Walenta Warsaw PMI Chapter Oct 2009

What PMOs can achieve and
how to get the most out of it

Thomas Walenta
thwalenta@online.de
+49 171 3358938

Agenda

Ø What is a Project Management Office (PMO)
q Status of PMOs
q Success stories
q How to build a PMO
q Potential Value of PMOs

2

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 achieved
Supporting projects, programs or portfolios and reporting to them
q Project Support Office (PSO)
q Project Office (PO)
q Program Management Office (PMO)

Name
Supporting 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

What is a PMO: definitions and names

q 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 projects

q 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

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

http://www.ogc.gov.uk/portfolio,_programme_and_project_offices_p3o.asp

What is a PMO: 27 functions in 5 groups found by PMI
survey (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 planning

2 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 audits

3 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

Agenda

q What is a Project Management Office (PMO)
Ø Status of PMOs
q Success stories

7

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

Status of PMOs: 50% of PMOs have less than 4 staff
members and exists less than 3 years

PMOs are challenged

9


Status of PMOs 2009: Challenges for PMOs – increase
impact on risk, benefit and top talent management

10

www.pmo.executiveboard.com, 2008

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, www.pmo-symposium.de)

– 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. )

Agenda

q Status of PMOs
Ø Success stories

12

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

Success Stories: Project Management at Siemens

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

Success Stories: Charter to transform IBM to a project
based 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

Success stories: become a project-based business is
driven by the global PM Center of Excellence at IBM

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

Success Story: Program Management governance structure
provides 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)

Agenda

q Status of PMOs
q Success stories
Ø How to build a PMO

18

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.

19
Use PMI OPM3, SEI CMMI and/or PM specific models like IBM’s PMPMG

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

How to build a PMO:
what worked well from scratch
qPEOPLE
qIdentify & develop PM staff
People
qCareer path
qCurriculum, competency development
qCertification, Coaching, Mentoring
qCommunity

Projects Processes
qPROJECTS
qReviews
qCoordination between projects
qBenefits management / program management

qPROCESSES Organization
qMethodology, standards, templates
qTools

qORGANIZATION
qDashboard reporting / Portfolio view 21
qMetrics

How to build a PMO: initial policy setting
10 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

Agenda

q Status of PMOs
q Success stories
Ø Potential Value of PMOs

23

Potential Value of PMOs: Reputation
IBM 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 PM/COE Director Carol Wright receiving
a PMI Distinguished Contribution 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

Potential Value of PMOs: PMO Executive Council 2007
PMO 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

PMO metrics on intermediate outputs (excerpt)
1 Percentage of projects on time
2 Percentage of projects in budget
3 Percentage of projects within scope
4 Percentage of projects on time, in budget and within scope
5 Average employee hours spent on project work
7 Employee turnover / attrition rate
9 Percentage reduction of skill shortages filled by contractors
10 Percentage of time spent on overhead
11 Percentage of time spent in rework
12 Percentage of steering committees attended by sponsor
15 Cost saved by contractor dismissal
16 Extent to which sponsors are able to estimate realistic business benefits
22 Percentage of sponsors satisfied with delivered project

26

Metrics on project outputs & business outcomes
1 Percentage of new products resulting from existing project
work (assets reuse)
2 Percentage of clients satisfied
3 Sponsor perception of contribution to business value
4 Sponsor perception of contribution to competitive advantage
5 Sponsor perception of contribution to business process
improvement
6 Sponsor perception of contribution to business strategy
7 Number of rotational assignments
8 Percentage of business cases achieved
9 Qualitative suggestions by senior management
10 Revenue increase directly related to project execution
27

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

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

Potential Value of PMOs : goals that worked
qAct as Change agent
qestablish PM culture and mindset within an organization
qtransform an organization towards a project-based business

q Support business objectives
qCost cutting, minimize repair costs
qSales support, competitiveness, references, brand image
qBrand image improvements

qReduce 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 committee

qNarrow 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

Summary

q Centralized group supporting an organization
q Care about people, processes, projects and organization maturity
q Status of PMOs
q Shortlived, challenged, small
q Success stories
q Multinational corporations count on it
q Identify goals > build roadmap > measure success
q Ensure to have the right leader and staff
q Business and sponsor related
31

Walenta Warsaw PMI Chapter Oct 2009

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