Case study of Improving the Performance of Business Change Teams Using an Intelligent Project Office
Shay Shargal, Head of Pilat Management Consulting
Ami Halfon & Michal Shalom, PMO, Comverse international division
In today's international market place, organisations are recognising that they need to execute business change in a more succinct manner. The budgets and the timescales afforded in the past are no longer available. Organisations are seeking a more reliable route to successful change. This is witnessed by the current interest in nearly any management theory that will enhance performance. Over the past four years, Severn has reviewed or audited over four hundred projects. All of these projects have been in the business change and technology space. The industries range from Banks, Insurance Companies, Retailers and various others. Analysis of information from these experiences has challenged my current thinking, providing the stimulus to prepare this paper.
This paper seeks to identify what are the latest developments in Project Management that give modern executives the leverage they are seeking. My hypothesis is that very little has, or can, change with the direct manage ment of the project-based activities. The structures and mechanisms afforded by the Guide to the Project Management Body of Knowledge (PMBOK® Guide) and other accredited standards are very largely best practice. Our training curricula are what you would expect from a mature profession. The change must be in the way in which we apply the skills.
For example, I’ve recently worked with two Global Banks who want to manage people with teams located in different countries working on the same project. Project Management in this environment becomes interesting! If the project manager seeks to gather information about progress, issues or any other project related area by traditional means, this requires sitting down with a team member; that results in the accumulation of excessive air miles! In this instance the project manager has to devise a new way of gathering information and communicating with the Project team. The weekly team meeting is impossible to sustain when team members are based in significantly different time zones. What is needed are new ways to achieve the same goals.
I recognise that the project managers need to change in order to meet these new trends, and must address how their profession and skills are deployed rather that what skills or techniques are used. The extra focus on how means that physical project manager time becomes an issue. The change that is required is the need to automate or process some of the things we do so that the PM’s can concentrate on delivering and “making it happen”. The resolution is in greater use of technology and of the Intelligent Project Office concept. This paper outlines the role, application and function of an Intelligent Project Office - IPO.
Current business trends
Doing more with less
Since mid 2000, when the macro economic climate altered, many organisations have sought to reduce their spending on business change. Yet, at the same time, these same organisations were facing a pent up demand for business change created by the Y2K phenomena, and in Europe, and in the financial institutions globally, this situation was exasperated by further pent up demand created by the change to the Euro. Faced with declining company values and with a reduction in revenues most organisations took a stance that they would still make inward investment but they would attempt to “Do more” than previously “with less” budget. This has created some radical changes in purchasing and investment policy.
Reduced dependencies on external resources
In the past many of the “more interesting” projects were bundled up and outsourced to consulting firms. In our experience there has been a significant change in the purchasing trend of organisations from 2001. Much to the consternation of the larger consulting firms, many organisations are no longer willing to pass expertise that they need to manage their core business activities and give competitive advantage to third parties.
More significantly this means that organisations are seeking to build and strengthen their internal resource capability in order to achieve their business goals. They have realised that not only is employing a large consulting firm very expensive, it significantly reduces their strategic capability in the future. Organisations are therefore questioning how they can enhance their internal capabilities to organise and control extensive business change based upon their own skills and resources.
The “Projects are always late” mentality is no longer acceptable
In most organisations a doubting Thomas exists:
“IT projects are always late”.
“Well the plan says we'll finish in March so lets say they will finish by June”.
Poor performance has to be a thing of the past and the indications are that the PM Profession has moved forward. We've all heard of the study in which, (Sauer & Cuthbertson, 2003, p. 1) the Boston Based Standish Group reported in 1995 that some 31% of all US projects were abandoned. The same study produced more recently shows that while the number of projects hitting all their targets remains low at 16%, the new variances are much less than commonly supposed. Average overrun on budget is 18%; average overrun on schedule is 23%; average underachievement on scope functionality is 7%. These figures suggest significant improvements are occurring and, in 2002, the study showed that a mere 5% of UK Projects were abandoned.
Another example of the “Projects are always late” (PAAL) culture is that in the past we have allowed project managers to reduce functionality or the specification of the deliverables in order to meet the stated timeframes. Now there is a significant problem with this approach and it is true that many organisations cannot accept half a solution. In the past IT projects, for example, would expect business processes to change to give a “work around” for deficiencies in delivered software. Greater emphasis in modern business on opening up systems over the Internet means that the project manager cannot rely upon the resource to produce the same “work around” for his or her deficient delivery.
Organisations are demanding more. Strategic goals now depend upon excellence in project execution. The Senior Executives are now demanding more than ever, that projects meet all of their goals. project managers must consistently deliver excellence.
Completion of complex projects in tight time frames
This excellence demand is apparent despite the fact that business change projects are becoming more demanding. It is now generally true that most of the easy projects for an organisation are complete all that remains are challenging projects. In the past, large or significant development projects were considered like the implementation of accounting systems or requirements planning. Now these projects are undertaken not by development, but by the implementation of packaged solutions. It is accepted that some of these packages take a significant implementation effort, but the associated risks are significantly lower than if the organisation was also developing the software from scratch! The advent of the Sarbanes-Oxley Act (in the USA), Turnbull and CP142 (in the UK) and other international legislation mean that organisations are increasingly risk adverse.
Looking at the risk aversion and the limited scope for investment, most organisations are seeking significant business change only where they can gain significant strategic advantage. The demand once again is that the managers of project-based activities must have the skills to be able to deliver. That skill for delivery has to be on every vector of the Time-Quality-Cost triangle. No more Phase Two projects!!
Not all project managers have these skills and some organisations simply do not have enough project managers to meet their business needs. The answer for some is to rely upon excellence and project management support delivered through an Intelligent Project Office.
What is an Intelligent Project Office?
David Marsh (2000) defines a Project Office as a function that is established to support an organisation's projects. Several organisations I have worked with, consider a Project Office function as a bureaucracy, a group of project assistants that pick up the menial tasks. Earlier in this paper, I suggested that for project managers to be effective in today's organisational project environment they need not change what they do, but alter how they do things. Given the significant increase in the pressures on the managers of project-based activities outlined earlier, I believe the solution to the current situation is for these individuals to concentrate their efforts on the things that make the projects happen. Working with the project team, issue control, quality verification and the like, these are the important items. Daily tracking, analysis and reporting cost collection etc can be left to the project management support system provided by an IPO.
I’d like to redefine the Project Office as a function that is established to make project managers more successful.
How do you know if you need an Intelligent Project Office?
One of the certainties about human endeavours is that activities either take longer or shorter than we first thought. Things cost more or less than we thought. I’ve often stood outside a shop with my wife looking at her as she says, “Well I didn’t know it would be that much!” Why is it that because we call something a project, this undeniable truth gets forgotten? Why is it that as project managers, we deny that our plan is simply a plan and the actual path to the activity conclusion will vary from what was planned at the beginning?
The above diagram (Exhibit 1) presents a situation that may be recognised by many. The project is said to have a status of green all the way through its life. Then suddenly, just before the point of delivery, it has a problem, with the budget or timescale and its status is changed to red. In reality, if we are honest with ourselves and our project sponsors this cannot happen. A project goes wrong a day at a time, and unless there is a calamitous event, then it never switches from Green to Red overnight. The fact is no one was doing the tracking and the trending on the project represented by the diagram to forecast its true status. It is in the area of tracking and trending that the IPO makes its greatest impact.
Two types of Project Office
In my experience, there are two types of Project Offices. The one that tells you that something has gone wrong and the one that tells you that things are ABOUT to go wrong. PMO normally adds value to the project manager by reducing the administration workload. It may also provide consolidated management reporting and a focus for project initiation.
The IPO, ("the making project managers more successful Project Office"), however has a totally different approach and concentrates on understanding what a project manager does on a day -to-day basis.
The project management process
Ten years ago my MBA thesis looked at how to make project managers more successful. The pith of the outcome from my research was a diagram (Exhibit 3) that presents the project management actions as a series of seven processes. Two of the processes, Initiation and Closure are only performed once in the project lifecycle. Four of the processes, Evaluate Risk, Plan, Execute and Control Change, form a continuum, a virtuous circle that if followed deliver enhanced performance. The last process Report is undertaken on a regular, weekly or monthly, basis.
The role of the IPO starts with the first process and continues to the closure stage. Research by Capers Jones indicates that many projects over spend and hit problems from which it is impossible to recover, during the Initiation process. Resources are not allocated; goals are not clear and arguments rage about how a project is to be undertaken (Kezsbon, 1992, p 730)
Using an Intelligent Project Office
Using an IPO as a centre of excellence for Project management and as custodian of the methodologies leaves the decision regarding how the work is to be undertaken by others, the methodology designers. The role of the project manager is then focussed on where it should be - creating a clear sustainable work breakdown structure and the preparation of an optimal critical path in addition to fine tuning the methodology to meet his or her project circumstances.
During the Evaluate Risk process, the IPO generates the required data that provides the essential clarity regarding the organisations previous experience of risk mitigation and issues associated with similar previous projects. Notice the emphasis, the planners of subsequent projects do not need to know about risks that were identified, that did not occur. The planners only wish to know about those risks that were identified and where mitigation actions were built into the plans, in addition to the evaluation of the issues that the previous project encountered. The IPO can help the project manager catalogue, mitigate the risks and then provide the infrastructure to facilitate the on-going risk management activities once the project is “in flight”.
Much has been written regarding the benefits of participative project planning (Kezsbom, 1992, p. 772). In fact, the most recent Microsoft Project Management products are specifically designed to facilitate this activity. Many project managers do not have the patience or the time to allow others to detail out their work. “Good plans are those that facilitate the execution of the project efforts,” states Deborah Kezsbom. “They help people understand their respective role(s) on the project”. The IPO can help individual functions generate their plans then integrate these properly into the total project system. This is of particular importance if the team is geographically dispersed or working in different time zones. If a project by the IPO is part of a programme, integration can also be undertaken at a higher level. Again based upon past data, the IPO can also provide estimation support. Validation of estimates requires the IPO to fully understand the current and previous projects and to have a detailed handle on previous project metrics.
Execution and analysis is where the real Project Management work is done. ‘Making it happen’ is the exclusive role of the project manager. The IPO can provide support by analysing and checking that progress is being made in all facets of the plan. Diagnostics drill down and earned value verification of the estimates are key skills provided by the IPO. The IPO provides the project manager with its independent assessment of where problems are being encountered. Metrics are gathered and analysed in order to give factual information. Subjective data is the sole remit of the project manager. If information is missing then it is the responsibility of the IPO to track the data down and subsequently provide it. Information needs to be gathered by the IPO on each of the Time-Quality-Cost vectors, and provided to the project manager through the project information system.
Controlling Change has two dimensions; Changes to the plan that are required because things took longer or shorter than was in the plan, and those changes that are externally generated. The IPO should be seen as the custodian of the project plan. Using a baseline, the project manager can see where progress is forcing alterations to the planned course. The IPO is an exponent of the dynamic plan concept. Remodelling of the WBS and what-if scenarios are used to help the project manager with his or her decision-making. This means that the ubiquitous “re-planning” is a thing of the past unless a major calamity is hit or significant course change is required. For example, at the end of a procurement stage when vendor selection has been concluded. Once the changes have been evaluated and agreed, then the IPO can undertake a revised risk assessment and the virtuous circle continues.
Surprisingly enough, the key benefit from implementing an IPO is financial. When an IPO is in action, the average cost of projects is cut. Unforced errors and delivery time are reduced. However the IPO does not directly provide these benefits. The benefits are derived from the increased maturity in the Project Management processes that are being applied.
The IPO facilitates the organisation's ability to enhance their project delivery process. As masters of the project methodologies and collectors of metrics, the IPO is able to use a Six Sigma approach to process enhancement. In addition the IPO is able to use skills and techniques that most project managers avoid. For example, Earned Value Analysis is a technique that has been around for years but is significantly “unemployed” when business change projects are considered. If the average project life cycle completes in say nine to twelve months, then the average project manager may only use this technique for diagnostics say two or three times during this period. Conversely if an IPO is managing a portfolio of projects then it is probably using the same technique. In this instance, Earned Value Analysis is used two or three times per month.
A major beneficiary of improved project performance is the project customer. Improved predictability, lower cost, shorter time to market, and increased quality of deliverables, gives project customers significant improvements in business benefits. Previously marginal investment decisions because of project performance uncertainly now become more clear opportunities.
Learning and Growth
For the IPO to be effective the culture must be that the IPO and project manager are a partnership. The roles are blurred but the responsibility for project delivery is not. Delivery remains and always should remain with the project manager. The IPO is a provider of services to the project manager “helping them to become more successful”. If the IPO ever takes over responsibility for the project, it will fail. That's not to say the IPO staff do not have the skills but if it crosses the boundary and is seen by the project managers to be a threat, the whole concept will collapse.
Data from the CMM websites indicate that the following benefits should be gained:
|Increased Productivity||= 35% Gain in productivity|
|Improved Quality of Deliverables||= 22% reduction in maintenance costs|
|Shorter delivery time||= 19% shorter project life cycles|
Costs of an IPO should be 2% of total project budget and 3% if the IPO is being implemented and enhanced.
The ingredients for a successful IPO are quite simple, but they do depend upon the implementation of a modern project information system, skilled staff and process rigour.
In the last three years, there has been a sea change in the project management tool set market. The more modern tools automate many of the manual mechanisms of the past. They are web-enabled and are able to deliver the metrics required in the IPO context.
The second area is skilled staff. The IPO needs to be staffed by individuals who are recognised by project managers as having the skills and expertise to ‘add value’ to the project endeavours. The IPO team needs to have coaching and mentoring skills and the ability to interact on a professional level.
Lastly, for the IPO to operate effectively, the project delivery process needs to be CMMI Level 3. If they are not at this maturity level, then the IPO can be used to enhance the capability. It is only by having the project delivery processes that are defined, repeatable and managed that the IPO can truly deliver on an orga nisation wide basis.
Strong high level management support
Like most business change projects, and the implementation of an IPO, there is a significant organisational culture change. Senior management sponsorship and support is essential.
Organisational culture change cannot be effected in a rapid, short, sharp, shock approach. The IPO concept requires a clear migration path with the organisational ‘pain points’ being addressed early in the change process. Implementing an IPO has been likened to a high jump competition. All projects are ‘encouraged’ to adopt the basic processes, the processes are enhanced and then the projects adopt these few gradually more exacting standards.
Manage the Stakeholders
As with most cultural change projects, stakeholder management is a key aspect for success. At the beginning of the IPO implementation project, and initially it is a project, stakeholders are identified and actions are put into the plan to meet these requirements or to satisfy the need for information or project deliverables. Gradually the IPO Implementation project becomes business as usual for the IPO and this transition needs to be very carefully managed.
The IPO implementation team need to ensure that they facilitate the IPO’s ongoing function and ensure that service levels do not drop when the IPO team take on responsibility. The gradual migration plan will help with this situation.
Walk before you can run
Every organisation we have worked with has a key strategic project. During the IPO Implementation, just as the ‘green shoots of growth’ start appearing a senior executive adds in the ‘big one’. It is essential that the IPO team are not daunted or deflected by this sudden vote of confidence. The concept of a gradual, incremental “rising of the bar approach” is sound, but the detail may vary on each and every ‘in flight’ project.
Use a tool
The modern tools provide a technology backbone to managing business change. They embrace every aspect form portfolio management - deciding which activities are to be undertaken, through Financial planning and control, Resource Management, methodology re-enforcement, virtual team enablement, reporting and analysis to providing a concise way of documenting lessons learned in the project closure phase. They comply with the Sarbanes Oxley principle that organisations should have “one version of the truth”. They enable reports to be created from information entered at a high level, combined with performance of activity data entered at a low level.
This paper argues that in order to meet the new face of business change projects in the twenty first century, project managers need not alter what they do, but how they do it. The IPO concept is new and is built upon the new technology introduced into the project management information systems market place. The IPO provides metrics on each of the Time-Quality-Cost vectors to enhance the project managers ability to succeed.
Comverse’s Case Study
Comverse is the leading provider of software and systems that enable multimedia value added services in wireless and wireline networks. Comverse has nearly two decades of experience helping service providers achieve their business goals through the deployment of enhanced telecommunication services.
During the last two years Comverse empowered the project management office in order to enhance the project management methodologies and increase the customer satisfaction from Comverse deliveries.
The Comverse FTR program was a direct result of the project oriented management processes, aiming to encourage and focus project managers on the project life cycle critical issues.
This paper reviews the logic in creating the FTR program, the methodology and its results.
What is the FTR?
“Public speaking ranks No. 3 among people's biggest fears.” (Postaer, 2003, p19)
FTR stands for First Time Right, meaning that every project manager should aim for completing his project successfully, on the first attempt and to the full satisfaction of his customer.
The roots for the FTR program was lies in an analysis program performed by the PMO, that identified the main issues that caused problems in delivering successful projects. Following the historical project analysis a new set of processes were defined in accordance to the PMI PMBOK, adjusted to Comverse work methodology.
In order to assist in implementing the new PLC (Project Life Cycle) the FTR program was conceived. The program is a semi annual contest of project managers, that measures the successful projects in Comverse and nominates the best managed project as the best managed project in Comverse.
The FTR agenda
The basic goals of the project, as generally agreed are time, cost and quality.
]In Comverse we have translated thes e parameters to the terms project managers knows better. We defined that an excellent project is a project that is delivered On Time, To SPEC, On Budget and is performed Together.
The choice of words was important. As Comverse commits to customers on strict time tables and specific system configuration these aspects are crucial to achieve high customer satisfaction. The budget is a symptom for problems, a project that slips it's budget plan, has high probability of missing other targets.
Together is the most interesting theme, we have learned that Comverse projects involves large interdisciplinary team. Communication and synchronization is a crucial factor in the project success. It is the project manager role to shape the team, bind it, create the personal relationships that will cause the people to commit to their ambitious targets and achieve them - together.
Defining clear requirements and a way to achieve them (Project life cycle), together with the CEO award and highly attractive prizes caused the FTR program to stir project managers into action and strive to be nominated as an FTR project manager.
The role of the intelligent PMO
The PMO role in the process is to serve as a knowledge source for project management methodologies, consult the project managers on the proper methodologies, and use the it's experience and knowledge in identifying possible risks before they become real problems.
It is through training, monitoring project processes and alerting the project manager regarding incomplete project life cycle activities that the PMO causes the project managers to align to the project management processes Comverse believes to be essential. In cases problems arise, the PMO assists in providing possible solutions.
Managers in different levels receive periodical reports from the PMO regarding the projects status, as well as possible threats in order to assist and promote activities that propose real threat to the project success. In the final phase, the PMO assists in evaluating and selecting the nominees for the FTR program, as a part of the election committee.
The first FTR program found the project managers slightly confused, unsure of their ability to participate. Some were unsure because their project slipped several days from it's p lanned delivery date, others had several open issues with the customer, as the specifications were not clear enough and it was unclear if the systems perform as agreed, others were confused as to how “together” they have been performing the activities.
Yet, several project managers were up to the task and submitted their projects for evaluation. Many were found adequate and several others were superb, which made the selection extremely difficult, but at the end of the day the first FTR project was nominated.
The first FTR award ceremony marked the change in project managers perception. Project managers found the FTR to be a worthy goal and aimed to achieve it by following the project life cycle methodology, as well as consulting the PMO of possible ways or activities to increase their project possibility to win the FTR program. Finding the second FTR winner was a lot more complex, as more projects were performing superbly and meeting their goals. Yet, it was a satisfying mission to be able to browse through numerous projects that achieve remarkable results.
For the third FTR program the bar was slightly raised and a high customer satisfaction review was required as well (to validate the process effectiveness). We have also learned that project managers include the “ready for FTR” as part of the projects objectives from the very movement of project initiation.
The third program's winner was a project that delivered an MMS system to a customer, establishing a record time in Comverse (for MMS systems) and absolutely no problems during the system's installation. The customer rated the delivery as a straight 10 and ordered several other Comverse products within weeks from the MMS system launch, as a direct result of his satisfaction.
The FTR program, and the clear methodology to achieve it, proved as a mighty combination to motivate and implement advanced project management processes. The PMO, facilitating the process, proved as a valuable resource to the organization by becoming a source of knowledge and information.
We believe that selecting the next FTR project will be even more difficult, and enjoying.
Kezsbom, D. (1992) Bringing order to chaos: An investigation into the sources of conflict in the 1990s, Project management without boundaries.
Kezsbom, D. (1992) Building project technical teams – Not a touchy-feely process. Project management without boundaries.
Marsh, D. (2000) Project and program support office handbook. The Foundation
Sauer, C. & Cuthbertson, C. (2003). CW360.com project/program management survey preliminary report. London: Oxford University, Templeton College
© Shay Shargal, 2005
Originally published as a part of 2005 PMI Global Congress Proceedings - Singapore