Breaking the PMO sound barrier
1. The Introduction
Project Management Offices (PMO's) over the past few years have had a difficult time gaining momentum in organizations and demonstrating real value and business benefits. Typically PMO's are perceived by many in the organization as administrative overhead and bureaucracy on projects that do not provide any tangible benefits in successfully executing projects “on time” and “on budget”.
We started our PMO journey in February 2010 with decentralized functional groups, inconsistent project standards and practices, and over half of our Information Technology projects in the portfolio (total of 53) requiring significant changes related to scope, schedule and/or budget throughout the lifecycle of the project. Do any of these PMO challenges listed below resonate with you and currently describe your PMO or projects?
1) Are internal and external stakeholders unclear on the role and responsibilities of your PMO? Is your PMO immature and advisory only in nature?
2) Are your projects struggling and constantly costing more than what was initially estimated / budgeted for, or taking significantly longer time than what was planned? Was this a shock to project stakeholders and/or the project sponsor?
3) Are project stakeholders and project sponsors not involved in risk management discussions and timely course correction?
4) Are resources inadequate and not available for projects or resource demand defined too late in your projects?
5) Are you struggling influencing project success and governing projects? Do you not have a consolidated view of your projects in your portfolio and do you not manage your project portfolio collaboratively with stakeholders?
6) Are you dealing with inconsistent templates and reports? Even on the usage of the word “yellow”?
7) Did you find that your Project Managers were burning out or frustrated because there was no clear path of escalation?
8) Did the lessons learned from previous years just disappear or not get applied or even looked at?
9) Did staff turnover significantly impact your PMO and its sustainability and did all the important knowledge leave with them??
If you answered “yes” to any of these frustrating but common PMO challenges then you definitely need to continue following our journey to gain valuable insights into strategies and tactics that you can leverage to help you overcome these PMO “disablers”.
The PMO journey is not for the faint of heart and requires tremendous commitment, patience and continuous change management and effective communication in order to overcome and conquer the many battles you will face in your organization and the challenging voyage ahead of you. Through our trials and tribulations we will share our journey and experiences with you and the many secrets we have found to help you break the “PMO Sound Barrier” in warp speed! Our team was successfully able to break the “PMO Sound Barrier” through various strategies and tactics deployed in Information Technology and across the organization. The team achieved a 92% success rate across the IT project portfolio (in excess of 50 projects) adhering to defined scope, schedule and budget commitments at a defined stage (Implementation Readiness) early on in the project lifecycle.
Are you ready to board our “wessel” as a famous sci-fi character would say – for your PMO Journey aboard the “Star Ship” PMO enterprise? Hold on tight, we are about to engage............
2. Proof the problem exists
According to PM Solutions and Gantthead's current 2012 research report of 554 firms regarding ‘The State of PMO's in 2012’, “The upward trend is unmistakable, both in the sheer numbers of PMOs and in their rising organizational clout”. In the 2000 research report “only 48% of companies had a PMO”, and in their 2012 research finding the percentage has almost doubled over the last decade to 87%. Percentage of organizations with PMO's over the last decade based on research findings in the report were:
2012 – 87%
2010 – 84%
2006 – 77%
2000 – 48%
The 2012 PM Solutions and Gantthead research report strongly supports the PMO challenges that our organization and team identified at the beginning of our journey in early 2010. The top challenges in this research report identified by executives as their two biggest aligned strongly to the initial challenges our team faced – “i) defining the role of the PMO and ii) demonstrating the value of the PMO”. Other significant challenges identified in this research report that correlate directly with the additional challenges we faced include iii) effective resource management on projects and across the project portfolio and iv) ensuring standards, practices and procedures are consistently applied across the portfolio. These top challenges in this most recent research report were identical to the key PMO challenges our team was faced with as we began our PMO transformation voyage in February 2010.
Other supporting PMO research was conducted by Planview in their 2010 PMO 2.0 Trending Survey, (downloadable at www.planview.com/PMOtrends2010), which had more than 550 organization survey respondents, and provides similar reinforcement to the PMO challenges our organization and team faced.
As can be seen in the Planview findings a large percentage of PMO survey participants were fairly immature in the implementation of consistent PMO processes, standards and procedures across their portfolios.
Another significant problem that is increasing in nature with PMO's and that we initially faced was that there was no well defined strategy or longer term plan for the PMO function. This is again supported in the Planview research.
Additionally managing the portfolio of projects in the PMO and review of projects and their approval are critical activities that often become overlooked by PMO's if they are not governed across the project portfolio. This is again supported by the 2010 Planview findings.
Also noteworthy to point out in these research findings are the planned 2011 activities PMO's will be undertaking which again aligned strongly to some of our teams key objectives and activities that were identified as part of our 3 year plan. We will discuss these planned activities in relation to our team's plan further on in this PMO journey.
3. Additional Problems
Ongoing studies of PMO's and project success specifically on Information Technology projects as well as research from other leading consultants and analyst firms, confirm that Information Technology PMO's are a very difficult and extremely volatile environment to manage projects and the overall portfolio. In addition another significant challenge is getting the many roles and different levels of the organization appropriately involved in their projects in a consistent and cohesive manner so that they can effectively support and sponsor their projects throughout the Project Lifecycle.
Our team has some additional insight on what strategies to employ to more effectively engage key stakeholders throughout a project's lifecycle.
In the early stages our team was also faced with secondary problems related to inconsistent and incomplete project and PMO standards and practices, ineffective project resource planning, poor forecasting processes, and limited performance measurement reporting was in place. As PM
Solutions indicates in their 2012 Research report and which aligns closely to the additional problem areas we focused on “PMOs plan to spend the coming year focusing on improving all their existing processes, with a particular focus on improving resource planning and forecasting (59%), and implementing or improving performance measurement reporting, analytics, and dashboard tools (54%)”.
Also gaining more attention and emphasis on projects is the topic of business change management. Organizations are starting to discover that taking a more complete approach to business change management significantly improves project success and assists in creating increased business value on projects. We will discuss the importance of effective business change management on our projects and our strategy we employed to ensure we supported change management requirements throughout the Project Lifecycle.
We will begin our journey and case study by discussing the “As Is” state of our Information Technology PMO and processes and conduct a 360 degree view of the way the PMO was initially perceived from both IT and business stakeholders, and how leadership was influenced by senior executives within the company to take significant corrective action. We will then provide context into the impetus for accelerating PMO governance and the maturity model, from a ‘walk’ before you ‘run’ approach to flat out sprinting with strong executive support and drive.
4. The First Steps
A current state assessment was conducted in the IT PMO in February 2010 to help determine improvements required to better support projects throughout their Project Lifecycle, to better define the PMO, and to improve project delivery success. The current state assessment of the Information Technology PMO and projects was developed through consultation with various project key stakeholders at all levels of the organization, to clearly identify gaps in an effort to build a suitable strategy and operational tactics to help Information Technology (IT) improve project delivery across the organization.
The following PMO assessment findings were developed and communicated to relevant project stakeholders:
- The Project Management Office had no clearly established role, was at an immature stage (level 1) and was perceived by stakeholders to add little or no value, and adding bureaucracy to the project management process
- Project management execution excellence on Information Technology projects was not predictable/repeatable
- The PMO was advisory in nature and had little influence over projects as they progressed through the Project Lifecycle, and provided little or no governance or oversight on projects in the portfolio
- No clearly defined PMO methodology and Project Lifecycle existed within Information Technology for monitoring and controlling projects in the portfolio
- There was inconsistent use of standardized PMO processes, procedures and templates & document version control on the PMO SharePoint site
- PMO processes, procedures and templates required significant administration, were not clearly communicated, required several stakeholder handoffs and were in dire need of streamlining
- Limited project resource demand management, capacity planning and allocation was conducted across IT and resourcing tended to be more reactive than forward looking
- Business change management was not clearly understood and integrated into the IT project management process and project key stakeholders had not been appropriately engaged or communicated with about their projects as they progressed through the five stage Project Lifecycle process
- The IT Project Portfolio Management (PPM) process was manual, adhoc, inefficient (excel based) and very labour intensive and automation across the PMO project lifecycle was lacking
- No standardized process was in place for PMO dashboard, reporting and analytics
- A standardized issue & risk management process was not been defined, and was not consistently reported on by Project Managers
- Project managers struggle with following PMO processes, procedures, templates as no consistent standards were communicated and little or no oversight or governance was in place.
The PM Solutions and Gantthead 2012 Research Report on “The State of the PMO in 2012” identify the top PMO functions that are required by organizations and they include:
- PMO methodology, standards, implementation and management
- Project policies, procedures, templates, implementation and management
- Project / program monitoring and controlling
- PM coaching and mentoring
- Project / program initiation
- Governance process implementation and management
- Multi-project coordination
- Project / program closing
- Project performance monitoring and controlling
- Dashboard / scorecard implementation and management
Top immediate priorities of PMO's as defined by their 2012 report include:
Improving resource planning and financial forecasting process
Implement / enhance core project / program management processes
Implement / enhance reporting analytics, dashboard tools
Implement / enhance governance processes
Implement / enhance performance measurement process
As can be seen in our PMO assessment findings the areas we identified as requiring improvement align very closely to these top PMO functions required and top immediate priorities identified above that PMO's should be focusing on.
The strategic method and tactics we used on our team to address these gaps will be discussed at our presentation at the PMI Global Congress in October 2012 in Vancouver.. One additional gap stakeholders also identified was the need for more effective portfolio management as the project portfolio grew to over 50+ projects. The need for including Portfolio Management as a key function within a PMO is strongly supported by PM Solutions and Gantthead's 2012 Research report as they conclude “as PMO's increase their capability, more of them engage in portfolio management, by successfully managing high-value tasks, they are entrusted with increased responsibility”.
5. Our Conclusion
At the PMI Global Congress in October 2012, 2we will discuss the “To Be” future state and design of the Governing PMO, roles and responsibilities, and the steps that were put in place “just in time” to help both business and IT stakeholders understand and apply the new framework and practices.
We will focus on a real life case study of a large Utility organization and the strategies and tactics that the team deployed to overcome their PMO challenges in Information Technology. You will learn how the team was able to transform an immature struggling advisory IT PMO into a strong governing, continuously improving maturing “best in class” PMO. Through strategic and operational tactics the team was successfully able to “break the PMO sound barrier” within a relatively short 18th month period of time. We will share with you our continuously evolving
Project Lifecycle, our continuous improvement framework and governance methodology we employed to effectively manage projects and our overall portfolio. The overall plan enabled us to move from a 50% conformance rate of baseline scope, schedule and cost defined at the Implementation Readiness stage gate to an impressive 92% conformance performance achievement.
We will finally discuss the lessons we learned from accelerating PMO governance and maturity, and what we would do differently now looking in the rear view mirror, the challenges we faced and the results that were achieved (the good, the bad and the ugly!). Business change management, shared project governance, key stakeholder impacts and establishing and monitoring metrics will also be discussed. The case study will show how you are able to accelerated PMO maturity and governance in an 18 month period compared to what we heard from colleagues taking as long as 3 years or more.
PM SOULTIONS (2012). The State of the PMO 2012, A PM solutions research report. Glen Mills, PA: PM Solutions.
Doerscher, Terry, (2010). 2010 PMO, Trending Survey Report. Austin, TX: Planview Inc.
© 2012, Carey Clenchy, MBA & Johnny Mo, PMP
Originally published as a part of 2012 PMI Global Congress Proceedings – Vancouver, British Columbia