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Many Companies Have PMOs
Different mandates
Varying structures
Most began in IT, many still are
3 of 5 organizations in PMI survey have enterprise PMO
“Managing capital projects for competitive advantage”McKinsey Quarterly, June 2008
“Planned capacity additions in petrochemicals such as styrene, for instance, are nearly twice the levels in previous economic cycles. Power stations now on the drawing boards in some countries will generate three times as much electricity as traditional plants do.”
“In the petroleum industry, a typical offshore project involving subsea risers might have cost €30 million to €50 million in the 1990s, but today a comparable project, in deeper and more remote waters, might cost €600 million to €900 million.”
Alignment Is Crucial As Projects Grow
When Projects Are As Large As Business Units
“One [engineering firm’s] senior executives decided to raise the profile of its project teams (and to attract up-and-coming employees to them) by explicitly comparing them to its business units during strategic-planning discussions.
Thinking of project teams in this fashion — they are, after all, comparable to a $2 billion P&L—forced the leaders of the business units to think more carefully about staffing them and ultimately helped the company improve its skill base.”
“Managing capital projects for competitive advantage”McKinsey Quarterly, June 2008
Enterprise-Wide PMOs are Focused on Strategic Aspects of Project Management
59%
90%
49%
65%73%
49%
40%
69%
57%
68%
59%
72%
44%41%49%
60%
0%
20%
40%
60%
80%
100%
Enterprise-wide Dept, Reg, Div
PM Standard-
ization
Monitor project
success metrics
Develop core PM maturity
Program Mgnt.
Training Provide PMs
Portfolio Mgnt.
Mgnt. of project
resource allocation
Q: Which of the following roles does your PMO fulfill? (PMI MURMER market research, Dec. 2010)
.
Project
Scope Budgets
Resources
Business Case
Milestones
Risks
Dependencies
StakeholdersBenefits
Governance
DeliverablesRequirements
Project Plan
Communication
Strategy
Roles
Time
Decision Making Priorities
Critical path
Skills
Control
Project
Scope Budgets
Resources
Business Case
Milestones
Risks
Dependencies
StakeholdersBenefits
Governance
DeliverablesRequirements
Project Plan
Communication
Strategy
Roles
Time
Decision Making Priorities
Critical path
Skills
Control
• How are we supposed to manage all this?• How can we balance the portfolio of projects?• Where do we allocate our resources?• How can we maximize benefits from our investments?
Portfolio Management
Do they complement and reinforce each other?
Approving projects and programs
Allocating resources
Setting goals
Monitoring progress
Adapting to conditions and strategy
2010 Pulse of the Profession Research
41% of those organizations with a PMO will bring a project in on time and in budget compared to 34% without
67% will meet project goals or intent compared to 62%
67% of those organizations with PMOs saw an increase in projects meeting goalscompared to 44% without
2006: Initial Objectives for IT PMO
• Implement standard processes for project requests, evaluation, and funding to ensure that approved projects were aligned with business goals and objectives
• Implement a standardized project management methodology to include policy, standards, guidelines, procedures, tools, and templates
• Build professionalism by providing mentorship, training, and guidance to teams as they adopt project management processes and best practices
• Manage the project portfolio by ensuring that required documentation is in place and that stakeholders are properly informed about progress through effective reporting of key performance indicators
• Direct project management for key strategic initiatives
• Ensure benefit realization by clearly defining business cases and the associated metrics for measuring project success
2008: Re-charter as Enterprise PMO
16
Next Steps:
• Improve integration of financial and project planning
• More professional development for PMO staff and project teams
• Repository for best practices and lessons learned
PMO: Hub of the Organization’s Learning
Evaluate individual projects
Draw insights from across teams and projects
Benchmark and research the organization’s approach
Assess the need for trained practitioners
Define how projects will be managedSupport project management activities
adaptable to each projectFacilitate sharing of project
management information, knowledge and experience Improve identification and use of best
practices Improve results through the avoidance
of common pitfalls
From Products to Solutions – via Projects
Shared Support Functions: Scale Dependent
Social Media Tools Reference Materials PM Perspective for HR decisions
Shared Support: Strategic
Strategic because projects are strategic
Contributes to portfolio management
Contributes to management maturity
Define and maintain the business benefits throughout the project and beyond
Cross-functional teams need to drive and own integration
Long term project success is dependent on stakeholder buy-in from beginning to end
The Strategic PMO Manages Results,Not Just Projects
Supports innovation
0%Aligns with company strategy
29%
Completed on budget
19%Supports revenue
19%
Completed on time
12%
Enhances competitive
position12%
Stays with the scope of the original
design9%
Most important project success criterion
N = 130Source: Gartner (September 2008)
USD $3.5 billion, 1993 to 2009USD $1.8 billion in procurement More than 8,000 vendors More than 12,000 contracts
1999: Major cost and schedule overruns are forecast Lack of systems engineering focus in
management Need for “clean room” assembly approach
throughout
Learning from the National Ignition Facility
National Ignition Facility: “Rebooting”
1999-2000: Strategic restructuring
New senior management
Bottom-up reassessment for new cost and schedule baseline
Reassess risk posture and contingency level
DoE and Congressional review
National Ignition Facility: PMI Project of the Year, 2010
NIF completed 2009, USD $2M under budget and 3 weeks ahead of schedule
Ignition experiments began early 2010
DoE improved management of its entire project portfolio and capital asset acquisition using concepts and processes from PMBOK® Guide
“The successful turnaround… can be traced directly to the strategic change in approach to project management.”
PMO’s Actions Determine Strategic Value
Portfolio management
Project management maturity
Shared support functions