Project scoreboard

Strategic management§ Advice to executive management§ Benefits management§ Networking and environmental scanning§ Participate in strategic planning

Develop PM Competencies & Methodologies§ Standard methodology§ Promote PM in organization§ Staff competency, training§ Mentoring for PMs§ Tools

Organizational Learning§ Risk database§ Lessons learned database§ PMO performance metrics§ Project documentation archives§ Post project review§ Project audits

1

2 5

4

Program and portfolio mgmt.§ Identify and select new projects§ Allocate resources§ Manage programs§ Manage portfolios§ Coordinate between projects

3 Plus§ Execute specific tasks for PMs§ Manage Customer Interfaces§ Recruit, select, evaluate and determine

salaries for PMs (22% of all PMOs)

+

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Agenda

qWhat is a Project Management Office (PMO)Ø Status of PMOsq Success storiesq How to build a PMOq Potential Value of PMOs

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Status of PMOs: Which PMO functions are used?

33245213412121

Group

48%Identify, select and prioritize new projects49%Manage one or more portfolios49%Provide mentoring for project managers

49%Participate in strategic planning50%Monitor and control performance of PMO55%Promote project management with organization

58%Develop and maintain a project scoreboard

65%Monitor and control of project performance65%Develop competency of personnel, including training

60%Implement and operate a project information system60%Provide advise to upper management

59%Coordinate between projects

76%Develop and implement a standard methodology83%Report project status to upper management

% of PMOswhere importantPMO Function

(PMO Whitepaper Hobbs 2007, PMI)

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Status of PMOs: 50% of PMOs have less than 4 staff members and exists less than 3 years

(PMO Whitepaper Hobbs 2007, PMI)

PMOs are challenged

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Status of PMOs 2009: Challenges for PMOs – increase impact on risk, benefit and top talent management

www.pmo.executiveboard.com, 2008

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Status of PMO – key success factors

– Key success factors– Commitment by topmanagement– Competence in methodologies and experience– PM culture and awareness in the organization – Central decision making and defined authority– Processes, tools and techniques flexible & pragmatic

– Value and Sustainability in PMOs (PMI)– Build a core ideology for the long term; – Pick the right PMO leadership; – Staff the PMO carefully; – Create a culture of discipline; – Confront the brutal facts, but keep the faith.

(Hurt, M., Thomas, J., 2009. Building Value Through Sustainable Project Management Offices. Project

Management Journal 40(1), 55-72. )

(PMO Maturity study 2009, www.pmo-symposium.de)

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Agenda

qWhat is a Project Management Office (PMO)q Status of PMOsØ Success storiesq How to build a PMOq Potential Value of PMOs

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Success stories: Project Management at Huawei(PMI Corporate Council Member)

• Emerging global telecoms player • Changing markets and customer

requirements • Multi-national project teams• Set up business re-engineering PMO in

2002 • Chose PMI standards and certification

“Project management training and development is essential for frontline managers growing toward business leaders at Huawei.”

Zhengfei Ren, CEO, Huawei Technologies

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Success Stories: Project Management at Siemens(PMI Corporate Council Member)

Transfer & Implementation

Personnel Management

Contract Management

Qualification

PM Portal

Project Controlling

Operative Quality Mgmt.

Processes & Roles

Knowledge Management

Small Projects

Project Procurement

PM Assessment

Siemens began assessing project management maturity in 2000 OPM3 reinforces Siemens’ best practices

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Success Stories: Charter to transform IBM to a project based enterprise was initiated by Lou Gerstner, IBM CEO

On November 19, 1996, the CEC approved the following recommendation

That IBM become a project based enterprise that applies and integrates project management into all core business processes and systems.

Business Units drive

One consistent approach common

but flexible

Significant projects managed by

certified PMs

Hold PMs, EXECs, accountable;

provide the system and tools

Advance PM as professional

discipline trough "giveback"

PM center of excellence and capability center to support the practiceof professional project management across IBM

– Own a standard set of PM enablers (capabilities)– Gain business units and geographies' transformation focus on steady state

and becoming project based (organizational competency)– Support, recognize and connect our PM professionals (community)

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Success stories: become a project-based business is driven by the global PM Center of Excellence at IBM (PMI Corporate Council Member)

Organization

§ Organizational integration with IBM management systems§ Develop

organizational maturity

"Make PM SYSTEMATIC to our business"

Stage 3

Project/Program

§ PM method for project and program manage-ment§ PM tools§ PM knowledge

network

"Put key enablersin place"

Stage 2

IndividualCompetence

§ PM skill development§ PM education§ PM certification

Initiatives

"Develop professionals"

Focus

Stage 1

1997 today

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Success Story: Program Management governance structure provides integration and stakeholder management

RelationshipManagement

SpecialistTeam

Program Management

OrganizationalChange

Management

ArchitectualSolution

Bord

BusinessBenefits

Test & Transition

Management

QualityAssurance

/ Risk

TechnicalProgram

Office

ResourceManagement

Operations

Maintenance

Help Desk

Project 4

Project 1 Project 3 Project 5

Project 6Project 2

Sponsor(s)Stakeholders, e.g. Users

Business SteeringCommittee

(Real life example Th. Walenta)

Example where Program Management structure really is a PMO

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Agenda

qWhat is a Project Management Office (PMO)q Status of PMOsq Success storiesØ How to build a PMOq Potential Value of PMOs

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How to build a PMO: Start with assessing Organizational Maturity, identify gaps

Level 1 – Pilot PhaseThere is no criteria for Level 1. If an organization cannot meetthe criteria for Level 2, then it is at Level 1.

Level 2 – In DeploymentOrganizational§ Roles and responsibilities defined for Project Manager§ Policy requiring Project Plans for every project§ Independent organization reviews project§ Organization resolves issues identified by independent unitProject§ Project plans its place and complete§ Project scope clearly defined and controlled§ Schedules in place and tracked§ Budgets allocated and managed§ Subcontractors identified and monitored§ Team responsibilities clearly defined

Level 3 – FunctionalOrganizational§ Defined project management methodology§ Training plan for project managers§ Clearly defined acquisition risk assessment and Xxx Xxx processes§ Independent startup review performed to assess project readinessProject§ Schedule dependencies clearly defined and tracked§ Critical path schedule used for planning§ Client interface well managed§ Risk management process in place

Level 4 – IntegratedOrganizational§ Organizational has post and scheduling tracking tools§ Executive manager receives quantitative project status data§ Mentoring program in placeProject§ Earned value use to assess status§ Management budget reserve methodology used§ Subcontract management plans used for major subcontractors§ Risk containment plans defined and implemented

Level 5 – World classOrganizational§ Lesson learned used to improve project management process§ Project manager actively involved in "give back" activitiesProject§ Project required to document lessons at the end of project

Disciplinedprocess

Standardconsistent

process

Predictableprocess

Continuouslyimproving processPortfolio ProjectProgram

Con

tinuo

usly

impr

ove

Con

trol

Mea

sure

Stan

dard

ize

Organizational Enablers

Use PMI OPM3, SEI CMMI and/or PM specific models like IBM’s PMPMG

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How to build a PMO:Follow a project phased approach with stage gates

Phase 4:Operate IPhase 3: Implementation

Implement Functions handoverto operational PMO team

Phase 2: Design

Design each PMOFunction Signoff

Phase 1: Setup

Preparation Solution Outline, agree on PMO Scope Kickoff

OperationLaunching TasksPlanning TasksInitiating Tasks

Set

ting

upa

PM

OPM

O s

etup

task

s 5. Define metrics & Interfaces

4. Define the

Functions

7. Estimate the

Resources

6. Identify PM

Processes & Tools

1. Define the

Goals

8. Get Budget and Approval to

Start

10. Orient theorganization

11. Transition

toOperations

9. Staff the PMO (operational)

2. Get Commitme

nt to proceed

3. Define the

Model

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How to build a PMO: what worked well from scratchqPEOPLEqIdentify & develop PM staffqCareer pathqCurriculum, competency developmentqCertification, Coaching, MentoringqCommunity

qPROJECTSqReviews qCoordination between projectsqBenefits management / program management

qPROCESSESqMethodology, standards, templatesqTools

qORGANIZATIONqDashboard reporting / Portfolio viewqMetrics

Organization

People

ProcessesProjects

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How to build a PMO: initial policy setting 10 MUST criteria for projects (example)

Client approvals are obtainedQuality activities are planned for executed

Change management is in place Project management plan is created and baselined

Project management plan is compared to actuals and updated as required

Project organization, roles and responsibilities are documented and agreed

Project records are stored Project manager is named, assigned and available

Regular status meetings with client are held and minutes are produced

Project charter and accompanying documents exist

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Agenda

qWhat is a Project Management Office (PMO)q Status of PMOsq Success storiesq How to build a PMOØ Potential Value of PMOs

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Potential Value of PMOs: ReputationIBM awards for project management

– 2009 PMI Continuing Professional Education Provider of the Year Award – 2007 PMI Distinguished Project Award– 2006 PMI Professional Development Provider of the Year Award – 2006 PMI Education Provider of the Year Award – 2005 PMI Professional Development Provider of the Year Award – 2005 PM/COE Director Carol Wright receiving

a PMI Distinguished Contribution Award– 2004 PMI Professional Development Provider of the Year Award – 2001 Patent award for "Learn How... Do It Now..." awarded to Dillon

Edwards (PM Curriculum Team) – 2001 International Society for Performance Improvement (ISPI) Award of

Excellence for Contracting for Project Management Lotus LearningSpace course (PM Curriculum Team)

– 2000 American Society for Training and Development Excellence inPractice Award recognizing excellence in Training and career development processes. (PM Curriculum Team)

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Potential Value of PMOs: PMO Executive Council 2007 PMO performance metrics on project inputs

Degree of project ownership by sponsors6

Degree of confidence in benefits estimation5

Project complexity score4

Average years of employee experience3

Percentage of standard deliverables used by project managers

2

Percentage of project managers trained on PM methodology

1

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Potential Value of PMOs: PMO Executive Council 2007 PMO metrics on intermediate outputs (excerpt)

Percentage of sponsors satisfied with delivered project22Extent to which sponsors are able to estimate realistic business benefits16Cost saved by contractor dismissal15Percentage of steering committees attended by sponsor12Percentage of time spent in rework11Percentage of time spent on overhead10Percentage reduction of skill shortages filled by contractors9Employee turnover / attrition rate7Average employee hours spent on project work5Percentage of projects on time, in budget and within scope4Percentage of projects within scope3Percentage of projects in budget2Percentage of projects on time1

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Potential Value of PMOs: PMO Executive Council 2007 Metrics on project outputs & business outcomes

Revenue increase directly related to project execution10Qualitative suggestions by senior management 9Percentage of business cases achieved8Number of rotational assignments7Sponsor perception of contribution to business strategy6

Sponsor perception of contribution to business process improvement

5Sponsor perception of contribution to competitive advantage4Sponsor perception of contribution to business value3Percentage of clients satisfied2

Percentage of new products resulting from existing project work (assets reuse)

1

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Potential Value of PMOs:Executive views on project management

• “Project management is our economic engine and central to how we do business… Project management is one of our key competitive strengths.” Gloria Lara, VP, Jervis Webb

• “Project management has helped the organization achieve the desired results in a given timeframe, maintain cost control, and increase our ROI.” Syed Shahabuddin, Deputy Managing Director, State Bank of India

• “We believe that disciplined project execution will deliver bottom-line profit and top-line growth.” David Rice, CIO, Siemens Medical Solutions

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Potential Value of PMOs:Executive views on project management

• “The intent is always strong business results. Our investment in PM has paid off in terms of delivering projects with higher success in regards to our outlined objectives. PM isn’t just a good idea, it’s a business imperative to drive common standards and criteria whiledelivering projects with excellence.” Cindy Grossman, VP, IBM

• “Since we invested in project management, clients have praised our diligence in scope definition, early communications of issues, and scheduling accuracy.” Jeffrey Amason, VP, Geofields, Inc.

•“Good project management is an insurance policy. It prevents project

disasters.” Melissa Herkt, President, Emerson Process Systems & Solutions

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Potential Value of PMOs : goals that worked qAct as Change agentqestablish PM culture and mindset within an organizationqtransform an organization towards a project-based business

q Support business objectivesqCost cutting, minimize repair costs qSales support, competitiveness, references, brand imageqBrand image improvements

qReduce executive time on trouble shootingqProject performance & outlook reporting – reduce surprisesqRecover project issuesqPrepare executive decision makingqEducate executives in their roles as sponsors and steering committee

qNarrow talent gapqRetain, hire and develop PM staffqIncrease retentionqExtend networking internally & externally (e.g. PMI)

qClose the gap between benefits and objectivesqServe as program management where it is missing

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Summary

q What is a Project Management Office (PMO)q Centralized group supporting an organizationq Care about people, processes, projects and organization maturity

q Status of PMOsq Shortlived, challenged, small

q Success storiesqMultinational corporations count on it

q How to build a PMOq Identify goals > build roadmap > measure successq Ensure to have the right leader and staff

q Potential Value of PMOs q Business and sponsor related