Adding focus to improvement efforts with PM3
by Ron Remy
COMMITMENT TO PROJECT MANAGEMENT is being renewed at many organizations. For information technology departments, project management is a critical success factor in eradicating the ubiquitous “Year 2000 Virus.” For scores of government agencies, reduced budgets and the Federal Acquisition Streamlining Act (FASA) require effective project management on programs that do not have a tradition of cost and schedule controls. For organizations implementing Enterprise Resource Planning (ERP), project management has emerged as a critical element, for both managing the initiative and reengineering the core project management processes and systems. As reliance on project management grows, many leading organizations are concentrating on taking project management to the next level.
As companies and government agencies consider the task of improving project management, they encounter a wealth of “best practices” information describing worthy improvement goals. Their challenge, however, is less a matter of identifying the final objective than of assessing their current condition, charting a realistic improvement initiative, and negotiating the often stormy seas of process improvement. As organizations enter the change process, they have to see the steps across to the other side. A project management maturity model allows organizations to see the path ahead.
Transforming Practical Experience Into a Conceptual Framework
For 10 years, Micro-Frame Technologies of Ontario, California, has provided software and consulting services to companies and government agencies striving to improve project success. The firm has worked with hundreds of organizations to improve their project management processes, implement scheduling and budgeting disciplines, and link project management to operational strategies. Over the past few years, a close association with Microsoft and an interest in enterprise planning applications have involved the company with a number of organizations for which project management is an emerging core competence. In the process, we have come to regard the journey to best practices as just as important as the destination.
In 1996, Micro-Frame undertook an internal project to build a “lessons learned” database of project management improvement initiatives. This distillation of practical experience was intended to be a reference tool for our cadre of implementation personnel. The database, covering several hundred engagements, draws on the experience of associates, implementation consultants, and key partner firms. Encompassing both project management and the management of multiple projects, our goal was to streamline the improvement initiatives by providing a comprehensive process improvement framework and avoid “reinventing the wheel” at new customer sites.
Project Management Maturity Model Categories
Exhibit 1. In order to index process improvement experience amassed from several hundred project management consulting engagements, the Micro-Frame team decomposed project management and the management of projects into eight major sections and then broke the sections down into 51 categories.
Project Management Maturity Model
To index our process improvement experience, we decomposed project management and management of projects into eight major sections, and further broke down the sections into 51 categories, as described in Exhibit 1. As we began mapping our implementation experience to the lower-level categories, a clear pattern began to emerge across virtually all companies. There was a surprising degree of correlation between the various levels of “maturity” for each of the categories. In other words, we found organizational behavior to be relatively predictable as project management processes and systems are improved. Once we recognized this pattern, one of our associates noted that the structure of our “lessons learned” database was evolving to look like the Software Engineering Institute's Capability Maturity Model for Software (Software Engineering Institute, Carnegie Mellon University, 1995), CMM. She proved correct. After reviewing the CMM in detail, we restructured our database into a maturity model. Registered and trademarked as the Project Management Maturity Model, or PM3, the resulting model is an evolving document based on our collective experience with project management improvement initiatives. PM3 provides a concise view of the transition from “business as usual” to best project management practices.
For an organization striving to improve project performance, it can be hard to know where to start. Certainly, there are scores of “best practice” references, excellent professional associations, numerous experts and literally hundreds of project management software “solutions.” Such abundance can be confusing; when it comes to the process improvement journey, Yogi Berra had it right when he declared, “You got to be careful if you don't know where you're going, because you might not get there.” We discovered that breaking down project management into discrete categories, then documenting the observed conditions of each category across five levels of process maturity provides a road map of project management process and system improvement. It also underscores Dr. W. Edwards Deming's contention that process improvement is a journey, not an event.
Maturity Levels. Like CMM, the PM3 incorporates five levels of maturity:
Ad Hoc—The project management process is disorganized, occasionally even chaotic. Systems and processes are not defined. Project success depends on individual effort. Chronic cost and schedule problems occur.
Abbreviated—Some project management processes and systems are established to track cost, schedule and performance. Underlying disciplines, however, are not well understood or consistently followed. Project success is largely unpredictable and cost and schedule problems are the norm.
Organized—Project management processes and systems are documented, standardized and integrated into an end-to-end process for the company. Project success is more predictable. Cost and schedule performance is improved.
Managed—Detailed measures of the effectiveness of project management are collected and used by management. The process is understood and controlled. Project success is more uniform. Cost and schedule performance closely conforms to plan.
Exhibit 2. Taking just one category from Exhibit 1, Schedule Development, we can see how each of the five levels of maturity is described for this one area of project management capability. The evaluation questions on the following page help to further focus the assessment.
Schedule Development Category Evaluation Questions
Is there a set of critical milestones with firm objectives (cost, schedule, and technical) defined for each project?
Are relationships between project activities clearly defined and documented?
Are relationships that are inputs from external sources to the project defined and documented?
Is the work effort (scope) required to meet the objectives of each milestone documented?
Are milestone objectives and closure criteria documented?
Are specific individuals assigned responsibility for accomplishment of each key milestone?
Are project plans derived from standard templates?
Are time reserves built into each project schedule?
Are critical projects required to have CPM models?
Is there a validation prior to baselining a schedule to ensure that all schedule objectives are met?
Is there a validation prior to baselining to ensure that all schedules are achievable?
Does the cost baseline provide the resources needed to meet the schedule baseline?
Adaptive—Continuous improvement of the project management process is enabled by feedback from the process and from piloting innovative ideas and technologies. Project success is the norm. Cost and schedule performance is continuously improving.
The objective of the model is not to evolve all categories to Level 5. Rather, it is to find a cost-effective balance of project management practices and systems that will consistently produce excellent project performance. Our process improvement experience supports Pareto's 80/20 rule. For the typical client, the last 20 percent of improvement will yield only marginal benefits and will generally cost more and take longer than the first 80 percent.
Example Category. The taxonomy of PM3 contains 255 system characterizations, each representing the intersection of category and maturity (51 categories, each with five levels of maturity). The characterizations synthesize practical experience and vary in length from several paragraphs to several pages. Exhibit 2 illustrates the “Schedule Development” category within the “Project Performance Management” section. Sufficient detail is provided to understand the contents of each level. These descriptions provide a framework for assessing project management operations, identifying gaps, establishing priorities, and determining where the organization resides on the improvement curve (or plans to reside). The maturity model is modular and scalable. For example, if a client does not plan to measure budget performance on projects, the budget categories can be set aside.
Reviewing all five maturity levels for a category provides insight into organizational behavior at different levels of project management sophistication and effectiveness. Stumbling blocks to improvement become obvious and, in many cases, these pitfalls can be avoided as the improvement process progresses. In Exhibit 2, for example, one pitfall is the tendency to evolve a one-size-fits-all solution at Maturity Level 3. In effect, this horizontal view provides a road map for managing the improvement initiative and avoiding adverse consequences.
Each of the 51 categories has “transition criteria” that describe the major factors that practical experience suggests should be improved to reach higher levels of maturity. For example, in Exhibit 2, the category “Schedule Development” has a transition criteria for “consistent identification of project work scope, work interrelationship, and resource requirements.” This means that as schedule development improves, plans more consistently identify and incorporate these key factors. Transition criteria provide focus to the improvement effort.
Breaking down project and multiproject management into 51 categories facilitated the development of objective indicators of performance, or metrics. Each category of the project management maturity model has one or more metrics to measure the ongoing performance of the category. For example, in Exhibit 2, the category “Schedule Development” has a metric of “Contingency Schedule Reserves.” Carefully selected metrics provide an unbiased barometer of performance, and are key to measuring the management process.
Assessment. The overall purpose of the maturity model is to provide a guide for companies that want to gain control of their project management, both on individual projects and in an overall, institutional context. Exercising control starts with an honest assessment of the “as is” condition. Like CMM, the PM3 is a tool for assessing project management effectiveness and constancy of purpose. Each category provides a manageable sized process for evaluation and the overall structure provides a framework for assessing the organizational context of project management. To facilitate establishing the maturity level, the model provides both narrative descriptions and a series of questions for each of the categories. Exhibit 2 also illustrates a typical set of questions. The majority of these questions are “scored” across a five-step maturity range. In many instances, the narratives alone are sufficient to grade maturity. Often, an individual who is familiar with a company's project management operations will read the descriptions and readily identify the level. Once the level is established, a histogram form is used to grade maturities, provide comments, and suggest corrective actions.
Like CMM, a PM3 assessment “grades” an organization's project management effectiveness. Many companies find that grading their maturity level helps motivate individual operating units to improve by creating peer pressure and establishing accountability for the underlying causes of poor project performance. Many organizations struggle with project cost and schedule problems without understanding that consistently superior performance requires consistently superior processes, systems, and culture.
Paradoxically, many companies that “live or die” with the success of their projects score-out at a nominal maturity level of 1 or 2. Historically, many of these organizations have been successful because of extraordinary individual efforts, operating within haphazard processes. Finding their supply of heroes diminished and past success hard to repeat, many are now striving to systematize project management, rather than simply encouraging heroics.
WHEN IT COMES TO improving project management, piecemeal approaches provide, at best, short-term benefits. Effective project management is the evolving interaction of process, systems, and culture. Addressing one aspect without considering the others produces little more than expensive frustration. Our core business is software. As a result, we've seen many futile examples of companies trying to “buy” a solution to inadequate project performance. Wouldn't our lives be simpler if improving project management were as simple as purchasing some new software, providing a brief training course, and capping it off with an admonition to “go forth and plan.” Of course, this approach never works and the maturity model vividly demonstrates why. ■
Paradoxically, many companies that “live or die” on the success of projects score-out at a maturity level of 1 or 2. Many of these organizations have been successful because of extraordinary individual efforts, operating within haphazard processes. Finding their supply of heroes diminished and past success hard to repeat, many are now striving to systematize project management, rather than simply encouraging heroics.
Ron Remy, senior partner at Micro-Frame Technologies, Inc., has over 20 years experience in engineering, manufacturing, and business operations. At Micro-Frame he is responsible for corporate best practices and process reengineering efforts. He is also an active member of PMI.
PM Network • July 1997
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