Project Management Institute

The project office

a common-sense implementation

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by Marie Scotto

Let's take the mystery out of developing a project office.

AS PROJECTS BECOME a way of life for more and more companies, the need for the centralized project office is burgeoning. In discussions about project office implementations, however, questions abound—not about the value of having a project office, but about the process of initiating one. How do I get started? What kinds of skills do I need to staff such a service? What do I need it to accomplish? What type of software do I need? Where should the project office be located? To which function should it report? On what level of the corporate structure should it sit? Can I benefit from a project office if I am still having problems making project management work?

If you are one of the growing numbers of executives faced with such a challenge, you need answers, and you need them fast. You don't have the luxury of learning from failed implementation approaches.

There is no single way to go about implementing the project office. Setting up such a service will differ based on where your organization is in the maturity of its project management practices. What's important is that the implementation follows a set of commonsense guidelines that will assure you at least a reasonable level of success. The benefit of initial successes cannot be overemphasized. Since the project office is a new function for so many organizations, it is important to build from a realistic base aiming at small successful service goals, pragmatically increasing responsibility until it develops into a mature, valuable, accepted support function.

Marie Scotto is president of the Scotto Group Inc., a consortium of management consultants and business trainers. She has an international following and has trained several thousand professionals from around the world. Her articles have appeared in the Journal of Systems Management, Computer World, and Project Management Journal; she was also a chapter contributor to the Project Management Handbook [Jossey-Bass, 1998].

The Range of Project Office Functions

All project offices are not created equal. Effective project offices can provide services that range from a set of simple administrative supports to a complete and expert portfolio of project management services. How they are positioned depends on both the industry and the company itself. In today's business organizations, the successful project office is often a simple data collection and distribution service. The reason for this is that project management approaches are not mature or standard enough within the business community for the project office to take on the responsibility of successful project performance. Before the project office can expect to successfully impact project performance, there needs to be a standard project approach that allows it to monitor accomplishment in some organized fashion.

In highly project-structured organizations—like those in the construction, aerospace, and shipbuilding industries—the project office often performs a full suite of services, being first and foremost a disseminator of highly developed project expertise. However, such organizations have long used standard project approaches, standard progress measures, and standard reporting techniques. So it is not unusual for them to not only staff a crew of qualified project managers and distribute project management training throughout the organization but also to function as fully supported enforcement agencies for project management practices.

Where Does the Office Report?

In addition to the differences in the way the project office functions, the location of the function can also vary. The project office can either be a corporate function, reporting to the highest level of the organization structure, or a more localized service. In mature project organizations it is frequently positioned at the corporate level or at the highest level of a self-managed business unit. On the other hand, in the typical business organization—one that recently (within the past 10 years) introduced project management as a strategy—the office is most often initiated within either the information technology or engineering function. Presumably, the immature project office needs to prove a service to an individual function before being able to operate as a true corporate support.

Wherever your implementation should rationally begin, creating an effective project office is a significant project. All tasks should be identified, all completed implementation steps should be tested, and the area management should approve each milestone achieved.

Ultimately, both the success of the project office and the extent of enterprise support it can contribute depend upon standard project practices that cross all functional lines. The common practice of allowing individual project managers to determine appropriate project approaches must be reversed before the project office can hope to offer any valuable service to the entire organization. Until there is at least a standard methodology being used for all projects, the project office is too limited in the contribution it can make.

As more organizations recognize the need for standard practices, begin using approved cross-functional project approaches more frequently, and succeed in improving their project management performance. Those project offices worth their salt will ultimately move up to occupy positions on the highest level of the organization structure. If yours is the typical business organization struggling with project management as a technique, consider initially implementing the project office at the functional level.

Implementation Strategy

As with any substantial plan, the project office implementation plan needs to be based on a common-sense strategy—one created after a reasonable analysis of the function(s) that the project office will be expected to contribute. But the list of possibilities is quite extensive. Some of the major functions performed by project offices around the world include, but are not limited to:

Monitoring and reporting project progress across the organization

Publishing project management guidelines

Standardizing project approaches

Ensuring the use of approved methodologies

Maintaining project metrics

Standardizing project reporting

Maintaining the performance database for use in improving estimating

Performing project scheduling and estimating

Performing functional portfolio management

Offering project management expertise to troubled projects

Developing and offering project management training

Supplying skilled project managers to the organization

Tracking cross-functional, interproject dependencies

Performing enterprise portfolio management

Ensuring that project objectives align with corporate strategy

Measuring strategic achievement

Creating and monitoring project contracts.

It's clear that the project office trying to be all things to all people too early in its development will become overwhelmed. Taking a common-sense approach means having a well-thought-out plan; one that first builds the foundation on which subsequent functions can be added. Of all the functions the project office can readily perform, the most important is to standardize the project methodology. Unless all projects use a common approach with a common language, common deliverables, and common progress measures, the project office has a difficult time determining the scope of project progress, the function on which all of its value lies. The implementation plan should be structured similar to the concept upon which the Software Engineering Institute constructed its Capability Maturity Model, building from single function service to more comprehensive services, until ultimately the project office becomes a true enterprise support service … until it becomes the best that it can be.

The Planning Process

If your eventual goal is to have the project office perform valuable strategic support to the entire enterprise, a quite realistic ambition—beginning with small valuable contributions, or “quick hits”—can get you on an easy, respectable track. The most effective project offices are developed in stages, just like any project is planned. We begin by building a foundation, testing each completed milestone, and adding functionality as each completed service achieves successes.

Stage 1: Project Focus. Implement and encourage (or enforce) standard project performance, which involves:

Developing and publishing a standard development/construction methodology

Developing and publishing project management guidelines

Implementing full-function project tracking software

Tracking all project progress

Producing and distributing all progress reports

Implementing phase-end reviews to ensure conformance to the established methodology.

Stage 2: Performance Improvement Focus.

Develop systems to improve project performance, which includes:

An estimating system for effort/cost estimates

A performance database to collect performance history for use in establishing cost standards

A nonthreatening system to collect project cost performance

A skills database for use in staffing projects (this is sometimes a separate function performed by resource management)

Production and distribution of personnel usage reports

Implementation of project process improvements, using lessons-learned reports

Development of and conducting project management training.

Stage 3: Corporate/Enterprise Focus. Ensure alignment of all projects with corporate goals, which includes:

Creating an automated system to track cross-functional interproject dependencies

Initiating project approval procedures to ensure project alignment with corporate goals

Creating the project prioritization system

Performing portfolio management, to ensure appropriate staffing of mission-critical projects

Reporting strategic support performance, including resource usage by strategic category.

Getting Started

Now, depending on where your company is in the development of its project management approach, the project office can be implemented at any point in the earlier-described process. The generic work breakdown structure (WBS), the basis of a standard methodology, is the foundation of the entire system. If you already have a well-established methodology that is actually being used for all projects as a matter of course, then you can begin your implementation at the second item under Stage 1, developing and publishing project management guidelines. However, those companies that think a high-level framework, like a system life cycle that only identifies standard phases and activities, is sufficient to function as a generic WBS are mistaken. For a project approach to be successfully monitored by the project office, the WBS should be detailed enough to list all possible tasks at a single-worker task level and at a size small enough to facilitate project control, which means that it should prescribe frequent task completions.

THOUGH THE FUNCTIONS identified here are fairly common, a detailed requirements study at your company might uncover some additional specific needs. Wherever your implementation should rationally begin, creating an effective project office is a significant project. All tasks should be identified, all completed implementation steps should be tested, and the area management should approve each milestone achieved. Be careful of attempting too ambitious an implementation too soon. A narrowly focused approach makes for the most successful implementations. Just make sure it's based on a reasonable commonsense strategy. ■

Reader Service Number 073

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.

PM Network September 2000

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