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Walenta Warsaw PMI Chapter Oct 2009
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Walenta Warsaw PMI Chapter Oct 2009


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  • 1. What PMOs can achieve andhow to get the most out of it Thomas Walenta +49 171 3358938
  • 2. AgendaØ What is a Project Management Office (PMO)q Status of PMOsq Success storiesq How to build a PMOq Potential Value of PMOs 2
  • 3. What is a PMO: there are lots of concepts and names- there seems to be a need for PMOs- but standardization is still to be achievedSupporting projects, programs or portfolios and reporting to themq Project Support Office (PSO)q Project Office (PO)q Program Management Office (PMO) NameSupporting implementation of strategic goals Project Management Office 59%q Program Management Program Management Office 12%q Portfolio Management Project Support Office 7% Contains ‚project‘ 4%Supporting Organizations / Units Project Office 2%q Center of Excellence (COE / PMCOE) Center of Excellence 2%q Project Management Office (PMO) No name 2%q Enterprise PMO (EPMO) Other (all less 1%) 12% (PMO Whitepaper Hobbs 2007, PMI) 3
  • 4. What is a PMO: definitions and namesq PMI PMBoK Guide: A PMO is an organizational … entity assigned various responsibilities to the centralized and coordinated management of those projects under its domain. Some responsibilities are, according to PMBoK Guide q Managing shared resources q PM methodology, best practices, standards q Project policies, processes, templates q Training, coaching, mentoring q Project audits monitor compliance with PM standards, policies etc q Communication across projectsq Wikipedia: A PMO is the department or group that defines and maintains the standards of process, generally related to project management, within the organization. 4
  • 5. What is a PMO: example of UK OGC‘s P3O approach(Portfolio, Programme and Project Offices) P3O® provides a universally applicable guidance for establishing, developing and maintaining appropriate business support structures. A P3O model provides the structure, governance, functions and services required for defining a balanced portfolio of change and ensuring consistent delivery of programmes and projects across an organization or department. 5,_programme_and_project_offices_p3o.asp
  • 6. What is a PMO: 27 functions in 5 groups found by PMIsurvey (PMO Whitepaper Prof. Brian Hobbs, PMI 2007)1 Monitoring & Controlling Project Performance 4 Strategic management § Report to upper management § Advice to executive management § Monitor & control project performance § Benefits management § PM information system § Networking and environmental scanning § Project scoreboard § Participate in strategic planning2 Develop PM Competencies & Methodologies 5 Organizational Learning § Standard methodology § Risk database § Promote PM in organization § Lessons learned database § Staff competency, training § PMO performance metrics § Mentoring for PMs § Project documentation archives § Tools § Post project review § Project audits3 Program and portfolio mgmt. + Plus § Identify and select new projects § Execute specific tasks for PMs § Allocate resources § Manage Customer Interfaces § Manage programs § Recruit, select, evaluate and determine § Manage portfolios salaries for PMs (22% of all PMOs) § Coordinate between projects 6
  • 7. Agendaq What is a Project Management Office (PMO)Ø Status of PMOsq Success storiesq How to build a PMOq Potential Value of PMOs 7
  • 8. Status of PMOs: Which PMO functions are used? % of PMOs PMO Function Group where important Report project status to upper management 1 83% Develop and implement a standard methodology 2 76% Monitor and control of project performance 1 65% Develop competency of personnel, including training 2 65% Implement and operate a project information system 1 60% Provide advise to upper management 4 60% Coordinate between projects 3 59% Develop and maintain a project scoreboard 1 58% Promote project management with organization 2 55% Monitor and control performance of PMO 5 50% Participate in strategic planning 4 49% Provide mentoring for project managers 2 49% Manage one or more portfolios 3 49% Identify, select and prioritize new projects 3 48% 8 (PMO Whitepaper Hobbs 2007, PMI)
  • 9. Status of PMOs: 50% of PMOs have less than 4 staffmembers and exists less than 3 years PMOs are challenged 9 (PMO Whitepaper Hobbs 2007, PMI)
  • 10. Status of PMOs 2009: Challenges for PMOs – increaseimpact on risk, benefit and top talent management, 2008
  • 11. Status of PMO – key success factors– Key success factors – Commitment by topmanagement – Competence in methodologies and experience – PM culture and awareness in the organization – Central decision making and defined authority – Processes, tools and techniques flexible & pragmatic (PMO Maturity study 2009,– Value and Sustainability in PMOs (PMI) – Build a core ideology for the long term; – Pick the right PMO leadership; – Staff the PMO carefully; – Create a culture of discipline; – Confront the brutal facts, but keep the faith. (Hurt, M., Thomas, J., 2009. Building Value Through Sustainable Project Management Offices. Project 11 Management Journal 40(1), 55-72. )
  • 12. Agendaq What is a Project Management Office (PMO)q Status of PMOsØ Success storiesq How to build a PMOq Potential Value of PMOs 12
  • 13. Success stories: Project Management at Huawei(PMI Corporate Council Member) • Emerging global telecoms player • Changing markets and customer requirements • Multi-national project teams • Set up business re-engineering PMO in 2002 • Chose PMI standards and certification “Project management training and development is essential for frontline managers growing toward business leaders at Huawei.” 13 Zhengfei Ren, CEO, Huawei Technologies
  • 14. Success Stories: Project Management at Siemens(PMI Corporate Council Member) Siemens began assessing project management maturity in 2000 OPM3 reinforces Siemens’ best practices Processes & Roles Contract Management Project Controlling Personnel Management Qualification PM Portal Operative Quality Mgmt. Knowledge Management Transfer & Implementation PM Assessment Project Procurement Small Projects 14
  • 15. Success Stories: Charter to transform IBM to a projectbased enterprise was initiated by Lou Gerstner, IBM CEO On November 19, 1996, the CEC approved the following recommendation That IBM become a project based enterprise that applies and integrates project management into all core business processes and systems. Business Units drive Hold PMs, EXECs, Advance PM as One consistent Significant projects accountable; professional approach common managed by provide the system discipline trough but flexible certified PMs and tools "giveback" PM center of excellence and capability center to support the practice of professional project management across IBM– Own a standard set of PM enablers (capabilities)– Gain business units and geographies transformation focus on steady state and becoming project based (organizational competency)– Support, recognize and connect our PM professionals (community) 15
  • 16. Success stories: become a project-based business isdriven by the global PM Center of Excellence at IBM(PMI Corporate Council Member) Stage 1 Stage 2 Stage 3 Focus "Develop "Put key enablers "Make PM professionals" in place" SYSTEMATIC to our business" Initiatives § PM skill development § PM method for § Organizational § PM education project and program integration with IBM § PM certification manage-ment management § PM tools systems § PM knowledge § Develop network organizational maturity Competence Individual Project/Program Organization 1997 today 16
  • 17. Success Story: Program Management governance structureprovides integration and stakeholder management Business Stakeholders, Sponsor(s) Steering e.g. Users Committee Program Management Business Architectual Organizational Relationship Quality Technical Test & Resource Benefits Solution Change Management Assurance Program Transition Management Bord Management / Risk Office Management Project 1 Project 5 Specialist Operations Help Desk Project 3 Team Maintenance Project 4 Project 6 Project 2 Example where Program Management structure really is a PMO 17 (Real life example Th. Walenta)
  • 18. Agendaq What is a Project Management Office (PMO)q Status of PMOsq Success storiesØ How to build a PMOq Potential Value of PMOs 18
  • 19. How to build a PMO:Start with assessing Organizational Maturity, identify gaps Level 5 – World class Continuously Portfolio Program Project improving process Organizational § Lesson learned used to improve project management process § Project manager actively involved in "give back" activities Continuously Project § Project required to document lessons at the end of project improve Level 4 – Integrated Organizational § Organizational has post and scheduling tracking tools § Executive manager receives quantitative project status data Predictable § Mentoring program in place process Project § Earned value use to assess status Control § Management budget reserve methodology used § Subcontract management plans used for major subcontractors § Risk containment plans defined and implemented Level 3 – Functional Organizational § Defined project management methodology § Training plan for project managers Standard Measure § Clearly defined acquisition risk assessment and Xxx Xxx processes consistent § Independent startup review performed to assess project readiness process Project § Schedule dependencies clearly defined and tracked § Critical path schedule used for planning § Client interface well managed § Risk management process in place Standardize Level 2 – In Deployment Organizational § Roles and responsibilities defined for Project Manager § Policy requiring Project Plans for every project § Independent organization reviews project § Organization resolves issues identified by independent unit Disciplined Project § Project plans its place and complete process § Project scope clearly defined and controlled § Schedules in place and tracked Organizational Enablers § Budgets allocated and managed § Subcontractors identified and monitored § Team responsibilities clearly defined Level 1 – Pilot Phase There is no criteria for Level 1. If an organization cannot meet the criteria for Level 2, then it is at Level 1. 19Use PMI OPM3, SEI CMMI and/or PM specific models like IBM’s PMPMG
  • 20. How to build a PMO:Follow a project phased approach with stage gates Phase 4: Setting up Phase 1: Setup Phase 2: Design Phase 3: Implementation Operate I a PMO Preparation Solution Design each PMO Implement Functions handover Outline, agree on PMO Function Signoff to operational PMO team Scope Kickoff Initiating Tasks Planning Tasks Launching Tasks Operation 4. Define the Functions PMO setup tasks 5. Define metrics & Interfaces 2. Get 6. Identify 8. Get 11. 1. Define 3. Define Commitme PM Budget and 10. Orient the Transition the the nt to Processes Approval to organization to Goals Model proceed & Tools Start Operations 7. Estimate the Resources 9. Staff the PMO (operational) 20
  • 21. How to build a PMO:what worked well from scratchqPEOPLE qIdentify & develop PM staff People qCareer path qCurriculum, competency development qCertification, Coaching, Mentoring qCommunity Projects ProcessesqPROJECTS qReviews qCoordination between projects qBenefits management / program managementqPROCESSES Organization qMethodology, standards, templates qToolsqORGANIZATION qDashboard reporting / Portfolio view 21 qMetrics
  • 22. How to build a PMO: initial policy setting10 MUST criteria for projects (example) Project charter and Regular status meetings with accompanying documents exist client are held and minutes are produced Project manager is named, Project records are stored assigned and available Project organization, roles and Project management plan is responsibilities are documented compared to actuals and and agreed updated as required Project management plan is Change management is in place created and baselined Quality activities are planned for Client approvals are obtained executed 22
  • 23. Agendaq What is a Project Management Office (PMO)q Status of PMOsq Success storiesq How to build a PMOØ Potential Value of PMOs 23
  • 24. Potential Value of PMOs: ReputationIBM awards for project management– 2009 PMI Continuing Professional Education Provider of the Year Award– 2007 PMI Distinguished Project Award– 2006 PMI Professional Development Provider of the Year Award– 2006 PMI Education Provider of the Year Award– 2005 PMI Professional Development Provider of the Year Award– 2005 PM/COE Director Carol Wright receiving a PMI Distinguished Contribution Award– 2004 PMI Professional Development Provider of the Year Award– 2001 Patent award for "Learn How... Do It Now..." awarded to Dillon Edwards (PM Curriculum Team)– 2001 International Society for Performance Improvement (ISPI) Award of Excellence for Contracting for Project Management Lotus LearningSpace course (PM Curriculum Team)– 2000 American Society for Training and Development Excellence in Practice Award recognizing excellence in Training and career development processes. (PM Curriculum Team) 24
  • 25. Potential Value of PMOs: PMO Executive Council 2007PMO performance metrics on project inputs 1 Percentage of project managers trained on PM methodology 2 Percentage of standard deliverables used by project managers 3 Average years of employee experience 4 Project complexity score 5 Degree of confidence in benefits estimation 6 Degree of project ownership by sponsors 25
  • 26. Potential Value of PMOs: PMO Executive Council 2007PMO metrics on intermediate outputs (excerpt)1 Percentage of projects on time2 Percentage of projects in budget3 Percentage of projects within scope4 Percentage of projects on time, in budget and within scope5 Average employee hours spent on project work7 Employee turnover / attrition rate9 Percentage reduction of skill shortages filled by contractors10 Percentage of time spent on overhead11 Percentage of time spent in rework12 Percentage of steering committees attended by sponsor15 Cost saved by contractor dismissal16 Extent to which sponsors are able to estimate realistic business benefits22 Percentage of sponsors satisfied with delivered project 26
  • 27. Potential Value of PMOs: PMO Executive Council 2007Metrics on project outputs & business outcomes1 Percentage of new products resulting from existing project work (assets reuse)2 Percentage of clients satisfied3 Sponsor perception of contribution to business value4 Sponsor perception of contribution to competitive advantage5 Sponsor perception of contribution to business process improvement6 Sponsor perception of contribution to business strategy7 Number of rotational assignments8 Percentage of business cases achieved9 Qualitative suggestions by senior management10 Revenue increase directly related to project execution 27
  • 28. Potential Value of PMOs:Executive views on project management• “Project management is our economic engine and central to how we do business… Project management is one of our key competitive strengths.” Gloria Lara, VP, Jervis Webb• “Project management has helped the organization achieve the desired results in a given timeframe, maintain cost control, and increase our ROI.” Syed Shahabuddin, Deputy Managing Director, State Bank of India• “We believe that disciplined project execution will deliver bottom-line profit and top-line growth.” David Rice, CIO, Siemens Medical Solutions 28
  • 29. Potential Value of PMOs:Executive views on project management• “The intent is always strong business results. Our investment in PM has paid off in terms of delivering projects with higher success in regards to our outlined objectives. PM isn’t just a good idea, it’s a business imperative to drive common standards and criteria while delivering projects with excellence.” Cindy Grossman, VP, IBM• “Since we invested in project management, clients have praised our diligence in scope definition, early communications of issues, and scheduling accuracy.” Jeffrey Amason, VP, Geofields, Inc.•“Good project management is an insurance policy. It prevents project disasters.” Melissa Herkt, President, Emerson Process Systems & Solutions 29
  • 30. Potential Value of PMOs : goals that workedqAct as Change agent qestablish PM culture and mindset within an organization qtransform an organization towards a project-based businessq Support business objectives qCost cutting, minimize repair costs qSales support, competitiveness, references, brand image qBrand image improvementsqReduce executive time on trouble shooting qProject performance & outlook reporting – reduce surprises qRecover project issues qPrepare executive decision making qEducate executives in their roles as sponsors and steering committeeqNarrow talent gap qRetain, hire and develop PM staff qIncrease retention qExtend networking internally & externally (e.g. PMI)qClose the gap between benefits and objectives 30 qServe as program management where it is missing
  • 31. Summaryq What is a Project Management Office (PMO) q Centralized group supporting an organization q Care about people, processes, projects and organization maturityq Status of PMOs q Shortlived, challenged, smallq Success stories q Multinational corporations count on itq How to build a PMO q Identify goals > build roadmap > measure success q Ensure to have the right leader and staffq Potential Value of PMOs q Business and sponsor related 31