Project Management: Integrating a PMO Case Study by David Bustin
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Method and challenge of introducing a new PMO. This brief .ppt demonstrates the need and real world implementation of a PMO. David D. Bustin
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Project Management: Integrating a PMO Case Study by David Bustin
- 1. AtekPC Reorganization: Formalizing Processes for Evolving Markets David Bustin Florida Institute of Technology
- 2. Table of Contents / Agenda • Organizational Chart……….…………...…...……………………………3 • Structure of the Organization……………..……………………………....4 • Integrating the PMO……..……...……..........……………………………5 • Structure of the PMO…………………...…...……………………………6 • Management Support…………………………..…………………………7 • Management Influence……………………...…………………………….8 • Other Internal Influences…………………...……………………………..9 • External Influences……………………………………………………….10 • Culture……………………………………...…………………………….11 • Reference……………………………………………………………........12
- 3. • Structure of the Organization Chief Information Officer John Strider Director Application Development Richard Steinberg Director Technology & Operations Sales Systems Manager Manufacturing Systems Manager Steven Gardner Financial Systems Manager Director Project Management Support Group Larry Field Workgroup Communications Manager Advanced Systems Replacement Project Manager Lead Analyst Linda Starr Lead Analyst Lead Analyst Lead Analyst Lead Analyst PMO Director Mark Nelson Project Manager Project Manager Organizational Chart
- 4. Structure of the Organization • AtekPC establishes a Strategic Planning Office for adapting to an evolving industry. • Current interdepartmental communications for informal projects were sufficient but need standardization. • Formal project management practices have been used but not established as organizational policy. • Lead analyst assumed project management roles and lack of consistency was the common denominator in the organization. • IT was not the center of business activities.
- 5. Integrating the PMO • Experienced and talented people were hired to lead the PMO program but were unfamiliar with the organization and industry. • The purpose of the PMO is aligning business strategy with IT resources. • AtekPC establishes a Strategic Planning Office for their long range plan of the PMO. • Standardization was needed and would be achieved through a new PMO. • PMO duties were divided into two categories, project-focused and enterprise- oriented.
- 6. Structure of the PMO • PMO resources and support was low but improving. • PMO-heavy and PMO-light were two models under consideration. • The current implementation strategy is supported by the PMO team. • Steinberg explains future options for governance and Strider describes the current model.
- 7. Management Support • An enterprise-wide PMO was supported by top-level managers but a bottom-up approach was needed. • PMO responsibilities were agreed upon and established but failed to address two key areas.
- 8. Management Influence • Managers at AtekPC did not realize they have used project management practices in the past. • Skillful management will allow the PMO implementation and operations to be successful. • The slow implementation approach requires time and patience.
- 9. Other Internal Influences • Two main factors creating a challenge for designing the PMO are cultural acceptance and authority. • The organization is struggling with changes in the industry.
- 10. External Influences • New technologies are driving the market demands. • AteckPC business needs evolve to compete in industry changes.
- 11. Culture • AtekPC is a mid-sized U.S. PC manufacturer. • An informal approach is used to manage projects. • Traditionally, IT was not part of the core strategy. • Functional departments were not accountable for measuring success. • Employees enjoyed benefits from the informal approach.
- 12. Reference McFarlan, F., Keil, M., Hupp, J. (2007). The AtekPC Project Management Office. Harvard Business School.
Editor's Notes
- John Strider, AtekPC Chief Information Officer, knows critical information technology (IT) projects are necessary in the near future. These projects are important because the personal computer (PC) industry is transitioning from bulky, desktops to more mobile devices and applications. AtekPC is aiming to assume a lead role in the changes and a project management office (PMO) could be a big help if implemented efficiently. Strider’s is questioning the outcome of implementing a PMO if they are too aggressive with the integration into the organization. He aimed to align the direction of business strategy with IT resources. Richard Steinberg, Director Application Development, mentions the fact that in the past, people in the organization believed the work quality on projects could improve. His explanation for justifying the PMO at AtekPC was to sharpen employees’ skills so they could confidently handle several projects simultaneously. His approach to the challenges of the evolving PC industry addresses cost reduction, resource usage, and improving creativity, adaptiveness, and agility in new product initiatives. Steven Gardner, Manufacturing Systems Manager, expected the new PMO to involve more personnel and support than a smaller, lighter model. He believed the PMO would be a resource pool for project managers. His view on the organizational model is that a project would borrow a person from the project manager resource pool. He further explained, “I think it’s the understanding that they have project managers to which you assign the various projects throughout the department.” According to Gardner, a project manager working on a project, would report to him and comply with his directions. Larry Field, Director of the Project Management Support Group, a key member of implementing the PMO from its inception. He advocated, “For us to be effective, we have to have support from the top. And we have that support from the senior vice-president through John Strider and on down.” He mentions the problem with a PMO model with many project managers and analysts is in addition to a shortage of business resources. He favors a slow integration approach. He noted another problem with adding a PMO is the culture shock. Previously, the organization had no formal project management approach and now they are considering an enterprise-wide process. Mark Nelson, PMO Director, provides mentorship and guidance on specific projects for IT executives. He worked under implied authority due to changes in management direction. His plan is to focus on project planning through frequent meetings with teams, status reporting, maintenance, and risk management. His goal is to foster support and acceptance from different functional areas, as well as, IT project team members. Nelson has been creating new standard project processes and procedures for the new PMO. He helped to develop an “idea form” to prioritize work.
- AtekPC established a Strategic Planning Office to address changes in their business process to meet new market demands. Larger, more complex projects were in the near future and to adequately handle multiple projects, the new Strategic Planning Office was established. AtekPC developed a large range of applications for operational level business functions. Previously, the application systems had only been integrated on a moderate level. For example, there was no interdepartmental integration of applications and those functional areas only provided discrete information among each other. IT was not at the core business practice and only consisted of small to medium sized operational or maintenance projects that were informally managed without standardized practices. The IT department was only viewed as a service provider and not a business function. The IT projects were ordinarily managed by appointing project manager responsibilities to one of the development staff of a specific functional area.. Through the informal project process, a user requested IT services from a lead analyst which managed workgroups of analyst and programmers that had different abilities. Consistency across the organization was absent as a result of individualized project methods, documentation, practices, and tools were used by each lead analysts. The benefit of their informal method is quick response to user request. They were also able to prioritize needs with few conflicts in their workgroup. As a result of their efficient process, a great amount of trust was formed. Relationships among the employees was very personalized and loyal. Strider had told Nelson the PMO is only one responsibility in the IT organization. The organization has previously completed a few large projects but these projects had not resulted in lasting formalization of practices. Large companies were acquiring smaller organizations and to avoid being absorbed by a larger company in the industry’s consolidation, AtekPC created a corporate planning office.
- AtekPc has an informal process for managing projects. Their product, personal computer, is declining in demand due to new, more mobile and cheaper technology. In order to maintain a competitive edge, more formidable project management techniques are needed to develop and manage. They are slowly integrating the PMO which has support from top level managers for an enterprise-wide approach. The PMO is still in very early stages. Strider’s management team has employed personnel with project management experience to lead the PMO program but unfamiliar with the PC business and organization’s culture. Strider told them that the PMO must become a part of the AtekPC culture by small changes over time. There were many initiatives and responsibilities with very limited resources for Strider to address. The PMO would bring the organization’s strategic business direction in alignment with their IT resources. In the fall of 2006, AtekPC began planning their position for the future. They established the strategic planning office to introduce change in business. Under the guidance from the strategic planning office, the initial PMO focused on formalizing IT projects and then expand to non-IT projects across the organization as an enterprise PMO. The current informal method of project management would not be sufficient to handle the anticipated large, complex projects that could occur simultaneously. The new PMO would provide standardization, consistency, and better practices for both business and IT projects. PMO responsibilities and scalability were still not completely clear Currently, they were limited to IT projects but upper level management discussed broadening the scope and encompass two categories, project-focused and enterprise-oriented. The project-focused approach covers consulting, mentoring, and training. The enterprise-oriented approach is responsible for portfolio management, project management standards, methods and tools, and project performance archives. Defined PMO responsibilities were revised as attempts to gain support for its mission and charter were made. Over time, PMO merits would prove its value and necessity. The plan for gaining acceptance was through consultation and mentorship on each project.
- There was a major shortage of PMO expert resources available to support projects. In addition to Nelson, there were three other project managers assigned to the PMO and these were contract employees. Temporary employees do not usually have the commitment to organizational pride and understanding of their culture. Normally, PMO staff did not directly manage projects. In one case, Nelson did assign one of his project managers to a critical project to launch a new notebook computer. There were two models that were being considered. The two models for the PMO are PMO-heavy and PMO-light. PMO-heavy includes a complete staff of project managers that managed all IT projects. It acquired experts in project management from external and internal sources to manage projects under PMO direction. In a fully integrated PMO-heavy model, no project is authorized without management’s consent or operates under the direct control of the PMO. In a PMO-light model, minimum expert staff reported to internal project managers to carry out PMO responsibilities. Every project were conducted outside of the PMO but within organizational direction and ownership of projects fell within the functional area, as well as, the IT group responsible for project performance. The PMO team consisted of four full time people from different operational teams. Gardner expected to implement the PMO-heavy model. His understanding is the PMO would provide a PM resource pool and from that pool, each project would borrow a project manager for the project duration. In his view, he would keep authority over the project and the assigned project manager would report to him. Resources would be assigned in a matrix structure for the duration of the project as he was currently doing. Onboarding project managers and analysts was a problem and a shortage of business resources, which already is a problem. Until a model is adopted and fully integrated, they would work within the culture and incrementally integrate a chosen model to overcome cultural resistance. To effectively gain support, they would mentor, coach, and train personnel.
- Upper management viewed the IT department as needing to improve conflict management between new business-critical initiatives and operations with small, frequent changes to current systems. One cannot be sacrificed for another. Support for Nelson’s PMO team initiative on enterprise-focused services was accepted. Progress in this areas was slow because of limited PMO resources but a collective agreement was clear that the PMO should establish, publish, and disseminate project practices, standards, and tools. Management had neglected to address establishing consistent methods for handling projects and project documentation archival for knowledge sharing. As the PMO developed, Nelson wanted to include the unaddressed issues. This was not achievable in the short term, given a lack of resources. Those resources would need to come from other critical areas which would adversely effect operational effectiveness. The senior vice president also supported the PMO. Larry Field, Director of the Project Management Group, was also a project champion. Among senior managers, there was no consensus for the level of influence that PMO had on the change process. In Strider’s opinion, it was too soon to include formal authority in the absence of value added benefits and more broad support. Nelson was trying to gain support from the functional areas by allowing his team to mentor and direct key projects. He referred to the bottom-up approach during the implementation phase. Steinberg, Director of Applications Development, supported the PMO concept from inception. In his view, working independently with each business group, the PMO could be implemented better. The senior vice president was willing to expand the PMO to non-IT projects if it proved to be successful for IT projects.
- AtekPC’s management understood they needed to manage projects efficiently and effectively for the success of the planning office. They failed to provide sufficient cost control and handle threats from the competition,. Competitive pricing caused management additional pressure to ensure every effort had a positive return on investment. Although the management did not have project management formalized, they had limited experience in 2000 through productive discussions in meetings. The skills to successfully carry out implementing a PMO required expertise. Maintenance and new development, in addition to, balancing resources in the development with resources for project management tasks in the new PMO. Nelson has mentored and supported project management on key projects since October 2006. His intention is to work with someone on project planning by attending team meetings, submitting status reports, addressing maintenance issues, and performing risk management. Nelson’s authority was implied and a result of management changing directions. An alternative approach to an incremental implementation was to hire experts and use a top-down approach that would mandate changes. The IT manager recommended a slow, incremental program in order for the PMO to prove valuable on a project by project basis.
- AtekPC was experiencing difficulty with the industry’s transition from growth to maturing. There were a lot of operational and enhancement projects but not very many enterprise application projects. Concentration on improving efficiency in the operations and maintenance of business functions was the focus for the past decade. Needs faced by the organization to meet new challenges of the market demand required the development of cross-functional integration systems and internet technology. Multiple technological and functional areas were part of the new larger, complex projects. A new PMO could provide solutions for these two challenges by cost reduction of resource usage and improving on projects creativity, adaptiveness, and agility when introducing new products to the market. A major concern is the bureaucracy in the organization which might slow progress down. Determining who the PMO is accountable to was a governance issue that would potentially inflate bureaucratic problems. There was an additional possibility that the PMO might fail as a result of the radical change from informal processes to a disciplined structure.
- Mobile phones, PDAs and web-based application software were advancing in technology and gaining popularity in the marketplace. These devices were less expensive with less storage requirements and processing power but more computing power. Business and consumer markets, both, strongly showed a trend in purchasing mobile devices. The PC industry was experiencing major setbacks as a result from the change in demand and smaller companies did not have the resources to compete. They were acquired by larger companies and AtekPC realized internal changes were critical if they planned to continue business. The industry began to evolve faster and keeping pace with changes would require more complicated projects. This growth in projects would need formal approaches for cost-control, consistency, and efficiency that would be provided by a PMO.
- AtekPC has been in business since 1984 and grown to a mid-sized company producing personal computers. They employ 2,100 full-time and 200 part-time employees. The company needed to change methods for their business practice from informal to formal, disciplined structure in response to consumer demands and industry shifts. Lead analysts traditionally worked for a long time in the same functional area and gained thorough understanding of specific business activities, needs, and people. This approach worked well in promptly responding to user requests and balancing emergencies in their workgroups. Trust relationships between lead analyst and personnel in the functional area developed as a result of the high efficiency. Trust-based relationships were unique to individual employees and lead analyst were able to collect, assess, and respond to request. Changing this culture of informalities to a formal, standardized method would take time and planning. An additional problem was that nearly all of the staff did not have experience with formal project management tools and techniques. New personnel would need to hired and the additional personnel would be unfamiliar with the current culture. There’s a greater chance of interpersonal conflicts. The current staff enjoyed the informal process because there was no cost tracking or performance records needed to be maintained for projects. Accountability for measuring project benefits was nonexistent and the IT staff was not confined to an assigned budget for projects. Although the IT department was a functional area in the business, they were viewed as external to the core business functions.