Lotti 2011


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The virtual PMO - Jumpstarting Project Management Efficiency

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Lotti 2011

  1. 1. PMI Virtual Library© 2011 Marc LottiThe Virtual PMO™ — Jump-startingProject Management EfficiencyBy Marc Lotti, PMP I t might surprise you to learn the project management community that 97% of organizations give decision-makers their first “aha” are only at a Level 2 or 97% of organizations moment? First, an assessment shouldbelow (out of 5 levels) in be made on how mature the projectproject management maturity are only at a Level 2 or below management efforts are within aand few have a formal project/ given environment. What exactlyprogram/portfolio management (out of 5 levels) in project is project management maturity? ”office (PMO). This presents Like most maturity models, it is a management maturitya tremendous opportunity framework for knowing where anfor efficiencies in the area of organization is (benchmarking) andproject management across measuring progress. The Unitedmost organizations. Often, the Kingdom Office of Governmentproblem with selling a project Commerce (OGC) offers a simplemanagement discipline or framework is generating the “aha” definition of a maturity model, as depicted below (Figure 1)moment—the moment in which enlightenment or value is in graphical form.finally realized. Decision-makers want to see the value in This article presumes that an organization at aimplementing something new, and, today, more quickly than Level 3 or above, by definition, already understands theever before. Once they have their “aha” moment, however,they become engaged and eager to learn more. Typically, at  this point, the value of something isn’t yet based on a financialcalculation; it’s solely driven by benefits. As with most  proposals, however, decision-makers want to be convincedquickly of a return on their investment; this changes the   analysis from being exclusively benefits driven to a financial calculation as well.    Return on investment (ROI), however, is no longer the only factor to consider—time and opportunity cost  calculations are moving to the forefront of the decision-  making process. There are few data supporting the positive ROI for investing the time, resources, and money in formal project management or a PMO; hence, it is difficult toconvince managers to undertake these initiatives. How can Figure 1
  2. 2. merits of project management, as defined in A Guide to Where the Virtual PMO™ really shines, however, isthe Project Management Body of Knowledge (PMBOK® in addressing a leap that organizations fail to makeGuide) or a comparable framework; they’ve already had because of the perceived and often real complexity andtheir “aha” moment, so typically, it isn’t these people we costs of implementing a PMO. Often, this results in aneed to convince. Levels 0-2 organizations, however, need delayed or unrealized “aha” moment and, consequently,to be convinced that efficiency can be driven through little to no progress in project management maturity.proper project management. We could ask all Levels 0-2 Thomas and Mullaly cited that measuring organizationalorganizations to grab a copy of the PMBOK® Guide—Fourth value is challenging for any corporate undertaking. Theedition and run with it, but the process can be made simpler. Virtual PMO™ addresses these challenges through a low-To demonstrate the immediate value and usability, we’ve cost (dollars, implementation, training, etc.) frameworkcondensed the key Process Groups of the PMBOK® Guide while offering the best parts of a PMO (best-practiceand added an easy-to-understand detail framework that standards, saving time, budgetary control, riskLevels 0-2 organizations can use, and there are many of containment, etc.) in a condensed format in which value isthem. According to Thomas and Mullaly, the distribution of immediately visible.organizations they studied was as follows: 50% at Level 0-1, The Virtual PMO™ template maintains sections that47% at Level 2, and only 3% at Level 3 (Figure 2). are often requirements or the least common denominators of most projects, irrespective of size. It focuses primarily on the Initiation, Planning, and Closing Process Groups Level 0-1 of the PMBOK® Guide, with the expectation that the Level 2 Executing and Monitoring and Controlling Process Groups are addressed using other project management tools. Just Level 3 as every component of the PMBOK® Guide is typically not Level 4 appropriate for every project, so are not all components of the Level 5 Virtual PMO™ template appropriate for every project and sections can often be excluded without compromising project success. Figure 2 Included here is a section for a project charter, as defined in the following statement: No organizations in their study qualified for Levels 4 “Drafted by the Project Sponsor to secureand 5. Presuming these statistics are representative of industriesat large, there is a tremendous project management growth project funding and communicated high-levelopportunity across many organizations that could possibly project purpose and objectives. Typically abenefit from a Virtual PMO™ jump-start, or, more simply,these organizations could discover their “aha” moment! separate document and not in the project plan, however, added here for simplicity andThe Virtual PMO™The simplicity of the Virtual PMO™ is its effectiveness in centralization.”introducing and leveraging the best practices from the PMBOK®Guide and immediately demonstrating value to stakeholders. This is followed by a table of stakeholders and their roles The Virtual PMO™ does not employ a staff, rather it uses (Table 1), a critical component so often missed by novicea basic template for governance; hence, the “Virtual” in its project managers. The PMP knows there’s nothing quitename. Its simplicity is deceptively effective and is extensible like missing stakeholders and discovering later that they havebased on an organization’s particular needs. The template requirements. This table specifies the stakeholder’s “name”offers guidance (a description of what belongs there) in each and his or her role in the project or organization.field for the project management novice who might not know Table 2 lists embedded plans that can be expanded aswhat a particular field represents or what its purpose is. So, needed; however, the basic plans of communication, qualityalthough it is immediately useful to a Project Management management, resource and scheduling, and risk are includedProfessional (PMP)®, it is also a training tool for less by default and detailed in the appendix of the completeexperienced staff and Level 0 organizations. Virtual PMO template. PMI Virtual Library | www.PMI.org | © 2011 Marc Lotti 2
  3. 3. Name Project/Organization Role Individual primarily managing the project Project Manager Individual who will assist the project manager or another project manager Project Management Resource Individual providing technical assistance Engineering Resource Individual representing business needs in the project Business Resource Individual managing project risk as prescribed by the risk management plan Risk Manager Individual responsible for the group within which the project will be executed Functional Manager Person securing project funding Project Sponsor Table 1 Probability Effect Cost to Probable Cost Risk Corrective Action 0-10 0-10 Correct of Inaction Catastrophic failure 1 9 Disaster recovery plan and insurance US$5,000 US$170,000 Client backlash 3 10 Client relations to monitor changes US$3,000 US$20,000 Table 2The Risk Management Plan “All project updates will be provided toThe all important Risk Management Plan tops the list ofembedded plans and covers the organizational management stakeholders as per the table below. Additionalof risk, including external vendors, client risks, and a risk-steering committee. This creates accountability for project dialogue and updates will occur in weekly teamrisk and defines participants’ roles in risk management.How risk is analyzed, screened, and ranked is defined next, meetings after which minutes will be posted tofollowed by risk tracking and a budget. Once the plan is the project repository.”approved, a Risk Register (Table 3) within the template acts asthe repository of all identified project risks, the probability ofoccurrence, the effect, and the mitigating action. The Quality Management Plan The Quality Management Plan is distilled in the template to:The Communication PlanThe embedded Communication Plan can be very brief and “This plan defines the procedure and level ofis often accompanied by a table for conciseness, making theplan very readable and effective. An example follows: quality management for this project.” Project/Organization Role Distribution Medium Frequency (days) Content Requested Project Manager E-mail 1 All updates Project Management Resource E-mail 7 Responsibility reports/updates Engineering Resource E-mail 10 Technical updates/tasks Business Resource Hard-copy reports 30 Schedule and cost variances Risk Manager Project repository Continuous Identified risk updates and new risks Functional Manager E-mail 15 Resource variances and product changes Identified risk updates, new risks, or schedule Project Sponsor Project dashboard 7 and cost variances Table 3 PMI Virtual Library | www.PMI.org | © 2011 Marc Lotti 3
  4. 4. • Client Requirements: What are the limits to satisfy the before you’ve made your case. Consider the Virtual PMO™ client requirements? the 30-second “elevator pitch” for the PMO—quickly engage,• Control Limits: What are the internal control limits intrigue, and impress on decision-makers the value, and before action is taken? they’ll be convinced!• Out-of-control Thresholds: What limits require immediate intervention, analysis, and a work stoppage? Reference• Quality Assurance Members: Those who will analyze the Thomas, J., & Mullaly, M. (2008). Researching the data value of project management. Newtown Square, PA: Project• Quality Control Members: Those who will collect the Management Institute. data through inspection About the AuthorThe Resource Acquisition and Scheduling Plan Marc Lotti has worked in information technology andThe Resource Acquisition and Scheduling Plan rounds management consulting for over 15 years and presentlyout the embedded plans by advocating the use of standard provides guidance to business executives and operationsmethods for resource acquisition, vendor engagements, the management through Mandragore, a boutique consultancyRFP process, and the project scheduling approach. firm he founded in 1996. Marc sits on several advisory Naturally, there’s a section for the all-important scope boards, contributes to strategic operations direction, andand a few sections are included as scope-creep inhibitors. The mentors staff in both operations and technology. Mosttemplate includes the following instructions in the scope section. recently, he bootstrapped UFlexData, a turn-key technology platform for small and medium-sized businesses. In “State the project’s objectives including the addition to Marc’s leadership role at Mandragore, he was the acting Chief Technology Officer of Trilogy Globalobjective project outcomes that can be measured. Advisors between 2004 and 2009, where he managed technology operations and led all technology integration(e.g., reduce the RFP process time by 30%) Enter during their 2005 merger with BPI Global Funds. In 2003, he developed a notable strategic computing roadmap order of magnitude costs, which may be from for the Corporate Travel division of American Express. 50% below to 100% above actual project costs. From 1996 to 2002, Marc was a technology consultant for Goldman Sachs Asset Management, followed by theThese are very rough estimates that will be more Investment Management Division, where he was employed in multiple capacities across many projects. Prior to accurate as the project is elaborated.” founding Mandragore, Marc was the Infrastructure Manager for International Emerging Markets worldwide There’s also an important Assumptions/Clarifications/ at Merrill Lynch and later, an Assistant Vice-PresidentExclusions or Limitations section to clarify any ambiguity and at Fuji Securities, where he led firm-wide technologydisclose as many assumptions about the project as possible to infrastructure. Marc earned a BA in Economics from Stonyenable stakeholder feedback early on in the process. Project Brook University, holds an MBA from Thunderbird Schooljustification and a cost outline are also included to appease of Global Management, and is a Project Managementthose paying the bills. Professional (PMP)®, with more than 15,000 hours of As with so many corporate undertakings, introducing project/program/portfolio management experience. Marctoo much, too quickly, and promoting something new can lives in Connecticut with his wife Andrea and their children,often be a turn-off, and decision-makers may walk away Nicolas and Bianca. PMI Virtual Library | www.PMI.org | © 2011 Marc Lotti 4