implementing pmo

Implementing A Project Management Office (PMO)

Prepared by: James Waln, PMP

October 2007

1

Overview The What and Why of PMO’s Starting a PMO Types of PMO’s PMO Roles and Responsibilities Executive Buy-In PMO Best Practices Sources and Suggested Reading Reference Material

2

The What and Why of PMO’s

3

What Is a PMO Exactly?

4

The Project Management Office (PMO)• A PMO is a centralized organization dedicated to improving the practice and results of project management.

5

PMO Responsibilities

6

What Benefits Does a PMO Offer?

PMO’s are/can… Making available

qualified project managers

Provide support personnel to assist project managers

Allow project managers to pool their skills and knowledge

Help project managers to develop professionally

Recommended for organizations with many project managers

Provide consulting-type services and products to its constituency

If a PMO is not used… With several projects under

way, project managers are probably not learning from one another

PM’s are probably not sharing best practices

PM’s are not challenged to continuously improve their skills

Project managers can be overtly influenced by line managers

Project managers scattered across an organization with no common bond are significantly handicapped

The most important service of a PMO is to provide qualified project managers to an organization…

7

Starting a PMO

8

Starting a PMO

FACTS Executives must deliver in two key areas — ongoing operational results and improvement efforts.

Functional managers are continuously evaluated by senior management, peers, and subordinates for their ability to make things happen quickly.

Many projects involve multiple departments and functional areas.

Each organizational unit has its own language, its own standards, its own project management techniques or lack thereof.

No wonder so many central project management coordination units have sprung up in the last few years.

Today, there is estimated to be over 50,000 such organizations in the U.S. alone.

FACTS Executives must deliver in two key areas — ongoing operational results and improvement efforts.

Functional managers are continuously evaluated by senior management, peers, and subordinates for their ability to make things happen quickly.

Many projects involve multiple departments and functional areas.

Each organizational unit has its own language, its own standards, its own project management techniques or lack thereof.

No wonder so many central project management coordination units have sprung up in the last few years.

Today, there is estimated to be over 50,000 such organizations in the U.S. alone.

9

Starting a PMOPMO Requirements:

PMO value must be measurable to become sustainable.

If you cannot measure, you cannot control and if you cannot control, you cannot manage.

The PMO must be aligned with the interests and goals of the organization to sustain itself.

PMO Requirements:

PMO value must be measurable to become sustainable.

If you cannot measure, you cannot control and if you cannot control, you cannot manage.

The PMO must be aligned with the interests and goals of the organization to sustain itself.

10

• A PMO has responsibility for educating the organization it serves about its benefits it brings to projects

• A PMO must create and track metrics to show the results of its contributions

• A PMO should survey its customers routinely to verify it is adding value

• A PMO has responsibility for educating the organization it serves about its benefits it brings to projects

• A PMO must create and track metrics to show the results of its contributions

• A PMO should survey its customers routinely to verify it is adding value

• The PMO should focus on portfolio management of:

Project investments

Resources

Assets

Strategic objectives

Types of PMO’s

11

Current PMO and Advanced Models Traditional PMO Next Generation PMO

Focus mostly on tactical issues Focus on strategic and cultural issues

Science of project management Art and craft of project management

Views organization as a "complex machine"

Views organization as a "complex ecology"

Emphasis on monitoring and control

Emphasis on collaboration

Provides tools similar to a precise "map" to follow

Provides tools similar to a "compass" that show the direction

Internal process focused Focus on end products, customers and outcomes

Process driven Business driven

Standard (heavy) methods and practices

Adaptable and flexible (agile) methods and practices

Based on rules; follow rules Based on guiding principles; follow rules and improvise if needed

Defined, repeatable, managed and optimized practices

Adaptive and innovative practices

Focus on efficiency Focus on effectiveness and innovation

Process leadership Thought leadership

Heavy management and governance

Balanced management, governance and leadership

Table courtesy of J. Duggal, Projectize Group, http://www.projectize.com.

12

What Does a PMO Look Like?

Typical starting point for a PMO can be three project managers, a team leader, and five team members (also called PMO support personnel).

Typical starting point for a PMO can be three project managers, a team leader, and five team members (also called PMO support personnel).

PMO Project Starter Services…• Provide well-trained and competent project managers to run key projects.• Provide project management consulting. • Review contract proposals from vendors.• Sponsor project management education.• Develop, document, and maintain project management best practices.• Conduct project culture training.• Perform project reviews.• Perform post-project reviews.• Ensure that new projects apply lessons learned.

PMO Project Starter Services…• Provide well-trained and competent project managers to run key projects.• Provide project management consulting. • Review contract proposals from vendors.• Sponsor project management education.• Develop, document, and maintain project management best practices.• Conduct project culture training.• Perform project reviews.• Perform post-project reviews.• Ensure that new projects apply lessons learned.

Reporting View of a Small Project Management Office

13

PMO ModelsEarly on in PMO history, the Gartner Group identified three PMO models as flourishing:

• "Project Repository Model”

• "Project Coach Model"

• "Enterprise PMO Model"

There is a fourth model, called the "Deliver Value Now Model," that should not be ignored.

14

PROJECT REPOSITORY MODEL

PROJECT REPOSITORY MODEL BENEFITS PMO serves as a source of information on project methodology and standards. Assumes the enterprise has embraced a cohesive set of tools for project design, management, and reporting. Occurs most often in organizations that empower distributed, business-centric project ownership or with weak central-governance.

Data gap identification Incremental risk management control as projects initiate and mature in the development cycle Bottleneck identification for all projects "Raising the bar" for delivery "goodness"

15

PROJECT COACHING MODEL

PROJECT COACHING MODEL BENEFITS Assumes a willingness to share some project management practices across functions and uses the PMO to coordinate the communication. Best practices are documented and shared and project performance is monitored actively. Results are used to raise enterprise performance and train inefficient or new project managers.

Acts as trainer Consultant or mentor Source of information on project processes Often helps in project setup and post-project reviews

16

ENTERPRISE PMO MODEL

ENTERPRISE PMO MODEL BENEFITS The most permanent, consolidated, organizational model and concentrates project management within the PMO. The mission of the EPMO implies direct management or oversight of projects. All project managers are staffed within the shared service and consigned to projects as needed. The EPMO acts as a contracted project manager, assessing scope, allocating resources and verifying time, budget, risk, and impact assumptions.

Many firms have since learned that a consultative approach aimed at increasing project throughput and reducing project durations requires teamwork between the EPMO and the project teams. The idea of a PMO owning the project managers has some significant potential negative effects. The project management expertise and standards may not filter through to functional areas. When significant portions of the projects are part of one functional area, that functional area may not feel as committed.

17

"DELIVER VALUE NOW" MODEL

"DELIVER VALUE NOW" MODEL BENEFITS Puts organization goals first. Improvements in PM methodology are viewed as a means to an end, and not the end in itself. A holistic approach, embracing methods, skills and strategy that views project management as one piece of a bigger puzzle. Enables consistent motivation for the entire organization to seek out accelerated project deliveries. A stronger, more balanced project portfolio and better project performance.

A strong, well-balanced project portfolio that identifies up-to-date project workload, sponsorship, tactical progress, health status and current data gaps. A monthly "plan and forecast" that identifies portfolio opportunities and threats, top issues and risks, projects over/under budget summary. A project prioritization model for all portfolio projects based on ability to form a Governance Board to direct model creation. Governance Board setup and/or modification enables the force-ranking of the portfolio of projects. Project management training, coaching, and mentoring based on need.

18

DETERMINING THE PMO MODEL FOR YOUR ORGANIZATION

Questions you should ask…1. Who will initially be the main customers of the PMO?

2. What is the maturity level of the project management community?

3. How well does the Executive Team work together for the good of the enterprise?

4. Where is the greatest pain?

5. Will the PMO be able to deal with the intensity of missed delivery expectations from the executives and all of its implications?

6. Will the PMO be able to rescue troubled projects critical to the business? What if it cannot?

7. Will the PMO be funded sufficiently and supported by the executives to meet the value opportunities and threats?

19

PMO Roles and Responsibilities

20


PMO EXECUTIVE

21

PROJECT MANAGEMENT TOOL MENTOR

PROJECT PORTFOLIO MANAGER

HELP DESK SPECIALISTS

RESOURCE PORTFOLIO MANAGER

DATA ADMINISTRATOR

PROJECT MANAGEMENT MENTOR

PMO Services Overview

As a PMO begins to define its objectives, it needs to consider what services it will provide to meet those objectives.

It must also assess when in its implementation schedule it will provide these services.

The services that are required dictate the various roles and responsibilities.

Each service provided will require some level of staff support.

22

PMO Services PMO Services

Portfolio Management

Consulting & PMO Services Training Admin./H.R. Archives

Project portfolio information

Project rescues Methodology Project accounting

Information repository

Asset, strategic objectives and resource portfolios

Project acceleration, assessments, threats and opportunities, auditing, risk management

Tools Operations planning and forecasting

Data integrity and security

Executive reporting and governance

Project management processes, tools, methodologies

Project management basics

Data collection and report distribution

Project document library/knowledge management

Prioritization techniques

Mentoring Certification Asset tracking Lessons learned

Staggering of projects

Help Desk Teamwork Materials and supplies

Closed contracts

Strategic resource management

Web portal/information management

Advanced project management

Contract and change management

Analysis Resource recruiting

Scheduling software

Metrics, bonuses, career path, rewards and recognition

Customer interface

Customer interface Customer interface

Customer interface

Customer interface

23

Executive Buy-In

24

Executive Buy-in of The PMO

A PMO must deliver on its promise through four major processes:

Choosing the right project mix — a new way of strategic planning

Linking the executive team's strategies to current and planned projects

Managing the project portfolio correctly

Measuring the PMO to tangibly improve project performance relative to the executives' strategic goals

Executives will embrace a PMO that dramatically increases the probability of meeting their goals.

Executives will embrace a PMO that dramatically increases the probability of meeting their goals.

A PMO must be able to help executives with execution of strategy, as determined by the project mix and flow, or the PMO will not achieve sufficient level of value to sustain itself. 25

Executives Embrace a PMO If… CHARACTERISTICS OF A PMO THAT EXECUTIVES WILL

EMBRACE:

Executives will perceive value if the PMO helps the executives meet the goals on which they are measured

It must drive more projects through completion, without correspondingly increasing resources

Projects must be completed in drastically shorter times The impact of the PMO is clearly felt on both the top and

bottom lines of the organization (even in not-for-profit organizations)

Executives and managers throughout the organization feel that they are getting benefit out of the PMO

26

PMO Best Practices

27

Elements of An Effective PMO The Right People

The Right Tools

The Right Data

AVOIDS: The Wrong Result

28

THE "WRONG" RESULT — WHY PMO IMPLEMENTATIONS FAIL…

The PMO did not define its value proposition.

The PMO is not perceived as impacting project delivery abilities.

The PMO is seen as a threat — most often too authoritative.

The PMO does not have buy-in from the senior management.

The PMO is too low in the management reporting.

Project Management Overhead — the bad PMO acronym.

The PMO is micromanaging — trying to control every project directly.

29

Some Final Thoughts on starting a PMO…

In today's economy, more value is needed now. Establishing a PMO that brings recognized value in

the first six months of its existence is critical. Recommend you go beyond the original models. As you plan the PMO implementation, seriously

consider establishing visible value to senior management from the get-go.

Go after the low-hanging fruit that helps everyone win and the PMO will be on its way.

Avoid being perceived as sitting in the "Ivory Tower of Project Management Excellence".

Build a PMO that will "Deliver Value Now."

30

Sources & Recommended Reading

31

Sources and Recommended Reading Advanced Project Portfolio Management and the PMO: Multiplying ROI

at Warp Speed by Gerald I. Kendall and Steven C. Rollins, J. Ross Publishing © 2003

The Enter Prize Organization: Organizing Software Projects for Accountability and Success by Neal Whitten, Project Management Institute © 2000

Improving Your Project Management Skills by Larry Richman, AMACOM © 2006

Building Project Management Centers of Excellence by Dennis Bolles, AMACOM © 2002

Introduction To Project Management by Kathy Schwalbe, Thomson Course Technology © 2006

“In Common” by Bud Baker, Ph.D., PM Network magazine, September 2007

“Definition Impossible” by Bud Baker, Ph.D., PM Network magazine, June 2007

32

Reference Material

33

Next Steps OverviewI. Executive Summary/Proposal Letter with these sections:

I. Business CaseII. ScopeIII. ApproachIV. RiskV. Cost and BenefitsVI. Timeline

II. To successfully gain executive buy-in spend an hour with each functional executive to assess the current environment

III. Executive Presentation (3 hour time slot)I. The problems in managing projects II. The cost of the problems III. The connections between the root problem and the executive problemsIV. Simulate one of the problems to show the executives the impactV. The PMO SolutionVI. DiscussionVII. Conclusion

IV. This proposal becomes the formal written document for chartering the implementation of the PMO as a project.

34


Role Responsibilities ValueRequired

Skills When Leads the development of the PMO value proposition Leads the PMO strategically Key to gaining organization-wide support.

PMO charter development and implementation Ensuring all PMO activities are driving bottom line value Buy-in and involvement of executives PMO staffing Approval of monthly forecast and work plan report PMO staff retention Approval authority on project mgmt. contracts

Measured by how much documented value is brought to the organization

Executive oriented Project management professional Has the ability to work well with all levels of the organization Cross-functional experience with project portfolio management Consulting background

This is the first person hired into the PMO.

PMO EXECUTIVE

35



Skills WhenPMO Career

Path Leads and maintains the development of the project, resource, asset and strategic objective portfolios Reports to the PMO executive Financial and what-if analysis.

Analyzes the project portfolio and makes recommendations to decision makers Balances the portfolio Evaluates and helps to implement processes to improve project flow Publishes the monthly forecast and work plan report Manages the development and definition of the prioritization model Can be backup to the PMO executive

Same measurement as PMO executive improvement in ROI in project portfolio.

Ability to report bad news Ability to work well with all levels of the business Portfolio management experience for project portfolios > $25 million.

Part of the first group of people hired into the PMO

PMO Executive

PROJECT PORTFOLIO MANAGER

36




Path Supports project rescues Works in the field assisting project teams Trains project managers Conducts project assessments Reports to the PMO executive.

Provides coaching and mentoring services to the project management community on top portfolio-related components Works with project sponsors and project managers to identify project delivery opportunities and threats.

Same measurement as PMO executive Monetarily identified in overcoming project team threats and opportunities

Ability to work well with all levels of business Consultative in nature and duties Certified Project Management Professional (PMP) Complete grasp of PMI PMBOK® fundamentals Ability to work in high stress situations


PMO Executive Project Portfolio Manager

PROJECT MANAGEMENT MENTOR

37




Path Provides technical leadership, coaching and mentoring on all PMO tool utilization Reports to the Project Management Mentors

Ensures the integrity of all data captured through the supported PMO tools Responsible for the competence of all project managers, resource managers and team members in PMO tools and applications Helps with project rescues in rescheduling work loads in the scheduling tool.

Same measurement as PMO executive Data integrity and completeness

Expert in scheduling tools Quick learner on software packages Ability to work well with all levels of the business Complete grasp of PMI PMBOK® fundamentals Ability to work in high stress situations


Project Management Trainer Project Management Mentor

PROJECT MANAGEMENT TOOL MENTOR

38




Path Customer service Supports the project management community service requests for assistance

Answers and tracks field requests for assistance from project management community

Same measurement as PMO executive Responsiveness to customer help desk calls.

Ability to work well with all levels of the business A complete grasp of PMI PMBOK® fundamentals Trained in all PMO standard tools and methodologies Excellent communication skills Ability to translate technical jargon into simple concepts

Part of the first group of people hired into the PMO No later than early in second six months of PMO implementation schedule

Project Management

tool Mentor Trainer Project Management Mentor

HELP DESK SPECIALISTS

39




Path Oversees resource portfolio, including strategic resources Works with Project Portfolio Manager to help balance the portfolios Seeks to implement resource portability

Full and correct utilization of the organization's strategic resources Tracks resource utilization trends in alignment with portfolio objectives Assists project management community in locating just-in-time resources.

Same measurement as PMO executive Utilization and throughput per week of the organization's strategic resources Primary PMO executive measurement: to reduce delays caused by unavailable non-strategic resources.

Ability to work in high stress situations with project team partners Strong negotiation skills.

Part of the second group of people hired into the PMO

Project Portfolio Manager

RESOURCE PORTFOLIO MANAGER

40




Path Works with project teams in the application of the project management methodology

Assesses team's methodology usage for method compliance and associative risk management for all key projects Works with Project Management Mentor to identify and overcome obstacles and resistance

Same measurement as PMO executive Percentage of project management community claiming that methodology is worthwhile

Strong background in PMI/PMBOK® concepts and their application Ability to teach concepts to work teams Certified as a Project Management Professional (PMP®) Able to work with business sponsors and their project teams in project startups.

Part of the second group of people hired into the PMO Brought in early if the work environment has very low project management maturity

Project Management Mentor Trainer Resource Portfolio Manager

METHODOLOGY SPECIALIST

41




Path Works with project teams, functional units and other organizations to provide and arrange project management training

Teach project management basic and advanced concepts

Same measurement as PMO executive Agreed upon financial impact of the training, signed off by sponsors or functional executives.

Professional training experience

Part of the second group of people hired into the PMO Brought in earlier if the work environment has low project management maturity

Methodology Specialist Project Management Mentor

PROJECT MANAGEMENT TRAINER

42




Path Constructs the monthly forecast and work plan report Document librarian Supports all PMO role players Provides primary support for the portfolio manager

Ad hoc reporting; PMO data repository processing and integrity Review of portfolio project status reports and schedules for data completion

Same measurement as PMO executive Customer satisfaction with information (not data) provided.

Ability to work in high stress situations with project team partners

Should be part of the first group of people hired into the PMO

Help Desk Specialist Methodology Specialist

DATA ADMINISTRATOR

43