The secrets for setting up successfully a PMO in Switzerland against the main stream
Managing Director, PPPM Expert
The concept of a PMO is about to make a comeback in its Next Generation format in the US where the emphasis shifts from a tactical role to PMO's that foster strategic alignment. In some of Europe's conservative nations, the same concept will also emerge - but nearly a decade later. Hopefully less.
This local delay may encompass some advantages. Just like the first release of software, a concept as complex as the PMO may be improved several times (i.e., debugged) before gaining widespread acceptance.
Such is the case with the PMO – now that project management office concepts have been implemented, tested, revamped, and are now emerging more to reinforcement of horizontal management structures, it is finally time for countries like Switzerland to embrace them
The author is involved in major initiatives of Project Management Institute (PMI®). He is a seasoned Project Manaagment Professional (PMP®) with a varied international background, and a strong supporter of proven PMt best practices. He successfully managed to give a Swiss flavour to the seemingly foreign concept of a PMO by advancing with little steps, seeking consensus, presenting new concepts in a non-threatening way to management, motivating PMt practitioners, - all the while implementing the PMO as a discrete efficiency driver.
He succeeded to overcome the stumbling block to create synergy between different business units, and put the project management profession on the corporate map. Telling his story at national conferences brought him peer recognition, at International conferences total company support and Dr. Kerzner's interest to include it in his new book, Advanced Project Management in Europe.
This paper gives positive testimony of building a successful PMO, in an environment where others often fail. During the two years covered in the time frame of the present paper, the author knew about the dismantling of 3 PMOs in major Swiss corporations for basically the same reason–no perceived contribution to the bottom line during harsh economical times.
Mobile Communication in Switzerland in 2002 (Swiss Federal ComCom, 2003)
Despite a penetration rate approaching 73% at the end of 2001, the growth in the Swiss mobile telephone market continued in 2002, reaching 79% at the end of year. Such a rate places Switzerland on the European average. It is also significant that the number of mobile telephone connections is greater than the number of fixed telephone connections (see Exhibit 1).
At the end of June 2002, Swisscom still occupied a leader position with regard to mobile telephone connections. With a 63% market share, the influence of the historic operator remains considerable, despite a drop of 1.1%, again to the benefit of Sunrise, which remains in second position with a 19% market share. Orange is also making a little progress, at 18%. It is also apparent that each of the three operators has again recorded an increase in the number of its subscribers in the course of the past year.
In an international comparison (Swiss Comcom, 2002) we note that there is no country in Europe where the leading operator has such a strong market position as it does in Switzerland, even though the leading operator is in most cases also the historic operator. In all the European countries, the operator ranked second in the market has a far greater market share than either of the two operators who share the remaining market in Switzerland (Exhibit 2).
The situation of the Mobile Communication Company
Under conditions of near market saturation, fierce Swiss competition and limited resources, most sponsors and stakeholders were looking at how to overcome the uncertainty that they were facing. The sponsors wanted to ensure their products were delivered within the opportunity window, the financial controllers wanted to ensure they maximised their profits and, on the other side, most of the project and programme managers wanted to get better prioritisation of the tasks they had to do and, where possible, find an assistance under any form, training or coaching, to better manage their projects.
The feverish days of start-up mode were over; the company was entering in a matured operational mode.
First, the PMO Manager only as a part time role
The first attempt to overcome this problem was to attribute the PMO Manager role as a part time activity to a Programme Manager on the top of his other activities in early 2002. This move had the merit to make exist the PMO, in reality a mere PO. Plus it was from the outset attached to the Corporate Development Office, a division attached directly to the CEO with a very strong transversal, cross-functional vocation, unlike most POs in other companies, coming out from IT and trying to cross later divisional border.
Three major initiatives were conducted by this PMO, pompously named Programme Management Office:
- The installation of a corporate prioritisation process – which collapsed rapidly by lack of any basis
- The introduction of a manual corporate project reporting – fell short because of the necessity of manual weekly re-entry of unverified divisional data
- The roll-out of a corporate project/programme consolidating and reporting software – became a pillar
The needs for project management related services increasing, the resources and results lagging, it became clear this model, having a part time PMO manager, who is on the top not formally PMt educated or PMP® certified, is not viable.
Finally, the PMO staffed with full time Managers
In December 2002 the author of the present paper was nominated as a full time PMO Manager, in parallel with a full time operational PMO manager.
Before getting to the explanation of the main idea, a quick word how did it all start. Based on the fact that the Project Management system of the Company is part of the whole organisation, a larger system, the Systems theory principle was appropriate to be applied.
Systems Theory sees our world in terms of ‘systems’, where each system is a ‘whole’ that is more than the sum of its parts, but also itself a ‘part’ of larger systems. For example, a cell is more than just a pile of molecules and itself is a part of larger systems e.g. an organ. An organ is on one level a whole in itself, but on another, it is a part of a system at the level of an individual person. A family and a community can both be seen as ‘systems’ where the ‘parts’ are people (Johnstone, 2002)
SYSTEM is composed of interacting parts that operate together to achieve some objective or purpose. A system is intended to “absorb” inputs, process them in some way and produce outputs are defined by goals, objectives or common purposes
There are five components that need to be considered when defining the system: people, organization, data, technology, and type of decision. (Exhibit 3)
Within any bigger system (here the company), the smaller system (here the Project Management System at the Company) plays a transitional role by transforming inputs (here needs, constraints, budget, time) into outputs (achieved objectives like increased market share, higher average rate per user of mobile communication, better liked services).
The constituent elements of the system that operates this desired transformation represent a black (here blue) box. The objectives with the creation of the PMO was to improve the transitional trough output of this black box (for many a PMO still is a true Black box) and to arrive at a more consistent, predictable result when taking into account the 400 or so projects treated yearly.
So drawing from personal experience, from numerous authors' interpretation of what is part of a system, and the specific needs at the Company, the PMO manager decided over a simpler version. Only 3 major elements, pillars were retained. And using a graphic presentation of the Greek Temple Metaphor, it seemed easily understandable by all. The graphic depicts the edifice of this internal system as a temple, which lays on the needs it is meant to transform and by being controlled and supporting the corporate strategy. (Exhibit 4)
This representation is a static view. No input and output are represented. Just merge mentally the two pictures (the blue box and this Greek temple), and you would be closer to the reality, the dynamic functioning of the Project Management system.
Conjointly the 3 pillars foster professional transformation of inputs into outputs. They enable good project management: the input being row material, (needs and tasks) the output becomes (hopefully) achieved objectives. But work is the prerogative of domain specialists. This “WHAT” is different per domain, per industry. In project management this is described by the product of the project and is covered by the project life cycle. At the Company the different divisions are responsible for the execution of the projects. This is one side of the coin.
What, in our case, is more interesting, and is in the scope of action of the Project Management System is the transformation of this work. The “HOW” (processes), “BY WHOM” (people, organisation) and “WITH WHAT” (tools and system). The three pillars of any system, which together contribute to at least efficient and hopefully effective transformation. They represent the second side of the coin.
Lets have a closer look into each pillar
The Process pillar
How to do the transformation? In what sequence what task to be executed? In the case of the Company, the “Process” encapsulated all the Project Management knowledge and good practices of more experienced colleagues, or worldwide accepted “Best Practices”.
The extended PMO team introduced one single corporate project management process (not surprisingly the PMBOK® Guide administered Project Management Life Cycle), and made all divisions' Project Life Cycle align with it.
The second major constituent part of the “Process” pillar at the Company is the series of decision meetings between process groups (called phases for simplicity). The most famous gate meeting being the one that authorises a project to start being executed (implemented). This Project Approval Corporate Team (PACT) is composed of the CEO and all VPs, administered by the Operational manager of the PMO.
The Organisation pillar
This pillar covers a wide spectrum of notions.
First, the people who are related to Project Management within the company.
Second the hierarchical organisation of people in project management, the reporting structures, and the dotted lines. With the R&R spelled out for the matrix organisational structure of the Company.
Third, the Education and Project Management Training. During several years there was a fainthearted approach to do some. Nearly always big hype to start with, total abandon after a while.
Fourth, Project Management Competency Framework. While training is the delivery, this is more linked with Organisational development and half way through the turf of HR. Good collaboration with HR people and the application of PMI's Organisational Maturity Model (OPM3®), the first commercial application in the world started 7th Jan 2004, allowed to put this new profession on the corporate map.
The System pillar
First, traditionally this is about techniques, tools. In the case of the Company a software (VPMi of VCSOnline) to consolidate its 400 projects portfolio. It has been installed even some time before the PMO got created.
Second, templates to accompany the project management process. A first set was created by the core PMO team in the early days. Later further templates were developed, adapted, as part of the training delivery.
And again, we need to reiterate. Non of them make separately an organisation successful Project Management wise. None of the 3 pillars is sustainable long-time without the others. So they have to be initiated more or less in parallel, and nurtured to growth together.
Set-up of the PMO
The art and science of succeeding in delivering any complex and untested results passes through some trial and error. To minimise too many errors, we handle it by subdividing the whole into small manageable and easily controllable pieces. In the case of our PMO set-up [author inspired by Gerald Kendall (2003)] it meant to define first of all a project (with the idea of subsequently defining an other one), and than defining the scope of this project. The time spam we cover in the present paper from January 2003 to October 2004 was subdivided in three phases. Each phase covered one or two strongly interlinked projects, the execution of which corresponded to the actual Project Management maturity of the Company.
Set-up phase 1
PMO set-up project
Two facts contributed to the creation of the first “PMO set-up” project. First, the author has been approved in his new PMO Manager position only on positive results of his first 3 months of work. 1 Second, preliminary observations on the presence and on the lack of Good (Best) Practices at the Company during the preceding year or so of the previous part time PMO manager necessitated an immediate response to some urgent needs. They have been labelled “quick wins” 1 at that time. Once disseminated, they allowed affirming openly the need of the existence of the PMO, which created them. Some of these good practices since vanished, but the PMO exist against all odds.
The 5 or 6 deliverables
- A first shot of a PMt glossary,
- A RYG project status explanation,
- An explanation of the hierarchy of portfolio, programme, project, sub-project,
- A “project work” categorising tool based on the previous definitions,
- A rapid project finishing self-assessment questionnaire
- A brief project team OBS template
of this project were quickly disseminated via e-mail, and it was “proved” 2 that it is useful to have a PMO and even more so a full time person for it. Furthermore a PMO Charter 3 has been created and a PMO set-up project plan 4 presented, based on recent best practices (Hallows, 2002), to the author's superior. They were dismissed before even getting to the end of the presentation, just like the proposition to have a KPI measuring the success of the rollout 2. It became obvious that the set-up will not be done in project mode, but in gradually improving operational mode3. Thanks to the solid experience of the author, this change was accommodated without a hick-up. 5
ADOPT phase 1 project
By the time the PMO set-up set project was taking shape and a virtual team was “talked” into participating in it, one representant from each division 6, in order to resolve their most important issue in regard project, another project has been launched nearly for the same participants. The company being part of an International Group, the group launched 51 Top Initiatives to simplify interactions and to save money. One of them, the Alignment of Marketing's Product Launching Process with F/A's Investment Management Process walked right on the turf of PMO. But it came from the Group, and the CFO was its sponsor. So the resources were told to do, what PMO was in the process to convince them to do. 4 Guess which project got off the ground? On which project finally the virtual PMO team concentrated it's efforts.
What was retained after all is the high position support7. After all, the scope of this project was a nearly total overlap with the PMO set-up, just the order changed. The project name has been agreed – ADOPT. It stands for Align Decision Over Project Tactics. As the PMO Manager's image was still weak, a director (of Corporate Quality) has been nominated PM at the face 8for this new project. The Team has been confirmed as composed from the PMO Manager (full time) and 5 virtual members, one from each division, responsible to create or further develop their project management processes and align them the corporate one.
The workstrems have been defined as shown above, on Exhibit 5. They have been admitted as the most urgent activities. Nearly democratically 9.
The project lasted the optimal 7 months. 10. This allowed to define, implement, account for success and start again define the next step in an overseeable time frame, roughly the reorganisation life cycle of the Company.
It delivered the single most important deliverable, the merged corporate project decision-making body, as promised after only about 2 months. It was baptised PACT - Project Approval Corporate Team.
- PACT was further categorised by the attributes
- Threshold (CAPEX / OPEX combination for level of decision)
- Participants – “C” level
- Procedure - frequency, timing, decisions
The other major deliverables were:
- Corporate PMt process, the roof for the all the divisional ones
- PMLC and PLC alignment – the similar interface between the Corporate and Divisional PMt processes
- Divisional procedure translation of the Corporate PMt process
- PMO Operational team & procedure
- Basic consolidated reporting
What characterised the project was that it only catered for the most urgent at this time 11. Only Elements of Initiation and Planning of the Project Management Life Cycle were elaborated.
Set-up phase 2
The PMO set-up project was officially on hold, whereas some of its constituent parts were being delivered “under cover”. Work was still being carried out in a “gradually improving operational mode” 5.
ADOPT phase 2 project (Exhibit 6)
Its scope has been constructed in a down-top way 12, as an aggregation of the yet urgent to be finished work. Its main goal was to deliver the Project Management Life Cycle's elements in the last three process groups (execution, monitoring, closing) and to straighten up the loos end of the first two process groups (initiation, planning). By now two PMO teams were active:
1. The newly created PMO operational team, one CDO full time person plus 5 virtual PMO operational team members, working truly in operational mode and using the processes, templates produced by Adopt phase 1.
2. The reconducted Process and Methodology team, working in operational mode, but building the future.
The major deliverables of this project were:
- Doc Repository – the concept, as an option 13.
- More templates (the Tool pillar)
- Deepened divisional use – roll-out of the aligned processes at the divisions (the process Pillar)
- Near acceptance of the hierarchical dependence between Business and Service projects, inherited nominations for projects at Mktg and IT; they were considered as two different types of projects 6.
- Corporate reporting of basic metrics
- PMO on Intranet (the Tool pillar) - 14
- Full PMLC covered (the process Pillar) - the last three process group elements completed
- Road show on PMO achievements (the Organisation Pillar)–21 altogether during 2 months 15.
- Long term plan (road map establishment) ADOPT phase 1, 2, 3 – N 16.
Project Management Educational Programme
The Tool Pillar was already covered during the time of the part time PMO responsible with the installation of a corporate project and programme consolidation software, VPMi of VCSOnline. Adopt phase 1 created essentially the Process Pillar's basics. It remained to cater for the people. A change at the top of HR gave the PMO Manager to possibility to start 17 building the Organisational Pillar. The new VP HR agreed to a company wide Project Management Educational Initiative.
The only thing which was constant in this Programme in 2003 was change. The PM of the first project within the programme changed, and the budget kept on shrinking every time a new concept was presented to the board. The scope remained vague; there was no expression of any expectation from the main sponsor 7. To hold the things together the PMO Manager kept acting as a shadow PM, but is was worthwhile. He gained HR over 18. And he paved the road for being considered as the main contributor 19 to the definition of the Project Management Competency Framework within the Company. He worked closely not only with HR Training, but HR Development.
The first project within the programme was called “Project Management Educational Programme Preparation”. Within it a major phase was the assessment of the Project Management Maturity of the Company as an organisation. At the beginning, the objective of the Preparation project was to identify a project management training curricula that could respond to the project managers' expectations and which could experience relief from some of the operational problems. But, it was evident that training alone could not be beneficial unless based on a broader perspective of project management education that would include the harmonisation trend and would address the need of a continuous development of knowledge and skills in the perspective of a project manager career.
It was the characteristics of OPM3 that were retained by the Project Management Office Manager and have driven the choice: an organisational maturity evaluation based on a comprehensive and broad set of organisational project management best practices, the support of well-defined improvement paths to progress, and the availability of key performance indicators to follow up on the progress.
Besides that, we could see a certain integrated approach that suited our internal needs: the presence of the domains of programme and portfolio management (addressed by the organisation strategy layer) besides the project management domain 20, and the establishment of stages approach (standardisation, measurement, control and continuously improve) across the domains 21.
The existence of those three dimensions, and the staged approach, was to allow us design a practical learning curve and boost the organisation toward a higher maturity in project management.
There were multiple constraints that we had to take into consideration:
■ The name of OPM3: it contains the word “Organisation”. HR Development were scared that the PMO was going to walk on their turf and steal their job and influence for nearly 5 months 7. Plus it is yet another acronym 8.
■ The schedule: it was imperative to begin training on OPM3 at early January 2004 if we were to complete the education project by March 2004,
■ The resources: candidates to the assessment training and assessment exercise had to be representative of the various Divisions and be partially relieved from their current tasks at short notice,
■ The planning: we had to plan and communicate involvement estimates when we could not see any further than the 3-days training9,
■ The organisation environment: misunderstandings and therefore fears on the assessment objective (was it about people assessment or projects assessment?), at a time where some other audits had been completed a few weeks earlier; indeed we replaced the term “assessment” with “interview” 10.
Set-up phase 3
PMO has proven widely their contribution by now. The initial rivalry has been forgotten, and a mental merge happened between the ADOPT projects and PMO set-up. The Quality Director could completely retire.
ADOPT phase 3 project (Exhibit 7)
The mission of this project was to further fine-tune all that has been built so far, to spread the use of best practices further, to connect further down, side wise and up. In other words all three pillars of the “Greek temple” were improved. By the mid 2004 the maturity has raised enough so that the two PMO teams (Process & Methodology and Operational) got merged. The scope of this project has been an amalgamation of both top-down and bottom up initiatives 22. Connection to Group has been added.
The Major deliverables were
- Improved rolled-out processes
- Improved rolled-out templates
- Desire to move to Portfolio Mgmt - Prioritisation
- Group alignment started
Educational Programme Roll-out
By now the second stage of the Programme started. All benefits were converging, such strong was the interlink between the two projects. The time invested by the PMO Manager in being around with HR handsomely yielded results in excellent collaboration 23. What remained a problem is the availability of the PMs to be trained –operational imperatives. General line managers' buy-in was still to be obtained 11.
The Project Management Office of the Company will continue to develop the umbrella process adapting it to future capabilities, and to sponsor the use of aligned to it divisional processes in all entities of the Company (Process pillar). The PMO fostered training, which is essentially coaching based, allows real life implementation of Good practices without taking PMs away from their projects (Organisation pillar). Adapting the right templates for the right environment derived from PMI inspired good practices and using likewise recognised project and programme consolidating and reporting software system will only make easier project managers life, and facilitate decision-makers tasks (Tool pillar).
There is no doubt that project management best practices are culture independent, just like general management ones. What is to be adapted in a country is the way the introduction of them is planned and executed. More authoritarian or more consensus seeking, quicker or slower, more centralised or more decentralised. Project Managers have a mission if they take their profession at heart. If it's useful, they just have to do it! Sometimes despite of the actual business context and climate. So they become bridges of past and future.
Although there are particularities inherent to the telecommunication industry and the organisations context in Switzerland, the described experience can be transposed to any industry, culture or Project Management maturity level. After all, isn't that what evolution is all about?
Hallows, J. (2001) The Project Management Office Toolkit, A step by step Guide to Setting up A PMO, New York, NY: AMACOM
Johnstone, C (2002) What is Deep Ecology? Retrieved from http://www.thegreenefuse.org/johnstone.htm
Kendall G. I & Rollins, S. C., PMP. (2003) Advanced Project Portfolio Management and the PMO, Boca Raton, FL, USA: J. Ross Publishing
Swiss Federal Communications Commission (ComCom). (2002) Annual Report (2002) Retrieved from http://www.fedcomcom.ch/comcom/e/rapports/rapport2002/IV_stat.html
© 2005, Alexander Matthey, PMP
Originally published as part of 2005 PMI Global Congress Proceedings – Edinburgh