Gurtu 2010


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Enterprise Project Management.
The definitions and the roles of the project management office (PMO) today are very diverse, and it is therefore important to examine and understand the evolving role of the PMO in a dynamic global business environment. The role of enterprise PMO is as important as any other corporate function, equivalent to other corporate functions such as strategic planning, finance, or audit. In addition, an organization can maximize the value of project management by standardizing the practices and consolidating the initiatives across the enterprise.

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Gurtu 2010

  1. 1. PMI Virtual Library© 2010 Amulya GurtuEnterprise Project Management By Amulya GurtuT he definitions and the roles of the project management Management Professional (PMP)®, and Program Management office (PMO) in industry today are very diverse, and Professional (PgMP)® credential holders—and also sending it is therefore important to examine and understand their employees to attend project management trainingthe evolving role of the PMO in a dynamic global business sessions and seminars. However, it is still evolving and thereenvironment. Two extremes of project management offices is not much focus on EPMO. Whenever an IT enterprise(PMO) that I have come across so far are those consisting application is to be rolled out, the consulting organizationof (1) a single sets up a PMO and, in the best-caseperson, who is not scenario, it is dissolved as soon asa certified project the project is completed. In mostmanager, managing cases, the role of this typea single project, and (2) of project managementa complete structure at the office is limited to thecorporation managing all of the technical side of theinitiatives across the corporation’s project or is focuseddivisions. The former, in my on the technical sideopinion, is at best no more of the project.than a project manager for There is a second kindwhom the organization of PMO, which consolidates thehas used the portfolio for a function and worksdesignation of as traffic police—Go/No-Go—withmanager–project management office, while the latter does not varying degrees of authority on the project resources andinclude the words project or project management office at all but accountability for project success. The list of all of the variantsfunctions like a project management office. is long and does not add much value (although it adds a I find that the role of enterprise PMO (EMPO) is as great deal of confusion). Therefore, I am skipping ahead toimportant as any other corporate function. I see EPMO the proposed solution for harnessing the benefits of projectas equivalent to other corporate functions such as strategic management at the enterprise level.planning, finance, or audit, with many similarities among thesecorporate functions. In addition, an organization can maximize Enterprise Project Managementthe value of “project management” by standardizing the I am using the term enterprise project management (EPM)practices and consolidating the initiatives across the enterprise. or enterprise project management office (EPMO) to refer to a generic corporate function and am avoiding the debateCurrent State on the meaning of “P” (i.e., whether P stands for project,Organizations are realizing the importance and benefits program, or portfolio). It is my intention to present a view thatof project management practices and are hiring more and project, program, and portfolio, while each having a distinctmore certified project management professionals—e.g., meaning, are part of the corporate function “enterprise projectCertified Associate in Project Management (CAPM)®, Project management.” EPM is like the medical or engineering field,
  2. 2. which includes a multitude of divisions and specializations not an addition to the existing facility or capability). Anythingin each area. Similarly, EPM has numerous subsections, such that cannot be delayed or for which schedules cannot beas portfolio management, program management, project negotiated because of externally imposed dates (e.g., by amanagement, and PMOs. government agency) also falls under the category of “vital.” First and foremost, the structure of this organization is The list of approved projects / programs and the functionsimportant. Figure-1 illustrates an ideal organization structure leading it should be made available to all employees so that thefor EMP. I would designate the EMP leader a CPO (chief entire organization understand the projects / programs thatproject officer). This designation helps in visualizing the an organization is working on within a given financial year. Aconcept. The idea is to centralize the project management corporate practice of working only on those projects that arefunction across the enterprise and standardize the project on the approved list should be fostered in the practices, in addition to leveraging the project All selected projects will have designated project managersresources from a central pool of project / program managers. from the pool of certified resources, and employees who wish to have a career in project management should be groomed toManagement Process grow in the organization within an EPM function.Synthesis of all of the inputs on the project/programs, spreadacross functions/divisions/business units (BU) will lead to Advantagesdecisions by the executive council on the selection of projects While there is only one perceived disadvantage of higher costand budget approval. Projects must be classified within due to structure, there are many advantages to the EPMO:each portfolio as vital, essential, and desirable, based on y Project / program managers will be optimally utilized,common selection criteria. The bucket of total money should and additionally will have a career in the distributed starting with the vital to the essential to the y Synergies between the projects / programs and theirdesirable class of project for each portfolio. The meaning of a relative importance will be identified by the viceproject / program here is anything required in the organization president–portfolio in the suggested organization. Thisother than operations. Anything required for improving / is not possible in the current structure, where portfoliomaintaining the operation is also considered a project, and, management is very functional.depending upon the time horizon, it could be vital or essential y Learnings from one project / program will be applied toor desirable. Examples of this type of project include upgrade projects in other portfolios. This is not possible in theof IT hardware or replacement of a machine in manufacturing current structure, where project management is a smallthat is required to maintain the existing operations (i.e., it is subset within a function. Figure 1: Organization structure for an ideal EPMO. PMI Virtual Library | | © 2010 Amulya Gurtu 2
  3. 3. y Project resources will be reinforced or balanced according oversight in decision-making. No one was allowed to work on to the progress made on the project / program, which any initiative that had not been approved by the governance will be easily identifiable by the vice president–projects / councils. The decisions taken by the governance councils programs in the proposed structure. This is not possible were shared with all of the executives routinely. The process in the current structure, where project management is a and criteria for prioritizing, shutting down, or shelving the small subset within a function. projects were simple. Criteria for prioritizing were (1) strategicy Every employee (including managers) will use the alignment, (2) return-on-investment (ROI), and (3) payback common list of approved projects and build their annual period. Higher-priority projects had a combination of tighter work plans accordingly. Anything not on the list of the strategic alignment, higher ROI, and shorter payback period. approved project cannot be part of anyone’s annual Resources were allocated from the highest priority initiative work plan. Human resources personnel and functional downwards until all of the resources were exhausted. This led managers can help employees focus on matters that are to balancing the resource utilization among divisions, too. important to the success of organization. Remaining initiatives were kept in the pipeline for startingy Monitoring of the performance parameter will be the next-highest priority project as soon as resources were common. available. New initiatives were continuously added to they Reporting will be in the common format, which will portfolio in the pipeline and reprioritized. The prioritization allow decision making to be easier on further release of of the initiatives (as these were called, rather than projects) funds to the project. across the enterprise led to the closing of many projects. Thisy Above all, the leadership team will have a single source was not a popular move, particularly for me, but it was done of truth across the enterprise regarding the status and successfully due to the support from the CEO (and his direct performance of projects / programs. reports). These initiatives required monthly reviews due to the gravity of the situation that the organization was facing andMy Experience with the Proposed Structure because it was a new culture in the organization. However, itI have experienced success with the proposed structure and should be noted that monthly review of all of the initiativeswould like to share two success stories from two industries by the CEO and his direct reports (CXOs) is expensive andfrom different continents. not necessarily required in every organization / situation. The frequency of the review should be determined by the size ofCase 1 the organization, number of initiatives, and the culture ofThe first success story took place in an automotive organization the organization. Nevertheless, as a rule of thumb, frequentin Asia, during the period of 2001–2003. The organization, reviews in the beginning will facilitate in establishing thewhich had six divisions spread across three states, was going EMP in an organization. I led the function and helped thethrough a rough patch, and needed to do something urgently organization turn around its performance in 24 improve its performance. Several consultants were hired tosolve divisional problems, without much impact on the overall Case 2performance of the organization. I attributed the single reason This success story is about a global mining organization in thefor their limited success to the lack of centralized structure western hemisphere. The North American organization hadand hence the lack of coordination of efforts across divisions. undergone acquisition by a South American organization.Finally, organizational restructuring was done to coordinate the As a result, many projects were undertaken for aligning andinitiatives across its divisions—i.e., three operations divisions: integrating the two organizations postacquisition. After aboutmarketing and sales, research and development, and corporate. one year of chaos in the new organization, I was hired to setAn organizational structure was created that was very similar to up a PMO at the global corporate office, in Toronto, Canada.the structured proposed above, with some exceptions, such as My mandate was to set up a PMO for effective and timelythe name of the department, the required number of resources, integration of the process across two organizations. The by-and the designations. product of integrating processes may lead to integration of Under the new structure, all of the initiatives (from systems, but that was not the primary purpose. I was surprisedevery functional portfolio) were consolidated, prioritized, to see a global organization in today’s competitive environmentassigned to leaders, and reviewed every month. All of this without a project management function at the corporatewas done centrally, which avoided the possibility of any division. General perception among the employees was that PMI Virtual Library | | © 2010 Amulya Gurtu 3
  4. 4. nothing is moving in the organization. From the get-go, I experiences and therefore are not exhaustive:started establishing an EPMO, from defining the vision for 1. Buy-in from the senior leadership team is the single mostthe function and organization structure, to writing the roles important factorfor various members of the team such as project managers / 2. Set realistic expectations / timelines with the leadershipcoordinators, approval of the levels / salary (etc.), developing teamproject management processes / templates, and governance 3. Build a roadmap with goals, objectives, and milestonesprotocols. This was a huge task. Concurrently, I consolidated and share it with others on the teamall the portfolios of projects and realized that there were 4. Develop organization structure, roles, and responsibilitiestoo many integration projects, which were not coordinated 5. Develop process for governance / decision makingacross divisions, and no prioritization among the projects, 6. Build the team to support the above (approved) structureand that all of the projects could not be handled due to lack 7. Involve / communicate regularly with the rest of theof sufficient resources in the organization. The consolidation organization about the changesof the project also gave an estimate requirement of project 8. Review the progress regularly—more frequently in themanagers. beginningHiring external 9. Be open to suggestions and reserveresources was not the option to change the roadmap /a viable option due to timelinesthe requirement of time 10. Maintainand resources for induction transparencyof the new employees. About12 weeks into the battleground, Conclusiona meeting of all of the key Business leaders haveexecutives from each seen success in projectsdivision was organized through the use of this unifiedwith the purpose of approach. However, organizationspresenting them perceive it as an overhead, which it iswith the big in the beginning (as it is when any otherpicture and enterprise initiative is started). Secondlyhelping them prioritize and assign the resources, starting from leaders become impatient for the results. It is not just aboutthe highest-priority projects downwards. The number of “top project management. It is about change in organizationalpriority” projects for that year was reduced from about 40 to culture and a different approach to structured decision-4 across the enterprise, and resources were assigned with clear making. It is starting a new function and building a differentmilestones. Each project was reviewed every alternate week culture of project management within the organizations. Itand a consolidated portfolio was reviewed monthly by the is a huge change management task, and organizations whoorganizational leader. Suddenly the organization started feeling want to embrace it should prepare the executive team tothe momentum, due to the concerted effort from EPMO. The commit to its success and allow it to overcome “teething”projects started completing on time, and people started to feel troubles.a sense of accomplishment. As a result, employees felt engaged.Then, suddenly, global financial meltdown disrupted this About the AuthorEPMO and kept it from maturing. However, everyone realized Amulya Gurtu is an expert on project management withthe benefits of EMP. One thing I would like to point out is over 22 years of experience in many industries (auto, process,that, although the effort required from the employees was not high-tech manufacturing, mining, and education) in differentreduced, the concerted efforts across the enterprise led to the countries in North America, South America, Europe, andquicker success and higher motivation among employees. Asia. He holds MBA and MS (engineering) degrees and is a Project Management Professional (PMP)® credential holder.Suggestions for the Successful Establishment of an He has served as an executive leader of many multinationalEPMO organizations. He provides consulting services on projectHere are few suggestions that you may find helpful in management / PMO and teaches at Humber College,establishing an EPMO. These are based on my own Toronto, Canada. PMI Virtual Library | | © 2010 Amulya Gurtu 4