When project management isn't working at an organization, it's often apparent. Basics such as failing to deliver projects on time, within budget or within agreed-upon scope are clear signs a project management office (PMO) is needed—or needs to improve.
For organizations all too familiar with those signs, fear not. Armed with the right guidance and vision, any company can modify an ailing PMO—or set up a new one—in 30 days, says Eddie Merla, PMP, principal of Duende Project Management Services, Missouri City, Texas, USA. “If you narrow your focus, you can make changes in an organization in a very short time,” he says.
The competitive advantages are clear. “An effective PMO provides project management training and mentoring as well as ensures projects are executed according to consistent processes,” Mr. Merla says. A good PMO aids the maturity of project management practices within an organization.
EXECUTIVE SUMMARY
| Project management offices (PMOs) offer a backbone of project support, training and mentoring. | |
| Customer dissatisfaction, lack of project management leadership and failed projects may mean a project management office must be established or the existing one isn't working. | |
| To implement or modify a PMO within 30 days, focus on fewer objectives. | |
| After 30 days, project managers and stakeholders should stop adding features and fine-tune what they have. |
“This maturity is reflected in the individual actions of project managers and in the maturity of organizational standards and processes, consistent with PMI's Organizational Project Management Maturity Model,” he says.
From Zero to PMO
The key is to keep things simple, according to Mr. Merla. First, assess the health and readiness of the organization to undergo changes. “It's also critical to get political awareness that you're implementing change because it gets you credibility for the PMO in a short period of time,” he says.
Additional work may be required in the planning phases to educate the organization on project management. To seasoned project managers and project-based companies, the virtues of a PMO are well-known: centralized project management support, standardized processes, training and mentoring. Many startups and non-project-based organizations aren't privy to the benefits of the PMO, however. Some may view it as just another layer of administration or overhead.
“Sometimes you need to step back and assess the organization to ensure change can be implemented quickly,” Mr. Merla says. “A project sponsor, usually an executive, needs to drive the implementation of the PMO.”
No two PMOs are identical but they do follow basic models. Less-complex ones provide a project repository and project management coaching. You can achieve these types with less commitment than an enterprise PMO or one charged with the core goal of delivering financial value.
Next, set minimal, but clear objectives for the PMO. They may be ROI-related or as simple as promoting standard project management practices and conducting project reviews. These goals must be the most critical for the organization to achieve in a short period of time, according to Mr. Merla. They frame the project scope and include aspects of any of three key areas:
ENTERPRISE FUNCTIONS: Practices, standards, risk
PROJECT FUNCTIONS: Consulting and mentoring support, metrics
HUMAN RESOURCES: Recruiting, resource management.
Then, depending on the particular needs and goals of the organization, Mr. Merla offers a template for implementing the PMO:
WEEK 1 PROJECT MANAGEMENT: Vision, scope, plan
WEEKS 2, 3, 4 PORTFOLIO GOVERNANCE: Change management, project dashboard reporting
WEEKS 2, 3 METHODS AND STANDARDS: Status reporting, estimating processes
WEEKS 3, 4 RESOURCE MANAGEMENT: Systems for resource forecasting and time recording
WEEK 4 TRAINING AND MENTORING: Templates, enterprise tools
ROLLOUT: Project-level tools, templates.
When setting up brand-new PMOs, organizations should start slow and set realistic expectations for the fledgling office. “After 30 days, stop additional changes,” Mr. Merla says, and “fine-tune what you have in place.”
Epiphany Ramps Up
Implementing a start-up PMO within 30 days has improved project performance and customer satisfaction at Epiphany Inc. The technology consultancy in Houston, Texas, USA, launched the effort in early 2005. Just more than three years old at the time, Epiphany was experiencing growing pains, according to CEO Brenda Brinkley, PMP. It was falling behind on client projects that had evolved from the likes of simple, two-day trouble-shooting projects to long-term enterprisewide software implementations.
WITHOUT A FORMAL PMO AND WITHOUT HAVING ALL THE PROCESSES IN PLACE, WE WERE BEHIND SCHEDULE. WE NEEDED TO DO BETTER ON RESOURCE MANAGEMENT AND UP-FRONT PROJECT DESIGN.
Brenda Brinkley, PMP, CEO, Epiphany Inc., Houston, Texas, USA
“Without a formal PMO and without having all the processes in place, we were behind schedule. We needed to do better on resource management and up-front project design,” she says. “There was an overextension of resources. It was difficult to know who was available and when they were available for a project.”
The goals for the new PMO, which Mr. Merla helped design and implement, covered many aspects of his four-week template. Portfolio governance, methods and standards as well as resource management were considered key elements. Epiphany's critical issue concerned project management, and better project tracking, and status reporting was the solution. So the company designed a project management dashboard on NetSuite software, an enterprise solution it implements for clients. “We're able to see red, yellow and green status on scope, budget and time, who the project manager is and a variety of status items,” Ms. Brinkley says.
Given that one to four of the company's seven full-time employees typically work on a project—and they all do it remotely, with clients around the country—there had been significant gaps in data. The data repository in an easily viewable form allows Epiphany to make more informed decisions that drive project management, according to Ms. Brinkley. “Don't underestimate the summarization power of a dashboard where you can easily see on one page or one view where you are with all your projects,” she says.
Sign of the Times
It's easy to spot an ineffective PMO, according to Eddie Merla of Duende Project Management Services. “The gauge is: Are your projects meeting your success criteria by how your organization defines success? In some organizations, like engineering and construction, for example, the focus is strictly on the schedule,” he says. Other signs of a struggling PMO include lack of leadership within the PMO or those run by administrative-only staff. “There has to be a clear vision for the PMO,” he says.
“A PMO may not have the right sponsorship to affect change,” Mr. Merla says, noting the direct link executives have with project manager leaders in influencing the bottom line. “One of the most difficult challenges faced by a PMO is providing portfolio management, such as prioritizing projects and ROI ranking. PMOs also are challenged with improving ROI on individual projects.”
Some of the more subtle signs that it may be time to implement a PMO or alter your current one include:
- Objectives for project management within the organization are not clear
- Customers (internal or external) complain about project delivery, incomplete scope or missing functionality
- Growing mistrust of the project delivery organization or PMO
- Inadequate staffing of the PMO, ineffective individuals or lack of empowered ones
- Stakeholder expectations are misunderstood or aren't formally managed
- Project status reporting is inconsistent or faulty
- Unprioritized projects lead to project and resource conflict
- Lack of available, skilled resources
- Inefficient use of resources from inconsistent processes from project to project
- Project scope is compromised or changed late in the project.
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IN APRIL 2005, EPIPHANY HAD 31 PROJECTS UNDERWAY OR IN THE PIPELINE. BY YEAR-END, IT HAD MORE THAN doubled ITS LOAD TO 75 PROJECTS.
The company also standardized processes for capturing project information, creating a project request document for use on internal and external efforts. Basic project requirements and descriptions easily are entered on the form, and project opportunities can be tracked via a customized application on NetSuite.
Training and raising the overall awareness of project management was a key benefit of establishing the PMO at Epiphany. By late 2005, most of the company's employees had completed Project Management Professional (PMP®) certification. The rest expect to be certified early this year. “The combination of having the PMP and the PMO helps our consultants better manage their projects, both internal and external,” Ms. Brinkley says.
Epiphany client Directory M, an online directory and marketing firm in Boston, Mass., USA, found that Epiphany's PMO procedures improved its estimating on timing and resource allocation. This improvement allowed Directory M to time the opening of its new office to coincide with Ephiphany's completion of a large customer relationship management software implementation.
The boost to resource management has allowed Epiphany to take on more projects and clients. In April 2005, it had 31 projects underway or in the pipeline. By year-end, it had more than doubled its load to 75 projects. “We're still working on on-time rates,” Ms. Brinkley says. The company planned to roll out project status reports to its customers in early 2006, after refining its internal status reporting.
As Epiphany demonstrates, a PMO—even one created in 30 days—can help a company deliver a quality solution, add business value and meet customer needs. The company must remain focused, however. “Have a strong vision of where you want the PMO to be in 30 days, and where you want it to be one to two years from now,” Mr. Merla says. PM
Marcia Jedd is a Minneapolis, Minn., USA-based supply chain and business writer.