PMO Overview June 2009

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PMO High Level Thoughts

PMO High Level Thoughts

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  • 1. Program Management Office
    A Changing Organization
  • 2. A Program Management Office (PMO)
    A PMO is a department or group that defines and maintains the standard processes for the execution of programs and projects. The PMO strives to standardize and introduce economies of repetition in the execution of projects. The PMO can serve the functions of project auditor, project manager and portfolio manager. Moreover, the PMO is the source of documentation, training, performance reporting on the practice of program/project management.
    Program Management Office Definition
  • 3. Program and Project Management Issues:
    Project portfolio information is not readily available
    performance metrics
    Project impact is not tracked
    Increased number and complexity of projects
    In 2008, IT expects to manage 108 new projects, not including 24 in flight
    The potential for ongoing acquisitions will keep placing additional pressure on IT resources with the increasing number of projects
    Loss of key resource productivity
    Line and IT resources spending increasing amounts of time on project management and monitoring activities, distracting them from customer activities
    Projects are not prioritized, IT resources may not be focusing on the appropriate projects, everything is just a number
    Projects are suffering from scope creep, increased cost and missed timelines
    Not all projects have a project plan, there is no standard project approach
    Project planning efforts are not effectively executed on all projects leading to projects being delivered late and at a higher cost
    Project requirements are not solidly identified in all projects before IT resources are engaged
  • 4. The implementation of a PMO can have significant benefits by improving the effectiveness and efficiency of program/project portfolios:
    Proactive selection, prioritization and management of the program/project portfolio – “Build the right thing”
    Proactive identification of issues, ideas for improvement – Demand Management
    Economies of scale in the integration of liked ideas into larger more impactful efforts
    Improved budgeting and estimation of program/project efforts and resource utilization
    Promote efficient and effective execution program/project management – “Build things right”
    Improve project ROI
    Reduced project cycle time
    Reduced delivery costs, delivery of projects on budget
    Delivery of projects on time
    Improved quality of project deliverables
    Increased capitalization opportunities
    Improved project tracking
    Reduce business and project failure risks
    Early identification and proactive management of project issues and risks
    Better containment and management of project scope
    Improve utilization of resources – including capital, equipment and people
    Align the right resources and identify knowledge gaps
    More opportunities to leverage and reuse knowledge
    Improved accuracy on the assignment and forecasting of resource utilization
    Reduced the time commitment of non project management resources
  • 5. PMO’s are a organization in transition
    Corporate Executive Board — PMO Executive Council
    A Function In Transition, 2006
  • 6. Perpetual MotionThe number of PMOs continues to grow, mature and transition their role:
    …leaders of this young function…
    While the use of PMOs within IT grows…
    (Companies with PMOs) / (Percentage of Respondents, 2003)
    (Age of Current PMOs) / (Percentage of Respondents, 2005)
    4-6 years
    82%
    More than 6 years
    70%
    20%
    22%
    53%
    13%
    45%
    Less Than 2 Years
    2-4 Years
    n = 40
    …search for the right structure…
    …and consider changing the role
    (Current and Desired Future Role for the PMO) / (Percentage of Respondents, 2006)
    (PMO Reorganizations) / (Percentage of Respondents, 2005)
    No Expected Change in Core PMO Role
    34%
    70%
    50%
    66%
    Corporate Executive Board — PMO Executive Council
    A Function In Transition, 2006
    Plan for Change in Core PMO Role
    n = 47
  • 7. Decision Making CapabilitiesBased on analysis by the Corporate Executive Board, PMOs can be grouped into four types:
    Effectiveness
    “Build the Right Thing”
    The “Manager”
    The “Advisor”
    • Inclusive of “Coach”, “Auditor” and “Manager” functions
    • 8. Supporting portfolio definition and asset allocation
    • 9. Guiding portfolio prioritization decisions
    • 10. Conducting business case realization audits
    • 11. Inclusive of “Coach” and “Auditor” functions
    • 12. Overseeing project managers
    • 13. Supporting project planning process
    The “Coach”
    The “Auditor”
    • Inclusive of “Coach” functions
    • 14. Tracking projects
    • 15. Assessing portfolio risks
    • 16. Analyzing and reporting on projects
    • 17. Project manager skill upscaling
    • 18. Project management, training
    • 19. Knowledge management processes
    Efficiency
    “Build Things Right”
  • 20. PMO Process Decomposition PMOs differ in scope, size and level of automation; based on their maturity and desired corporate objectives. However, all will include some or all of these processes depending on their scope and objective:
    Program Management Office
    Portfolio Management
    Methods and Tools
    Project Management
    Resource Management
    Financial Management and Reporting
    Knowledge Management
    Processes
    • Idea Identification and Management
    • 21. Project Approval and Funding
    • 22. Project Prioritization
    • 23. Methodology Management
    • 24. Tool Configuration and Deployment
    • 25. Project Planning and Initiation
    • 26. Project Control and SQA
    • 27. Project Execution
    • 28. Project Closure
    • 29. Staff Forecasting
    • 30. Project Staffing
    • 31. Consultant Sourcing and Management
    • 32. Expense Allocation
    • 33. Expense Recovery and Capitalization
    • 34. Research and Adjustment
    • 35. Portfolio Analysis and Reporting
    • 36. Training
    • 37. Acquire
    • 38. Develop
    • 39. Categorize and Store
    • 40. Disseminate and Communicate
    Sub - Processes
  • 41. PMO Types and Organization and core mission:
  • 42. Aligning PMO Competencies With the Core Mission PMOs looking to bridge gaps between current and ideal activity involvement for greater focus
    Manager
    Advisor
  • 43. Organizations from different industries and diverging size have varied mandates and scope for their PMOs:
    (Key Characteristics) / (PMO Executive) Council Analysis)
    Corporate Executive Board — PMO Executive Council
    A Function In Transition, 2006
  • 44. Moreover, the Corporate Executive Board found factors that are influencing the evolution of PMOs:
    Influence Without Control
    Successful PMOs are adapting their specific organizational structure and reporting relationships
    PMOs tend not to have direct ownership of project managers
    Focus on coordination and facilitation
    Looking Beyond IT
    PMOs are beginning to gain widespread recognition and expanding its scope to take on corporate-wide responsibilities
    Organizations are beginning to leverage their IT PMOs and are turning them into Enterprise PMOs or EPMOs
    From Support to Service
    PMOs across the board are getting more service-oriented
    Taking on more of a business partner role in project management
    PMOs are beginning to move away from being pure “cost center” within the organization and are starting to explore various types of chargeback mechanisms for their services
  • 45. Types of PMO Influences (cont’)
    From Data to Decision
    PMOs are moving beyond data-oriented project reports to more strategic, portfolio-level dashboards
    PMOS are tailoring the level of information granularity to surface portfolio issues
    Surfacing pertinent information, inconsistency of metrics, and the quality and validity of data also continue to be challenges to PMOs
    Reporting will continue to be among PMOs’ top core activities
    65% of PMOs dedicate at least 20% or more of their time to reporting
    However, overall effectiveness of reporting remains low
    Next-Generation Metrics
    PMOs are beginning to look beyond traditional approaches of tracking
    Relying more on the use of earned value (EV) metrics to track project- and program-level performance
    Other PMO metrics include: earn-burn rates, project sponsor engagement tracking, project initiation cycle time, time lag between project change requests (PCRs) authorization, assessment and implementation, and average project health recovery times
    The inability to provide forward-looking visibility for senior management is one of the biggest challenges for a PMO
    There are now many Portfolio Management tools available
    PMOs are increasingly relying on software-based automation tools for their reporting function
    More than 95% of PMO Executive Council members surveyed indicated they rely on automated tools for tracking