organization structures for effective project management...

ORGANIZATION STRUCTURES FOR EFFECTIVE PROJECT MANAGEMENT

SUPPORT

GEORGE MERGUERIAN

SENIOR PARTNER – GBMC [email protected]

WWW.BMC-GLOBAL.COM

George Merguerian

Senior Partner at Global Business Management Consultants – www.BMC-Global.com Experience developed in leading edge companies: Engineering: Construction, Engine Manufacturing, Oil Services, Executive Development, Information Technology and Consulting sectors. Consulting Experience: Project Programme and Portfolio Management, Strategy Execution, Quality Management, IT/IS Technologies applied in …...

Private sector: Ashland-Solenis, Atos Origin, Coca Cola, DSM, GSK, Goodyear, LJA Engineering, Momentive, MSF, Omron, Pliva-Teva, Schlumberger, Solar Turbines, SMIT, UCB, Valtech, … Public Sector: European Commission, European parliament, NATO Agencies and NGOs: Fusion for Energy, European Defence Agency, EMCDDA, IDF, JRC, Médecins sand Frontières, OHIM …..

Education: Engineering degree and an MBA (IMD) Certified Project Management Professional (PMP®), a member of the Project Management Institute and the Society of European Engineers and Industrialists (SEII). Faculty member for project management programmes at the Rotterdam School of Management, the International Management Institute in Ukraine, Management Centre Europe in Brussels.

Established in 1987 GBMC is a leading provider of project management services globally – coaching, consulting, direct project support, project resourcing, maturity assessments, methodology development and implementation and training.

GBMC Services

Diagnosis & Assessment

Professional Development

Coaching, Facilitation & Management

Methodology & Tools

Competency & Career

Development

Technology &

Automation

PMO Office Development &

Consultancy

Session Objectives

Conclusions

Identify Best Practices for Project Management Offices

Illustrate the role of senior management for successful project management

Discuss Best Practices for Effective Project Management

Example of challenges of Project Teams – distilled from 100 inputs from 3 organisations in 2014

Challenge

Senior Managers do not understand Project Methodology Lack of knowledge of project team members to perform their tasks Lack of senior management support Lack of resources for project Lack of clarity of roles Risk Management is not done Cross project risks are not analysed No risk culture Too many priorities Too many deadlines Lack of management involvement Reactive Vs Proactive Weak interdepartmental communications No link of project to strategy KPIs that cannot be measured Frequent scope changes .. ..

Percent of projects meeting goals

PMI: Pulse of the profession 2015

Reasons sited for project failure

Impact of Project Sponsor Training on a Project’s success

Source: BCG and PMI survey of 897 project managers and 232

executives - 2014

Project Definition and Impact on Organization

Ongoing operations will be impacted by the project

Temporary - resources must be allocated for the duration of the project

Degree of Uniqueness

introduces risks

Structures must be in place to support

effective decision-making

A project "is a temporary organization setup to create a unique product or service within certain constraints such as time, cost, and quality.

The Portfolio Of Projects and Programs Deliver the Strategic Goals

Organisational Resources

Strategic Goals

Vision

Mission

Operations & PPP

Effective Organisational Processes

Governance and competences are required to realize a project’s benefits

Required elements for PM success

Principles and

Methods

Organisation Support

Effective Teams

Successful Projects

Project Manager •Develops and Executes the Project Plans with the Project Team •Directs and Leads the Project Team

Project Owner •Makes the Business Case •Approves the Project Charter •Approves changes •Manages the benefits

Senior Management • Decide on projects and programmes • Monitor projects/programmes • Manage strategy and strategic change

Functional Managers •Provide resources •Coach resources

Broad Project Roles and Responsibilities

Principles and Methods - A Project Management Methodology Source: Adapted from PM²@EC

Project

Charter

Project Plan Project

Deliverables

Project

Drivers

Phase

Inputs

Phase

Outputs

Project

Sponsor initiates

Project

Manager (PM) plans

Project

Core Team (PCT) executes

Project

Stakeholders evaluate

Project

Phases

Business Case

Initiating Define Scope

Assign PM

Planning Elaborate Scope

Assign PCT

Executing Manage Scope

Coordinate

Closing Capture Lessons

Accept Project

RfP Phase Gates

Approvals RfE RfC

Monitor & Control

Project

Charter Project Plan Project

Deliverables Project-End

Report

Effective Project Teams

Mutually Accountable

Interpersonal and Leadership Skills

Technical skills for the project

Organizational Support

Maturity Development

Organisational Structures

Senior Management Sponsorship

Project Management Maturity

Source: PMI – Pulse of the Profession -2015

Organizational Maturity Models

Gartner PM Maturity Model (modified)

Level 0: Non-existent – ad hoc

Level 1: Initial – reactive

Level 2: Developing – emerging discipline

Level 3: Defined – initial integration

Level 4: Managed – increasing efficiency

Level 5: Optimized -enterprise – orientation

People

Staff assigned to projects on a first-available basis. PM activity based on interests of individual managers.

Priority projects get appropriate staffing – everything else is “first available”.

PMO(s) established. Project resource capacity issues begin to be addressed.

PM leader role formalised. Shared-resource pools formalized.

Network of PM leaders exist. Capacity planning enabled.

PM leaders exist. Accepted specialisation (programme, portfolio) supports maximum performance.

PM Processes

Projects are assigned to line or staff managers. No formal PM process beyond high-level budgeting.

All internal processes centred on management of critical projects.

Project processes in place. Risks reviewed.

PM function established. PMO(s) organised.

Projects are approved on a portfolio basis.

Portfolio is actively managed and maintained. in real-time

Level 0: Non-existent – ad hoc

Level 1: Initial – reactive

Level 2: Developing – emerging discipline

Level 3: Defined – initial integration

Level 4: Managed – increasing efficiency

Level 5: Optimized -enterprise – orientation

Technology

Intermittent use of project schedulers, spread sheets.

Project scheduling tools and milestone reporting adopted.

Project collaboration and team workspaces supported.

Portfolio tool is in place. Reporting dashboards.

Workflow added to toolset. Business users adopt tools as useful.

Single, integrated system supports reporting, collaboration and analysis.

Financial Management

Projects done without formal cost, benefit or risk valuation.

Projects have budgetary estimates. Actual cost can be estimated. Some benefit statements

Project cost and labour hours captured. Estimate of benefit made for each project.

Costs are captured and forecast. Benefits are identified and related to strategy in the portfolio.

The portfolio is modelled and appropriately optimized, factoring in risk. Benefit realisation is tracked

Programmes have their own financial resources and full life cycle costing is available.

Gartner PM Maturity Model (cont’d)

Example of Maturity Assessment (GBMC model)

Project Management Maturity - Organizational Support Sub System

3.13.1

3.3

3.5

3.2

2.32.3

3.6

2.5

2.7

3.2

2.9

Senior management awareness & Support

Projects Review Committee

Project Plans demanded

Project Manager / Line relationship

Projects Prioritized

Project Management Development Forums

Spirit of Co-operation

Project Management System Development

Project Management Center of Excellence

Project Management performance evaluation

Project Management System Auditing

Process

Integrated Project Teams

Variance

Variance Target (3.5)

Maturity


Project Management Maturity - Methods Sub System

2.6

2.3 2.6

2.6

2.5

2.7

3.12.6

2.92.7

2.32.6

3.0

2.9

2.7

2.9

3.0

Objectives

WBS

Project Organization

Scheduling & Resourcing

Baseline (Budget)

Interfaces

Project Plan

Closure & Post Activity

Risk PlanningRisk Assessment

Risk Response

Risk Control

Control Process & Behaviors

Control Infrastructure

Control Techniques

Reporting Process & Behaviors

Reporting Infrastructure

Variance

Variance Target (3.5)

Maturity


Assessing Organizational Competences

ENHANCED PERFORMANCE

Snr. Mgmt. Coaching of

Pmgrs

Prioritized Projects

Project / Line Mgr. Relationships

Project Planning Process

PEP’s Demanded

Line Mgr. Support

Measured

Resource Planning

Project Performance

Measured

PM Training

PM Practice Audited

Percentage of the time you agree that these are done

100-90% 89-75% 74-50% 49-25% 24-0%

1. A management group formally exists which meets to review the performance of projects with Project Managers to assist them in removing obstacles that impede their progress.

1. Snr. Mgmt. Coaching of Pmgrs

2. Prioritized Projects

3. Project / Line Mgr. Relationships

4. Project Planning Process

5. PEP’s Demanded

6. Line Mgr. Support Measured

7. Resource Planning

8. Project Performance Measured

9. PM Training

10. PM Practice Audited

Assessment

2. Project priorities are established, reestablished as necessary and clearly communicated to the project teams and appropriate managers. 3. The project managers meet regularly with their respective line managers to review progress, problems and corrective actions.

4. Project planning and control processes exist, are documented, understood, and practiced across the organization. 5. A Project Execution Plan is required before a project is permitted to begin.

6. Line managers are evaluated on the degree to which they support the performance of cross functional project teams as well as projects in their own areas.

1. Snr. Mgmt. Coaching of Pmgrs

2. Prioritized Projects

3. Project / Line Mgr. Relationships

4. Project Planning Process

5. PEP’s Demanded

6. Line Mgr. Support Measured

7. Resource Planning

8. Project Performance Measured

9. PM Training

10. PM Practice Audited

Percentage of the time you agree that these are done

100-90% 89-75% 74-50% 49-25% 24-0%

Assessment

7. Resource plans and commitments are maintained by the line organization and an appropriate mechanism exists for sharing and resolving resource problems.

8. Contribution and performance in support of project teams is formally recognized in performance reviews.

9. Project team members are adequately trained in project management techniques and methods.

10. Management reviews, audits and evaluations of the project management system are conducted regularly and actions are taken to improve it.

Conference Participants Input – Aggregate result

Organizational Support


Resource

Planning

• Project Plans that have resource requirements over time

• Process that updates data on a regular basis

• Regular forum that takes responsibility for addressing short, medium and long term resourcing issues

Typical components and data required to manage resource and capacity

Enterprise Wide Resource and Capacity Planning

Typical Functional Capacity Plan

Department %

Projects

%

Functional

Resource

available

for projects

Hrs per

day

Hrs per

week

Hrs per

year

IT - Architect. 85% 15% 3 18 89 4284

IT- Programming 70% 30% 11 54 270 12936

IT-Testing 50% 50% 11 39 193 9240

IT User Services 10% 90% 8 6 28 1344

Corporate - Anne 80% 20% 1 6 28 1344

Corporate - Bill 40% 60% 1 3 14 672

Corporate - Legal 30% 70% 4 8 42 2016

Corporate - Finance 25% 75% 8 14 70 3360

Marketing 20% 80% 4 6 28 1344

Marketing Comms 20% 80% 2 3 14 672

Operations 0% 100% 13 0 0 0

Total 37212

Enterprise Wide Resource and Capacity Planning

0

20

40

60

80

100

120

02-Jul 09-Jul 16-Jul 23-Jul 30-Jul 06-Aug 13-Aug 20-Aug 27-Aug

Mdys

UAT Demand UAT Availability HDQ Demand HDQ Availability Total Demand Total Availability

ASC Ph2 - NAU-EOT *

ASC Ph2 - Pt shipm't flt list *

ASC Ph2 - AWB in use * ASC Ph2 - Pt 1 shed manifest *

ASC Ph2 - Pt 1a shed manifest *

ASC Network - NFM *

ASC Network changes 'J' package *

ASC Ph2 - Planned support/maint. *

35

Organisational Support


PMOs

The State of PMOs

Source: ESI International, survey of 3044 professionals – February 2012

Survey Results of What PMO’s Do

Firefighting and Keeping the

Lights on 20%

Running Strategic

Projects Most of the time

26% A good balance of firefighting and executive

strategic projects

23%

Supporting company growth

and competitiveness

20%

Supporting the launch of new

products 11%

Source: Gartner and CA Survey, 2009

Project Management Offices (PMOs)

Source: PMI – Pulse of the Profession -2013

Three Levels of a PMO

Level 3

Strategic PMO

IT PMO

EnterprisePMO

CEO

IT Operations Finiance

PMO

Systems SupportDevelopment

Project Level 1Project PMO

Level 2

Business Unit

PMO

PO

PMO Structure

PMO role from a High Maturity Industrial Organisation

• PLC Definition

• Gates Pass Process

• Select

• Implement

• Support

• Maturity Assess.

• Alignment to strategy

• Train

• Coach

• HR Plan

• Data & Knowledge Capture

• Knowledge diffusion

Knowledge Management

PM Competency

PLC Governance PM Tools

Typical PMO Roles that vary with Maturity

A. The Weather Station (Project Office)

(Traces and reports events without effecting them) Progress against schedule milestones and deliverables, Budget performance, Quality performance against requirements, Risk.

C. The Resource Pool (Enterprise Portfolio Management Office)

(Provides a pool of skilled, supervised project managers to be assigned to projects) Develops, coaches, supervises and maintains a pool of project managers; assigns project managers to projects; accepts overall quality, schedule and budget performance responsibility for projects

B. The Control Tower (Program Management Office)

(Nurtures project management as a business process within the company) Establishes, enforces, improves and maintains and consults on management standards, e.g. life cycle management, planning and control, risk management, portfolio management support.

PMO Roles

- C

olla

tes, m

onitors

, re

ports

pro

gre

ss

and a

dm

inis

tration

- P

roje

ct P

rioritiza

tion

- P

roje

ct C

lassi

fica

tion

- P

ortfo

lio C

ontr

ol

- P

rogra

m M

anagem

ent

- S

ets

Pro

cedure

s a

nd

Meth

ods

- A

udits

the U

se o

f M

eth

ods

and P

ract

ice

- P

rovi

des

PM

Coaches

- S

ets

the P

M B

aselin

e/M

atu

rity

- D

efin

es P

M C

om

pete

ncie

s

and C

are

er

Path

- R

ecr

uits

PM

sta

ff &

manages

succ

essi

on p

lannin

g

- K

now

ledge E

xpert

- O

wns the P

M C

om

pete

nce &

Deve

lops the P

M 'V

isio

n'

Y

Resource

Pool S Y Y Y N Y Y Y Y Y Y Y

Control

Tower S S S N Y S Y S N N S Y

Weather

Station Y N N N N S N N N N N Y N

S

Y

Control Tower Example PMO Monitors KPIs of the Programs

Program: c

Program: IT 4G

Program: A

Program: X

Strategic Goal X

PMO Role Example - Project Gate Management

Governance during Start

Up - Screening &

Prioritization

Governance during

Implementation – Progress

Reviews, Checkpoint and

Highlight Reporting

Governance at

closure

– validation of

benefit realization

Business

Case

Approval

Proposal Concept

G0

Idea Approval

Or

Rejection

Handover,

demobilization

and closure

Execution Project

Planning

Project

Initiation

Project

Launch

Approval

to

Execute Continuous

Execution reviews

Project Sign-off

& Lessons

Learned

G1 G2 G3 G4 G5 1 2 3 4

Approval to

Transition

PMO and Sustainability

Does your PMO demonstrate value to Business?

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Not at all Very little Somewhat Considerably We deliver comprehensiveROI reports to the business

in real time

Source: Gartner and CA Survey, 2009

PMO – Perceived Value

• Partner to the business

• PMO Management Culture

• Service Excellence

PMO Competences

• Business acumen

• Organizational

• Leadership

• Change Management

• Service delivery

Service Excellence

• Understanding the customer and needs

• Proactive to business needs

• Support available when needed

• Service received perceived better than externally available

• Continuous improvement

• Continuous competence development

• Evolving with the business

• “Unbureaucratic”

PMO Service Excellence –Example of Metrics

Criteria Importance of Criteria (1-5)

Current Rating Actions to improve Rating

Capability to enable business strategy

5

Capability to support projects

5

Capability to extend reach

5

Performance metrics - costs 5

Performance metrics - SLA 5

Competence of PMO Resources 5

Ease of communicating with PMO

5

PMO Assessment and Improvement

III. Capability Planning A B C D E PMO has clear understanding of its annual objectives to be

achieved.

PMO works at developing a project teams.

PMO keeps close contact with Project Managers.

PMO conducts capability and resource requirement plans.

PMO has Programme Set up and Management competencies.

PMO has portfolio analysis and management competences. PMO proposes alternative solutions to problems to senior

management for consideration.

Total 0 0 0 0 0

IV. Monitoring and Controlling A B C D E

PMO continually reviews projects performance.

PMO maintains current projects schedules chart that displays

actual progress toward objectives compared with the originally

planned progress toward these objectives for each task being

controlled. PMO maintains projects cost charts that displays budgeted costs

or levels of effort for work completed and the actual cost of the

work. PMO informs relevant parties of needed corrective actions

whenever accomplishments deviate significantly from the plan.

PMO reviews regularly project managers' risk registers.

PMO keeps respective line managers well informed about the

projects performance.

Total 0 0 0 0 0

Percent of time you agree with the Question

A B C D E

90-100 75-89 50-74 25-49 0-24

I. Business Management A B C D E

1 PMO maintains close personal liaison with senior management for all critical

projects. 2 PMO facilitates all processes of project lifecycles. 3 PMO supports project teams in resolving their problems 4 PMO proposes solutions to project problems to management 5 PMO supports PIR of projects

6 PMO reports to management on organisational support elements status with

respect to improving the services that it provides. 7 PMO establishes SLAs and provides performance data

8 PMO demonstrates it's value added to the organisation

Total 0 0 0 0 0

II. Organization A B C D E

1 PMO develops a clear chart describing its roles and responsibilities in the

organisation. 2 PMO staff have clear roles and responsibilities. 3 PMO has defined lines of authority for all PMO staff. 4 PMO provides a good balance of workload for its staff.

5 PMO provides advice to line managers in selecting project managers for

projects. 6 PMO makes best possible use of skills and talents of its staff.

7 PMO provides guidance to project managers at the beginning of each

project.

8 PMO provides coaching to project managers.

Total 0 0 0 0 0


A B C D E

90-100 75-89 50-74 25-49 0-24

V. Reporting A B C D E

1 PMO has adequate project resources for quality reporting.

2 PMO writes reports that are tailored to the target audience.

3 PMO validates all reports prior to distribution to various stakeholders.

4 PMO maintains close personal liaison with project managers throughout the duration of the project.

5 PMO requires project managers to report on progress on: Risks, Quality, Schedule and Budget

objectives of projects.

6 PMO submits periodic reports to management on: Risks, Quality, Schedule and Budget objectives of

projects.

7 PMO reports to management when projects pose risks to the organisation when performance is lagging

plans.

Total 0 0 0 0 0


A B C D E

90-100 75-89 50-74 25-49 0-24

SCORING

After you have completed all questions, your column totals for each of the PMO Functions which will be automatically

transferred to the table below to calculate the total scores for each.

A B C D E Total

I . Business Management 0 0 0 0 0 0

II. Organization 0 0 0 0 0 0

III. Capability Planning 0 0 0 0 0 0

IV. Monitoring and Controlling 0 0 0 0 0 0

V. Reporting 0 0 0 0 0 0



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