Developing your PMO roadmap
This paper outlines a comprehensive and practical framework for developing a roadmap to ensure that the project management office (PMO) is aligned to your business and optimized to deliver the most effective outcomes.
The PMO can have a profound impact on the success or failure of programs and projects, and indeed organizations. Through experience and consultation, we have found a method of defining a PMO Roadmap that is both effective and sustainable. Our aim is to share this framework with organizations to improve portfolio, program, and project management throughout the world.
This paper guides the reader through an assessment of the current PMO and identifies business drivers to give cause to the desired state. We then develop the desired future state and plan activities that are divided into PMO domains. These activities are plotted against a timeline and allocated to the previously defined business drivers. The roadmap is then tested and benefit measures agreed before the activities within the plan are executed. The cycle repeats for continual improvement.
With varying degrees of ruthlessness, organizations around the world are looking to drive efficiencies to remain competitive and retain or grow market share.
The world of modern project management has been in place for over 50 years and yet it seems we are still not quite at the point where enough business leaders understand the real value that improvement in projects, programs and portfolios can bring. According to a well-recognized annual PMO survey, The State of the Project Management Office (PMO) 2012 (PM Solutions, Inc., 2012) with 554 respondent organizations, 70% of them based in North America, the greatest PMO challenges are:
Although more than 87% of organizations now have a PMO (PM Solutions, Inc., 2012), how well these PMOs are functioning is another matter. The cited report has established that with higher portfolio maturity comes significantly higher performance, hence warranting investment in the PMO. Recently, with cuts being made in a hesitant marketplace, we find that PMO resources or the entire PMO, in some cases, is being disestablished. This is instead of alternative cost reduction measures, such as stopping an individual project. In most cases, this demonstrates a lack of understanding of the value of the PMO and related impacts. The paradox is that this is a key area where efficiencies will be born.
Approach to PMO Improvement
The PMO is complex and often misunderstood, and when the going gets tough, can be tossed aside. The PMO means different things to different people and is valued accordingly.
Practitioners and many executives understand that the PMO can be a pivotal success factor in the delivery of successful projects and programs. Standards and methods, such as the portfolio standards in Exhibit 1, for designing and developing a PMO are well documented. However, maintaining the effectiveness of your PMO is something that has been left to the consultants and practitioners to fathom out for themselves.
What is needed is a framework to follow that reinvigorates your PMO, bringing it from whatever its current state might be into a bright new world of success and happiness. Attempts to improve PMOs often fail because they are not comprehensive enough. They simply do not follow a robust framework.
This paper focuses on a framework to help improve your PMO. In our example, we consider a portfolio (management) office. You can equally apply the framework to project or program management offices, but the framework requires tailoring to the relevant context.
Maturity assessments from maturity models such as OPM3® and P3M3® (Exhibit 2), are great inputs to developing a PMO Roadmap but typically don't go far enough into detail to fully realize the potential path for a PMO to develop.
As we step through the framework in Exhibit 3 (this paper only has scope for the high level), we draw upon existing, commonplace techniques to build the PMO roadmap. Keeping the process simple and using readily known techniques helps to make the framework a success and one that many can use. Note that this paper addresses the existing PMO and not developing a new PMO.
Define Your PMO's Scope
Our first step is to determine what your PMO will deliver in the future. Care should be taken to align the ambition of the PMO with the maturity of the business within which it resides. We often find that the PMO is ahead of the business's views of how the PMO can support and add value to the business. An incredible amount of effort is spent trying to convince businesses of the value of a PMO, usually without complete success.
The PMO needs to align to the strategic goals of the business, providing the business understands or accepts that alignment.
As defined in the standards, your PMO requires a charter. So ensure that the charter is relevant to the business goals. If your PMO doesn't have a charter, one needs to be developed. You may want to wait until the end of this process to update or create your PMO charter. However, it is a useful input.
Next, we need to determine the future scope of your PMO, preferably based on PMI (Standard for Portfolio Management) or UK Cabinet Office (P3O®) standards and your organization's capability. We do this by defining domains for your PMO. Domains are functional areas of your PMO and can vary from PMO to PMO. You can use a work breakdown structure or decomposition technique to help you determine them.
These domains will help you define your current and future state as we progress through the framework.
Consider defining domains that help you manage up into your organization's executive and others that help you manage down into your programs and projects. Some domains will fit both models.
Example domains might be as described in Exhibit 5.
Developing Your PMO Roadmap – Define the Current State
Defining the current state of an entity or business unit has well-documented methods and approaches, especially from our friends the business analysts and their BABOK®. You can select your own form of documentation and approach if you wish, but we recommend you keep it simple.
Impartial honesty is the capability you now need the most. You also need to canvas opinion from various stakeholders and pull together as much factual information about the current portfolio, programs, and projects as you can find.
The key here is to ensure that you drive the right information from your analysis and assessment.
There are several sources of input to defining the current state of your PMO. As previously noted, a maturity assessment using models such as OPM3® and P3M3® will certainly help, as seen in Exhibit 7. However, it will most likely not be sufficient to deliver the detail you require to get the best from your PMO. Recording performance against a current PMO charter might also provide some value, but be careful that your charter is not out of date. A project management handbook, if your organization has one, can also provide input and inspiration for defining your current state.
Conduct a series of workshops, inviting relevant stakeholders for each domain (P3M – portfolio, program, project), and develop short, factual, and accurate statements about each domain. Ensure you invite a variety of stakeholders to understand different perspectives. See the two examples of current state in Exhibit 8.
Developing Your PMO Roadmap – Selecting Business Drivers
Each time we develop a PMO roadmap, we always try to seek out the key strategies that the business is currently driving. By aligning your roadmap activities to business drivers, you are more likely to get ownership from the business for the initiatives.
Driving cost efficiencies is often a key objective for an organization, since it is seen as improving return on investment and competitiveness. So where this is the case, identifying initiatives that will help drive cost efficiencies will please your senior executives. Exhibit 10 shows a few example business drivers.
Each activity on the PMO Roadmap will be given one or more business driver and a color code assigned enabling easy reading of the activities and which business driver(s) they support.
Developing Your PMO Roadmap – Defining the Future State
We are now going to define the desired future state for each of your domains. Having the business drivers in mind can be helpful at this time.
Ideally, you are an experienced portfolio practitioner or you have just gone to PMI's Registered Consultancy Program (http://www.pmi.org/Business-Solutions.aspx) and engaged an expert. A good understanding of your organization is key to taking each step on this framework from here.
You will also need input from those stakeholders that were so helpful in defining the current state.
Our preferred approach at this stage is another series of workshops. Ensure that you bring into each workshop the people who are relevant to each domain, making it an inclusive process and achieving ownership from these stakeholders at various levels of your organization.
It is important to get your workshop participants into the “zone” for defining the future state. Stimulate your workshop participants and get their left and right brains working together.
You might like to post some images on the wall of the workshop room and leave some manuals on the tables. Certainly, some research and thinking time prior to the workshops proves to be worthwhile.
Exhibit 12 provides some simple examples of what a future state might look like for those domains we used earlier. Note that there is no concept of time as yet and that future state is not always ‘end state’. Some Future State outcomes might turn out to be delivered before the end of your roadmap timeline once we have defined the activities and prioritized them.
Developing Your PMO Roadmap – Planning the Roadmap Activities
This is where your skills and experience will be tested to the maximum. Again, a workshop approach is recommended. Tackle each domain as a separate workshop or join smaller domains with the same stakeholders together. Workshops should not last more than two hours.
For each domain, determine the activities you consider best to take you from current to future states. Keep the level of activities fairly high or the exercise will take several weeks. These activities can be broken down further at a later stage. We need to determine the measurable benefits of these activities as we go. This will serve as a powerful tool when benefits are achieved.
Do not place the activities on the roadmap template (Exhibit 14) immediately. We usually use a simple spreadsheet to record the activities against each domain. Once they are all defined and prioritized, we then place them on the roadmap.
For ease, we often use MS Visio or Omnigraffle on the Mac for the template, and then convert it to PDF for printing, storing, and distribution.
The roadmap is configured for three customizable time periods. The time periods defined are the current year, the following year, and the next three years as a single timeframe. The graphic provides more space to year 1, as the activities here tend to be more detailed and better known. The space provided for year 2 is a little less, and space decreases again for years 3–5.
The left column of the roadmap document has a reddish background to reflect the traffic-light status of the PMO. This defines the current state. You may like to make this amber or green, depending upon your assessment of the current state! The right column of the roadmap document has a green background color to again align with the traditional traffic lights project managers often use. The right column defines the future state.
Usually we configure the roadmap as an A3-size page, so that it can be easily printed and posted on the wall or folded and carried around by key stakeholders. These pages make great laminated images for the office.
We usually develop a summary page of all domains on a single page, as per the example in Exhibit 14. This represents a great image for senior executives to understand. We also create a separate page for each domain, to easily identify the detailed activities.
When defining the activities to take the PMO from current state to future state, it is important to know that, in our experience, PMO managers are usually over-optimistic about the timeframes for completing the activities and achieving results. So consider being conservative in your planning.
The very exercise of stepping through the framework will excite your staff as they are involved in the workshops. Just going through the process will lift morale and re-energize the team.
Establishing the roadmap is also a great way to get started as a new PMO manager. You effectively baseline the status and set about improving it using a very structured approach and best practices from global standards. Then in 18–24 months, you can demonstrate the improvement you have brought about as you re-baseline.
Developing Your PMO Roadmap – Test and Execute the Plan
Remember to color-code the activities on the roadmap by the driver(s) they represent. This gives a good visual on what drivers are most prominent.
Another optional technique is to reserve the bottom section of the roadmap for benefits. The business usually gets quite excited about seeing tangible benefits on a timeline.
Before finalizing the roadmap you will need to define measures for the benefits you have decided you will achieve in the planning stage.
Before you go out and starting singing from the hilltops, get some one-on-one time with a few key stakeholders. Walk them through the final draft and test it on them. Does it reflect the most important areas of concern for them? Is the language pitched about right? Do they understand it as far as they need to? Is it providing the outcomes required?
Once it is tested, we are ready to launch. Presentations to your management team and your direct reports are appropriate. It is surprising how many organizations will do the hard work of defining their PMO roadmap and then not follow through and implement the activities they have determined are required to drive the improvement they sought at the outset.
In order to make sure this doesn't happen to you, define a program or project, assign a program/project manager (perhaps part-time), and make sure the benefits are driven out and realized. Get regular feedback from key stakeholders on the measurable improvements.
It is highly recommended that you develop a PMO handbook, if one doesn't exist. This will reduce the risk of your intellectual property in the PMO leaving with your PMO manager or staff within the PMO.
Make sure that you measure your improvements. Define the perceived benefits on the roadmap and record progress.
Developing Your PMO Roadmap – Continual Improvement
If you don't plan to repeat the improvement plan, it is highly unlikely you will achieve sustained success. Make sure that you have scheduled in the repeat exercise and provisioned any costs that may be incurred within the budget year.
Keep abreast of the latest information, research, and ideas by joining communities of practice such as PMI's PMO Community of Practice (http://pmo.vc.pmi.org/Public/Home.aspx).
If your organization has embarked on a P3M continual improvement cycle, such as through a project management maturity assessment model, incorporate the detailed PMO roadmap into that cycle.
Typically those more mature organizations are conducting project management maturity assessments every 18–24 months, some with great success.
Continual improvement plans are proven to drive cost efficiencies and improve outcomes.
London Underground's CFO reported in May 2011 savings of US$700 million over three years, rising to US$1.5 billion over five years due to repeated project management maturity assessments and improvement plans. New Zealand Treasury reported savings of up to US$378 million in project costs and up to US$3 billion of benefits leakage reduction (Avery, 2012).
In December 2010, the U.S. government launched TechStat (U.S. Government, 2012), an accountability review group to curb failures on large government IT projects. In its first year, the team claim to be responsible for saving the U.S. taxpayers around US$4 billion.
These examples demonstrate that driving improvements in project, program, and portfolio management can achieve significant savings and improvement.
Future Direction for PMO Improvement Plans
This framework has been developed over the past five years in Australia and is based on more than 20 years of work in the field. The client base has been wide, including government, finance, energy, civil and mining, engineering, retail, and telecommunications. It deliberately leverages existing tools and methods to align with best practices and keep it simple.
As a continual improvement tool, it also needs to continually improve. Feedback is welcome. It is hoped that, in the future, standards that define PMOs will include frameworks such as this, to continually improve the PMO and not simply to define the PMO in the first instance.
Avery, G. (2012, March 19). The return on investment of increasing practice maturity. Retrieved from http://www.pmi.org.nz/pmi/sites/default/files/Branch/Central/20120319%20The%20Return%20on%20Investment%20of%20Maturity%20Avery%20-%20Final.PDF
PM Solutions, Inc. (2012). The state of the project management office (PMO) 2012. Retrieved from http://www.pmsolutions.com/resources/view/the-state-of-the-project-management-office-pmo-2012/
U.S. Government. (2012). TechStat. Retrieved from http://www.cio.gov/techstat/
© 2012, David Wright
Originally published as a part of the 2012 PMI Global Congress Proceedings – Vancouver, Canada