Achieving strategic organization objectives through a PMO
Sultan A. Alkhuraissi, PMP, CPMM, AVS
This article discusses a current case study of achieving strategic organization objectives by adopting a project management office (PMO) as a tool to manage and align projects within different functions and units, link them to the strategic objectives and at the same time ensure a systematic methodology and tools for execution. The case study focused on building a PMO, selecting the PMO model and explaining the PMO role as per the literature of project management standards and the practices of the organization. The PMO explained within this case study is a unit that supports an operation and maintenance sector (O&M) that consists of five departments in the Royal Commission for Jubail (RCJ) in Saudi Arabia. The overall strategy of the RCJ O&M sector is to achieve the cities of excellence mandate. As the PMO accomplished the intended purpose of aligning and achieving strategic objectives of the O&M sector, it will continue to ensure alignment of the functional objectives with strategic objectives. The following points are covered: (a) initiating and building the PMO; (b) selecting the PMO model; and (c) explaining the PMO role. The status of the case study PMO will also be briefly explained.
Keywords: Project management office (PMO), Royal Commission for Jubail (RCJ), Operation and Maintenance (O&M).
The Royal Commission for Jubail (RCJ) is the governmental authority in the Kingdom of Saudi Arabia responsible for the master planning and development of infrastructure, utilities, and facilities in Jubail, the largest industrial city in the Middle East. The city supports the petrochemical processing facilities in the region and provides approximately 8% of the Kingdom's national gross domestic product (GDP). In 2009, the RCJ developed a refined strategy including a vision and mission. One objective is the cities of excellence mandate and to be recognized as one of the top industrial cities globally. The O&M function is one of the supportive sectors within RCJ and is responsible for achieving this objective in conjunction with other sectors in the RCJ (Exhibit 1). This sector consists of five departments, each with a specific scope to deliver services within the city.
Therefore, to achieve the strategic objective through the O&M sector, a high-level roadmap was developed to achieve the cities of excellence mandate. This roadmap consists of multiple programs and projects within the five departments and the implementation challenge was their alignment and integration using a standard methodology, performance measures and technical as well as management support, as will be elaborated more in this article.
From a functional view to explain the role of the O&M sector within the RCJ, so as to understand the complexity and challenges of objective alignment, the O&M maintains all infrastructure, assets and facilities through five core departments: roads, buildings, sanitation, irrigation and landscaping, and general utilities. All O&M services are delivered through 23 O&M contractors (over 5,000 employees) using operational O&M processes and procedures. Each department has a set of processes, procedures, and improvement plans within a specific scope and reports to the general manager, O&M. An example of the daily operational tasks with different functions and deliverables is the preventive maintenance for roads and bridges, which requires different resources, processes, and supervision from those required for buildings; the same applies for sanitation and waste collection. The structure and scope of the O&M sector within the city is illustrated in Exhibit 2.
To evaluate O&M capabilities within the sector and to achieve the strategic objectives, RCJ came up with a group of projects that are required to improve performance and achieve the corporate objectives as shown in Exhibit 3.
To manage the projects in one layer (high level) to ensure alignment with strategic objectives, sustain improvements and changes, share and manage knowledge and practices, and systematize the methodology of management, the PMO was established to manage the transformation. The business case was presented to the executive management to approve building a PMO within the O&M sector.
RCJ implemented the idea of the PMO at the beginning of the project in 1970 to build the city and successfully practiced PMO building, management, and operation. However, the idea of the PMO within O&M wasn't mature, and there was no prior experience.
The first phase to initiate the PMO was to answer the following:
- What is the PMO structure and organization?
- What is the PMO's role and services?
- What is the PMO methodology?
- What PMO model should be adopted?
Structure and organization
The PMO would act as the unit to manage projects within the transformation and coordinate, communicate, and share knowledge, practices, and progress across five departments, as explained in the following paragraphs. Exhibit 4 shows the reporting structure of the PMO within the O&M sector.
PMO role and services
Determining the role of the PMO and its services was important to:
- make clear the communication channels and reporting;
- define the roles and responsibilities for each function within the sector and the PMO;
- differentiate between the operational and daily activities from strategic projects and goals.
The entire project must achieve the strategic objectives and these projects are the starters with more in the pipeline. So after elaborating and developing the overall O&M plan, the main role of the PMO is the responsibility of managing all projects and programs within the O&M sector and aligning them with the business strategic objectives. That will result in changes and transformation from one way of doing things into another way of doing them. In this case study, the PMO leads the transformation through different models, using the portfolio method as per Project Management Institute (PMI) industry standards. This portfolio consists of programs and projects for planning, scope management and execution of each project. Therefore, the PMO is responsible for sharing knowledge and information during strategy implementation with departments and reporting to executive management.
As part of initiating and building the PMO, it was important to identify the provided services and communicate those services to executive management, users and departments, as these stakeholders interact with and are influenced by the PMO. The services include the following:
1) Create a repository for project information.
2) Manage and share knowledge and experience throughout the five departments and their projects to ensure alignment and integration (knowledge management).
3) Manage consultant performance and measure compliance.
4) Manage changes and support transformation through training, sharing best practices and recommending additional training.
The PMO model was selected based on the transformation roadmap for the O&M, which integrated the different phases of the roadmap (stabilize, transform, excel and sustain). Each phase has the required support from the PMO based on requirements and deliverables and on the maturity of both the PMO and the departments responsible for preparing, managing, and executing the projects. The PMO model in each phase shows how the PMO executes work within its role. The three models for each phase of the PMO are shown in Exhibit 5.
The PMO provides departments with support in creating the scope, specification, and deliverables for each project. This allows the PMO to share knowledge across departments and provide on-demand expertise, templates, and best practices, and it serves as a means to measure deliverables against objectives. This process also provides management with high-level progress reports on each project using PMI methodology. In general, the support phase has no execution other than planning and preparing the specifications and scope of each project within the portfolio. The main purpose of this phase is to ensure all programs and projects are aligned to the strategic objectives of the sector as requested by top management (i.e., the general manager of the O&M).
The transfer from support to managing starts with the phase of execution, which is the second wave of the strategic roadmap (transform). During this wave, all departments transform from the existing approach to a total asset management approach. This transformation includes the implementation of asset management and the computerized maintenance management system program within the portfolio. These two programs serve more than one department and consist of projects assigned to each department. The role of the PMO includes centralized reporting of the execution of programs and projects, strategizing processes, managing change, providing training, and supporting departments in executing the portfolio project.
Center of Excellence
The PMO manages the transformation of the O&M sector into the sustain and excel wave. This phase ends as soon as the asset management centre of excellence is completed. At that time, the PMO will take on a more supportive role. Exhibit 6 shows the cycle of the three PMO models.
Portfolio management refers to a collection of programs or projects and other work grouped together to facilitate effective management to meet strategic business objectives (Dow, 2012, p. 139). The selection of the PMO methodology was based on the strategic objectives, as presented by the roadmap, organization structure, business objectives, and recourse available. Exhibit 7 shows the PMO methodology.
PMI Standards Compliance
To ensure that the PMO follows PMI standard industry methods, no deviation from PMI standards will occur and the projects will adhere to the following:
1. Auditing: A consultant working on the asset management strategy performs auditing to ensure no deviation from the PMI standard methods; the PMO closes any gaps based on the audit report.
2. Compliance: A system is established to measure compliance with the PMI standard processes; for example, planning processes, reporting, risk management, terminologies.
The existing PMO is to be expanded, adding project managers to manage projects and programs. One of the challenges is the limitation of resources and utilizing outsourcing to close the resources gap. That might create conflicts in communication and the quality of deliverables.
Depending on the nature of the business case, organizations need to build PMOs and determine their main objectives. The following are necessary to ensure the suitability and effectiveness of PMOs:
- organization maturity and experience;
- organizational processes and procedures;
- role of PMO, model and methodology to manage projects;
- approval from executive management and those affected by the PMO.
This case study identifies the PMO roles, services, models, and methodology that contribute to the performance and achievement of the PMO in managing the transformation. The concept of successfully managing transformation through a PMO can be summarized as follows:
- selecting the PMO role, model, and methodology;
- management approval, communication, and agreement on the scope and role;
- building and staffing the PMO;
- identifying the maturity level and supporting the required expertise;
- PMI standard methods and process compliance.
Dow, W. (2012). The tactical guide for building a PMO. Publisher: Author.
© 2015, Sultan Alkhuraissi
Originally published as a part of the 2015 PMI Global Congress Proceedings – London, UK