enterprise project office
TRANSCRIPT
Enterprise PMO
Defini/on, Assessment, and Opportuni/es
By Imad Al-‐Murib
Lean Vector Consultancy
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An enterprise program management office (EPMO) is a governance en/ty, employed by senior organiza/onal leadership, suppor/ng the integra/on and driving success between strategic goals and their enabling ac/on ini/a/ves such as projects and programs.
What is the EPMO?
Agenda:
• EPMO Organiza/on Assessment Readiness • EPMO Styles. • EPMO Mission and Objec/ves. • EPMO Structure • EPMO Risks • PorRolio Management
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EPMO scope is heavily dependent on the enterprise environment
EPMO has limited scope. Project PorRolio.
Skip EPMO EPMO has limited scope. Opera/on Excellence and Business Process Improvement.
Full-‐fledge EPMO focused on building market-‐leading business capabili/es
The Client
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Run The business Planned Improvement
Survival-‐Induced Change
Strategy-‐induced Change
1-‐ Most of the mee/ngs are focused on running the business
1-‐ Is there a good stream of revenue currently coming into the business?
1-‐ Is your organiza/on losing money or facing significant reduc/ons in funding?
1-‐ Is the Org capable of managing programs well enough?
2-‐ The Organiza/on Chose small improvement over large ones.
2-‐ Has management successfully op/mized produc/on and sales capability in the past, and is it commi[ed to con/nuing to do so?
2-‐ Is the Org capable of managing change well enough.
3-‐ Has the business been delivering reliable revenue and reliable profits, even if there might be more money to be made if new markets or alterna/ves were more aggressively pursued?
EPMO is focused on Opera/onal Excellence and Process Improvement
EPMO is focused on PorRolio management. Control to stop the bleeding.
EPMO focused on building market-‐leading capabili/es.
NO EPMO Limited Limited Full EPMO
Readiness Assessment: Client is more focused toward Planned Improvement and Strategy-‐induced Change
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In the Client case, the drive for the EPMO is more of Pull.
Push: The IT PMO asking for more authority to get the job done in a cross-‐func/onal environment. Pull: The Senior execu/ve entrust few to become his eyes and ears to ensure that things are ge^ng done.
The drive to the EPMO could be either a pull or push
Source: Gartner
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The Four Styles of EPMO
EPMO Style What does it do? When it fits Outcomes
Repor/ng gathers data mul/ple siloed func/ons and detects poten/al issues
When there is a concern around projects outcomes and value
Provides the Execu/ve team a complete transparency of the state of the projects
Opera/onal All project managers within the organiza/on report to a single en/ty
When the organiza/on want to centralize all projects to make best use of the resources
Tight control and high visibility of what’s being done.
Strategic Evaluates projects/program benefits against corporate strategy to ensure the right projects are approved and others are stopped.
When there are concerns about disconnec/on between the strategic level and execu/on level of the organiza/on.
Facilitates the "transla/on" of elements in the organiza/onal strategy into ac/on through projects
Business Transforma/on looks at changing the very DNA of the enterprise
When the organiza/on want to transform and change the core business model.
New business models or even new organiza/on.
Source: Gartner
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EPMO Area
When: • Set up a strategic EPMO if there is a high degree of change on the
horizon and if the various business units in the organiza/on will need to work together to achieve the goal.
• Establish a strategic EPMO if there is a wealth of good ideas in the organiza/on all compe/ng for limited funding.
Skills needed: Success in this organiza/on requires different skills than classic project management. Hire for:
• Analy/cal and cri/cizing skills that will support/challenge the development of business cases and appropriate project and program metrics.
• Strong systems or associa/onal thinking skills • Emo/onal intelligence • Facilita/on skills
Change management is another cri/cal skill. Understanding the magnitude and source of change directly impacts the nature of programs and the sequence of projects in the porRolio.
What: • Focusing in detail on the measurement of value at the pre-‐selec/on
phase is how the EPMO can assist top management in making be[er porRolio decisions.
• The strategic EPMO focuses on providing facilita/on and analysis to ensure that strategy gets executed.
• Set up a strategic EPMO to help ensure that projects and programs are actually driving strategy fulfillment. Increase the focus on change management and strategic communica/on. Facilitate strategic tac/cs forma/on.
Given Client environment and vision, a Strategic EPMO would be the most suitable EPMO style.
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The Mission: To ensure that strategy is translated into an executable form (a project
or program) To ensure that the project's scope stays true to only what is required to
implement the strategy.
The Func/on: Is to act as a "cataly/c mechanism" to promote and enable: 1. Strategy collabora/on 2. Change management 3. Communica/ons 4. Program execu/on
A strategic EPMO is a Strategy Execu/on Office and NOT Project Execu/on en/ty.
EPMO does only a very limited amount of actual program execu/on.
Set up a strategic EPMO to: • Ensure that projects and programs are actually driving strategy
fulfillment. • Focus on change management and strategic communica/on. • Facilitate strategic tac/cs forma/on.
To bridge the gap between strategy and tac/cs, begin by applying the concept of benefits realiza/on as a basis for determining to what extent a project actually contributes to the strategy it is designed to support, and use this as a priori/za/on criterion.
Strategic EPMO Mission:
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1. Strategy Collabora/on
The Air Sandwich challenge of Strategy Collabora/on * The Sponsor
The What: Execu/ves, who excel at reading the market, determine the organiza/on's op/mum response to specific market condi/ons and the economy in general, and then cral the strategy for the organiza/on
Senior Managers The How: Senior managers then a[empt to intuit how that strategy relates to the work they had been planning to do anyway and then "tack their sails" in a direc/on that they hope will accomplish the goal. This is the "how" part of the vision.
No Filling !
"The New How: Crea/ng Business Solu/ons Through Collabora/ve Strategy.“ *
The EPMO role is to facilitate the collabora/on and sharing of ideas on how something can and should be done to move the organiza/on closer to realizing its strategy.
The filling should be a process of collabora/ng on strategic tac/cs.
Agreements generally only emerge as a result of people presen/ng their views of the situa/on and then gradually arriving at a shared and, hence, unique view of the right course of ac/on.
The job requires a great deal of listening and probing to ensure there is agreement. Effec/vely, while not all aggressive goals are realis/c, not all opera/onal obstacles are real either, and both groups will need to change some elements of their ini/al concept.
EPMO as Strategy facilitator is to make everyone Focus and Balance these two Factors
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2. Change Management Change management is a mul/step process that begins with craling a realis/c and doable vision.
CommunicaKon is a cri/cal component of change management and will be invaluable in enlis/ng support and establishing the reality of the change.
Start-‐up
Design
Implementa/on
Create Awareness
Employees
Educate
Reinforce and Reward
Acquire project resource
Project Team
Provide Direct Support
Maintain momentum
Build management support
Stakeholders
Develop Sponsorship
Align leadership and manage resistance
The magnitude of the change be fully understood and that the organiza/on have the core capabili/es to achieve the change.
3. Communica/on Social Media Town Hall
Mee/ngs
Corridor Discussions
VoicE
emails
Training sessions
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4. Program Management Execu/on The EPMO should set up a small Center of Excellence for program management. This group will: 1. Monitor the health of programs in the enterprise porRolio 2. Manage the execu/on of a very small number of highly risky and
strategic programs 3. Assist in the management of other strategic programs as required
Planning and Control Timescales, costs, outputs and dependencies, risks and assump/ons, a schedule showing the tranches, the transi/on plan and the monitoring and control.
Benefits RealizaKon Management A benefit is the measurable improvement resul/ng from an outcome, which is perceived as an advantage by a stakeholder. As the program introduces transforma/onal change, this results in a desired outcome.
Blueprint Design and Delivery The Blueprint is a model of the organiza/on upon comple/on of the program, its working prac/ces and processes, the informa/on it requires and the technology that supports its opera/ons. This detailed descrip/on of the future organiza/on is designed to deliver the capability described in the Vision Statement.
Quality management Risk Management and Issue ResoluKon
The Business Case Is an aggrega/on of specific informa/on about the value of the benefits, the risks to achieving them, the costs of delivering the Blueprint and the /mescales for achievement.
Leadership and Stakeholder Engagement
Defining the Vision of the program The Vision Statement is used to communicate the end goal of the program being an outward-‐facing descrip/on of the future state following program delivery.
OrganizaKon roles and capabiliKes documentaKon.
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EPMO Structure
Monitor the health of programs in the enterprise porRolio
Manage the execu/on of a very small number of highly risky and strategic programs
Assist in the management of other strategic programs as required.
Develop Business Case. Translate Strategy to tac/cal opera/on plan Build Strategy execu/on plan
Ensure that benefits are iden/fied and defined. Measure & Track benefits Align the program’s desired benefits and the strategic objec/ves
of the organiza/on.
KPIs • General recommenda/ons range
somewhere between 10 and 25 projects. • This might entail reviewing and suppor/ng
somewhere around 50-‐60 business cases throughout the year.
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The strategic EPMO is backed up by two other organiza/ons, the Project Capability Office and the business process center of competency, whose respec/ve mission is to ensure that projects and business process work can be done anywhere in the organiza/on.
EPMO and other governance bodies
Combining the opera/onal and process aspects of PPM with an organiza/on focused on strategic execu/on simply doesn't work well over /me.
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Mostly Delivers Typical Staff Level Examples of Major CapabiliKes
Program office • Support to one program, for the life of the program
• Senior administra/ve or domain experts
• Budget tracking • Methods support • Contractor repor/ng • Risk tracking • Resource management
Project, program or por]olio management office
• Ongoing organiza/onal PPM maturity improvements • Ini/a/ve repor/ng
• Experienced low-‐ or medium-‐level IT staff • May include the organiza/on's IT or business project or program managers
• PPM maturity assessment and improvement • Status repor/ng • Resource tracking • Methods sustainment • Sa/sfac/on review
Enterprise PMO • Advice and some/mes leadership to major organiza/onal ini/a/ves • Escala/on of issues to leadership
• Management or lower-‐level execu/ves
• Strategy implementa/on • Expecta/ons review • Value realiza/on • Governance linkage
Por]olio management funcKon
• Monitoring ini/a/ves' investment "condi/on" • Providing impact analysis for new or changed ini/a/ves
• Senior IT staff for porRolio management and financial analysis
• Execu/ve insight support • Ini/a/ves' investment analysis • Situa/onal impact analysis • Execu/ve priori/es and decision support
4 similar names, 4 different roles… and a common source of confusion
As shown in the EPMO structure, PorRolio management is part of EPMO func/on. The EPMO might also be asked to do Program Management for selected cri/cal projects in certain circumstances.
This is where the lines blur some/me.
Risks
Risk Impact Possible MiKgaKon Poli/cs and concern over "turf" ownership might hamper EPMO produc/vity.
The EPMO team produc/vity.
The EPMO sponsor (CEO or COO) must make it very clear that the head of EPMO will not be taken any C-‐Level seat within the organiza/on
The EPMO as an ini/a/ve is primarily linked with its sponsor. It’s olen no/ced that once the sponsor is no longer with the organiza/on, the EPMO team goes with him.
The EPMO team job security
Acceptance of the risk.
Having a strong strategic-‐oriented team might encourage other department managers to stop trying to link strategy with opera/on. A leave-‐it-‐to-‐the-‐EPMO symptoms might develop if not addressed properly.
Organiza/on maturity The EPMO has to engage with the rest of the business with a clear agenda to help the line managers to link their opera/ons with the corporate strategy. At no point, the EPMO will actually start doing the work for the business heads.
It’s olen no/ced that cri/cal programs might got assigned to the EPMO team to manage it end-‐to-‐end rather than just provide governance and health check. If con/nued uncheck, this could overload the EPMO team.
The EPMO team produc/vity.
At a certain stage, it might worthwhile considering the Opera/onal EPMO style.
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Business Case for Project/Ini/a/ve Seeking approval
Por]olio Model
Support business func/ons that primarily impact the bo[om line.
Grow top-‐line revenues and enhance the reason why customers choose to buy its products or
services
enterprises that are lacking appropriate infrastructure and
compliance are likely to have an unacceptable
degree of risk
These investments represent "good risk" for the enterprise and ensure that it stays
ahead of the compe//on
How much revenue that investments can deliver? Rate of return? Time to
return?
Hard-‐dollar cost savings, sol-‐dollar produc/vity and cost avoidance in the financial analysis of
benefits
Calculated risk approach to determine the
business damage from not making that investment
The degree to which success could create
compe//ve advantage.
Governance
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16M
50M
12M
300K
33M
5M
Com
pe/
/ve
diffe
ren/
ator s
Com
mod
i/es
and
oper
a/o
ns
Infra
struc
ture
and
com
plian
ce
Inno
va/o n and
gam e
chan ge
Budgeted
Strated
IT Investment in 2014
IT spending is a good indicator of the organiza/on spending.
2014 budget was focused on Commodity and Opera/on efficiency.
Only 1.8% of the Compe//ve Differen/ators projects actually started.
Was it due to unrealis/c planning or execu/on difficul/es?
Nothing has been treated as Experiment and Write Off approach.
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Strategy execu/on framework An important EPMO role is the facilita/on of Strategy execu/on. SEM is an Execu/on Model for Strategy will be discussed here.
SEM provides a structured method for iden/fying, documen/ng and communica/ng the interdependencies among organiza/onal business units' strategies as they a[empt to execute the corporate strategy.
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SEM requires a strategic EPMO func/on to carry out different tasks. However, even a minimum EPMO (repor/ng EPMO) Can help facilita/ng strategy execu/on.
Other frameworks and tools to help Strategy ExecuKon: 1-‐ Business Capability mapping 2-‐ Balance Score Cards 3-‐ SEF: Strategic Execu/on Framework – Stanford business school 4-‐ Gartner Risk-‐Adjusted Value management.
Step1: coherent strategy and measurable goals.
"how this will be done" (the lever) "amount of change we expect" (the measure)
The EPMO can aid in the ar/cula/on of these levers and measures as part of the business case/por]olio review process.
Step2: iden/fy the areas that need to be involved to make a strategic ini/a/ve happen.
Cascading Success Measures Are as Difficult to Come by as An/cipated Benefits
If we will grow revenue by 5% through new geographical channels, then we need to grow X area by Y%,
“Grow revenue by geographic expansion" (the lever) “5% grow for 2015" (the measure)
Step3: Cascading Success Measures
“Implement a reverse-‐aucKon system that will maximize the number of suppliers compeKng against each other to sell raw material to manufacturing, resulKng in lower prices for nonstrategic raw materials.”
Step4: EPMO should support Business Units in Providing an Early Look at How They Intend to Accomplish Their Changes
The goal at this step is to collect just enough informa/on so that, when socializing it at Step 5, the various business units can see where they are working together and where they are working at cross-‐purposes.
• Proposed high-‐level solu/on/project. • Benefits of proposed solu/on/project —
This should con/nue to refine the strategy statement in Step 3.
• Solu/on/project dependencies: what other business units will need to provide assistance?
• Solu/on/project risks
Step5: Circulate a composite view of what every business unit has submi[ed and capture the various organiza/onal dependencies that the proposals might engender.
Step6: Convene some form of governance or advisory group to mediate any differences that become visible.
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SEM: Strategy execu/on framework
Summary
• It is important to decide which type of EPMO is right for the client.
• EPMO will have a crucial role in strategy execu/on of the organiza/on.
• EPMO will be adopt Change Management and Capability modeling prac/ces to drive changes.
• It is important to understand the role EPMO plays in PorRolio Management.
• EPMO will be backed up by other governing bodies within the organiza/on.
• It is important to understand the risks involved with the EPMO in order to establish a successful prac/ce.
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Thank you
Q & A
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