Line of Sight
Three Organizations Rely on Project Management Offices to Reach Their Strategic Goals
BY TEGAN JONES
A project management office (PMO) can provide a boost to any organization—whether it builds planes, powers smartphones or lights homes. Turning strategy into reality, PMOs help organizations deliver the benefits that fuel global progress.
Each of the 2016 PMI PMO of the Year Award finalists has achieved next-level improvements by aligning their portfolios and boosting performance. One organization provides a Canadian province with reliable renewable energy. Another allows people to fly more efficiently. The third is bringing more Chileans online.
These high-performing PMOs are proof that, regardless of sector, project management maturity helps drive success. Here are brief overviews of how each mapped out a clear path to keep the finish line in sight.
Canadian utility BC Hydro provides clean energy to 98 percent of British Columbia. More than 4 million residents rely on the power it provides. But the province's aging infrastructure is straining to support its growing population.
That's why the government-owned utility plans to invest CA$2 billion per year in capital improvements over the next 10 years. But with that many utility customer dollars on the table, BC Hydro's projects must deliver their intended benefits. The utility turns to its PMO to keep this high-profile portfolio on track.
Managing nearly 600 projects at any given time, BC Hydro's PMO follows a strict governance process. From conceptual designs and feasibility testing to construction and commissioning, PMO reporting keeps stakeholders informed on how each project is progressing. Engaging key decision-makers each step of the way reduces the risk that poor choices will put a project behind schedule or over budget, says Ken McKenzie, vice president, capital infrastructure project delivery, BC Hydro.
“PMO reporting minimizes the potential of us selecting the wrong alternative for the project or going in a direction that doesn't meet corporate objectives,” he says.
That level of involvement goes all the way to the C-suite. The deputy CEO is involved in monthly update meetings, at which the PMO team highlights key risks that require executive attention. All projects with a budget of more than CA$50 million are reviewed, with lower-cost projects making the docket if their health indicators are yellow or red. Whether they're small generation, transmission or station upgrades or critical capital investments, all projects follow the same processes—and it's a strategy that works.
Over the past five years, BC Hydro has successfully closed 563 capital projects, worth roughly CA$6.5 billion—coming in 0.18 percent under budget as a whole. “Because our capital program is so large right now, the overall success of BC Hydro is very dependent on how well we deliver our projects to scope, schedule and budget,” Mr. McKenzie says.
PMO employees understand their strategic role and are committed to delivering. A recent employee engagement survey found that 87 percent of PMO employees experience a sustainable culture of employee engagement.
Organization: BC Hydro
Location: Burnaby, British Columbia, Canada
PMO launch: 2007
BC Hydro's Kootenay dam
“PMO reporting minimizes the potential of us selecting the wrong alternative for the project.”
—Ken McKenzie, BC Hydro
Location: Santiago, Chile
PMO launch: 2007
“The PMO should have the strategic position within the company. That's how you ... deliver a competitive advantage.”
—Santiago Villarroel Ávila, Entel
The telecommunication industry is evolving at a rapid clip. To meet ever-shifting customer expectations—and remain Chile's top player in the industry—Entel, a PMI Global Executive Council member, is making massive infrastructure investments. But those projects must align to the company's growth strategy.
That's why the organization's PMO uses a clearly defined project evaluation, prioritization and selection process to keep initiatives in line. Each project proposal must include a business case that outlines all of the strategic areas, such as cellular customer service, that could be impacted during execution.
“With this evaluation, we can allocate the right resources to projects that will generate the highest value to the company, clients and stakeholders,” says Santiago Villarroel Ávila, PMO deputy manager, Entel.
On average, the PMO supports around 730 projects and more than 200 project managers at any given time. One of the most impactful projects underway aims to provide mobile service and internet access to isolated and rural areas covering more than 549 communities, 212 schools and 373 kilometers (232 miles) of road. This US$136 million project is expected to improve the quality of life of more than 85,000 people.
Entel's PMO sets its projects up for success by focusing on project management maturity, which is established through improving and updating project, program and portfolio practices to the latest standards and processes. To entice—and retain—Chile's best and brightest project talent, the company offers training programs and skill profiles for five job roles: project engineer, project manager, senior project manager, program manager and portfolio manager.
Together, these small-scale improvements help Entel meet its big-picture strategic goals. And customers are happy: The company won Chile's customer satisfaction award for mobile service providers for the 13th consecutive year in 2015. And after 50 years operating solely in Chile, Entel expanded its horizons in 2013 by starting operations in Peru.
“The PMO should have the strategic position within the company,” Mr. Villarroel Ávila says. “That's how you understand and develop the capabilities that will deliver a competitive advantage.”
With a customer roster including Airbus, Boeing and the U.S. Department of Defense, Parker Aerospace and parent company Parker Hannifan Corp. have a lot riding on their projects to create aircraft-control and emission-reduction systems. Each initiative must deliver just what the customer ordered for the organization to maintain relationships—and win additional contracts.
“Our customers expect that their products will be delivered with perfect quality, on time and on budget,” says Barry Draskovich, PMP, vice president of program and contract management, Parker Aerospace. “We strive to ensure the quality that it needs to be. That's where disciplined project management comes into play.”
Parker counts on its PMO to execute projects as efficiently and effectively as possible. From schedule development to stakeholder management, the PMO's defined standardized practices help keep the company running smoothly.
The PMO has built buy-in for standardization by focusing on influence. Its Program Management Leadership Council has brought together representatives from each of Parker's divisions to develop and deploy the tools, techniques and processes that will work for everyone. Through weekly conference calls and quarterly face-to-face meetings, the leadership council has found common ground—and helped get project management standards adopted across the entire company, Mr. Draskovich says.
“We are not so much different from each other,” he says. “If something's good to be done in one division, it's probably good to be done in all divisions. This approach helps us maintain the standard work that is so important for efficient execution.”
Parker also has deployed earned value management across the organization to better control project cost and schedule. This rollout, which started two and a half years ago, required the team to overcome gaps in project management fundamentals, a lack of timely financial reporting and a decades-long culture of lax accountability. Earned value management now allows the PMO to thoroughly assess the health of projects and programs, measuring their ability to meet cost and schedule commitments. Over the past 12 months, one division using earned value management showed a 92 percent reduction in cost overruns. All other divisions have taken note and have adopted the same methods.
“Earned value management is providing us with insight into the health of our programs so that we can identify root cause issues challenging our performance and then put corrective actions in place to address them,” Mr. Draskovich says. PM
Organization: Parker Aerospace
Location: Irvine, California, USA
PMO launch: 2010
Sector: Aerospace and defense
Parker Aerospace customers include Airbus.
“Earned value management is providing us with insight into the health of our programs.”
—Barry Draskovich, PMP, Parker Aerospace
AND THE WINNER IS …
Find out the winner of the 2016 PMO of the Year Award at the PMO Symposium 2016 in San Diego, California, USA, scheduled for 6-9 November.
Then, check out videos for each finalist on PMI's YouTube channel and look for full case studies in future issues of PM Network.
CALL FOR AWARD NOMINATIONS Honor PMO excellence in 2017. Visit PMI.org/Awards.
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