Implementing a value-driven

Project Management Office

a business value proposition for integrating Project Management as a core capability across the enterprise

Topics

Project Management: existing situation

The missing link: PMO

Roadmap for a successful PMO implementation

Project Management: existing situation

Project Environment

Projects are executed in isolation, across various business units

Different approaches in managing projects across the enterprise

Lack of common understanding/ language:

Link between business strategy and projects

Project Management terminology

Project business value

Successful projects, but poor business results

Business needs

Changing environment, need to adapt quickly:

More competing market

Changes to the operational model

Product diversification based on market segmentation

Mergers/ Acquisitions

Integrating different business models

Assimilating different cultures

Economic slowdown

Increase resource usage: do more with less

Cost reduction initiatives

Expectations

Business Executives

Better connection between business goals and projects results

More value with less resources

Project Managers

Common approach on managing projects

Enough resources

Functional/ Unit Managers

Better control of resources

Improved reporting capabilities

Overall conclusion

Projects are not delivering maximum value to the organization

Project Management is not yet a core business practice across the enterprise

Executives don’t perceive Project Management as a business enabler

There is a missing link between project execution environment and business strategy

The missing link: PMO

PMO: the VALUE LINK

Project Managemen

t Office - PMO

Shareholders

Resource and Line

Managers

Project Manager

s

Project Teams

Customers

Business strategy

Consolidated Reporting

Solution: PMO is the VALUE LINK

Corporate/ Division Strategy

Project Portfolio BoardPMO

Project Execution Environment

Governance and Prioritization

Project Mix Alignment

What is a PMO?

Chartered organizational structure: “Dept. of Project Mgmt. Practice”

Set of processes

Functional model of the PMO

Project and Portfolio Mgmt. methodologies

Process Assets Library

Pool of resources (project managers, tools and applications)

Competency Center (training, coaching. Technical support for Project Managers)

Shared Services Provider for the enterprise

“executive cockpit”

Major components of a PMO

Strategy, commitment and support

PMO

PMO’s Mandate

Maximize project benefits

Connect strategy with tactics

Implement rigorous PM practice across the organization

Integrate:

Processes and practices

People

Departments/ organizational structures

Executive radar screen

Support for portfolio governance and alignment

Two major types of PMO

Cost Control Model

Focused on reducing cost an delivering on-time

Limited or no impact on project alignment

Performs only on the project execution level

Limited or no visibility to executive management

Throughput Model – The ROI engine

Focus on business value maximization

Executive radar screen

Business integrator (horizontal/vertical, internal/ external)

Major role in Project Portfolio Governance

Benefits of the Throughput Model

More projects with the same resources (20%-50%)

Reduced completion time (up to 25%)

Increased business performance (depending on selected KPIs)

Allows for more accurate measurement of the PMO value across the organization (both top and bottom levels)

Increased forecasting capability

Agility –responsivness to the changing environment

Major functions areas (high-level)

Practice Management (processes, know-how, methodologies)

Infrastructure Management (software tools, organizational support functions, logistics)

Resource Integration (project managers, team members, other shared resources)

Technical Support (training, coaching, mentoring to project managers and project support personnel)

Business Alignment (helps prioritization and governance of Project Portfolio based on business goals)

Staged PMO

PMO is designed for progressive evolution through stages

Each function area is divided into specific functions, based on the Gap Analysis result

Each specific function can be executed to different performance levels

The overall PMO Function Model defines:

Specific functions to address

Expected performance level on each function

Timeline to achieve specific stages of development

Roadmap for a successful PMO implementation

PMO Conceptual Lifecycle

AnalysisAnalysis

Design and Planning

Design and Planning

ImplementationImplementation

EvaluationEvaluation

Most successful PMO implementations go through these four main phases—and repeat as necessary

Implementation phases (high level)

Gap Analysis Design and Build Operate

1. Understand current status

2. Document requirements and expectations

3. Validate alignment with business strategy

4. Document constraints and assumptions

1. Select PMO model

2. Design functional model

3. Issue PMO Charter

4. Assign responsibilities and authority

5. Develop processes (PAL)

6. Select software tools

7. Develop capabilities based on functional model

8. Establish budget and cost/revenue model

1. Perform assigned functions:

A. Process development and deployment

B. Consolidated performance reporting

C. Training center

D. Audit

2. Provide feedback for Portfolio Management

3. Integrate business processes

4. Organizational integration (vertical/horizontal, internal/external)

Typical timeline

Validate analysis report, PMO Charter, High-level Plan

Assessment and validation

Approve concept and detailed plans

Project kick-off

Design

6 months

Deployment

12 months 6 months

Continuous Improvement

PMO up and running

Duration may vary based on specific conditions

3 months

Gap Analysis

Critical success factors

Executive’s involvement and commitment: continuous

Right (balanced) positioning within the organizational hierarchy – sufficient authority

Choosing appropriate PMO type for the given business model

Access to adequate competencies, skills and know-how in building a PMO

Questions?