how to build a pmo

How to build a Strategic PMO

Terri Kenitzer, PMP

9/19/06

2

So you want to build a strategic PMO?

3

So you want to build a strategic PMO?

Take a class.

4

So you want to build a strategic PMO?

Hire some strong clerical support that is organized to track projects.

5

So you want to build a strategic PMO?

Hire some data guys to really put some controls in place to manage status, cost, time and resources.

(A fancy database would be nice.)

6

So you want to build a strategic PMO?

Skeptical?

7

So you want to build a strategic PMO?

A project management office is designed to manage projects and improve the

management of the enterprise through portfolio management linking projects to

corporate strategy.

Projects Portfolio Corporate Strategy

8

So you want to build a strategic PMO?

More than establishing an office and creating reports, it’s infusing a cultural change

throughout the organization.

9

So you want to build a strategic PMO?

J. Kent Crawford who authored “The Strategic Project Office” identified seven key areas of cultural change that deciding to implement a

PMO will require.1

As with any good textbook or course you take….let’s see what we can sift

out and apply to our worlds.

10

So you want to build a strategic PMO?

Speed AND Patience

Building a PMO culture takes time, however, achieving clear objectives during PMO

development is key or you risk the possibility of a failed PMO where leaders lose sight of the value project management practices can bring.

11

So you want to build a strategic PMO?

Speed AND Patience

Move forward quickly

Show results within 6 monthsBegin changing corporate culture within 1 yearBegin showing corporate results within 2 years

Be prepared that it will most likely take 2-5 years to fully deploy a PMO.

12

So you want to build a strategic PMO?

Leadership from the Bottom Up

Start small, with individual projects that focus at the departmental level.

13

So you want to build a strategic PMO?

Leadership from the Bottom Up

Two things will happen:

This is grass roots cultural change.

1. Business partners that participate as stakeholders of the departmental projects experience the project methodology AND delivery of results.

2. These leaders will ask… how can we leverage this approach for our own performance….can we adapt this approach?

14

So you want to build a strategic PMO?

A Systems Thinking Perspective

All players must be on board, from the project team member to the executive sponsors of initiatives.

As a result, successful PMOs are located at the corporate level providing data on funding, resources

and status for projects.

15

So you want to build a strategic PMO?

A Systems Thinking Perspective

When executives can prioritize initiatives based on facts about initiatives, funding and resources…they

are applying a Systems Thinking Perspective as opposed to tinkering with pieces and parts or political

favors.

At a corporate level, the playing field is leveled as this information gains visibility, in terms of what the

organization is working on.

16

So you want to build a strategic PMO?

Enterprise-wide Systems

Kent Crawford recommends that all data to support enterprise-wide project management be in a single

system.1

The reality for many of us is we’ll use spreadsheets and databases to manage this

work.

Guard against creating a project to develop a tracking system that takes more resources and funding than the initiatives your PMO is

managing for your clients.

17

So you want to build a strategic PMO?

Knowledge Management

Establishing a set of basic procedures and standards with a common mechanism or

practice for storing and sharing information.

18

So you want to build a strategic PMO?

Learning and Learned Project Organizations

Ensure project management staff have the baseline education to be successful in your line of business.Seek out individuals with college degrees in project management OR the Master’s certificate in project management.

Seek out individuals with PMI’s certifications; PMP or CAPM

19

So you want to build a strategic PMO?

Learning and Learned Project Organizations

Sure….education isn’t all that and a bag of chips, there are plenty good project managers who have degrees from the school of hard knocks. However, education provides any organization a baseline

understanding of project management methodology.

This approach simply removes a set of barriers with all PMO associates talking AND walking the PM talk.

As a result, you are better positioned to focus on learning knowledge associated with your industry versus focusing on

basic PM knowledge.

20

So you want to build a strategic PMO?

Learning and Learned Project Organizations

One of Stephen Covey’s habits of highly effective people is to ‘Sharpen the Saw’.

On going learning opportunities, whether they be internal lessons learned sharing or more formal educational opportunities are required to help your associates keep their

PM skills sharp and ensure you continuously improve.

21

So you want to build a strategic PMO?

Seems straight forward.

Open Communications

Open communications is the point between which project management crosses between

function and art.

We spend lots of hours training, learning and executing WBS’s, Gantt Charts, documenting

meetings, requirements, critical path calculations, cost estimates, resource allocation,

etc.

This is the function

22

So you want to build a strategic PMO?

Open Communications

Facilitating divergent groups of people to a common goal or

objective with trust, integrity and commitment.

The art is when through the PM’s skill, a team, who thought the goal could not

be achieved and have divergent objectives, achieves a goal as a team

through the art of applying project management.

23

So you want to build a strategic PMO?

Open Communications

When this happens in your organization, not only does the project team win, but deliver enough of

these initiatives and the culture from the CEO to the project teams, start to use common

terminology to describe their work, how projects inter-relate to each other and ultimately how the

company is managing their portfolio.

24

So you want to build a strategic PMO?

Let’s Review those 7 components of cultural change….

Speed AND Patience

Leadership from the Bottom Up

A systems thinking perspective

Enterprise-wide systems

Knowledge management

Learning and Learned project organizations

Open Communications

25

So you want to build a strategic PMO?

A Maturing Profession……

As a child, who knew they wanted to be a nurse or fireman?

As a child, who knew they wanted to be a project manager?

As a young adult, who selected their college due to is reputation on education for project management?

Who majored in project management in college?

26

So you want to build a strategic PMO?

What this validates for us is project management is an evolving profession.

The majority of us likely were assigned to some task or initiative and through frustration or the result of

being a control freak…..you found yourself providing project management.

Now, you may have accomplished a goal once, been assigned another objective and re-used some of

the things you previously did, but primarily made it up as you went.

27

So you want to build a strategic PMO?

Over the years we have learned that the free spirit of project management increases the failure rate on

projects.

Stated differently, if projects are not initiated, repeated, defined, managed and optimized using a consistent methodology…..failure is more likely to

occur.

Also known as the Capability Maturity Model

28

So you want to build a strategic PMO?

Success

Initial

Repeatable

Defined

Managed

Optimizing

Process is ad hoc.

Necessary process are established to repeat earlier success.

Processes are documented, standardized and integrated for the organization. All projects use an approved, tailored process to deploy.

Quality measures are collected and process is quantitatively understood.

Continuous improvement on qualitative data and feedback from piloting innovative ideas.

Components of the Maturity Model

29

So you want to build a strategic PMO?

So how do you know what your PMO’s maturity is?

Reference the triple constraints……

Tim

e Cost

Scope

A less mature organization will

consistently miss milestones and

completion dates

A less mature organization will experience cost variances, require additional funds and shrink profit margins.

Two of the most frequent measures associated with lack of maturity are runaway scope and low

customer satisfaction.

30

So you want to build a strategic PMO?

Maturity is good….Excellence is better.

Part 1 of Excellence Defined:

Excellence in project management requires a continuous stream of successfully managed projects. Keeping in mind that projects may not be successful, but the projects were successfully managed. If you find yourself with 100% project success, then you are likely not taking enough business risk. 2 Excellent companies take risks. It’s what separates good from great.

31

So you want to build a strategic PMO?

Maturity is good….Excellence is better.

Part 2 of Excellence Defined:

Requires that decisions made on individual projects must take into considerate the best interest of the project and the company. Companies that have achieved excellence in project management also realize that excellence is ongoing. Complacency opens the door for competition.2

32

So you want to build a strategic PMO?

Maturity is good….Excellence is better.

Projects

Time

Maturity Excellence2 Years 5 Years

Failures

Successes

2

33

So you want to build a strategic PMO?

Cut to the chase….

The reality is whether you want to start a PMO or improve project management processes, it begins with one of those honest conversations and base-

lining what exists…..against your organization’s business goals or strategic intents and know that

performance, over a period of time, is the only measurement.

34

So you want to build a strategic PMO?

At Humana, we evaluate each request for professional resources against their contribution to the:

Let’s look at an example of the tools…..

Cost Benefit

Financial Benefit

Strategic Alignment

Competitive Position

External Customer Impact

Consultancy Resource Impact

35

So you want to build a strategic PMO?

Once a resource is assigned….our PM Professionals follow our Playbook which is summarized with a quick tip

sheet.3

Historically, we’ve done semi-annual audits of projects for compliance to the Playbook methodology

36

So you want to build a strategic PMO?

Project executives have warned….a company must use maturity modeling as a way to meet business

goals, not as a goal itself.1

While other professionals have suggested, …when it comes to an art/science like project management, we must be cautious not to standardize the life out of the

organization.1

In Summary……

37

So you want to build a strategic PMO?

Bibliography

1 The Strategic Project Office – J. Kent Crawford and accompanying course

2 Advanced Project Management – Harold Kerzner, PhD. And accompanying course

3 Humana’s Playbook

4 Humana’s Initiative Intake Workbook

38

How will you strategically align your PMO?