Creating & Maturing a PMO

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  • 1. The PMO Connection -Linking Projects to Business Success Presented by Syed Raashid Ahmed Best Practice User Group Middle East, 12th November 2007Project Management, Programme Management, Risk Management PRINCE2™, MSP™, M_o_R® Sponsored by
  • 2. Agenda• SCENARIOS and KEY FACTS• LAYING the FOUNDATION• CREATING the PILLAR• FORMING the STRUCTURE• MATURING• Q&A Sponsored by
  • 3. Some Scenarios• I am your prospective client. I have a budget of 100K, you have estimated 200K. What have you to say to win this deal?• You are a friend of the CEO and all the steering committee members. The company has bought the product you recommended and are unhappy that the suite is functionally poor. The company does not suffer from funds. How would you triangulate the political, economic and technical dimensions of this scenario to come out okay?• We have the estimates all wrong. At every stage of the project we are over budget. What will you do in terms of priority?• You quoted 100K for a job to fix a problem. Upon start of development we realize we can fix it is 3 days with 1 person. What would you do? Sponsored by
  • 4. Harsh Reality 63% of projects have schedule delays 49% of projects exceed budget or do not meet business objectives 45% of projects face cost overruns 23% of all projects FAILSource: Research by the Standish Group International Inc., as reported in Computerworld, Feb. 17, 2003. Recent research (Meta Group) has indicated that 70% of Global 2000 IT operations struggle with the business-side perception of value from IT Services – even when 99.9% SLA compliance and IT Balance Score card are reported. Sponsored by
  • 5. Business Challenges & the need for PMOExternal Factors Internal Factors Mergers & Acquisitions Management Transition Corporate Restructuring Pressure to manage costs Changing Competition Technology enablers Legislative & Regulatory IT / BP Outsourcing Oversight Relationship Management Public Accountability & Integrity Risk Management The Project Management Imperative Portfolio view of projects aligned with a strategic business plan Defined technical processes for different types of projects Uniform project management process Integrated business and quality controls Viable tools to support process, project management and portfolios Sponsored by
  • 6. Terms of Reference“Project Management Office (PMO)is a company’s source of project Global Recognitionmanagement expertise and serves Profitabilityas the guardian of project Improvementmanagement standards, a central Productivepoint for process and project Project Teamsmanagement tools, best practice Organizationalreuse and process library” Improvement Culture Shift to Project Management Staff Professionalism in Project Management Predictable, Reusable PM Tools“A set of stable, predictable, and Techniquesrepeatable, reusable and Benefitsreliable managementtechniques and processes” DOES A GOOD PMO GIVE A FIRM COMPETITIVE PARITY OR ADVANTAGE? Sponsored by
  • 7. Choosing the Model Coach Model (X Model) Manager Model (Y Model) Support Role & Mentor Supervisory RoleThe two models are mutually exclusive & PMO should entail both mentoring & Supervising Sponsored by
  • 8. Way Forward Success Increases …While Ignorance Decreases 65% 62% Percentage who report 42% Percentage who don’t increased project know or track project success success37% 23% 22%1yr 2yr 3yr 4yr 5yr 1yr 2yr 3yr 4yr 5yr PMOs: The Longer you have them, the Better they work Source: CIO/PMI survey (available on www.cio.com/research Sponsored by
  • 9. Creating the First PillarThe “Who” question….Who is the right sponsor for the PMO? Who are the right people for PMO?Pain Area Sponsor from Typical roles to choose from:Execution Senior VP - Projects - PMO ManagerExcellence - Financial AnalystFinancial reform CFO - Process Expert - Risk Management ExpertDSS CEO - TrainerResource HR - Senior Project Managerallocation - Communication Specialist - Resource Manager It is now best to recruit core PMO Members and have them participate in the rest of the processes The typical size of a PMO is 3 – 8 members Sponsored by
  • 10. Laying the floor Agree on what needs to be changed Pain Area Focus AreaProject Failures Execution ExcellenceCosts out of control Financial ReformInsufficient Information Portfolio Information TransparencyNo decision framework Portfolio Decision supportResource bottlenecks Resource Allocation If you are thinking “All of the above”, think again Focus on a few goals if your PMO is to be successful Create a roadmap with a timeline for adding additional focus areas Sponsored by
  • 11. Creating the Second Pillar Decide the Scope & Communication plan. Name each PMO member as liaison officers (SPOC) Prepare & release the ‘Service Catalogue’ Task ActivityProject Inventory Construct inventory of all projects underway & gather key informationProject Process Development Create Processes, templates & tools for effective Project ManagementTraining & Support Train Project Managers & provide supportProject Execution Services Provide ‘Turnkey’ execution services as a ‘Go By’Best Practices Repository Create means to capture & store documentsFinancial Analysis & Reporting Create Cost / Benefit models & train PMs on their use, analysis & reporting of resultsStatus Reporting & Dashboards Design KPI, SLA, & facilitate Metric collection & other MIS reportsDecision Support Design criteria for Project decisions, facilitate gathering information & conduct decision meetings Sponsored by
  • 12. Creating the Third Pillar Typical ToolsCreation of Tools Project Charter SDLC templates Gather & disseminate Tools, Templates & Processes Project Plan Build & Operate a Central data repository Costing Model Risk Analysis template Create and build a Knowledge Base Status Reporting formats KPI, Dashboard SLA, IM & PM Tool MPP , EPM, Start Small & build – Create a timeline for adding to the tool suite Sponsored by
  • 13. Forming the Super structureInventing a Maturity Model is a 5 step process: Select Capabilities of conceptual “Perfect” PMO viz…Financial Analysis, Project Planning, Resource allocation, Risk Analysis, etc Determine a “Scale of Progression” for each capability Perform an “As-Is” analysis Set a “To-Be” goal for each capability Create a road map on how to get there Sponsored by
  • 14. Forming the Success MeasurePerformance Measure: PMO should provide its own basis for Measurement Performance Area Performance Measure Execution Excellence Reduction in Project delays, Increase in User satisfaction, Reduction of Issues Financial reform Reduction in Cost per employee or Cost as a % of revenue DSS % of Projects subjected to Decision analysis, Spending eliminated due to prioritization Resource allocation % of Resource utilization, % of Billable Vs Non- billable time First, last & always, the PMO is the hub of communication. Remain focused as the Single Point of Contact for all projects Sponsored by
  • 15. Maturing Business Workflow Perspective Level C – Portfolio View ic ul t eg Ad r at St Level 5 – Continuous Improvement/ Level B – Program Focus Organizational Alignment l Level 4 – Optimized / Focus on Quality ca nt cti l es ce Ta o Ad Level A – Project Focus Level 3 – Defined – Standard Processes Level 2 – Managed / Basic PM il d Process Perspective Ch Level 1 – Initial / Adhoc---------------------------------------------------------------------------------------------------------------------------------------------- Maturity Model Road Map Note: Levels indicated(numbers & letters) are for illustrative purposes only Do not stay in the corridor but move in to the ‘Engine Room’ Feed & Support Change governance process Change the conventional theory of Project being synonymous with Software development Bring Value adds to Organizational Decision making process Sponsored by
  • 16. Maturing in Change Governance • Organize along customer lines • Bring the voice of the customer into the Planning process • Support a move to continuous planning • Institute a transparent decision process with accepted decision criteria • Make use of Online real-time planning & prioritization tools A customer focused organization where decision process allow organized,PMO should shift the enterprise rational priority decision usingfrom a functional, siloed driven by politics, to trusted information, where customerswhose decisions are not well understood, voluntarily and actively participate, thiswhose decision criteria is a black box where analysis of the portfolioand whose communication is internalized is real time and vital to the Management Sponsored by
  • 17. Maturing in Benefits & Cost Management • Implement a consistent Cost / Benefit model to forecast portfolio benefits • Focus achieving benefits, not just controlling costs • Create a Portfolio repository where benefits accountability can be transparent • Move the organization to life-cycle thinking about benefits & costs • Bring the focus of the organization on value A transparent environment where thePMO should shift the enterprise economic value of the IT portfolio isfrom a environment where costs are unknownbenefits are not quantified, departmental to known and credible, Continuous planning for life cycle of investments is practiced,budgeters fight for funds & planning is done this and the reporting of value is automatedon an annual time & financial target is ‘Costcutting’… Sponsored by
  • 18. Maturing in Risk Management People worry • Show teams how to identify risks about risk • Educate how risks can be assessed or scored Risks scored, • Institute common Risk Management techniques people worry more • Associate Risk scores to Cost, Schedule & Utility Risk is variance, • Group Risks – Do Risk Profiling Investments have ‘risk profiles’ • Make use of Online real-time planning & prioritization toolsRisk is value variance, Upside is pursued Types are balanced’ Sponsored by
  • 19. Maturing in Process Performance Process exist Document existing processes and improve on themadherence optional Make process ‘User Friendly’ and sell improvements Process Build supportive tools and obtain users involvement standardized & stratified Gradually ensure refined processes are accepted Process Shift from a ‘Prescriptive mode’ to ‘Supportive mode’ supported by tools Develop a framework that ensures ‘Value Delivery’ Process is a framework for value delivery’ Sponsored by
  • 20. Maturing in Performance Reporting Communicate difference between Value creation andPerception of health reported to project performance sponsor Demonstrate ‘Value leak’ of poor performance through Quantified health indicators & statistics reports Evolve a system to support everyday Project Management, task assignments & the like.. Automated health indicators Provide services to projects identified as ‘Troubled’ Provide information no one asked for & show how it can be Management by data is used to solve problems mature’ Sponsored by
  • 21. Maturing in Resource Management Perform demand forecast & cost tradeoffs of resourcesForecast project over ‘Baseline’ demand Strategize a workable mix to meet demand against supplyProvision flexible supply to meet of resources demand Identify constraints & Integrate Demand & Supply to do Capacity Planning Apply Capacity planning algorithms’ Develop ‘Charging models’ Notice ‘Key Business differentiators’ within theExplore chargingcustomers based organization and evolve ‘Unique expertise’ on use Sponsored by
  • 22. Enhance strategic opportunities Promote Organizational communication at all levels andInculcate Systems avoid the silo effect thinking Deliberately increase the business knowledge of PMO Increase Business Operations Capitalize on the relationship with 3 or 4 ‘Business knowledge Leaders’ within the organization and provide value to your counterpartsParticipate & propose operational What value will PMO provide this year….in the next 2 years improvements and in the next 5 years? Create a governance process for portfolio management of Create synergies innovation opportunities in the context of strategy between development departments Help earn ‘Profits’ and not to spend from ‘Profits’ Sponsored by
  • 23. Can we do without a PMO? No PMO With PMOProjects are selected based on the “squeaky wheel” Projects are tied to strategiesPoorly performing projects just keep on going, and Stage Gates are predetermined to helpgoing, and going determine viability of projectProject performance is unknown until failure is PMO reviews projects objectively &identified mentors/coachesProjects follow various, if any, methodologies; lack Projects follow standard methodology,defined process consistent processProject success varies by PM chosen Project success more consistent as best practices are used throughout the organizationProject Managers looked at as, “you know, those Project Managers recognized as changeweird guys” leadersProject Managers afraid to ask for help Project Managers build relationship of trust with PMOProject Managers chosen based on technical skill, or Project Managers chosen for their ability toavailability deliverProject Managers alone when dealing with PMO support and help Project Managersstakeholders negotiate with stakeholders Sponsored by
  • 24. Thank youQ & A…. Sponsored by