The PMO in practice

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This series of presentations was given on 15th May as part of the APM PMO SIG's 1 day conference entitled 'PMO in Practice'. This conference sought to demonstrate how PMO people have taken theory and implemented it in their organisations.

The APM PMO SIG designed this conference to cover the following topics:
Benefits management
Demonstrating the value of PMO
Project definition
Developing PMO maturity

During the day each speaker discussed their personal experience in implementing a specific function or service and give delegates practical tips and advice that they can take to their own PMO organisation.

Speakers on the day were:

Stuart Dixon, APM PMO SIG chair (at the time)

Emma Arnaz-Pemberton, EU PMO Manager Office Depot (now the PMO SIG's new chair)

Huw James, Head of Programme Management at Network Rail

Chris Mills, Managing Consultant for BMT Hi-Q Sigma Ltd

Published in: Business

The PMO in practice

  1. 1. @PMOSIGUK #PMOinPractice
  2. 2. Introduction Stuart Dixon APM PMO SIG Chair
  3. 3. A Word from our Sponsors
  4. 4. Practical PMO Recognising and Demonstrating Value Gary Mitchell
  5. 5. INTRODUCTION  A bit about me and where my practical experience has been drawn from  Structure of this presentation around key themes:  Maturity of environment  P3O Focus  Segmentation of stakeholders
  6. 6. A BIT ABOUT ME  My practical experience is drawn from a number of PMO implementations – mainly in the public sector - over 17 years  BAA  Government Agencies  Canon  Office of National Statistics  Cabinet Office  I will be focusing on the first two for this presentation
  7. 7. PMO CONTEXT  Govt Agency PMO covers portfolio, programme and project and more!  Mixture of centralised Management Information/Standards team and localised hand on support  Policy, Processes, Tools, Templates, and Capability all established  PM resource and PMO (outsourced) part of same business unit but separate  PMO supports does not manage
  8. 8. PMO CONTEXT  BAA PMO smaller – 3 PMO teams into one (infrastructure, software, and networks) - Focused on IT Project level controls  Mixture of centralised Management Information/Standards team and localised hand on support  Policy, Processes, Tools, Templates, not established  PMs separate (staff, key supplier and contractors)  PMO supports does not manage
  9. 9. PMO OFTEN HEARD VALUE STATEMENTS  PMOs do not add value until after a year or so  But we are more than often pressured to provide value from the outset  Return on Investment is a key value measurement  But what do we class as returns, how should we calculate investment?
  10. 10. PMO MATURITY FOCUS
  11. 11. PMO VALUE AND BAA IT project focus
  12. 12. PMO VALUE AND BAA - IT project focus Segmented Stakeholders values maturity  Consistency – More of a PMO value  Efficiency/Effectiveness (i.e. ROI)? Not yet! BAA Seniors value requirement  Basic milestone performance – linked to bonus!  Visibility across projects – resource management PMs value requirement  Reduce paperwork – too many reports  SUPPORT Central/Business value requirement  Reduce paperwork – IT jargon  Financials
  13. 13. PMO VALUE AND BAA - Keep it Simple BAA Seniors value requirement  Basic milestone performance - introduced milestone levels to identify key milestones worth measuring, tolerance levels to reflect confidence and specific planning mentoring  Visibility across projects - developed basic project portfolio map showing projects, their lifecycle status, budget and spend PMs value requirement  Reduce paperwork - conduct business analysis on information flows, rationalise reporting, standardise controls  SUPPORT - provide process for PMO support resource requests and train up resources to standard Central/Business value requirement  Reduce paperwork - as above  Financials - follow the money through dedicated resource and controls and challenge
  14. 14. PMO VALUE AND BAA - Project Portfolio view
  15. 15. PMO VALUE AND BAA - Costs and Reputation Cost as a ‘hard’ value indicator  Combining three PMOs reduced headcount and resource cost of PMO  However, more PSOs requested as reputation grew – increased resource cost of PMO – Look at different funding models – funding responsibility moved to projects for specific PSO  Driving consistency and promoting role developed clear identity – efficiency savings apparent in reduced duplication, but difficult to quantify Building positive reputation and clear identity as a ‘soft’ value indicator  Co create standards (processes, templates ...) with PM community – by engaging and involving PMs in governance development helped position PMO as active and close to delivery rather than remote  Promoting PMO Terms of Reference – Stakeholders have a clear understanding of the role of the PMO, helps reduce misunderstanding of value!
  16. 16. PMO VALUE AND GOVT AGENCY BUSINESS FOCUS
  17. 17. PMO VALUE AND GOVT AGENCY - Business focus Segmented Stakeholders values maturity  Consistency – relaxed through maturity – practical value  Coherency – key value alignment with strategy  Efficiency/Effectiveness (i.e. ROI)? Rigorous! – Evidence continually required Govt Seniors value requirement  Management Information  More for less  External Reputation as best for delivery  Assurance  Economies of scale and one size fits all  Annual reduction in PMO costs PMs value requirement  Reduce bureaucracy  Practical application of standards  More SUPPORT
  18. 18. PMO VALUE AND GOVT AGENCY - what do we do? Service Catalogue and Timesheets – effectiveness agenda  Clarity on what we do – in order to be able to demonstrate value we had to be clear on what we did – our services and their KPIs  Clarity on effort to do it – in order to understand how much investment was being put into these services we introduced timesheets  Clarity on its value - and then canvas which of the services were valued the most, this enabled us to match return on investment and adjust, add, and delete. This was critical for us to be able to offer a degree of more for less Tools and workflow – efficiency agenda  Document review cycle – assess areas where time and effort can be measured against a process and outputs and look to business analysis to find efficiencies. A workflow tool was used to radically reduce the time for document reviews and the tool provided the stats evidence to back up the efficiency claim and help reduce the annual cost of the PMO
  19. 19. PMO VALUE AND GOVT AGENCY - efficiencies Business Process Automation Business Case  Headcount - Reduce R&A FTE effort by 40% (9 FTE’s down to 5.4 FTEs)  Cash back - Client investment of £309K to be paid back in 18 months – by November 2010
  20. 20. PMO VALUE AND GOVT AGENCY - effectiveness Keeping close to our consumers and customers  Service Delivery Certificates (SDC) – monthly reviews with Programme staff against an agreed number of effectiveness criteria – threshold set where management action required  Satisfaction Surveys – wider review to assess the totality of service and view of satisfaction trend  Timesheet data – records of effort to correlate with scores from SDCs. In this way we have been able to assign resources and effort where it matters the most in order to do more with less. e.g. the portfolio of projects requiring support has grown but the number of PMO staff to support them has reduced. So instead of providing all of our catalogue services per resource, we only provide what is of most value – typically finance, planning, and risk are most valued.
  21. 21. PMO VALUE AND GOVT AGENCY - insights Operating Costs  PMO - Price per report – track decreasing costs as tools and process become leaner!  Scale – costs/headcount/output over time – record the number of PMO staff and their cost against outputs such as number of base lined documents, risk registers, plans (activities, milestones, dependencies etc)  PPM - Price per Business Case – comparison costs for value!  Business - Cost of a programme – insight into how much change can the business really afford. Good example of PMO analytical insight and provided value in setting benchmark Continual Improvement (CI)  Build in CI cycle/plan/list – what is valued today may not be what is valued tomorrow –  three major redesigns of PMO to reflect changing maturity and business conditions  more stakeholders required redesigned MI dashboards  focus on portfolio management  more delivery areas requiring support  reduce bureaucracy
  22. 22. PMO VALUE AND GOVT AGENCY - insights Initially team size and quantity of reporting grow together, once automation kicks in productivity should soar. The volume of MI being produced should start to decline as reports come to the end of their life (the problem they were designed to address has been resolved), also there should be consolidation and removal of (near) duplication. The volume of BI will start to build more slowly than the MI as it requires more sophisticated data analysis and better data quality. The reporting team should become more focused on keeping reports relevant and analysing the data for it's message rather than just reflecting the data.
  23. 23. PMO VALUE TAKE AWAY  Providing insights based on our unique position placed a value on the PMO  By being clear on what we offered helps us to adjust to maintain maximum value (timesheets)  Keeping close to our consumers through feedback provides evidence of value  Showing efficiencies using Business Case style measurements helped bring confidence in the PMO as a business function  Keeping different stakeholder views of value and the maturity of the PMO in mind when tackling value Balanced Portfolio view
  24. 24. Questions
  25. 25. The Journey (So Far!) Huw James Head of Programme Management Network Rail May 2014
  26. 26. Contents 1. Context - The UK Rail Sector 2. 2010 - At the beginning 3. Project automated Reporting 4. 2013 – the formation of a P3M strategy 5. Where next? 6. Questions
  27. 27. Context – Network Rail  UK Rail Infrastructure – £6.4Bn per annum – 34 000 People – 22 000 Miles Track – 40 000 Bridges – 11 Managed Stations  24/7 Operations – 50% increase in number of trains over last 10 years  The largest investment since the Victorian Era
  28. 28. Context – Organisation  Infrastructure Projects – Enhancements and Renewals – £4Bn + per annum – Approximately 4000 live projects – Business Units - 4 Regions, 2 National Programmes, Thameslink – Role of Head of Programme Management – A community of 1800 PM’s and Planners
  29. 29. Context – Regulation  5 year Control Periods  Transparent open book access  ORR Introduce and maintain ‘the challenge’  ORR and DfT manage the Passenger and Freight operator franchise's  Reputation
  30. 30. 2010 – At the beginning  There was no PMO strategy!  There was – A clear desire for no surprizes – A need to reduce costs – A need to provide accurate information to the business and our regulator – A need for governance and an independent view  Change Project based on cost and risk reduction
  31. 31. 2010 – At the beginning  Change Project (Project automated Reporting) based on a number of assumptions – Common systems were in use (OP, Primavera, ARM etc.) – Systems contain single point of truth and are fully updated – Organisation used the coding standards and mandated finances and milestones etc.
  32. 32. Project Automated Reporting (PaR)  Consistent Reporting Packs (Project and Portfolio)  Exception based  All data extracted from source systems  Set timeline  Open Access  Governance built in to RAG rating  Tiered structure  Team set up for Independent Review
  33. 33. Project Automated Reporting (PaR)  Overall Summary Page  Earned Value  Schedule  Financials  Risk and Opportunity  Commercial/Claims  Safety and Environmental
  34. 34. Project Automated Reporting (PaR)  Issues – Original Assumptions! – Sponsorship – Acceptance of common format – Training the Users – Training the Reviewers – Visibility
  35. 35. Project Automated Reporting (PaR)  Benefits – Project, Portfolio and Organisational view – Ability to interrogate and make timely interventions – Move from ‘Red’ to ‘Green’ – Robust forecasting – Independent review and Governance (project and organisational level) – Accountability still with management teams – Cost reduction
  36. 36. We had created a PMO without setting out to do so: Portfolio covers whole organisation (£9Bn and 4700 projects) Consistent approach and measures Small team to administer and analyse Provides insights directly to the Managing Director Project Automated Reporting (PaR)
  37. 37. The formation of a P3M Strategy  3+ years to embed Portfolio management (PaR) into the business  Professional Development of our PM Community  APM Accreditation in 2013  Involvement of the Client and Sponsorship community - P3M across Network Rail  Approval of the Business Case  A need for a common language and understanding
  38. 38. The formation of a P3M Strategy Investment Portfolio Business Change Infrastructure & Operational Change Portfolios Infrastructure & Operational Portfolio Change Programmes Infrastructure Programmes Change Projects Projects Delivery Portfolio
  39. 39. The formation of a P3M Strategy Investment Portfolio The Investment Portfolio is the totality of an organisation’s investment required to achieve its strategic objectives. Example: Strategic Business Plan Infrastructure and Operational Portfolio The Infrastructure and Operational Portfolio is a segment of the organisation’s investment required to achieve its strategic commitments that includes Operations, Enhancements, Renewals and Maintenance. Examples are the 8 Routes, or Functions (e.g. GBS, Property, etc.)
  40. 40. The formation of a P3M Strategy Delivery Portfolio A Delivery Portfolio is defined as a grouping of an organisation’s activities, or projects, likely to be either geographically, and/or work type, and/or synergistically linked Examples: Sub-regions (bundles of small projects within the work-bank) Infrastructure Programme A programme is a temporary structure which has been created to coordinate, direct and oversee the implementation of a set of interdependent projects and activities in order to enable outcomes and benefits related to the organisation’s commitments. Examples are: Northern Hub, TLP, EGIP, Crossrail
  41. 41. The formation of a P3M Strategy Project A project is a unique set of coordinated activities with definite starting and finishing points, undertaken to meet specific objectives within defined time, cost and performance parameters. Projects range from “Simple” (e.g. Bridge Replacement) to “Complex” (e.g. Kings Cross)
  42. 42. Where next?  Establishing Portfolio Management – NR Investment Portfolio – NR Business Change Portfolio – Route Portfolios – Delivery Portfolio – Business Portfolios (IM etc.)  Measurement of effectiveness (P3M3)  Role of the Community of Practice
  43. 43. Questions
  44. 44. Lunch
  45. 45. UK Submarine Dismantling Programme: The PMO’s role in Benefits Management Chris Mills Managing Consultant BMT Hi-Q Sigma Ltd
  46. 46. 18 submarines held in afloat storage – rising to 27 as current classes are decommissioned A safe approach for over 30 years. UK policy is to progress nuclear decommissioning as soon as is reasonably practicable. Costs are rising as the submarines age and increase in number Management of decommissioned nuclear submarines in the UK 47
  47. 47. A nuclear waste management problem 48 Diagram courtesy of the MOD
  48. 48. External forces Challenges to SDP arise from all dimensions: Political  UK and Scottish political landscape Economic  Affordable value for money in time of austerity Sociological  Interactions with local communities Technical  Meeting the regulatory requirements Legal  Possible challenges to decisions Environmental  Responsibility for managing waste liabilities 49
  49. 49. Solution is to move to a programme management approach  Use of MSP framework to deal with uncertainty in the change programme  Programme boundary to deal with external environment, stakeholders & comms  Projects to focus on output delivery  Interdependencies managed within programme environment  Programme intermediate steps aligned with MOD approval requirements  Can differentiate between ‘change’ and ‘steady-state business’ After a successful assessment phase using a project approach, now have an increased set of challenges:  Increased volume and complexity of integration between workstreams  Multiple outputs across dispersed team with increased supplier involvement  Greater exposure to complex, diverse and influential stakeholders  Need for consistent and co-ordinated communications with stakeholders  Uncertainty – need to maintain flexibility and focus  Long timescales for disposing of all 27 submarines Why a programme approach? 50
  50. 50. HINT #1  The PMO can help define a programme approach with an integrated framework for managing risks, issues, assumptions, benefits and requirements.
  51. 51. A PMO-defined framework 52 Strategic Programme boundaries and approvals Influenced by/affect other PTs & key external stakeholders L1 L0 L2 L3 Programme Overall programme definition and inter-project boundary management Project Focus on delivery of individual project outputs and support to programme outcomes Supplier Specific project work packages Supplier activities
  52. 52. Defining the change programme Focus on what is required – bound the change – The entire scope of the SDP challenge consists of several key elements – The change programme is the change of state – not the eventual submarine disposal – Approach provides focus and clarity on the new state 53 Medium-Term Change Programme Short-term intermediate step-changes in capability CURRENT STATE (afloat storage) FUTURE STATE (planned disposal) Long-Term Submarine Disposal Steady State Programme (27 submarines) Facility Decommissioning (dismantling & storage) ILW DISPOSAL IN GDF
  53. 53. HINT #2:  Identify how the PMO will integrate services with the programme and project teams
  54. 54. An integrated offering 55 In Service Submarines Team MOD SDP Programme Team MOD SDP Project Teams SDP PMO Tech Support 1 Finance Cost Suppliers Tech Support 2 PM Strategy, Plans, Controls, Benefits, Comms Tech Support 5 Technical integration & Nuclear Waste mgt Tech Support 4 Safety & Regulatory Strategies and plans Tech Support 3 Benefits Decision analysis MOD Comms, Finance, Business, Quality, Environmnt
  55. 55. PMO services SDP - Programme and Projects Programme Office Project 1 Project 2 Project 3 Project 4 Project 5 Approvals Governance, Strategy & Planning Controls Requirements Integration Management Stakeholder & Communications Environmental Co-ordination Benefits Management Finance & Commercial Options Analysis Legal & Regulation Quality Management
  56. 56. HINT #3:  The PMO needs a common purpose to provide a focus for an integrated service. 57
  57. 57. The SDP PMO Mission statement The SDP Programme Office is a central resource that underpins both the Programme and the constituent Projects. It supports the Programme Manager through its work in Governance, Integration, Controls and Assurance. It provides a strategic overview as well as support and advice to Projects, health checks at Programme and Project levels, sharing knowledge and expertise throughout the team and enabling the governance framework to operate effectively with robust decision making. 58
  58. 58. HINT #4:  An integrated PMO can champion a benefits-led approach.
  59. 59. Benefits management Benefits Management Strategy Benefits Report Benefits Profiles Benefits Realisation Plan Identification, analysis & Results Detailed definition of individual benefits Tranches, projects, outcomes & intended transitions Why we need to do BM & how we set about it What we did to identify the range of benefits & underpin the decision making process and confirm against the user requirements What the benefits are in detail PMO support How and when we intend to achieve the Benefits. Includes the Benefits map.
  60. 60. Benefits realisation Project execution Project outputs New /modified capabilities Programme outcomes Benefits realised • Assurance that the integrated system meets its requirements • Objective evidence that the needs of the stakeholders are met Integrated verification and validation: Integrated Test, Evaluation and Acceptance Plan Benefits Realisation Plan
  61. 61. PMO-led benefits mapping Outputs Outcomes High level benefits Key user requirements Corporate Objectives 62
  62. 62. Expected accumulation of benefits SDP-BEN-5 SDP-BEN-6 SDP-BEN-7 SDP-BEN-8 SDP-BEN-9 SDP-BEN-10 SDP-BEN-11 SDP-BEN-12 SDP-BEN-4 SDP-BEN-3 SDP-BEN-2 SDP-BEN-1 Sustainable, Safe Removal and Storage of ILW Sustainable, Safe Removal and Disposal of LLW/VLLW Sustainable, Safe Removal and Disposal of Hazardous Waste Sustainable, Safe Removal and Disposal of Non-hazardous Waste Optimise Direct Financial Impact Optimise Indirect Financial Impact Optimise Socio-Economic Impact Improved Public & Stakeholder Confidence Minimisation of Operational Impact Maintenance of UK Industrial Capacity Minimisation of Health and Safety Risk Optimise Environmental Impact Operational Impact Financial Impact Deliverability 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Tranche 1 Tranche 2 Tranche 3 Tranche 4
  63. 63. HINT #5:  The PMO can track and report benefits delivery through programme schedule integration
  64. 64. Key Milestones Inputs Outputs Activities Example Milestone Example Input Example Output Example Activity 1 Example Milestone Example Activity 2 Link to external successor (other EPM project) Link to IMS milestone summary Link from external predecessor (other EPM project) Project schedules are set up to provide the links and interdependencies necessary for programme coherence  Outputs, outcomes and benefits delivery are shown in the integrated master schedule (IMS). Schedule Integration 65 Link from other project output Link to IMS milestone Link to other project output
  65. 65.  A Programme approach requires thought and agreement about the vision, the future state and benefits to be delivered;  PMO can play a pivotal role in benefits-led programmes; – Provides the clarity needed to understand relationship between strategic, programme and project management; – Leads, identifies and tracks benefits as an integrated process; – Benefits measurement can be difficult and stakeholders may need to be convinced of its value; – Defines and agrees the benefits baseline. Summary
  66. 66. Questions
  67. 67. Project Definition Emma Arnaz-Pemberton European PMO Manager
  68. 68. Office Depot PMO: An Overview PortfolioFunction • Portfolio Build • Prioritisation • Planning & Estimating • Pg & Pj setup & closure • Performance Monitoring • Communications DeliveryFunction • Monitor, Review, Report • Risk & Issue Management • Finance Control • Quality Assurance • Information Management • Transition Management CenterofExcellence • Standards & Methods • Internal Consultancy • Organisational Learning • Knowledge Management • Training & Coaching • Change Management • Best Practice Sharing
  69. 69. Office Depot PMO: Real Results • Full visibility of portfolio • Independent project spend analysis • One version of the truth “We don’t know what projects are going on” • Globally subscribed Community of Practice (200+ members) • SME’s for PMO developments • Volunteer event facilitators (Champions) “I don’t get Project Management or PMO” • Fully integrated business partner • Genuine and credible internal consultancy • Supporting Project Managers to do better “PMO are the Police” • Balanced Scorecard measuring circa 60 KPIs • Development via dedicated career path • Owners of the financial approval processes “What’s the point of PMO?” • Independent communications • Launch and promotional events • Regular touch points with Sr Leadership “I don’t know what PMO do”
  70. 70. Project Definition: Most Frequently Asked…  When is a project a project, and when is a project a project that needs governance?  How is it possible to have one process to categorise projects?
  71. 71. Project Definition: What is it? The process of defining workload for the purposes of identifying the level of governance, structure and expertise required to successfully deliver the expected outputs Office Depot
  72. 72. Project Definition: Why Bother? BaU pieces of work could be delayed by unnecessary process Scope can become unmanageable Unable to really prioritise if we don’t know how complex the work is Incorrect expertise levels can be assigned to the work Incorrect level of visibility – see too much or too little! Pitfalls Identify where structure is required for pieces of work Support can be provided to Project Managers when the level of work is known Supplies the business with clear visibility of its Initiatives Can provide a direct link to budgeting processes Appropriate Governance levels and expertise can be applied Benefits
  73. 73. Project Definition: When is a Project a Project? Differentiate • Business as Usual (BaU) from project activity • Unstructured and structured activity • Simple from complex work Governance • When BaU needs to be structured • When a project is a PRINCE2TM project • Provide a choice of methods for management Categorisation • Based on size and complexity • Align to current & proposed budget processes • Define project characteristics in project type
  74. 74. Project Definition: OD Project Categories Versatile - <6 months - Financial approval - Structured BaU Quick & Small - < 1 month - No additional money - Business as Usual Implausible - Estimation incomplete - Blue Sky Thinking - Feasibility Study Fast & Reliable - < 1 year - Financial Approval - Standard Project Big & Dependable - < 3 years - Experienced Associates - Complex Project Heavy & Inflexible - >3 years - Significant Investment - Programme of Work
  75. 75. Project Definition: Tooling Stage 1: Identify non-project work 1 2 3 Will this piece of work produce a specific deliverable, by a set date (or in a set timeframe) Do you require capital investment, outside of your functional budget? Will this activity bring about a benefit or change that can be measured? Stage 2: Initiative Size 4 5 6 Work effort - Months How much investment will be required? Benefit Type C 7 8 9 10 11 12 13 14 FTE # Functions Current Capability Complexity Deployed Where How Impact Who Changing a..
  76. 76. Project Definition: Real Life Benefits Common Language Higher Adoption Enhanced Portfolio Visibility One way of working
  77. 77. Project Definition: The Future • Lean Six Sigma adopted • Inclusion into existing method • New tooling • Approach based on project nature • Cross-skilled Project Managers • Resource allocation based on skill & experience • True blended approach
  78. 78. Project Definition: The Take-Away  To develop something like this in your organisation you need to consider the following: Innovative Organisation? Reinventing the Wheel? Adoption History Who Needs to be On-Board? Do you have the Skills?
  79. 79. Project Zoo Interactive Session
  80. 80. Close Stuart Dixon APM PMO SIG Chair
  81. 81. How to contact us: pmosig@apm.org.uk http://www.apm.org.uk/group/apm- pmo-specific-interest-group or http://www.pmosig.co.uk @pmosiguk APM PMOSIG group
  82. 82. Chairman’s Report 2013-2014
  83. 83. Events held  Full Conference – Assurance and its relationship with the PMO – March 2014  Local events: – World Café – Manchester – February 2014 – World Café – London – October 2013 – The practice of planning and the PMO – July 2013 – Ahead of the Curve PMO – July 2013
  84. 84. APM activities  APM Competence Framework – Attended sessions for Project, Programme and Portfolio competencies & PMO involvement – Reviewed competencies from PMO perspective  PMO role profiles – Developing 5 role profiles for PMO staff aligned to APM competence framework
  85. 85. Other activities  Regular newsletters +  P3O® manual – 2013 refresh  PMO Manifesto  PMO conference – June 2014
  86. 86. Summary  Challenging year – lots of committee changes  Successful events delivered  PMO involvement across APM  Making a difference for our members
  87. 87. This presentation was delivered at an APM event To find out more about upcoming events please visit our website www.apm.org.uk/events

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