A PMO Standardized Practices and Upgraded Talent to Push an Aerospace Company to New Heights
BY MATT SCHUR
PORTRAITS BY JOE SCHMELZER
There's no room for error in the aviation industry: An aircraft's myriad components must work flawlessly no matter the altitude or weather. Since the dawn of the aviation age, Parker Aerospace has been engineering precision parts and reliable systems for the world's airplane manufacturers. When it delivers critical operating systems to the likes of Boeing, Airbus or the U.S. Department of Defense, those products must last for decades.
“In the aerospace industry, our product life cycle typically lasts 25 to 40 years,” says Barry Draskovich, PMP, vice president of program and contract management, Parker Aerospace, Irvine, California, USA. “So it's really important in the development phase that we get the profitability right—because that profitability [has] to last for a very long time.”
But inconsistent program and project delivery methods were causing cost overruns and missed deadlines, undermining Parker Aerospace's ability to chart and execute a growth plan. So in 2010, the organization—an operating group of Parker Hannifin Corp.—launched a program management office (PMO) to develop the practices, tools and talent required to deliver certainty around program execution and ROI.
This yearslong upgrade process has given Parker Aerospace on-demand insights into the health of projects, programs and the entire portfolio—which in turn has allowed teams to steer initiatives toward intended benefits, Mr. Draskovich says. “The PMO has emphasized not just completing projects to the satisfaction of our customers, but completing them in a profitable fashion to meet the commitments that we've made to the corporation and to our stockholders.”
Before the implementation of the PMO, Parker Aerospace had little visibility into the status of projects and programs. Equipped only with ad hoc spreadsheets, teams across the organization were executing projects with inconsistent processes. Delays and overspending were major problems.
“The last thing you want a project team to do is spend time determining, ‘How do I do this?’” says Dave Conlon, PMP, director, program management office, control systems division, Parker Aerospace, Irvine, California, USA.
To allow teams to concentrate on the “what”—the product and benefits to be delivered by a project—the PMO focused on the “how,” standardizing processes, tools and metrics across the organization. Early on, PMO leaders set their sights on deploying earned value management (EVM) to identify performance shortcomings in the portfolio. They quickly realized EVM would have to wait until the house was in order.
“After an evaluation of the organization's maturity, I knew that EVM wasn't going to be possible right away,” Mr. Draskovich says. “There were too many holes that we needed to fill before it would be effective.”
The team turned to PMI's A Guide to the Project Management Body of Knowledge (PMBOK® Guide) for help identifying ways to improve. The PMO implemented processes, tools and training supporting resource-loaded scheduling, risk management and the creation of work breakdown structures.
With a foundation in place that could generate meaningful project data, the PMO began rolling out EVM. The full organization-wide rollout began in 2014, and EVM practices continue to mature.
“Now accurate, reliable data comes together quickly, and it allows us to dissect the health of the project not only in the context of a program, but across the portfolio of programs that we have at Parker,” Mr. Conlon says. This visibility into project health drives accountability and reveals systemic problems. “Because of our ability to look into projects with great granularity, we have a higher level of accountability,” he says.
Armed with new insights into the health of initiatives, project and program teams can take swift corrective action to rein in overspending. Thanks to the power of EVM, one division within Parker Aerospace reduced cost overruns on its major development programs by 92 percent within a year.
PHOTOS COURTESY OF PARKER AEROSPACE
“By bringing standardized processes and tools within Parker Aerospace's divisions, the PMO ensures that we're all driving in the same direction and improves program execution and business results across the entire organization,” Mr. Draskovich says.
In addition to EVM, another major initiative to boost performance involved implementing more robust project and program schedule reporting processes. The PMO started measuring the completion of program “inchstones,” or tasks scheduled to be completed within a given week; larger programs might have up to 100 of these each week.
Prior to PMO tracking, in 2012, inchstone completion was roughly 46 percent. By 2015, it was hovering above 85 percent—and leading directly to tangible outcomes. In Parker Aerospace's fluid systems division, on-time delivery for a critical customer project increased from approximately 35 percent to 100 percent over a six-month period after tracking began. And in the gas turbine fuel systems division, PMO monitoring was critical to the on-time delivery of a combustion system to a major customer, resulting in US$22 million in subsequent contracts.
“When we execute our projects on time and on budget, our customers know what to expect from us,” Mr. Draskovich says. “With repeated performance, our customers will come back to us with additional opportunities.”
FLIGHT CREW TRAINING
The PMO's leaders know that these kinds of benefits aren't a simple product of new tools and processes, however. Teams need to be well-equipped with the right capabilities and a common language.
A Century in Flight
Parker Aerospace is nearly as old as aviation. Founded in 1917, it built parts to support the first flight across the Atlantic Ocean and the first moon landing. Headquartered in Cleveland, Ohio, USA, Parker Aerospace today makes everything from flight control, hydraulic and pneumatic systems to wheels, brakes and other components. These products are destined for commercial aircraft and military planes, helicopters, missiles and unmanned aerial vehicles.
160 Number of project and program managers at Parker Aerospace
5,800 Number of employees spread across seven operating divisions in 39 facilities across North and South America, Europe and Asia
Parker Aerospace's 2016 fiscal year revenue
Major customers include:
- The Boeing Co.
- U.S. Department of Defense (Parker has provided parts for Air Force One, the U.S. president's plane)
Size: 180 full-time employees
Annual PMO budget: US$180 million (2015)
Average project budget: US$80.5 million
At Parker Aerospace's PMO, that begins with requiring a Project Management Professional (PMP)® or a Certified Associate in Project Management (CAPM)® certification. In the 2011 fiscal year, only 15 percent of project and program managers at the company had either certification. By 2013, that rate shot up to 100 percent, where it remains today.
These certifications “allow us to effectively communicate with one another about what the expectations are and where we're headed with the execution of our program management processes,” Mr. Conlon says.
The PMO also emphasizes ongoing and targeted professional development. This takes the form of monthly shared experience forums, yearly individual competency assessments (relative to PMBOK® Guide Knowledge Areas) and a survey regarding practitioners’ understanding of PMO processes and tools.
A 2014 survey revealed that the organization's project and program managers needed to improve risk management skills. To develop those capabilities, the PMO has established monthly workshops bringing together people from various divisions: project and program managers, but also engineers and technical leads.
Workshop hosts walk through their own programs’ risks and mitigation plans in front of the group, and attendees help identify additional potential problem areas. “Bringing in more people helps teams to take action where needed,” says Duane Reyes, PMP, project manager, Parker Aerospace, Irvine, California, USA.
At the end of each session, project managers walk away with a more detailed risk register—and plans of action. These workshops have trained more than 280 people from 40 project teams and 22 sites since late 2014.
“The most important success of the PMO has been the way we've increased the competency levels of our people,” Mr. Draskovich says. “Without the people, you can have the best processes in the world, you can have the best tools in the world, but you're not going to be able to get the job done.”
READY FOR TAKEOFF
Boosting project and talent management practices has paid off for Parker Aerospace: It has won more than US$20 billion in new business over the last eight years. Throughout this period, the PMO also helped the organization adapt to a changing business environment by redefining when a project is truly over.
In recent years Parker Aerospace has evolved from simply a component supplier into a systems integrator. While this shifting role has helped to drive growth, it also has presented major challenges for the company: The product development process now often encompasses transitioning to production and entering into service.
To help identify risks and improve effectiveness in this “post-development” product life cycle, the PMO rolled out a major initiative two years ago: the production and support readiness (PASR) tool, which measures progress against 58 variables defined as critical to success. Support extends to the organization's ability to address issues once an aircraft is in service; Parker Aerospace needs to be able to respond to problems in a matter of hours—not days.
“The production and support readiness tool has really pushed us to get involved with more customer support aspects of what we do,” Mr. Reyes says. “The training and tools available now allow us to reach into parts of the organization we weren't necessarily comfortable with before.”
Deployment effectiveness of the PASR process and tool is measured on a five-point scale; one is “initial commitment” and five is “best in class.” In 2014, the PMO established a baseline reading of 1.5. By 2016, the number climbed to 3.5.
The improvements have been noticeable to clients. For example, Rolls-Royce awarded Parker Aerospace its Supplier Best Practice Award, noting that the PASR tool has been a critical element in reducing risks relative to the entry of propulsion engines into service.
“It's the PMO's job to establish the tools, procedures and training to enable Parker Aerospace to deliver on commitment to our customers,” Mr. Conlon says.
The PMO is driving deployment of best practices into the project team's daily standard work, creating a competitive advantage for Parker Aerospace, says Mr. Draskovich:
“We've established a benefits-focused mindset by directly linking project performance to business performance.” PM
LIGHTS, CAMERA, ACTION!
Check out behind-the-scenes videos of this year's PMO of the Year winner and finalists on PMI's YouTube channel.
CALL FOR AWARD NOMINATIONS Honor PMO excellence in 2017. Visit PMI.org/Awards.
JANUARY 2017 PM NETWORK
PM NETWORK JANUARY 2017 WWW.PMI.ORG