Organizational Project Management (OPM) Improvement Program Management

From Why to How

Joseph A. Sopko, MSP, OPM3 Professional, PMP

Joseph A. Sopko Consulting, LLC and Avner Ltd.

This is the second of a two-part series. Please click here for the first part.

Introduction

The OPM Improvement Program

Program Organization

Program Organization Example

The Nature of Programs

Program “Triple Constraints”

Program Life Cycle

The Program “Blueprint,” or the Future State of Capabilities

How Much Maturity is Enough?

Conclusion

References

Abstract

Among the triad of organizational project management domains, programs are the organizational mechanisms for delivering transformational change that result in the delivery of sustained added value to the organization. As such, programs are often cited as the preferred mechanisms for organizational project management (OPM) improvement. The business case and impetus for OPM improvement was discussed and defined in Organizational Project Management: Why Build and Improve? (Sopko, 2015). This paper builds upon that discussion and explores the structure of an OPM improvement program and how such an organizational approach could be established using currently existing standards and methodologies to achieve both organizational transformation as well as the desired level of organizational excellence.

Introduction

As the economic environment improves and becomes increasingly more competitive, organizations that are able to execute projects that predictably meet or exceed plan become the most desirable suppliers or partners. A sufficiently mature OPM infrastructure is key to this project execution, as well as to achieving organizational agility. Additionally, as the global market continues to venture beyond the project domain, the focus is not only on cost management, but also on strategic value optimization. This is shining a bright light on the domains of program and portfolio management. By doing so, organizations become increasingly aware of the benefits they intend to secure—or potentially may lose. This forms the basis of the business case for OPM maturity improvement as discussed in Organizational Project Management: Why Build and Improve? (Sopko, 2015).

Implementing Organizational Project Management: A Practice Guide (PMI, 2014) states that OPM improvement initiatives should be conducted as programs and that advice has been supported widely for some very good reasons. Benefits accountability is a growing area of focus, but the exact organizational responsibility for managing benefits remains elusive in many organizations. KPMG (2012) reported that benefits realization continues to fall short of expectations and has not improved substantially for almost a decade. To achieve benefits that are not being delivered today, organizations need to change, and this transformational change requires a more complex degree of stakeholder engagement. Program management is the enabling domain for transformational change.

Programs begin with a vision and expectation of defined benefits that quantify the business case for that vision. The program organization defines a “blueprint” of the future state of processes, organizational structure, technology, and information flow that will enable the delivery of the value proposition the vision lays out. Projects and other related work are established by the program leadership to build and enable the new future state. The program delivers value through the coordinated delivery of these new or improved capabilities and transitions those new capabilities into the organization (the program cost). Transformational change results in the realization of benefits and achievement of the program vision (added value to the organization).

A program manager is best positioned to align the set of projects for OPM improvement with program value delivery and stakeholder engagement. Since programs are complex undertakings, a carefully selected program organization with the proper influence, stakeholder credibility, and authority is paramount to OPM improvement program success.

The OPM Improvement Program

Program management should exist where new organizational capabilities are not only built but are also used to demonstrate the expected outcomes and realize sustained benefits. These benefits must then align with the expectations with regard to the total value or return-on-investment that the program sponsor intended. In this section, we will explore the various aspects of programs that align with OPM improvement and enable transformational change.

Program Organization

OPM improvement initiatives involve a significant transformation of the organization's culture, especially in low maturity organizations. To achieve this, selecting the program organization is one of the most important activities in conducting OPM improvement initiatives. Five roles within the program organization that we will discuss are: Initiating group, program sponsor, program manager, integrator, and the program board.

The classical organizational model for programs is often centric to the program manager. The shortfall of this model is that it places all the accountability and responsibility on the program manager in a manner similar to projects. This may be adequate in a functional or projectized organization where the program manager has direct authority over the organization undergoing change. However, in most organizations, some form of matrix organization is the norm. This often dilutes the authority of the program manager to effectively change the organization.

A significant amount of organizational change must be planned, managed, and realized at a level parallel to the authority and position of the program manager. This activity requires not only a significant amount of stakeholder engagement to adopt the new OPM processes and tools, but also requires an active role in defining the requirements and the organizational need. Most OPM programs are managed by the project management office (PMO). However, the PMO is typically not the target audience for most of the transformation. The “business-as-usual” side of the organization must adopt the new processes, use them, and ultimately deliver and sustain the benefits.

image

Figure 1: Program organizational structure.

One approach is to establish an integrator role that manages the organizational transition and benefits realization activities and works alongside the program manager. This positions the integrator to have as much visibility into the details of the initiative as the program manager directing the initiative. The program sponsor, program manager, and the integrator sit on the program governance board. Figure 1 is an illustration of the relationship within the program management structure.

Initiating Group

Starting at the top is the initiating group. This is normally the senior leadership team (e.g., C-Level leadership) of the organization or may be the portfolio management board. The initiating group is responsible for establishing programs and projects that facilitate the realization of the organization's strategy.

Program Sponsor

In change initiatives, such as an OPM improvement program, the initiating group would typically appoint one of its members as the program sponsor. The program sponsor is ultimately accountable to the initiating group for the success of the program and the program business case. As the senior management representative who is accountable for the program, the program sponsor establishes and leads program governance.

Since stakeholder engagement is critical in change initiatives, the selected program sponsor should have managing authority or direct influence over the organizational entities that are undergoing change. This is extremely important when there is potential for internal resistance to the change or when budgetary constraints prevent optimum resource assignments or budget to the development and transitioning of new program capabilities.

Program Manager

The program manager is the more traditional role and is responsible for planning, monitoring, control, and execution of the program throughout its life cycle. This is the expert in program management who in this model is directly responsible for establishing projects that deliver the enabling capabilities needed by the program. The program manager is most often the project sponsor for all the component projects and other related work in the program. In an OPM implementation, projects can be as complex as a new IT or supporting infrastructure to the development of new processes. Often, the program manager for OPM improvement is a member of an organizational-level asset like an enterprise-level PMO.

Integrator

The integrator plays a critical role in transitioning the new capabilities delivered by the OPM improvement projects and the full realization of intended benefits from using the new capabilities. These activities usually include pre-transition preparation, training, staffing, transition, and post-transition acceptance. The integrator is not required to be a project or program management expert. Rather, the integrator is selected from the operations-as-usual side of the organization that will own and use the capabilities long term and derive benefits from them. As such, they are excellent resources for requirements development as well as organizational change management and stakeholder engagement.

In OPM improvement programs and other organizational change initiatives, change agent(s) work along with the program manager, integrator, and program team as the initial drivers and champions of the change. Often, they are project management leaders from component organizations that must use the new OPM process framework and tools. In this manner, they work with the integrator and program manager and balance the operational environmental needs with OPM theory by tailoring guidelines to match organizational culture. They are also helpful in understanding the effectiveness and utility of OPM processes and in recommending further areas for improvement. In some cases, such as operations transition activities, the integrator might also act as project sponsor for projects or related work that has a direct operational focus.

When one looks at the complexity of OPM improvement programs, one quickly realizes the significant and diverse competencies required. The two roles of program manager and integrator take advantage of the diversification of responsibility, authority, and expertise in governing the program. The integrator, as the title implies, should be well versed in organizational change. Aziz (2015) describes the deployment of an OPM infrastructure from an organizational change perspective, emphasizing the need for managing organizational change as a central part of the OPM deployment.

Program Board

The program board provides the governance structure for the program (e.g., program management strategies, plans, and quality assurance) and is composed primarily of the program sponsor (chair), program manager, and the integrator. Subject matter experts could add support for program guidance and consultation to the program leadership. This is typically where OPM consultants would interact with the OPM program providing recommendation using OPM assessment tools. Since the planning and execution of the program's new capabilities are as important as the adoption of the OPM capabilities for benefit and value delivery, the program manager and the integrator work together and jointly report to the program sponsor. In practice, the program board is a powerful and effective structure. It aligns the program to the organization's strategy, assures the program value proposition, develops future-state enabling capabilities, and represents the voice of the operational or market environment (e.g., the user community). Ultimately, there may be budgetary issues that restrain resources and features for the new capabilities or the program may experience varying degrees of OPM process adoption that would hinder benefits realization. The program board provides a vehicle for program stability, focus on value, and organizational agility.

image

Figure 2: OPM program organizational structure for an example organization.

Program Organization Example

Theory is wonderful, but what does this look like in practice? Figure 2 is an example of an OPM program organization for a medium to large organization whose primary business is delivering industrial solutions to its customers through projects. For complexity, let's also consider that this organization has multiple business units in diverse market regions. The diversity could include different markets, cultures, workforce components, or geographical regions. The organization could also conduct projects of varying complexity with respect to size, budget, risk, or compliance regulations. In other words, OPM processes and tools must be tailored in order for them to be effective.

The most central aspect of the program governance structure is the program board. As the chair of the program board, the program sponsor is the link between the OPM improvement program and the organization's strategy. If the organization is primarily trying to improve its profitability as a project delivery business, the chief operations officer (COO) might be a good selection as a program sponsor since the COO has leverage over the organizations that must undergo transformation and is also accountable to the organization's strategic governance.

Since the OPM improvement extends to all of the organization's projects, either the enterprise PMO (EPMO) director or a delegate could fill the role as the program manager. The program manager is the expert in all aspects of program management and is responsible for program planning and control as well as the sponsorship of the program's component projects.

But, who will actually use the OPM processes and tools? Will they be consistently and effectively implemented? Will the tailoring guidelines suit the diversity of the organization's project needs or will they simply add administrative overhead? The voices of the end users must be represented on the program board to help ensure that requirements are valid and there is organizational buy-in. And, when things aren't perfect, someone must assure the organization that the solution prescribed by the program leadership is the best possible for the organization. This is the role of the integrator.

The integrator must be an expert in the day-to-day operations of the business and ideally be a respected leader that others in the organization will follow. Further, the integrator will remain as a practitioner in the organization long after the OPM improvement program has been disbanded. Choosing the integrator may range from one person in a small organization to a change team leader with a global team in a large organization. In the example, the integrator is the change team leader who closely coordinates with globally distributed change team members to establish requirements, prepare the organization for change, implement the new capabilities, and deliver sustained benefits.

The Nature of Programs

Program “Triple Constraints”

The business case for projects is, for the most part, a cost versus scope analysis. The project's triple constraint of balancing cost, time, and scope drives it to becoming a cost center measured by efficiency metrics such as cost/schedule performance index. At least as of today, the project's impact on adding organizational value is not well-communicated or established. To do this, one must view projects as investments and measure their impact on the value proposition of the entity that created them (Devaux, 2014). This value is measurable at the program level.

Programs also have a cost component associated with the delivery of a new or improved future state of capabilities, but the business case is more of a leveraged model. A common question asked by senior executives when engaging in OPM assessments is, “What do I get as a result of this assessment?” From the project view, the executive gets a report, an analysis of the findings, and an invoice for the work (i.e., only cost and scope). From the program perspective, the assessment identifies gaps between the current state of the organization's OPM capabilities and the future state operational model needed to achieve the targeted benefits and strategic vision. These gaps become improvement projects that when fulfilled will complete the future state description (or “blueprint”) of the new organization in terms of processes, organization, technology, and information flow. The new capabilities, when used by the organization, achieve outcomes that in turn deliver benefits if the program plan was effective. When one compares the benefits to the cost of constructing the blueprint and the transitioning of the new capabilities, the program business case is established. From this perspective, as a project balances cost, time, and scope, a program must continuously balance the blueprint, benefits, and the vision (Figure 3).

image

Figure 3: Programs strive to achieve an optimum balance of OPM capabilities (blueprint), benefits, and alignment with the program vision.

Another aspect of benefits is that they actually quantify the achievement of the vision. Organizations have a vision only for one reason—they want to improve upon where they are today. Benefit description and measurement validate the vision and provide a metric to measure program success.

Program Life Cycle

All projects are undertaken to enhance the capability of the organization that created them. But first, the reason for why those projects are to be built and how they fulfill the organization's strategy must be determined. Without that, requirements and project sponsorship suffer. OPM initiatives are no different. The foundation of the program and the vision of the enhanced future state of the organization must be defined to establish what success looks like. From that, projects can be established to build the new capabilities. Those capabilities can be transitioned into and used by the organization. Outcomes, which are the result of the capability usage, are evaluated and benefits are measured against expectations. In most cases, this is an iterative process as new technology and processes are evaluated for their effectiveness and degree of movement toward realizing the program vision. Adjustments are made and multiple cycles of capability delivery, transition, and benefits realization are performed. Once the expected benefits are reached and proven to be sustainable, the vision is verified as having been achieved and the program is closed. An example of an iterative staged model that defines an OPM improvement program life cycle is shown in Figure 4.

image

Figure 4: Program life cycle activities.

Since the path forward is typically less certain in programs, more effort and time must be taken at the start of the program in order to properly identify and define the program strategies and plans. Transformational change often requires more depth and complexity of planning than developing a defined capability. Organizations may intuitively know what they want to achieve (e.g., a world class project organization), but may not know exactly how to get there or even what the true benefits of achieving that status are. Benefits must be identified and measured to counter the cost and effort of the program. Requirements for new enabling capabilities must be developed. The current state of the organization must be assessed for targeted areas of improvement and the organizational readiness for change must be evaluated. This presents an added level of complexity to the early planning stage, which in itself requires funding and resources. One strategy to accomplish this is to first understand the viability of the OPM improvement program, define the scope of the program at a high level, and define the cost of planning the program (Program Formulation). Once the program is determined to be viable, the resources to adequately plan the program in detail are engaged (Program Preparation).

Both the formulation and preparation stages as well as the iterative approach of the execution stage form a methodology for ensuring the viability of the program business case and managing program risk. This approach presents a staged approach for introducing new capabilities (Benefits Delivery), transitioning those capabilities into the organization, and using them to realize benefits and sustain organizational change. People are more receptive to change when they understand the benefits are real. Therefore, the early stages present opportunities for piloting new capabilities and assessing quick wins to demonstrate results and to gain stakeholder confidence in the program (Benefits Assessment). The governance, monitoring, and control of the various stages to ensure that the program phase is progressing as planned are performed at predetermined intervals often aligned to certain milestones. Once the program has achieved its objectives and the organization demonstrates that it can sustain the benefits on its own, the program is closed using a program closeout process (Program Closure).

The Program “Blueprint,” or the Future State of Capabilities

Another principle of program management is delivering a coherent capability that enables the organization to achieve and sustain the program vision and benefits. This presents a challenge for many organizations as they define what the future state needs to be and what capabilities need to be developed. Cooke-Davies (2015) points out the importance of capabilities when compared to maturity. When one looks at the structure of maturity models such as CMMI® (CMU, 2010) or OPM3® (PMI, 2013d), one can see that the lower levels of maturity are aligned with the establishment of specific practices of project management such as risk management, communications management, resource management, scheduling, and so forth. The higher levels or stages of maturity are aligned with institutionalization, measurement, and continuous process improvement. So, a good default target for OPM improvement is to first establish the recommended processes and practices that define good project management.

Once the new capabilities are established, the next step is to ensure that they are institutionalized in the organization, tailored to project complexity, and measured for both compliance and effectiveness (e.g., CMMI® Level 3 or OPM3® Standardized and Measured). Achieving this level of maturity provides an organization with not only good practice coverage, but also metrics that show the value the processes are contributing to the organizational goals—their effectiveness. From that point forward, improvement projects can be conducted that align with what is critical to the organization in terms of competitive advantage or market demand. This does not exclude agile approaches. Even though agile approaches to project management may not follow a “waterfall” path, there still has to be consistency in practice as well as measurement of its effectiveness to facilitate organizational consistency and identify improvement opportunities. Again, the recommendations made by Aziz (2015) are useful in developing not only a program strategy for effective deployment of OPM capabilities, but also in defining an effective architecture for the future target operating model that will enhance organizational change and OPM adoption success.

How Much Maturity is Enough?

The short answer is: when the OPM improvement program has achieved its benefits and realized its vision. The exact answer varies widely among industries, corporations, and public and private organizations. In low-maturity markets, expectations may not be very high and late projects are the norm. The fact that every project employs practices described in A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition (PMI, 2013c), even if not organizationally standardized, might present some competitive advantage. However, there are human factors that are improved when OPM maturity improves. Standardized and measured processes enable automation tools and leverage PMO shared resources (e.g., schedulers, project control specialists, coaching). They also enable the project managers to shift their work burden from OPM processes to managing project issues. Standardized processes allow for more efficient collaborative workload sharing at the PMO level. Improvements to one process now can show improvement across the entire organization. Keep in mind that efficiency improves as chaos decreases. This also has a beneficial effect on employee morale.

Can an organization go too far in OPM improvement? Yes. Perfection costs money. Always remember the definition of “good enough.” There are only so many resources to go around. But, the only way to know this is to have standardized processes and data. Seek benchmarking data wherever available to see where the market and competition are with regard to OPM maturity.

Conclusion

Programs are an ideal vehicle for the orchestration of OPM improvement initiatives. Programs are benefits driven and enable transformational change in delivering sustained added value to the organization. A focus on delivering a coherent future state operational model that adds value to the organization in both business terms as well as stakeholder interests encourages innovative thinking and stakeholder buy-in.

AXELOS. (2011). Managing successful programmes (MSP). Norwich, England: The Stationery Office.

Aziz, E. E. (2015). Deployment of organizational project management methodology. Retrieved from https://www.pmi.org/learning/library/deployment-organizational-project-management-methodology-11136

Carnegie Mellon University (CMU). (2010). CMMI Product Team. CMMI for development, version 1.3 (CMU/SEI-2010-TR-033). Software Engineering Institute, Carnegie Mellon University. Retrieved from http://resources.sei.cmu.edu/library/asset-view.cfm?AssetID=9661

Cooke-Davies, T. (2015). Delivering strategy: What matters most, capability or maturity? Presented at 2015 PMI Global Congress, London, England.

Devaux, S. A. (2014). Managing projects as investments: Earned value to business value. New York, NY: CRC Press.

KPMG. (2012). Project and programme management survey 2012. Amstelveen, Netherlands: KPMG Advisory, N.V.

Project Management Institute (PMI). (2013a). The standard for program management – Third edition. Newtown Square, PA: Author.

Project Management Institute (PMI). (2013b). Managing change in organizations: A practice guide. Newtown Square, PA: Author.

Project Management Institute (PMI). (2013c). A guide to the project management body of knowledge (PMBOK® guide) – Fifth edition. Newtown Square, PA: Author.

Project Management Institute (PMI). (2013d). Organizational project management maturity model (OPM3®) – Third edition. Newtown Square, PA: Author.

Project Management Institute (PMI). (2014). Implementing organizational project management: A practice guide. Newtown Square, PA: Author.

Sopko, J. A. (2015). Organizational project management: Why build and improve? Retrieved from https://www.pmi.org/learning/library/organizational-project-management-10667

Beijing | Bengaluru | Brussels | Buenos Aires | Dubai | Lelystad | Mumbai | New Delhi
Philadelphia | Porto Alegre | Rio de Janeiro | Shenzhen | Singapore | Washington, DC

PMI.org

Project Management Institute
Global Operations Center
14 Campus Blvd
Newtown Square, PA 19073-3299 USA
Tel: +1 610 356 4600

©2015 Project Management Institute. All rights reserved. “PMI”, the PMI logo and “Making project management indispensable for business results” are marks of Project Management Institute, Inc. BRA-137-2015 (10/15)

image   Making project management indispensable for business results.®
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.

Advertisement

Advertisement

Related Content

Advertisement

Publishing or acceptance of an advertisement is neither a guarantee nor endorsement of the advertiser's product or service. View advertising policy.