Grow up already!--An OPM3® primer

Abstract

Organizational Project Management (OPM) is the alignment of an organization’s projects to its strategic goals. To support an initial implementation of and subsequent improvements to OPM, a standard called the Organizational Project Management Maturity Model (OPM3®) was developed by the Project Management Institute (PMI®). Specifically, this standard defines a methodology for implementing and improving OPM. It comprises a five-step iterative cycle that emphasizes assessment and continuous improvement. In the broadest sense, OPM3® is a maturity model. However, it is different from many other maturity models (such as the Capabilities Maturity Model - CMM) in that it defines a continuum of maturity as opposed to discrete maturity levels.

Model implementation can be facilitated through the use of the OPM3® tool developed by the PMI. The web-based tool consists of three embedded directories that analyze the domains of project management (project, program, and portfolio) for existence of industry recognized best practices and the level of implementation of the practices, both within the individual domains and among the domains to determine current level of maturity. The tool also provides guidance for improvement selection.

Successful implementation of an OPM3® program requires explicit buy-in by senior management, as they determine strategy and must provide insights into the objectives of the organization. Further, overall success potential is increased by taking advantage of the iterative nature of the model to garner successes by attacking ‘low hanging fruit’ in the initial iterations to build confidence in the process.

OPM3® can benefit organizations by ensuring efficient use of project resources and providing cost savings associated with elimination of projects that are not tied to the organization’s strategic goals. It can also enhance the prestige of project management in the organization by positioning it as a critical partner in strategic planning instead of administrative overhead cost.

As organizations evolve they go through phases much as people do. When they are young they are brash and often take foolish risks. As they grow older they learn what behaviors produce positive results, and what behaviors result in negative outcomes. If your organization has been pursuing improved project management outcomes, maybe it’s time it grew up already, and took advantage of the benefits this model can provide!

OPM3® Model Defined

The measure of an organization’s maturity is the robustness of its Organizational Project Management (OPM) infrastructure, which is how well it ties the management of projects, programs and portfolios to its stated strategic goals. The OPM3® model is a methodology for implementing and improving OPM. It accomplishes this goal through a five-step iterative cycle that emphasizes OPM assessment and continuous improvement. The assessment cycle focuses on the domains of project management (project, program, and portfolio) to determine the robustness of the OPM infrastructure of the domains both individually, and in the aggregate.

The OPM3® tool, which may be purchased from the Project Management Institute (PMI) facilitates the assessment process through the use of embedded directories that analyze the industry best practices and capabilities that make up the best practices, as well as adherence to A Guide to the Project Management Body of Knowledge (PMBOK® Guide) guidelines to determine the domain’s OPM infrastructure maturity level.

The model is implemented through a three-phase process:

  • Acquiring an understanding of the model and its implementation – Knowledge,
  • Comparing the current OPM infrastructure to a robust OPM infrastructure – Assessment, and
  • Determining which changes are feasible at the current time and implementing the noted changes – Improvement

Hence the initialism OPM3® was developed to represent the three-phase nature of the model.

Organizational Project Management (OPM)

The crux of the OPM3® model is the concept of OPM, which the PMI defines as the “systematic management of projects, programs, and portfolios in alignment with the achievement of strategic goals” (PMI, 2003, p. xiii).

OPM avoids a hierarchy of ‘levels of maturity’, as is presented in many other maturity models. Rather, the model views maturity as continuum (see Exhibit 1). The OPM3® model also recognizes that maturity level usually varies between the domains of project management (project, program, and portfolio.)

OPM Maturity Continuum (Graphic – PMI, 2003, p. XV)

Exhibit 1 – OPM Maturity Continuum (Graphic – PMI, 2003, p. XV)

The OPM3® model cycles of assessing and improving OPM are iterative. Management of projects, programs, and portfolios is evaluated not only for industry best practices but also for adherence to PMI standards regarding the project management processes (initiation, planning, execution, control, and closure), and the stages the processes exhibit (standardization, measurement, control, and continuous improvement) as enumerated in the PMBOK® Guide

The interrelationship between adherence to PMBOK® Guide standards for project management processes and their stages, and implementation of industry best practices provide the basis for an analysis of OPM. Projects, programs, and portfolios have both individual and shared project management infrastructures. The result of this dynamic is that OPM must consider both the variances between the domains’ adherence to standards and process improvement, as well as the synergies that are created for all domains when one of them enhances its OPM infrastructure. The OPM3® tool addresses this dilemma of domain interaction by using directories embedded in the tool to define best practices, current organizational capabilities, and roadmaps for improvement at the domain level.

Benefits of OPM3®

Successful implementation of an OPM3® program will yield the following benefits to the organization:

  • Leverage the organization’s project management infrastructure investment to advance its strategic goals. The ultimate test of OPM maturity is how well an organization can tie its project management operations to it organizational strategy. Many organizations invest heavily in project management infrastructure to ensure projects are completed on goal, on time, and on budget. These project management infrastructure improvements can provide good returns on the investment, especially if coordinated well at the program and portfolio level. This return is enhanced if OPM is practiced because when all projects are driven by the strategic goals of the organization there is both a synergy created through sharing of resources, and a savings associated with eliminating projects that are not directly tied to the organization’s strategic goals.
  • Enhance the ability to assess OPM through access to Best Practices information. If the OPM3® tool is used, the organization’s project management practices are compared to industry project management best practices through the tool’s best practices directory analysis. The best practices directory lists approximately 600 best practices, addressing the project management domains. By comparing the organization’s current implementation of best practices and robustness of the implementation to its embedded best practices, the directory can determine this aspect of OPM maturity level.
  • Report which Best Practices and Capabilities the organization currently demonstrates. The OPM3® tool performs a thorough analysis of the organizations capabilities relative to best practices and provides clear reports to determine areas of strength and areas of potential improvement.
  • Provide a roadmap for prioritizing and planning future improvements in Organizational Project Management. By analyzing the reports that the OPM3® tool provides and then measuring these against the needs of the organization, the organization’s management can determine which areas of potential improvement would provide the greatest return on investment.

OPM3® Domains - Projects, Programs, and Portfolios

OPM analysis divides the project management universe into three domains:

  • Project
  • Program
  • Portfolio

Each domain possesses defining characteristics and their interactions are an important aspect of OPM maturity analysis.

Project Management Domain

Project management represents the most basic of the three OPM domains. This domain encompasses individual projects. A project is temporary endeavor undertaken to create a unique product, service, or result. (PMI, 2004, p. 5). Adherence to PMBOK® Guide processes and existence of robust industry project management best practices at this domain will lay the foundation for a robust OPM infrastructure.

Program Management Domain

The second domain of OPM is program management, which refers to the management of projects that share similar business objectives. Program management has two major attributes that differentiate it from project management:

1)   Multi-project management, and

2)   Elements of ongoing operations, such as post deployment management of the products and services produced and deployed by the program (PMI, 2003, p24)

Successful Program Management processes must be instituted that meet the following objectives:

  • Take advantage of potential synergies between projects
  • Arbitrate between projects for the most effective use of shared resources
  • Manage expectations of the proposed benefits of the program.

The five process groups found in project management are also relevant to program management, but the interaction of projects creates coordination challenges. Robust project management process implementation facilitates program management process maturity; conversely loose control of project management processes significantly hinders the potential for successful program management. For example, program management is measurement driven, as program managers do not have the time to get into the day-to-day operations of the individual projects. If the ‘project control’ processes of the individual projects do not at least display the ‘measurement’ stage, it is unlikely that program managers will receive useful control metrics.

Portfolio Management Domain

The third domain of OPM is portfolio management. In this domain management of projects, programs, or both are combined to facilitate strategic objectives of the organization. The most significant difference between portfolio management and program management is that program management focuses on grouping projects based on interdependencies, whereas portfolio management is not concerned with relationship between projects or programs. Instead, portfolio management is focused on meeting the strategic goals of the organization.

Just as an organization may have a number of programs, to meet the needs of significant product offerings, an organization may also have a number of portfolios to meet substantially different organization segments. The key is to group portfolios by evaluation criteria. For instance an organization may have one operating unit that produces lighting products for the automobile sector, and another operating unit that produces paper products for office use. The strategic goals of the two units would be significantly different and each unit’s projects and programs would be in a different portfolio.

Key activities in portfolio management are as follows:

  • Translating organizational strategies into specific initiatives or business cases that become the foundation for programs and projects
  • Identifying and initiating programs and projects
  • Providing, allocating and reallocating resources to programs, projects, and other activities
  • Maintaining a balanced project portfolio
  • Supporting the organizational project management environment (PMI, 2003, p26)

The process groups found in project management and program management are relevant to portfolio management, but coordination challenges are larger. Just as program management success depends on robust implementation of project processes, the existence or lack of strong program management processes facilitates or hinders portfolio management.

The Interaction of Project, Program, and Portfolio Management Domains = The Organizational Project Management Process

The interaction of the project, program, and portfolio management domains constitute the OPM process for an organization. The OPM3® tool assesses the level of maturity of each domain and their impact on each other. This interaction determines the maturity of the organization’s OPM process by comparing the current implementation and robustness of the implementation of industry project management best practices to the best practices directory of the tool.

There is a hierarchy within domains that is defined by the inclusion of lower-level domains, specifically, portfolios comprise of programs, and programs comprise of projects. Although each domain has its own success measures, they share the overall presence of the five project management process groups. Further, the five project management process groups interact with their counterparts in the other domains. The implementation of the process levels in the higher-level domains depends on the implementation at lower-level domains. The tools for implementation of processes in the higher-level domains are developed in the lower-level domains. Figuratively speaking, the ‘house of strategic success’ consists of a foundation of Project process implementation, walls of Program process implementation, and a roof of Portfolio process implementation. (See Exhibit 2)

The House of Organizational Project Management – Interrelationships of the three domains

Exhibit 2 – The House of Organizational Project Management - Interrelationships of the three domains

Best Practices

A best practice is an optimal way currently recognized by industry to achieve a stated goal or objective (PMI, 2003, p. 13). Best practices evolve as organizations employ continuous improvement in their operations. Typically organizations that are more mature are always looking for better ways of doing tasks. Such organizations keep abreast of process changes by staying current with industry trends through trade journals and meetings, taking part in polls that share results with participants, contracting outside consultants to evaluate their operations, and being part of industry groups that fund research on process improvement.

Best practices are useful in the OPM3® process because they provide the following:

  • Benchmarks against which an organization can be measured to indicate current maturity.
  • Direction in training strategy development.
  • Measures for lessons-learned analysis.

The OPM3® model evaluates best practices by analysis of the following:

  • Capabilities – These are incremental steps that indicate the existence of a best practice. A best practice consists of two or more capabilities. For example, the best practice “Establish Internal Project Management Communities” has four interdependent capabilities: a) Facilitate Project Management Activities, b) Develop Awareness of Project Management Activities, c) Sponsor Project Management Activities, and d) Coordinate Project Management Activities (PMI, 2003, p. 17).
  • Outcomes – These are benefits that accrue to an organization as a result of a capability. The outcomes can be both tangible and intangible
  • Key Performance Indicators (KPIs) – These are metrics that are applied to determine whether a capability exists and to what degree, based on demonstrated outcomes.

Best practices are built on capabilities and capabilities tend to build on each other. It is this interdependency of capabilities that characterizes the evolving nature of maturity within an organization. That is, as an organization employs capabilities to its benefit, the growth of other capabilities is facilitated. The OPM3® model evaluates this reinforcing nature of capabilities when determining the extent to which best practices exist in an organization.

The OPM3® tool maps best practices by both domain (Project, Program, Portfolio) and stage (Standardize, Measure, Control, Continuous Improvement) in its reports to facilitate maturity analysis.

OPM3® Directories

There are three Directories in the OPM3® tool:

  • Best Practices Directory
  • Capabilities Directory
  • Improvement Planning Directory (PMI, 2003, p. 31)

The best practices directory lists approximately 600 Best Practices with a brief definition of each practice. It also indicates in which domain each respective best practice occurs and at which stage each respective practice occurs.

The capabilities directory lists, for each best practice, all of the capabilities that are displayed for that best practice. The capabilities directory includes a brief description of each capability, its corresponding outcome and KPI, as well as in which domain it exists. Although each capability has a specific outcome and KPI, a capability may exist in multiple domains.

The improvement planning directory lists all of the best practices, provides a brief description of each best practice, lists the capabilities that are required for each corresponding best practice to be present, and identifies for which domains and stages the best practices are displayed.

Although it is not a requirement to use the OPM3® tool to perform this analysis, the tool facilitates the analysis by providing access to the directories in a format that enables quick analysis and reporting. (See Exhibit 3)

To use the OPM3® tool, the organization representatives complete a Self-Assessment questionnaire. In turn, the tool processes the information provided in the questionnaire and produces reports that indicate the organization’s current position on the organizational maturity continuum from the project, program, and portfolio perspectives.

Access to the OPM3® tool and its directories also assists the Self-Assessment phase of OPM3® analysis. The three directories enable an organization’s representatives to better understand the degree to which each best practice is implemented within the corresponding organization. The OPM3® tool’s self-assessment questionnaire provides documentation and analysis of the current best practices implementation.

Initially the OPM3® tool was sold by the PMI in a CD format. Currently, the tool is available as an interactive online Web-enabled application. Organizations can purchase single-user or multiple-user accesses to the tool.

OPM3 Directories Examples (PMI, 2003, pp. 33 and 34)

Exhibit 3 – OPM3 Directories Examples (PMI, 2003, pp. 33 and 34)

The OPM3® Cycle

The OPM3® cycle consists of five steps:

Step 1: Prepare for Assessment

Step 2: Perform Assessment

Step 3: Plan for Improvement

Step 4: Implement Improvement

Step 5: Repeat the Process (PMI, 2003 p. 36)

Step 1: Prepare for Assessment

Step 1 in the OPM3® cycle entails knowledge of the OPM3® model, which is described in detail in Organizational Project Management Maturity Model, Knowledge Foundation, (PMI, 2003). The directories included in the OPM3® tool provide an excellent reference on best practices and capabilities, and supply a guide to improvement programs. It is also important to have an understanding of project management standards as described in A Guide to the Project Management Body of Knowledge (PMBoK® Guide) (PMI, 2004).

The person who is directing the OPM3® implementation effort should have a thorough understanding of the OPM3® model and the tools used in its implementation. Team members should be comfortable with the OPM3® model concepts and requirements.

Step 2: Perform Assessment

Step 2 in the OPM3® cycle is to perform an assessment of the organization’s current maturity level. As part of this step, two assessments are completed, a high-level view and a comprehensive assessment.

The high-level view employs a questionnaire methodology to determine what best practices are currently implemented by the organization being evaluated in the domains of project, program, and portfolio, and what stages exists in those best practices. One method of accomplishing this view is through the use of the OPM3® tool functions. The embedded questionnaire enables this analysis to proceed quickly. The OPM3® tool produces reports that indicate overall organizational maturity, and that identify areas of strength and weakness within the organization.

The comprehensive assessment phase of this process requires that further analysis of the high-level view be performed with a focus on capabilities. Best practices are analyzed to determine existing capabilities’ stages as well as to identify which capabilities are not currently present. This analysis uses the OPM3® tool improvement planning directory to identify which capabilities are present and the capabilities directory to determine stage attributes.

When this step is completed the organization knows the following:

  • What capabilities currently exist in the organization and at what stage the capabilities demonstrate
  • What capabilities do not exist in the organization
  • The importance of the individual capabilities to the organization

Step 3: Plan for Improvement

Step 3 of the OPM3® cycle uses the information gathered by the completion of Step 2 that identifies areas that need improvement. In most cases, a given organization cannot address all of the issues noted in the comprehensive assessment because of resource constraints, the fact that many capabilities build on the existence of prior capabilities so they can’t be addressed simultaneously, or both. To address these issues an organization will need to employ ‘organizational maturity triage’ as a part of Step 3. Improvement efforts should only be undertaken if the following criteria are met:

  • The improvement pursued has a high probability of being completed successfully. The OPM3® model is an iterative process; initial passes should emphasize harvesting low-hanging fruit. Success encourages future iterations, whereas failure during early iterations can result in the entire program being shut down.
  • The capabilities to be improved or implemented have direct ties to organizational strategy. Organizational maturity by its definition enhances successful completion of strategic objectives. Capability improvement efforts must reflect this emphasis.
  • The benefits of a given improvement can be realized quickly. Especially in the early iterations, proof of concept is important for organizational acceptance of the OPM3® model.
  • The cost is acceptable to the organization. A capability improvement that will cost more than the organization is willing to spend is doomed to fail because the funds will not be there to enable success.

The OPM3® model is unique among models in that it does not have rigid levels of maturity hierarchy. It recognizes that a given organization will embrace organizational maturity only if it sees solid results. Consequently, the strategy for a successful OPM3® implementation must employ tactics that exploit the iterative nature of the process to ensure successes that will encourage continuous improvement.

Step 4: Implement Improvement

Step 4 of the OPM3® cycle implements the improvements chosen in Step 3. Most of these improvements will end up being projects themselves and an understanding of PMBOK® Guide methodologies will enhance successful implementation.

As was noted previously, organizational buy-in is imperative to the success of the improvement effort. When possible, priority should be given to projects with shorter timeframes. This can help to minimize the possibility of a change in strategic direction or of organizational leadership diminishing the need for, or commitment to, the improvement.

Step 5: Repeat the Process

Step 5 of the OPM3® cycle formalizes the iterative nature of the OPM3® model. When improvement projects have been completed successfully, an organization can do one of the following:

  • Go back to Step 2: Perform Assessment, and re-assess where it now is on the Organizational Maturity Continuum, or
  • Go back to Step 3: Plan for Improvement, and determine which capability enhancement or new capability establishment would best serve the strategic interest of the organization.

Which choice makes the most sense usually depends on the amount of time spent in implementation of the previous improvements:

  • If the improvement(s) that was just implemented has taken a number of months or has had a large impact on the organization, it would be more useful for the organization to perform a reassessment.
  • If the improvement(s) was completed in a relatively short period or did not have a major impact on the structure of the organization, the organization would be better served by implementing the improvement that was noted previously as providing the next largest benefit to the organization.

OPM3® Model Vs Other Maturity Models

The main difference between the OPM3® model and other maturity models is that the focus of most maturity models is consistency of product achieved by progressing through a hierarchy of levels. Conversely, the OPM3®model emphasizes alignment of project, program, and portfolio results with the organization’s strategic objectives achieved by continuous improvement through the adoption and enhancement of best practices. Comparing the OPM3® model to the following popular maturity models highlights this difference

  • Capability Maturity Model – CMM
  • People Capability Maturity Model – PCMM
  • Six Sigma

OPM3® Vs CMM

The goal of the Capability Maturity Model is to produce consistent products and consistent support for products through an evolutionary process of continuous improvement. This model postulates that organizations evolve through five levels (Value Based Management.net, 2006):

  • Level 1 Initial – ad-hoc processes are employed based on the strength of individual team leaders.
  • Level 2 Repeatable – basic processes are informally established and more or less followed.
  • Level 3 Defined – documented processes are standardized and integrated into daily operations.
  • Level 4 Managed – process adherence is measured through established metrics and evaluations are based on these metrics.
  • Level 5 Optimizing – continuous process improvement is practiced and documented; organization culture is continuous improvement.

OPM3® Vs PCMM

This model is similar to OPM3® in that it acknowledges that organizational maturity is an evolutionary process and that growth is achieved through continuous improvement. It is different from OPM3® in that it does not tie maturity to achievement of strategic objectives, and also that it is based on a hierarchy of levels as opposed to an iterative process of improvement.

The goal of the People Capability Maturity Model is to improve ability of organizations to attract, develop, motivate, organize, and retain the human resources needed to continuously improve the product development capability. Like the Capability Maturity Model, whose framework it has adapted, it is comprised of five ‘levels of maturity’ (Curtis, Hefley, & Miller, 2005):

  • Level 1– ad hoc management of employee processes are used based on the strength of individual team leaders and the HR department.
  • Level 2 – key process areas focus on the work environment, communication, staffing performance, training, and compensation.
  • Level 3 – key process areas focus on skillset improvement, competency improvement, competency based work practices, and enhancing a participatory environment.
  • Level 4 – key process areas focus on mentoring, team building, organizational competency management, and enhancing organizational performance.
  • Level 5 – key process areas focus on continuous improvement in the areas of personal competency, coaching, and innovation.

The PCMM is adapted from the CMM as such the similarities to and differences from OPM3® are similar. The area of unique difference between them is that PCMM focuses exclusively on improvement at the human resource level.

OPM3® Vs Six Sigma

Six Sigma is often characterized as a quality improvement initiative. However, its impact is on enhancement of organizational maturity. As such, it is in effect, a maturity model. The goal of Six Sigma is implementation of a measurement-based strategy that focuses on process improvement and variation reduction. This goal is accomplished through application of process cycles (iSixsSigma, 2006, ¶ 3):

  • For process assessment and improvement - define, measure, analyze, improve, and control (DMAIC)
  • For new process or product development - define, measure, analyze, design, and verify (DMADV)

The Six Sigma model is similar to OPM3® in that it is an iterative process focused on continuous improvement. However, it is different from OPM3® in that it does not tie explicitly to the organization’s strategic objectives. Further, it is metric centric in its deployment.

OPM3® Dos and Don’ts

OPM3® Model implementation Dos include the following:

  • Do have a through understanding of the organization’s strategic objectives.
  • Do define project, program, and portfolio goals explicitly in terms of the organization strategic goals; In other words, this project (program; portfolio) will meet the following strategic goals of the organization: Goal 1, goal 2, and so forth.
  • Do get an explicit buy in from senior management on the program implementation.
  • Do have a senior-management champion who endorses explicitly the implementation.
  • Do start with ‘low hanging fruit’ and become more aggressive in implementing improvements, as the organization perceives results.
  • Do have a through understanding of the organization’s culture and tolerance for change before you develop an implementation plan, and address any objections both up front and explicitly.
  • Do have the program planned and managed by employees who will have an on-going commitment to continuous improvement.

OPM3® Model implementation Don’ts include the following:

  • Don’t plan the roll-out in secrecy and without soliciting potential objections from organization members.
  • Don’t assume that senior management will support OPM3® because it is in the organization’s best interest.
  • Don’t ignore organization politics.
  • Don’t outsource the project to a consulting firm; it’s okay to use consultants to help in their respective areas of expertise but organization employees must do the ‘heavy lifting’.
  • Don’t try to make major organizational changes in initial iterations.
  • Don’t plan improvements that do not have budget commitments.
  • Don’t attempt an OPM3® implementation without thorough knowledge of both the OPM3® model and the organization culture.
  • Don’t assume OPM3® will be a ‘quick fix’ for the organization’s problems.

Conclusion

The OPM3® model is an excellent methodology for usage in aligning an organization’s strategic goals to all of its corresponding projects. This alignment enables the organization to run its projects more effectively and to realize savings by identifying and eliminating projects that do not fit the organization’s strategic goals. Implementation of the OPM3® model also raises project management from an administrative overhead role to a strategic planning function, thereby enhancing the prestige of project management in the organization.

Curtis, Bill, Hefley, William., & Miller, Sally (2005) Overview of the People Capability Maturity Model. from http://www.sei.cmu.edu/publications/documents/95.reports/95.mm.001.html

iSixSigma (2006) Six Sigma – What is Six Sigma Retrieved on June 10, 2006 from http://www.isixsigma.com/sixsigma/six_sigma.asp

Project Management Institute. (2004) A Guide to the Project Management Body of Knowledge (PMBOK®) (Third Edition). Newton Square, PA: Project Management Institute

Project Management Institute. (2003) Organizational Project Management Maturity Model (OPM3 ™) knowledge foundation. Newton Square, PA: Project Management Institute

Value Based Management.net. (2006) Capability Maturity Model from http://valuebasedmanagement.net/methods_cmm.html

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2006, Pete Matassa
Originally published as part of 2006 PMI Global Congress Proceedings – Seattle Washington

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