Implementing a PMO with an OPM3™ roadmap

Introduction

The new Project Management Institute (PMI®) Standard, OPM3™, is a great opportunity to expand the project management best practices to the entire organization. However, at a project manager level, selling the idea of applying an organizational project management concept, and successfully implementing it through a Program Management Office (PMO), can be a real challenge. This paper takes a case from the construction industry to illustrate how the beta version of OPM3™ was used to get the senior executives to buy in, to gain ownership of the improvement plan at all levels of the organization, and to stimulate exchanges of knowledge on PMO best practices between this organization and leaders of other industries.

The concept of using an OPM3™ roadmap for a PMO implementation was viewed as a possible stepping-stone to demonstrating the value of organizational project management. To position a PMO within the organization is not an easy matter. It was assumed that OPM3™ diagnostic tools could be used to define the gap that the PMO had to fill at a program level, and to define an incremental roadmap for acquiring the desired capabilities. Another challenge was that the project was initiated at a project management level: getting senior executive buy in was the main issue.

The paper will first present the background for the PMO implementation, a Canadian public works body responsible for realizing a major construction program and the context in which OPM3™ was brought up to sell the idea of a PMO. It will then explain why and how OPM3™ was used to outline the organizational project management gap between the existing maturity and the one required to manage a program. It will also describe the implementation strategy that was prepared to meet a very restrictive timeframe and an unexpected result, the creation of a community of practice (CoP).

The Background

Having a PMO manage a program is very unusual in the Canadian Construction industry. This industry, once a leader in project management, is now lagging seriously behind (Winch, 2002). This situation is explained by a fragmented, undercapitalized industry. The consequence: there is no leader with enough money and market share to support and impose best practices and tools on the industry. There is also no incentive to improve: choices are based on the lowest bid; innovation is considered as an added risk.

This project is part of a research effort to bring this industry up to date with project management best practices. The value of a maturity model to trigger and manage change has been recognized in some research projects (Sarshar et al, 2004). The missing drivers were:

  • The absence of a robust maturity model applicable to construction peculiar characteristics.
  • The absence of a strong leader caused by the fragmented nature of the industry.

The future OPM3™ standard, with its PMI strong back up and its advertised reach, flexibility, scalability and link with A Guide to the Project Management Body of Knowledge (PMBOK® Guide), was identified as a potential model that could fit with the industry characteristics. The lack of leadership in bringing change in a fragmented industry can be addressed by taking a new perspective on how the construction value chain is managed. The possibility of a dominant role for the client in the management of the construction value chain is not taken into account in this statement of a fragmented industry. There are very strong leaders on the client side and our assumption is that one of these strong leaders has the power to impose changes on the rest of the industry that will improve their maturity. For example, in the United States, Department of Defense, a software development big client, was the main driver behind the application of the Capability Maturity Model to improve this industry maturity.

This is the reasoning behind the choice of a major program undertaken by a large public organization with the biggest real estate portfolio in Canada to experiment with OPM3™ as a tool to help improve the construction industry maturity. The client for the program is the Canadian Parliamentary body. It comprises the Senate, the House of Commons and the Library of Parliament. The organization, Public Work and Government Services Canada (PWGSC) has a dedicated business unit Parliamentary Precinct (PPD) to provide real estate services for this client. PPD is responsible for realizing the long-term vision and plan (LTVP) for the Parliamentary Precinct (the pre-eminent symbol of Canada's history and traditions). The LTVP goal is to transform this historic landmark, so that it accommodates parliamentarians and their staff in the 21st century, while preserving and enhancing the symbolic presence of parliament and its environment, for all users.

The LTVP has been developed using traditional architecture planning processes: establishing a Brief to describe functional and building retrofit requirements and deriving from them a series of projects organized in phases. The phased execution of this 25-year program with a budget of $2 billion began in 2001 and includes new construction and renovation projects. In this process, described in Exhibit 1, each project is assigned to a project manager who has to follow a project-focused management methodology: the Project Delivery System (PDS). Projects are therefore handled individually, and performance measurement at a program level is non-existent.

Initial LTVP delivery process

Exhibit 1: Initial LTVP delivery process

The problem behind this process stems from the fact that the PDS was limited to project governance. There is no process in place for tracking project performance at a program level, apart from the financial metrics used to measure the cash flow. Without a requirement baseline at a program level, there is no tracking of changes in the project requirements during execution of the LTVP. With the dynamic of governing a country, changes occur in time. These changes are handled not at the program, but at the project level, whereby creating delays. Because most projects are closely interlinked, a change in one project may impact subsequent projects, requiring additional scope and schedule adjustments. This results in important deviations from the original LTVP.

The proposed LTVP delivery process (eExhibit 2) adds an organizational project management (OPM) dimension, a program governance capability. Here, a program baseline is defined, and project performance is measured not only at a project level but also at a program level. If a change is requested in the PPD strategy, alternate scenarios can be conducted, impacts and risks identified and decisions can be made to adjust the program in a timely manner.

proposed LTVP delivery process

Exhibit 2: proposed LTVP delivery process

Building the Value Proposal

The question is: what makes a value proposal convincing? Thomas, Delisle, Jugdev (2002), pinpointed in their study some reasons why selling project management to senior executives could fail. They also identified some success factors in selling project (program) management, such as:

  • Framing investment in project management as a senior executive decision, providing supportive evidence and facts.
  • Presenting project management as uncovering issues and defining solutions.
  • Packaging arguments in executive language.

PPD senior executives are accountable for the LTVP performance. There was strong supportive evidence of the lack of program performance: the plan execution was plagued with scope shifts, cost and schedule overruns. The issue, as mentioned earlier, was the absence of proper program tracking to measure program performance and to provide information for decision making and for adjusting the plan. The challenge was to outline a feasible and attractive solution. Attractive, in senior management language, means a small-investment high-return solution. Because the project takes its origin from the project management level, funding for the value proposal could be problematic. Some organizations occasionally offer programs to stimulate innovative behaviour. In this case, funding was granted from the PWGSC Innovation program for a proposal to investigate the opportunity to derive an integrated program management system from existing best practices and tools used in leading-edge industries

The proposal was based on the assumption that a PWGSC procurement service, Major Project Service Line (MPSL), which carried the management of some National Defence and Forces Canada (DND/FC) major projects, had the knowledge and technology that could be transferred or adapted to enhance the PDS. This group had expertise not only in program management, but also in leading edge Enterprise project management and requirement software accessible through an extranet.

The value proposal was constructed around the result of the collaborative research project that proposed an integrated program management system concept of operations, constructed around the PWGSC Project Delivery System enhanced with data, configuration and requirement management processes, and automated with Enterprise project and requirement management software. The selling package included a mock-up illustrating the means by which the program could be managed, and information for decision making could be made accessible. It showed how the executives could have a 24/7 view of the LTVP program status, main issues and risks, and how easy they could drill down to a project's specific issues, at a click of a mouse.

The goal was to get upper management attention on the benefits of managing the LTVP at a program level. The objective was to get the authorization to proceed with a business case to demonstrate the feasibility of the project i.e. to confirm that it was a proportionally low investment high return solution. With the mock up, senior executives had a clear idea of what they could get. The concept of operations, built using the expertise developed by MPSL while managing (DND/FC) major projects, provided confidence to go further. The proposal included a recommendation to create a PMO in the organization.

Building the PMO Roadmap

The PMO represents a clear deliverable to senior executives by providing a palatable result, something new in the organization that can confirm their contribution. It also provides an anchor to the program governance model, the first step in introducing organizational project management. As mentioned earlier, the plan was to use a maturity model, OPM3™, to define the actual and desired state and to map the processes that will connect these two steps. Using an OPM3™ beta version to help draw the PMO implementation roadmap conveyed nonetheless a fair amount of uncertainty. There was no background to judge the tool's capabilities and readiness, in its beta version, to deliver what it was designed for:

  • To help users understand and appreciate organizational project management and its value in the execution of the organizational strategy.
  • To help organizations understand organizational project management and its potential importance to every aspect of their operations.

The roadmap also had to consider senior executives' desire to show results in a very short timeframe which, in the government terminology, is the end of the fiscal year. A main expectation was having the PMO in place by that time. This meant a 9-month timeframe to build the roadmap and to deliver a PMO that was up and running: a great challenge, bearing in mind that neither the senior executives nor the appointed planning team had a clear grasp on the roles and characteristics of a PMO. The plan was to divide the PMO project into 3 phases: feasibility; planning; and implementation.

Feasibility

The goal of the feasibility phase was not only to get upper management commitment and funds to implement the PMO, but also to agree on the project scope and expected results. The go ahead for the feasibility coincided with the start of the beta version OPM3™ testing. Testing, the first step consisted of assessing the current maturity using the high-level diagnostic tool. It produced the result shown in Exhibit 3, which was interpreted as follows:

  • The organization had project management standards (PDS) but they were not systematically applied.
  • The organization had some project and portfolio capabilities but program capabilities were close to none.
  • The organization did not have the capability of measuring and controlling project or program performance.
OPM3™ High-level diagnostic results

Exhibit 3: OPM3™ High-level diagnostic results

According to the OPM3™ construct, in order to efficiently manage its program, PPD had first to acquire the capabilities that were missing to measure and to control processes at a project level; after that, to develop the same capabilities at a program level. PPD also had to define and standardize the program processes. The gap was larger than expected, the organization's maturity was rather low, and so the number of capabilities to acquire was quite large. It was decided, for the business case, to focus on delivering capabilities related to senior executives' main expectations, i.e. to be able to make decisions based on program cost, schedule and risks, and to postpone the OPM3™ comprehensive assessment to the planning phase. To confirm the value of moving to a higher maturity, data derived from SEI, CMM was used, showing benefits of achieving a ROI that could exceed 7:1 (Sarshar et al, 2004) and a 2:1 increase in productivity. The amount of the investment was to be kept low by:

  • Reallocating and training PPD staff.
  • Using already owned MPSL expertise plus their Enterprise project and requirement management software.

The senior executives responded favourably to the business case. The Architecture & Engineering Director was appointed as the sponsor, and a project manager was assigned the project of delivering the PMO. However:

  • Neither the senior executives nor the appointed project manager had a clear grasp of the roles and characteristics of a PMO at that time.
  • None of the project resources were appointed on a full-time basis.

One can realize that while moving to the next phase, the level of uncertainty for this project was still very high: the implementation of the PMO would require major changes to the organization; these changes had to be conducted with untrained, part-time resources; senior management was not in control of the issues and solutions proposed, there were a lot of unknown about the OPM3™ beta version usability for devising a PMO implementation roadmap; the timeframe was very short.

Planning

The goal of the planning phase was to prepare the PMO implementation project plan. The objectives were:

  • To develop sponsor and planning team ownership of the project.
  • To define the capabilities roadmap.
  • To communicate the proposed changes and to get the buy-in from all the stakeholders.
  • To demonstrate how the project management tools were going to be used for tracking and reporting at the project and the program levels.

The main issues were:

  • Moving from project to program governance.
  • The complexity of the OPM3™ comprehensive assessment tool.

Moving from a project to program governance model required, in this case, major changes in the method of doing business. The PMO entity had to be introduced in an existing PPD structure, people's roles and responsibilities modified, and new tools and processes introduced. As shown in Exhibit 4, managing such changes is a matter of simultaneously addressing people, tools and process issues. The strategy was two-folds: to capitalize on lessons learned from organizations that had achieved outstanding results dealing with the capabilities related to the 3 areas of focus, and; to use a series of workshops that constituted milestones in defining process requirement for each area of focus. Learning from the success of other organizations helped build sponsor confidence in the PMO benefits, and team understanding of the PMO nuts and bolts; the workshops gave the team focus on specific deliverables and gave them an effective reality check by the stakeholders on their assumptions and what was required.

Proposed change framework

Exhibit 4: Proposed change framework

In the OPM3™ process, the comprehensive assessment tool had first to be used to identify the missing capabilities and to select which ones the organization wanted to implement. Then, the improvement plan could be mapped. The plan was to use the requirement management software as a tool to track the implementation of the capabilities. It proved to be unmanageable in realizing the planning phase in the short timeframe. The chosen alternative was to use the OPM3™ directories sparingly as references for validating minimum capabilities required for managing cost, schedule and risk.

The main lesson learned from other organizations was that moving from project to program governance was the toughest issue. This seemed to be the main cause of delays in implementing a PMO in other organizations. It was the reason why the governance issue was brought to the fore at the first workshop. It was also during that workshop that the planning team asked the sponsor to be responsible for leading the governance issue while the team was to focus on processes and tools, as shown in Exhibit 4.

The main deliverables for this phase were: a set of high-level program processes covering the areas of focus; a program governance framework, a proposed dashboard and reporting system, and a high level demonstration of the system capabilities in managing project interdependencies and in preparing “what if” scenarios. The latter was the main value statement: the capability to get rapid and accurate impact analysis in requested changes for the delivery of the program while having a real time status on the program health.

Implementation

The goal of the implementation phase was to have a PMO up and running that could deliver high-end information for decision-making. The objectives were:

  • To have program processes completed and approved.
  • To upload all the project schedules and to complete tests and validations.
  • To train staff.
  • To complete the tracking and reporting system.

Major changes in the PWGSC organization and processes disrupted the PMO implementation process. Under the Treasury Board pressures, PWGSC created a new entity that would be responsible for all its major crown projects. The LTVP being the most important PWGSC major project, PPD organization was drastically impacted at the senior executive level by this overhaul: key players left, such as the PMO sponsor, the LTVP director and PPD executive director.

Conclusion

It is worth saying that, even if the PPD PMO implementation was heavily impacted by major organizational overhaul, its value was recognized throughout the entire department and plans have been made to replicate the model within other PWGSC business units. However, the PMO has to start from square one in gaining back the new senior executives buy-in and leadership. Nobody could predict the impact of losing the implementation momentum on the success of the PMO.

Notwithstanding this fact, the project provided significant insights on how OPM3™ could be used or enhanced to better support the implementation and operation of a PMO. OPM3™ beta version was very useful in diagnosing the organization maturity at a high level. However, the comprehensive diagnosis required too much time: to be successful, the PMO implementation had to show quick results (Crawford, 2002). Doing a comprehensive diagnosis and roadmap can take months, and the results may not be that convincing for senior executives.

The project also showed that using a bottom-up approach to sell organizational project management requires the development of skills and competencies not expected from even an experienced project manager. The project manager has to adjust to a paradigm shift: moving from horizontal to vertical management. It also has to address risks and uncertainties both at a project and at a program level. In this case, the project managers had to develop new skills while planning and implementing the PMO, which was a difficult task. Learning from other organizations helped to accelerate this process.

An unexpected result from the process of sharing knowledge with other organizations was the creation of a PMO community of practice. As a matter of fact, organizations can learn and improve from their projects, but this is much more difficult with a PMO, often a one-of-a-kind project. The experience with PPD showed there was a strong need for learning from other organizations and sharing best practices in this field. A CoP may be a good way to gather information and success stories that will help to convince senior executives. Sharing information about OPM3™ at a program level will also accelerate its adoption and provide useful insights for the revisions of the standard. Finally, the development of a program-management competency framework was identified as a need which will be addressed in a research project

References

Crawford J. K. (2002). The strategic project office. Marcel Dekker Inc. New York

Project Management Institute. (2003) Organizational Project Management Maturity Model (OPM3) Newton Square PA: Project management Institute.

Sarshar M. et all (2004) Standardized Process Improvement for Construction Enterprises. 18/8/04,

http://www.scpm.salford.ac.uk/spice/.

Thomas, J. L., Delisle, C., & Jugdev, K. (2002). Selling project management to senior Executives: Framing the moves that matter - A research monograph (1st ed. Vol.1). Newtown Square, Pennsylvania: Project Management Institute.

Winch, G. M. (2002) Managing Construction Projects, Blackwell: Oxford

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.

© Daniel Forgues
Originally published as a part of 2004 PMI Global Congress Proceedings – Anaheim, California

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