Project Management Institute

Creating a world-class PM organization

a success story

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by Ed C. Bunnik, PMP, and Gregory A. Garrett, PMP

Lucent Technologies took the steps necessary to build a disciplined program management organization, and shares the secrets of its success.

LUCENT TECHNOLOGIES SERVICE PROVIDER NETWORKS (SPN) has aggressively worked to create a world-class program management capability during the past five years. Its success story serves as a case study for any large company or organization going through a similar process of institutionalizing program management. Lucent considers every business opportunity a project and the integration of related projects as a program, all of which must be successfully led to meet or exceed customer expectations.

To get to the stage it is today, Lucent's Program Management organization rapidly went through four distinct phases: Awakening, Implementing, Professionalizing, and Enterprising (see Exhibit 1).

Awakening. The first phase that an organization creating an institutionalized program management culture will experience is the Awakening phase. During this stage of development, leadership's involvement and support is crucial because it is during this stage that program management's effect on the business is evaluated. Lucent's leadership was convinced that program management had the potential for improving business performance. To Lucent—a manufacturer, planner, and implementer of communication networks—improved business performance translated to reduced cycle times, cost reduction, improved on-time delivery, and greater customer satisfaction. Lucent's leadership team moved rapidly to take advantage of program management's promise, initiating its implementation as a discipline within the services organization. It formed a headquarters core program management team charged with establishing a constant but flexible program management discipline that could be quickly applied for all Lucent projects around the world.

Ed C. Bunnik, PMP, is manager of Project Controls, Lucent Technologies Egypt, and is responsible for providing scope, schedule, and cost control and data for all projects performed by Lucent in Egypt. He has held project management positions in Saudi Arabia and the Netherlands.

Gregory A. Garrett, PMP, vice president of Program Management at the Qwest and U.S. WEST Customer Program Team, Lucent Technologies, serves as chairperson of the Lucent Technologies Project Management Leadership Council.

Lucent's Program Management Organization went through four distinct phases while institutionalizing its program

Exhibit 1. Lucent's Program Management Organization went through four distinct phases while institutionalizing its program.

In the awakening phase, leadership is crucial. In a nonproject-based organization such as Lucent, functional organizations such as engineering, manufacturing, installation, and sales have traditionally operated independently from their peer organizations. For program management to be successfully implemented, it was clear to Lucent's leadership team that it needed to change from a functional operating structure to one that was project oriented. Then they led the way.

To ensure that all of Lucent Technologies would benefit from the implementation of program management, the executives also established a corporatewide Project Management Leadership Council consisting of directors from every business unit. This council was chartered to provide a forum for the project management community to foster the growth and development of a world-class corporate project management resource. The Lucent Project Management Leadership Council helps foster program management's attributes by sharing lessons learned and best practices throughout the company.

Implementing. The second phase that an organization will experience is Implementing program management; the most expensive and labor-intensive phase in creating a disciplined program management organization. At Lucent, the core program management team was critical to making the implementing phase work. Staffed with a small team of experienced project managers from both internal and external sources, this core program management team focused on developing processes and training and supporting selected large programs. To help jump-start the effort, the team supplemented its knowledge-by bringing in experienced external program management consultants. Initially, Lucent's core program management team established a highly customized three-course program/project management-training curriculum. The training, essential in the implementing phase, focused on project management principles and on customer and Lucent requirements management. The intent of this curriculum was to provide managers with sufficient knowledge to start applying the program management discipline in their work environment. Upon completion of the three courses, students receive a company training certificate in program management.

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Lucent developed an internal program management process documentation that is used to facilitate rapid and consistent implementation

Exhibit 2. Lucent developed an internal program management process documentation that is used to facilitate rapid and consistent implementation.

During the implementing phase, the main function of the core program management team was to provide experienced project and program managers to augment newly formed program teams, sometimes temporarily. In this phase, program management implementation was concentrated on selected large programs. The driver behind placing experienced project managers on selected programs was the belief that concentrating talent to the largest programs would lead to the highest return. On the international front, Lucent initially focused on a number of high-profile global multiyear and multimillion- to billion-dollar programs, such as those in Saudi Arabia, Mexico, and Russia. In the United States, Lucent concentrated on AT&T programs, where its first significant successes were achieved. Choosing highly visible projects to internally showcase and document program management successes and lessons learned is vital in this phase. Internal support can only be obtained by successfully performing these showcase programs.

Professionalizing. The third phase an organization will undergo is the Professionalizing phase, in which the program management discipline is strengthened and program/project management tools are improved. During the professionalizing phase, Lucent established program management organizations led by vice presidents (PMVPs) worldwide. The establishment of these PMVPs is an important step in the implementation of program management. It signals the importance that the company has put on institutionalizing program management. It also establishes champions of program management who are highly visible internally and to external customers. To ensure that the business regions were aligned, specific program management objectives were established to proactively manage scope, schedule, cost, and customer relations. Clear objective setting is essential in the first steps toward globalization of program management.

During the professionalizing phase, Lucent undertook several actions to improve its level of program management professionalism. Today, more than 150 Lucent professionals have obtained the Project Management Institute's Project Management Professional (PMP®) certification, which is one of the internal measurements of success.

To further support communication and professionalism within Lucent, a yearly projct management conference (PMC) was established. In April 2000, more than 850 project managers attended Lucent's PMC 2000, an important medium for communicating and applying lessons learned worldwide. Lucent also improved professionalism by creating an intranet program management website to facilitate dialogue within the Lucent global business community. In addition, introduction of project controls specialists helped improve the efficiency of project managers by allowing them to focus on customer and management issues instead of on data collection.

In the professionalizing phase, Lucent also continued to develop its internal program management process documentation to facilitate rapid and consistent implementation. Today, it includes a Program Management Professional Development Guide (providing career path information, training programs, and job descriptions), a Program Management Handbook (focusing on essential tasks and providing checklists for activities), a Project Controls Handbook, and other practical guides (see Exhibit 2). Another important tool that was created is a Program Management Sales Brochure, which Lucent's sales teams use to educate existing and potential customers on the program management capabilities and the value it can add for the customer.

Building an internal reputation as a value-added benefit that boosts sales is an important success factor for program management during the professionalizing phase. Lucent project managers and program managers are proactively engaged with the sales teams during the pre-award phase and have been vital in obtaining many new sales opportunities.

Enterprising. Enterprising is the fourth and final phase of creating a world-class program management organization. Connecting the various projects and programs is pivotal to take companywide advantage of every business opportunity. Effective use of company resources across multiple projects can be obtained if processes and tools are compatible among these projects. Within Lucent, standardization of progress reports and tools to generate these reports is the first step in this phase. Initiated by the PMVPs of Europe, Middle East, and Africa, a tool was created to support the communication between projects and regional program management offices. This tool, called Wall Chart, uses the power of the Internet to create and communicate project reports. Providing project managers and program managers with an effective way to create and distribute reports will increase their willingness to communicate project status in realtime, both internally and with their customers. The Wall Chart has proven to be a successful tool to facilitate resource management and escalation processes.

Another important step in enterprising is standardization of resource codes and names used in planning tools. In organizations that manage projects that consume hundreds of resources, the tracking of these resources is often done using resource categories (for example, engineers) instead of specific individual resources. It is essential that there is cross-project agreement on how to use and code these resources before enterprise project management can become a success.

Finally, integrating program management processes with other processes within the company, such as engineering, manufacturing, installation, customer service, logistics, asset management, and contract management, is essential within the enterprising phase. Lucent has developed an integrated program implementation process description. In this process all interfaces, such as those between program management and contract management, were agreed to and documented. This integrated process description also includes an analysis of current information systems and outlines the target system architecture for the business.

The integrated process description is used in “Health Checks,” or team assessments. During a health check, members of the headquarters organizations visit program teams and evaluate their performance against the integrated process and systems architecture description. An outcome of these health checks is a road map to migrate the program to standard processes and systems and documented best practices. An important difference between a financial audit and this health check is that the health checks are done by request and are conducted in a team-building environment. This collaboration between the programs and the core headquarters organizations uses the strengths of both and is a sign of a world-class program management organization.

To ensure that all of Lucent Technologies would benefit from the implementation of program management, the executives also established a corporatewide Project Management Leadership Council consisting of directors from every business unit.

APROGRAM MANAGEMENT ORGANIZATION should view every internal and external business activity as a project and the integration of related projects as programs. A true world-class company uses the power of the program management discipline to reduce cycle times and costs, improve on-time delivery, and ensure customer satisfaction. Nearly any organization can evolve through the Awakening, Implementing, Professionalizing, and Enterprising phases of the program management organizational life cycle, given executive support and resources. The real key to successful program management introduction is the ability to do it well, do it fast, and exceed customer expectations. ■

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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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