Do you remember the hypothetical company that we wrote about in the October issue? They had just made an extensive effort to upgrade their tools and practices used to manage their projects. This included the acquisition of new software; Advanced Utopian Project Manager VII, and training of the two new Acting Assistant Deputy Project Planning Coordinators. The company, let's call it Global Ventures Ltd., even heeded our advice to extend the training and indoctrination to all of the personnel involved in supporting the system. So now they can feel comfortable with their expectations for successful implementation, can't they? No! Not quite yet.
There is a tendency to assume that all that we need to successfully implement a new set of practices is to set up the tools and support systems, issue a complete set of instructive documentation, and conduct orientation training. Although Global Ventures has done all of this, it will not be sufficient. They will require at least two additional functions. One such requirement is to issue a corporate directive, clearly defining what is expected of each participant in the project process, and how top management expects to support and monitor the process. This somewhat bureaucratic step is necessary to vigorously tie the new project management processes into the basic “way of life” of the company. It is also necessary to clearly show that the new processes are being implemented as part of the overall corporate strategy, and have the full backing and support of top management.
But this is still not enough. Directives are only effective if people believe that they are being enforced, and that there will be rewards for successful support and penalties for not doing so. In any organization, there are always multitudes of directives and instructions, some of which can even be in conflict. The choice of which of these gets supported (whether consciously or subconsciously) is often directly related to the degree that such support is recognized, either through a reward system, or as a condition of employment. The second requirement, therefore, is to establish a project management audit procedure, and a mechanism to implement the audit practice.
The purpose of the directive and the audit procedure is to further clarify the objectives and conditions of the new project management practices, to define the guidelines for their implementation, to state the milestones for this implementation, to establish measurement criteria for the attainment of quantitative and qualitative objectives, and to define a mechanism for the audits. As noted in Mr. Revay's article on the Project Management Overview, the audit practice should be more than a police function. The audit position should not only oversee the implementation of the project management practices, but should also be available to assist other personnel in understanding the practices, and in overcoming any difficulties in their implementation. The audit function, therefore, while being charged with independent assessment of the implementation, is also expected to be a positive influence on its success.
Mr. Stephen O. Revay, Jr, is Calgary Branch Manager for Revay and Associates Limited, Management Consultants and Construction Economists. Mr. Revay recently wrote an article in his firm's newsletter, The Revay Report, on the Project Management Overview. While the scope of this article was a bit different than the audit of the project management system, advocated above, his comments have a direct bearing on this subject. It should not be difficult to use Steve's excellent guidelines as a basis for developing a project management audit function, providing for assessment, support, and advocacy of your company's project management practices. A reprint of Steve's article follows.
Harvey A. Levine, President, Project Knowledge Group, (3.5 Barney Road, Clifton Park, NY 12065) has been a practitioner of project management for over 24 years with General .Electric Company and is a past Chairman of PMI. Mr. Levine has been Adjunct Professor of Project Management of Rensselaer Polytechnic Institute, Troy, N, Y., and is the author of the book Project Management using Microcomputers, as well as several articles.
In Ottawa circles “PMO” means “Prime Minister's Office” but in U.S. construction circles the abbreviation has become the latest buzzword and stands for “Project Management Overview,” In essence, it involves a periodic monitoring of the project manager and has application whether or not the owner has its own supervising engineering department or engages project managers, construction managers or general contractors to execute its projects. This article briefly describes the procedure, discusses its pros and cons, and offers a set of criteria as a basis for considering its suitability for a particular project.
In fashion somewhat akin to the old traveling medicine shows, recent American technical journals are advocating Project Management Overview (PMO) as the cure for what ails the construction industry. The extent of that illness has generally been demonstrated through the current proliferation of contractual disputes and their root causes, i.e., overruns in time and/or money.
There is little doubt that there is merit to the assertions contained within these articles. After all, PMO has been successfully used in the United States and is currently being used on several major U.S. Government projects. There is, however, equally little doubt that the concept of PMO is being exploited, by some, so as to generate work for the authors of these artitles and their firms without due consider-at ion to its cost effectiveness.
The following comments initially explain the principles of PMO and then discuss its advantages and disadvantages, Final comments will offer criteria for implementation.
OBJECTIVES
Conceptually, PMO is adjunct to project management with a view to overcoming the following common failings of many project management arrangements:
- Management cannot see the forest for the trees;
- Management decisions are biased by contractual commitments and/or corporate policy.
These problems can be circumvented by having outside personnel, with no inherent financial or organzational ties to the project or its progress, reporting directly to senior management on the status of the project and the effectiveness of the project team.
These individuals would be consultants independent of the firms associated with or responsible for the management, engineering, procurement and construction of the project, who-because of this independence—could offer an unbiased assessment of the performance of team members (those responsible for the aforementioned function) and of the tools and processes being utilized to meet project objectives.
There is of course nothing new about owners engaging independent consultants to perform such assessments. In the past, this exercise has been called” management audit.” What is innovative and different about PMO, however, is that this assessment is continuous throughout the life of the project and is intended to forestall problems-as opposed to being the consequence of a recognized problem. PMO is, as such, a preemptive, proactive approach to project management.
CRITERIA
For an effective PMO process, one needs to look at two further integral aspects of this concept. They are:
- reporting level;
- projections/forecasting.
April 1990