A Global Insurance Giant's PMO Helps Its IT Portfolio Deliver Clear Benefits
BY MATT SCHUR PORTRAITS BY JILLIAN CLARK
Location: Cary, North Carolina, USA
Size: 23 full-time employees
Value of portfolio: US$500 million
Average project value: US$400,000
One of the world's biggest companies knew it had to do better.
With customers in more than 40 countries and over 57,000 employees, MetLife is a major player in the insurance industry. But five years ago, the organization realized its US$500 million global IT portfolio wasn't reaching its potential. Projects were run by various business units using scattershot practices. The lack of consistent delivery processes made it difficult to gauge project performance and decide which projects to fund.
So the organization decided to create a project management office (PMO) to bring rigor and standardized approaches to the portfolio.
“We needed to understand holistically the initiatives that we were taking on, how they were performing, what our budget spend was and how we were delivering value,” says Carol Andreu, vice president, PMO, MetLife, Cary, North Carolina, USA.
From left, Carol Andreu, Brian Bolt, Caroline Martinez, PMP, and James Stewart, PMP
“Whether it's by understanding how [the PMO delivers] programs or understanding our spend and bringing back data to share with them, we've become a trusted partner.”
—Carol Andreu, MetLife
The PMO's leaders had their work cut out for them. The IT portfolio comprised dramatically different projects—everything from implementing an enterprise-wide global customer relationship management platform to deploying internal email infrastructure updates in the United States. To understand how and where value was being delivered, the PMO sought clear views into the full life cycle of all projects—setting the stage for a big focus on the business case and benefits realization.
“By being able to measure each project in a consistent way, we can understand the overall value of our portfolio from a hard and soft benefit perspective, and better prioritize projects,” says James Stewart, PMP, portfolio management director, PMO, MetLife.
BUILDING THE CASE
Before the PMO, MetLife's IT project selection process was more about timing than merit. So putting the business case at the center of the process was a major focus from the PMO's inception. The goal was simple: provide executives with the right information to greenlight only the most profitable projects.
“In the past, different business units were given funding in order to execute their projects, but we never ensured that money was being spent in the right place,” Ms. Andreu says.
When the PMO launched in 2013, only 11 percent of business cases for projects and programs more than US$500,000 were vetted. Today, the PMO reviews all business cases as part of an approval process that examines a project's planned scope and budget, strategic alignment and intended benefits. PMO staff members score initiatives and share that information with senior leaders.
“By decomposing each requested initiative into key value drivers and then helping to drive project selection, we ensure MetLife is selecting projects that are going to provide maximum value and return,” Mr. Stewart says.
The ROI is clear: The more rigorous project selection process has delivered more than US$125 million in increased revenue and decreased costs since the PMO's launch.
From the beginning, the PMO's purview extended well beyond the selection process. The organization needed a clear picture of the health of projects and programs underway across various lines of business—and different delivery and status tracking approaches were obstacles.
“If you have multiple processes going on organizationally, you will have inconsistent views of the portfolio,” Mr. Stewart says.
The PMO set out to align MetLife's 250 IT project and program managers around standardized approaches to resource management, stakeholder management and project health tracking. PMI's A Guide to the Project Management Body of Knowledge (PMBOK® Guide) was a go-to resource during this change process, but to establish a shared knowledge base the PMO also encourages people to earn a Project Management Professional (PMP)® certification. From 2016 through the first quarter of 2017, the number of IT project managers with a PMP® certification increased by 11 percent.
“Having a consistent, repeatable process in our project management practices and in our training helps drive better and more efficient project execution,” says Caroline Martinez, PMP, process and effectiveness director, PMO, MetLife. “It helps us realize the benefits of the project faster, and it reduces our overall time to delivery.”
To keep senior executives up to speed on the health statuses of projects and programs, the PMO also created monthly operating reviews. For each meeting, the PMO provides executives with a scorecard detailing key metrics.
“The reviews take executives through the entire IT organization, from financials, business case progress and project delivery,” Mr. Stewart says. “They allow our senior executives to understand in greater depth exactly where we are from a project performance perspective and ask questions or provide additional direction.”
The process enables strategic decisions, such as canceling a troubled project or ramping up resources to keep one on track, to ensure MetLife's overall portfolio remains profitable. The PMO's monitoring function helps make all this possible.
“Resource management allows executives to make very important strategic planning decisions,” says Brian Bolt, planning and forecasting director, PMO, MetLife. “It allows us to know exactly who we have, where we have them and where they may be needed in order for our portfolio to succeed.”
TAKING THE PULSE
But the PMO takes pains to avoid being perceived only as a command-and-control center. It also serves in a support role, especially when it comes to talent development.
“Resource management … allows us to know exactly who we have, where we have them and where they may be needed in order for our portfolio to succeed.”
—Brian Bolt, MetLife
Along with encouraging PMI certifications, the PMO launched an online training academy in 2016 to provide project and program managers with 24/7 access to educational materials tailored to specific roles, tools or processes. Over the last four years, the training academy also has hosted biweekly project management training forums and offered one-on-one support for methodology and process development to increase delivery quality.
The efforts have paid off: Project fitness scores—a way to measure project and program managers' compliance to processes—have drastically improved, increasing from 67 percent in 2013 to 92 percent in 2017. And since the PMO launched, projects delivered both on time and on budget have increased by 22 percent, while customer satisfaction has shot up by 35 percent.
“Having a consistent, repeatable process in our practices and in our training helps drive better and more efficient project execution.”
—Caroline Martinez, PMP, MetLife
Staff turnover has slowed as well. That might be because the PMO has taken care to listen closely to project professionals within its purview. In 2017, Ms. Martinez implemented “heart-to-hearts” meetings—small focus groups that gather feedback from project managers about their barriers to success. The meetings cover anything from methodology and stakeholders to getting too many emails. For instance, one of the sessions revealed that project managers felt they were receiving too many materials from the PMO. In response, the PMO is working to streamline communications.
“They like to know that people are listening,” Ms. Martinez says. “MetLife is a very large, complex organization, and you can get lost in the shuffle. Being asked about what can be fixed is important.”
PAYING IT FORWARD
By cultivating fully engaged, highly trained project professionals, the PMO is helping to drive benefits realization. It tracks benefits throughout each project's life cycle—and for as long as 10 years after close. That very long benefits attention span has to do with the nature of MetLife's IT portfolio. Some projects, such as the organization's global rollout of a customer relationship management (CRM) platform in 2015, won't necessarily generate benefits for years. After all, just because a platform is developed doesn't mean it's going to be used, or used effectively, right away.
“With sales-driven benefits, we need to be sure that the targets that were set and built into the business cases are actually being achieved,” Ms. Andreu says.
Following the CRM's launch, as with other projects that need to be tracked post-deployment, the PMO has been conducting monthly meetings with teams to track results and then report back to the CIO.
“These communications generated insights and allowed us to increase our sales,” Ms. Andreu says. “After this platform was deployed, we worked back with the business and with finance to understand if we actually hit the sales targets identified in the business case. And the good news is, we achieved those targets.”
Taking a hands-on approach to uncover how value is generated through MetLife's global IT portfolio has helped make the PMO indispensable to senior executives, she says. “Whether it's by understanding how we deliver programs or understanding our spend and bringing back data to share with them, we've become a trusted partner.” PM
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When it comes to delivery approaches, the PMO leaves room for waterfall, agile and anything in between.
MetLife's project management office (PMO) places a strong emphasis on standardized execution. But that doesn't mean project and program managers don't have flexibility when it comes to delivery approaches. Team members can select what they feel is best—agile, waterfall or hybrid, says Caroline Martinez, PMP, process and effectiveness director, PMO, MetLife.
“The team should pick the delivery approach that works best, especially given that our customers differ—it could be an internal IT customer or a business customer. The majority of our projects are hybrid—a combination of waterfall and agile.
“Once a team has chosen an approach—and the PMO can certainly assist with that process—we do ask them to follow repeatable processes so that everybody does things the same way. If the team chooses waterfall, there's a process that includes gating and governance. If the team chooses agile, there's a governance process so we can measure progress and identify where there may be training needs.”
“By being able to measure each project in a consistent way, we can understand the overall value of our portfolio from a hard and soft benefit perspective.”
—James Stewart, PMP, MetLife
MetLife plows any savings achieved by IT project teams right back into the business.
MetLife's project management office (PMO) team and the global technology business it serves have an unusual stake in the success of the organization's IT portfolio. Every dollar saved through efficient delivery practices affords teams the opportunity to pitch projects to reinvest that money back into new platforms and global applications.
“Technology ages, and upgrades are needed,” says Carol Andreu, vice president, PMO, MetLife, Cary, North Carolina, USA. “But the business really wants to spend more dollars on new capabilities that will increase sales.”
The reinvestment fund allows MetLife's IT arm to fund projects that might otherwise fall by the wayside. It's a significant amount of money: In recent years, around US$250 million has been pushed to projects annually from the fund. Like all other IT projects, these initiatives must follow the PMO's rigorous business case approval process to ensure strategic alignment and value delivery.
The fund has been especially helpful in supporting MetLife regions that struggle with aging IT infrastructure and a lack of funding for capital projects.
“Because of it, we were able to start building the foundation of global platforms, which then could be rolled out to the countries at a reduced expense for them,” Ms. Andreu says. “As long as technology provides savings, the fund will persist.”