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Implementing a Project OfficeImplementing a Project OfficeImplementing a Project OfficeImplementing a Project Office

Presentation to Applications Division, Edinburgh University, 24th May 2007

Paul Lyden, Fistral Consultancy (www.albanorth.co.uk)

• What is a Project Office?

• How can you create an effective Project Office

• Action Plan

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What is a Project Office?What is a Project Office?What is a Project Office?What is a Project Office?

• What the PMI says:

• What the Gartner Group says:

There is a range of uses for what constitutes a project office. A project office may operate on a continuum from providing support functions to project managers in the form of training, software, templates, etc. to actually being responsible for the results of the project.

—PMBOK Guide, 2000 Ed.

Recently Gartner has seen the renewed use of a dedicated organizational structure to develop an enterprise discipline for project management. More than 40 percent of client organizations have implemented some form of project office to “professionalize” project management.

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The Project OfficeThe Project OfficeThe Project OfficeThe Project Office

• Provides standards and procedures to all project managers

• Advises and mentors in specific project situations

• Monitors delivery of project milestones

• Establishes a culture of best practice

• Ensures that lessons learned are preserved

• Improves the success rate of projects within the organization

• Improves return on investment of corporate projects

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Justifying the Cost of the Project OfficeJustifying the Cost of the Project OfficeJustifying the Cost of the Project OfficeJustifying the Cost of the Project Office

• Projects are valuable

• Organizations are becoming more “projectized”

• Project failure is very costly

• Cost of The Project Office can be justified

According to The Standish Group International Inc. in West Yarmouth, Mass., schedule delays on IT projects still occur 63% of the time, while 45% of companies face cost overruns. Overall, 23% of all projects fail, which means the project is canceled before completion or is never implemented. Furthermore, 49% of projects are challenged, meaning that the project is completed but is over budget, exceeds the time estimate, or boasts fewer features and functions than initially specified.

Case Study: The project office had annual operating costs of $253,000, but it saved the company $2.5 million by canceling uneconomic projects in just one year. That demonstrates real value—both intermediate and longer-term—to the bottom line.

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Project Management Office: Staffing and Project Management Office: Staffing and ResourcesResourcesProject Management Office: Staffing and Project Management Office: Staffing and ResourcesResources

• Managed at a level consistent with the role within the organization (See upcoming slides)

• Project management staff— Full or part time— Methodology “champions”— Senior troubleshooters

• Administrative staff— Project-aware— Supportive of the project management function

• Technical and functional staff— Seconded “as and when required”

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Matrix OrganizationsMatrix OrganizationsMatrix OrganizationsMatrix Organizations

• Functional organizations— Groups of people operating in

specializations— Projects are not coordinated

• In a matrix organization, the project manager— Works part time— Has little or limited authority— Is not empowered

• Result— No common standards— No priority assessment— No senior management

involvement— High failure rate— High cost

Matrix organization

Data analyst

Data analyst

Data analyst

C++

Pascal

COBOL

Installer

Installer

Division manager

Technician/project manager

Functional manager: database

Functional manager: programming

Functional manager: servers

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Project-Oriented OrganizationsProject-Oriented OrganizationsProject-Oriented OrganizationsProject-Oriented Organizations

• In a strong matrix, the PMO— Is supported by senior management— Is at the same level as PMs— Is independent of functional

departments

• In a projectized organization,the PMO— Is managed at a senior level— Coordinates all projects

– And all staff are project-oriented

• Result— Project standards are maintained— Priorities are managed— Costs are controlled— Success rate is improved

Data analyst

Data analyst

Data analyst

Functional manager:database

C++

Pascal

COBOL

Functional manager:programming

Installer

Installer

Functional manager:servers

Division manager

Manager PMO

Project manager

Project manager

Director of PM

Senior manager

Strong matrix organization

Configuration specialist Project manager

Staff

Staff

Staff

Project manager:

Staff

Staff

Staff

Project manager:

Staff

Staff

Staff

Project manager:

Director PMO

Vice president

Projectized organization

Staff

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The Project Office FunctionsThe Project Office FunctionsThe Project Office FunctionsThe Project Office Functions

Administration functionsCultural functions

Project registration Training

Project support

The project handbook

Maintain the project intranet

Conducting project reviews

Assigning project mentors

Promoting best practiceMaintaining the methodology

Certification

Recording lessons learnedCheckingand

approval

Operational functions

Tools and techniques

Project slate

Ongoing education

External seminars

Manage projects

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The Administrative Functions of the Project The Administrative Functions of the Project OfficeOfficeThe Administrative Functions of the Project The Administrative Functions of the Project OfficeOffice

• Registering new projects— Formal acceptance of projects, assignment of account code— Assignment of project manager— Recording of sponsor, budget holder, etc.

• Maintaining the project methodology— Ensuring version control— Recording errors and improvements

• Establishing the project slate— Defining the process to change project priorities— Maintaining project benefit/cost record— Maintaining project resource requirements

• Checking and approval— Ensures all project documents are checked by independent project manager— Ensures all projects are authorized at the appropriate level, if required

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The Operational Functions of the Project The Operational Functions of the Project OfficeOfficeThe Operational Functions of the Project The Operational Functions of the Project OfficeOffice

• Conducting project reviews— Milestone events— Risk reviews

• Assigning project mentors— Internal or external assistance to project manager, when required— Reacting to unsatisfactory project status

• Project support— Identifying and providing additional project resources— Facilitating scope and time negotiations with project sponsor

• Tools and techniques— Researching contemporary techniques in project management— Introducing new methods and processes— Coordinating feedback on practical use of existing tools— Maintaining templates, etc.

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The Cultural Functions of the Project OfficeThe Cultural Functions of the Project OfficeThe Cultural Functions of the Project OfficeThe Cultural Functions of the Project Office

• Establishing the project handbook— A reference for all project staff, with access to the methodology, templates,

and documents

• Maintaining the projects intranet— A central source of methodology messages and specific project information

• Organizing project management training— Conducting training needs analysis for project staff— Identifying and sourcing project management training suppliers

• Promoting certification— Establishing a certification path— Supporting certification candidates— Implementing corporate maturity (e.g., OPM3)

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The Cultural Functions of the Project Office The Cultural Functions of the Project Office (continued)(continued)The Cultural Functions of the Project Office The Cultural Functions of the Project Office (continued)(continued)

• Promoting best practice— Recording what works and what does not— Disseminating performance information among project management staff— Holding best-practice seminars to spread the word

• Preserving lessons learned— Promoting and facilitating end-of-project reviews— Recording lessons learned— Disseminating results among project management staff— Initiating corrective action, if required

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Summary of BenefitsSummary of BenefitsSummary of BenefitsSummary of Benefits

• Project redundancy eliminated — Reduces occurrence of “reinventing the wheel”— Identifies project overlaps and gaps

• Standardized project delivery— Stakeholders come to know what to expect— A consistent step-by-step process— Consistent use of project terminology

• Improved ROI— Project costs reduced— Benefits assured— Reworking reduced

• Priority changes managed— “Latest and greatest” avoided— Cost of priority change accurately assessed— Management given all the implications of priority change

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How to create a Project OfficeHow to create a Project OfficeHow to create a Project OfficeHow to create a Project Office

• Decide on the services you are hoping to deliver— To project managers— To senior management— To staff

• Create a vision /goal— Write a goal statement— Establish a “Brand”— Advertise the service

• Justify the cost to senior management— Fewer failed projects— Better return on investment

• Establish the service— Procedures— Methodology— Training

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Learn from past experienceLearn from past experienceLearn from past experienceLearn from past experience

• Create services across the spectrum— If project managers get something from it they will support the PMO.— Senior Management will want to see benefits

• Write a Project Management Handbook

• Create a Lessons Learned Database

• Provide tools

• Make reporting proportionate

• Provide monitoring and clinic services

• Tell management about the successes