xcel energy pmo: success from the start -...

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Xcel Energy PMO: Success from the Start

Eric Weimert, IT Portfolio ManagerJill Rodning, Senior Portfolio LiaisonAnne Olson, Program Manager for Utility Innovations

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Agenda

Xcel Overview

Why Projects Fail

PMO Overview

PMO Tools for Success

Support Structure

Organization Engagement

PMO Results

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Xcel Energy Overview3.3 million electricity customers and 1.8 million natural gas customers in 8 Western and Midwestern states

9,000+ employees; I/T staff of 640+ professionals

Total Annual Revenue revenues of $10B

$142M Operating I/T budget for 2007$75M Capital I/T budget for 2007

90% of I/T functions and services delivered to Xcel Energy through 3rd

generation outsourcing partnership with IBM Global Services

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Why Projects FailPoorly Developed Business CaseLack of User involvementLack of qualified resourcesUnrealistic ExpectationsLack of Executive Support (I/T and Business)Changing RequirementsProject Team StructureNot aligned with Business PrioritiesNo Project Oversight & VisibilityPoor Risk Management

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End-to-end PMO1.0 Idea

2.0 Planning

3.0 Business Case Analysis

4.0 Project Execution

5.0 Project Close

Business unit prioritizes ideas, plans, budgets and develops business casePMO provides portfolio management, planning support and seeks consolidation opportunities

Business unit approves projects, Project Change Requests (PCRs) and Finance Leader agrees to benefits/budget impact Project Manager manages project and tracks issues, risks, dependencies and PCRsPMO manages cross-unit dependencies and risks

PMO compares benefits realized to original projections

Closed Loop

PMO Overview

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Idea/PlanningIdea• Idea involves identifying and prioritizing business unit

needs and objectivesPlanning1. PMO Kickoff Meeting

• The Liaison will work with the project team to discuss how the project will be managed, as a:

• Single Project• Single Work Effort• Larger Program made up of possibly multiple Projects and/or Work Efforts

2. Project Charter• The Project Charter describes the:

• Outlines the need for the project. • Necessary resources• Timeframes & cost estimates to complete the Business Case Suite (BCS)

2.0 Planning



5.0 Project Close

Closed Loop

PMO Overview

1.0 Idea

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Business Case AnalysisBCS Deliverables

ScopeBusiness DesignTechnical DesignRiskScheduleCost Benefit Analysis (CBA)

Milestone Approvals

2.0 Planning



5.0 Project Close

1.0 Idea

Closed Loop

PMO Overview

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Funding GovernanceGovernance Layers



5.0 Project Close

1.0 Idea

Closed Loop

Idea Charter BCSExecute& Imp PCR’s

Approvals: Cumulative Of total

Dir Fin. and PMO NA NA <$250K <$1M <20%

SLT* NA NA <$5M <$5M >20%

IRC NA NA <$10M <$10M >20%

Board NA NA >$10M >$10M >20% Funded by: Business Unit Business Unit Business Systems Business Systems Business Systems

*SLT = Senior Leadership Team in Business Systems (Ray Gogel and his direct reports)

Notes:• The cost to develop an idea and preparation of a charter is authorized by management within the

Business Unit.• Business Systems Finance Director, PMO Director, or Asset Director approve material requests up

to $500K• CIO signs all contracts and approves material requests above $500K• If the project is canceled because the business case does not support it, the business unit absorbs

the cost of the BCS effort

2.0 Planning

PMO Overview

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Project Execution & Tracking• After a project has been approved by the business

unit, the Project Manager can begin project execution

• Project execution is comprised of five key elements:– Status reporting– Issue management– Risk management– Dependency management– Project Change Request (PCR) management

1.0 Idea

2.0 Planning



5.0 Project Close

Closed Loop

PMO Overview

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Status Reporting - Project Health It is the responsibility of the Project Manager to accurately track (metric driven) and anticipate (issue driven) project health changes.The project “health” calculation is based on the following:

Spend to Date (LTD)Estimated spend at completion (EAC)Labor (Hours)Number of tasks completedMilestones past dueIssues

Project Execution & Tracking

1.0 Idea

2.0 Planning



5.0 Project Close

Closed Loop

PMO Overview

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Project Execution & Tracking

1.0 Idea

2.0 Planning



5.0 Project Close

Closed Loop

Project Change Requests (PCRs)Project Managers update project baseline information for all approved PCR'sThree types of PCRs

Type A – New functionalityApprovals Required – Sponsor, Business Manager, Business Technology Executive (BTE), Governance

Type B – Missed requirementsApprovals Required – Sponsor, Business Manager, BTE, Governance

Type C – No Scope, end date or $ changeApproval Required - Liaison

PMO Overview

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Project Close/Closed Loop

Project Close• Project Managers should continue to focus on project

close-out activities including:• Submit Final Status Report• Project Completion Report• Lessons Learned• Work Order close out

Closed Loop• BTEs, PMO and Business Unit will set a future date to

validate the benefits have been realized (Closed Loop)

1.0 Idea

2.0 Planning



5.0 Project Close

PMO Overview

Closed Loop

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Support Structure: PMO Infrastructure


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Support Structure: PMO Library


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Support Structure: Process Automation


1. Submit Idea

2. Route Idea

4. PMO Kickoff Meeting

3. Annual Budget

4. Route Budgeted Idea

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Support Structure: MS Project Sourced Metrics


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Support Structure: Forums/TrainingQuarterly Refresher Training

Modularized training½ day sessions

Onboarding TrainingJust-in-time trainingModularized training

Monthly PM ForumIntroductionsPM Community

Staffing ChangesRecognition Key Highlights

Special TopicsResourcesPM Forum Roadmap


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Organizational Engagement: IT & the BusinessMilestone Approvals

CharterBusiness Case MilestonesUpon Deployment

Scope, design validation, transition to operations3.0 Business Case

Analysis

5.0 Project Close

1.0 Idea

Closed Loop


2.0 Planning


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Organizational Engagement: GovernancePurpose: Provide Business and Business Systems Senior Management Oversight in the areas of

prioritization, funding, exception management and progress tracking.

(1)

Idea

(2)

Charter Governance

(3) Business

Case Analysis Governance

Project

Initiation

(4) Project

Execution

(5) Project

Close

Not drawn to scale to reflect relative effort or duration

IdeaPrioritization

Future – BU Work Authorization Process

(e.g. WRAP & demand Capture))

Annual Budgeting

Program & Project CharterPresentation Funding for

Business Case Development

Business Case PresentationFunding for

Project Execution

Tuesday Project Review Meetings(upon request)

Issue, Risk, DependencyEscalation (as needed)

Future – Post ImplementationMeasurement

Status Reporting(every other week)

Scope, Business Design, and

Technical Design Acceptance

Project Health = Red or YellowCorrective Action Implementation

PCR - Funding orSchedule Change

Project Steering Committee(high profile projects)

Go No-goDecision

Transition to OperationsTransition to Support

Financial Governance

Oversight Governance


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2005 General Computer Controls

99.3%

92.0%

96.5%

88%

90%

92%

94%

96%

98%

100%

Jan Feb March

% o

f GCC

s P

asse

d

0

2

4

6

8

10

12

14

16

18

20

# of

Rev

iew

s

PassedReviews

For 1Q05, 494 GCCs have been tested in 45 QA Review s. Overall 1Q05 compliance is 96.4%

BCS ReviewsRated Satisfactory

10.0%30.0%50.0%70.0%90.0%

Jan-0

4Fe

bMar Apr

May

June

/July

Augus

tSep

tOct Nov

Dec

% o

r Rev

iew

s

Improved checklists revealed previously

undetected problems

Project Development End to End Process Framework

Idea PlanningPlanning BusinessCase

AnalysisBusiness

CaseAnalysis

ProjectExecutionProject

ExecutionProjectCloseProjectClose

GovernanceGovernance

Control 7Control 6

ScopeDesignRisk Assess. Sched. CBA

Control 2Control 1

Control 5Control 4Control 3

Control 8

Project Development End to End Process Framework

Idea Planning CaseBusiness

CaseAnalysis

ProjectProjectExecution Project

CloseProjectClose

Finance and Accounting ProceduresFinance and Accounting Procedures

GovernanceGovernance

Control 7Control 6

ScopeScopeDesignDesignRisk Assess.Risk Sched.Sched.

Control 9

Organizational Engagement: Integration


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Project Health

2003 2004 2005 2006 2007Green Target 75% 82.50% 85.0% 90.0% 90.0%Green 82.5% 86.0% 90.5% 94.9% 89.3%Yellow 5.2% 6.8% 4.0% 6.0%Red 8.8% 2.6% 1.1% 4.7%

Days Healthy

Mercury ITG Project and Work Effort Health - YTD Trend by %Projects in "Healthy" Green

0%10%20%30%40%50%60%70%80%90%

100%

Week Ending 06/29/07

% o

f Pro

ject

s

Green

Red

Yellow

Target - Green - 90%

Target - Yellow - 6.7%

Target - Red - 3.3%

2004

=85

.9%

94%

2%

4%

Year to date average:Green: 89.38% (target GE 90%) Yellow : 5.91% (target LE 6.7%)Red: 4.71% (target LE 3.3%)

2005

= 9

0.53

PMO Results

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PCRs – 2003 through 2007

PMO Results

LTD PCR Summary - $s

$-

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

Actuals To Date PCR Actuals Remaining Budget Budget

Remaining Budget $30,174,092

PCR Actuals $62,459,061 $62,306,686 $11,880,684 $5,664,286 $2,245,649

Actuals To Date $26,740,939 $69,793,314 $57,690,774 $66,143,714 $42,780,259

Budget $89,200,000 $132,100,000 $69,571,458 $71,808,000 $75,200,000

2003 70.0%

200447.2%

200517.1%

20067.9%

2007 4.3% of Actuals2.7% of Budget

Thank you for attending

xcel energy pmo: success from the start -...

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