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ce en er nf co le Te

PMO Executive CouncilResearch Teleconference 18 June 2008, 12 p.m.1 p.m. EDT

State of the PMO Function

Featuring: Current PMO Trends Priorities for 20082009

Copies and CopyrightAs always, members are welcome to an unlimited number of copies of the materials contained within this handout. Furthermore, members may copy any graphic herein for their own internal purpose. The Corporate Executive Board requests only that members retain the copyright mark on all pages produced. Please call the Publications Department at +1-571-303-4444 for any help we may provide. The pages herein are the property of the Corporate Executive Board. Beyond the membership, no copyrighted materials of the Corporate Executive Board may be reproduced without prior approval.

Legal CaveatThe PMO Executive Council has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and the PMO Executive Council cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, the PMO Executive Council is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither the Corporate Executive Board nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by the PMO Executive Council or its sources, or b) reliance upon any recommendation made by the PMO Executive Council.

Road Map for Todays DiscussionPMO Functional Trends

The Ascendance of the EPMO

Pressure to Boost Resource Productivity

Heightened Interest in Benets Realization Tracking

PMOEC1A8YAXV

2008 Corporate Executive Board. All Rights Reserved.

3

Emergent PMO TrendsPMO leaders are demonstrating a strong interest in growing their value perimeter, pushing to move beyond delivery of functionality to delivery of benets, and become a center of excellence for resource managementPMO Competencies of Highest Importance and Least Effectiveness PMO Executive Council Maturity Diagnostic

while the Enterprise PMO model continues to grow in popularityPMO Executive Council EPMO Cohort As a Percentage of PMO Executive Council Membership

Average Maturity GapHigh

Project Management Tools and Methodology

2006 Project Manager Incentives

20%

Importance

Project Manager Coaching and Development Project Selection PMO Performance Reporting Stakeholder Partnership Bene ts Assessment and Tracking Organizational Structure Project Manager Hiring Vendor and Methodology Training Outsourcing Management End-User Adoption Readiness Assessment PMO Mandate Denition Project Stafng Portfolio Resource Monitoring 2007

30%

Project Performance Reporting Project Manager Performance Assessment

Portfolio Data Collection and Reporting

2008(E)

40%

Portfolio (Re)Prioritization High

Low Low

Maturity Gap (ImportanceEffectiveness)

Source: PMO Executive Council research.PMOEC1A8YAXV

2008 Corporate Executive Board. All Rights Reserved.

4

State of the PMO Function

Top of the Priority List for Second Half of YearChallenges to PMO Success

1 Enterprise coordination for large-scale programs Challenge

2 Anticipating and mitigating project resource bottlenecks

3 Improving clarity on returns on project investments

Current Trend

The Ascendance of the EPMO

Pressure to Boost Resource Productivity

Heightened Interest in Benets Realization Tracking

Source: PMO Executive Council research.PMOEC1A8YAXV

2008 Corporate Executive Board. All Rights Reserved.

5

Road Map for Todays DiscussionPMO Functional Trends

The Ascendance of the EPMO

Pressure to Boost Resource Productivity

Heightened Interest in Benets Realization Tracking

PMOEC1A8YAXV

2008 Corporate Executive Board. All Rights Reserved.

6

The Ascendance of the EPMO

State of the EPMOEPMOs maintain authority over large budgetsEPMO Budget Managed, 20062007 Percentage of Companies2006 2007

Eighty-two percent of EPMOs manage budgets greater than $1 million, up 5% from 2006.

32% 32%

36% 36%

14% 5%Under $500,000n = 22.

14% 9% 9%

14%

$500,000$1 Million

$1 Million $5 Million

$5 Million $10 Million

More Than $10 Million

and report beyond the IT functionEPMO Reporting Relationships Percentage 31% 23% 15% 15% 8% 8% Sixty-nine percent of EPMOs report outside of IT.

n = 26.PMOEC1A8YAXV

CIO/CTO/ Governance

COO or Operations

CFO or Finance

Functional Heads

CEO or Head of Subsidiary

Strategy

2008 Corporate Executive Board. All Rights Reserved.

7

The Enterprise PMOEPMO Architecture Infrastructure Applications and Operations Support Shared Resource Pools Non-IT IT Business Unit PMO Functional PMO

IT

Governance Activities and AccountabilitiesPortfolio Planning Creating the Portfolio Management Framework Aligning with Business Partners Setting Allocation Levels Across Portfolio Asset Classes Screening Business Ideas for Strategic Fit Developing Business Cases Dening Project Requirements Prioritizing the Portfolio Process and Methodology Governance Developing Resource Management Processes and Standards Tracking and Reporting Key Metrics to Business Partners Reviewing Cross-Functional Projects at Stage-Gates Selecting a Resource Management Tool Enforcing Resource Management Processes and Standards Managing Multiple Vendors Capacity Planning Monitoring Key Delivery and Quality Metrics Reconciling Skills Prociency with Role Requirements (Re)allocating Resources to Projects Estimating Demand

Owned: The PMO has complete decisionmaking authority for this activityPMOEC1A8YAXV

Consulted: The PMO inuences decisions with analysis and recommendations

2008 Corporate Executive Board. All Rights Reserved.

8

Source: PMO Executive Council research.

Reporting Maturity Curve

Download the EPMO Metrics and Reporting Toolkit at www.pmo.executiveboard.com

Maturing Toward Business ValueEvolution in EPMO Metrics PMO Executive Council Analysis 3Business Outcomes

Assessing Portfolio Returns Sample Metrics: Portfolio ROI Dollars of generated revenue Dollar efciencies gained Cost avoided from automation efforts FTE Savings

2Focus of EPMO Activities

1 Standardizing Process Sample Metrics: Percentage of PMs using standard methodology Percentage of PMs attending methodology training classes Percentage of BUs using standard PM job descriptionsProcess Inputs Low

Delivering Projects Successfully Sample Metrics: Percentage of sponsors satised with delivered projects Percentage of projects delivered on-time Percentage of projects delivered on-budget Rework as a percentage of total project work

High

Relative Cost of Measurement

With Sincere AppreciationCISCO SYSTEMS, INC.

Source: PMO Executive Council research.PMOEC1A8YAXV

2008 Corporate Executive Board. All Rights Reserved.

9

Road Map for Todays DiscussionPMO Functional Trends

The Ascendance of the EPMO

Pressure to Boost Resource Productivity

Heightened Interest in Benets Realization Tracking

PMOEC1A8YAXV

2008 Corporate Executive Board. All Rights Reserved.

10

View from the Corner Ofce

No ExcusesBusiness tolerance for delivery lapses is at an all-time lowCurrent Business Customer Expectations Percentage of Respondents

just as the traditional options for accelerating delivery are no longer availableContract Employees Percentage Change in Headcount

Very Low Tolerance for Projects Not Delivered on Time and Budget

89%

14.13%

20072008 Increasing Pressure to Accelerate Speed to Market

67%

20062007

(7.45%)n = 33. Source: PMO Executive Council research. n = 145. Source: CIO Executive Board research.

Just Get It All DoneInput prices are at historic highs, competition is brutal, and our margins are under tremendous pressure. To survive, we all have to nd ways to deliver more with fewer resources. So I dont want to hear about our limited capacity for new projectsI dont care how you do it, I need it done. Business Unit GM Services Company

Get It Done for LessI dont care what you do, just do it for 20% less! CFO Pharma Company

PMOEC1A8YAXV

2008 Corporate Executive Board. All Rights Reserved.

11

Pitfalls to Avoid

Three Myths About Increasing Resource ProductivityThe Myth 1 The Process Hound 1. 2. 3. . . . 7. The Reality Drivers of PM Effectiveness Ownership and Commitment Learning Agility Risk Management The Lesson

More Methodology Does Not Mean More Productivity

More Process Adoption is Better If people followed our methodology more consistently 2

Process Adherence

n = 65.

The Technologist1010101010101010

What Tools Cant Do Secure executive support Identify effective resource management processes Tools are Necessary not Sufcient

Tools are the Solution! Once we nish our PPM implementation, well be able to! 3

Ensure data quality

The Empire Builder

Projects That Cut Across Business Units Percent of Projects in PortfolioSingle Business Unit 26% 74% Two or More Business UnitsSource: PMO Executive

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