the impact of pm improvement
DESCRIPTION
The impact of improving project management is huge, but most companies don't know how big it can be. This presentation shows the ROI for improving PM performance across the enterprise and how to get started.TRANSCRIPT
Personal Change, Business Leadership, Life Success
How to Jumpstart Your Project Management Office (PMO)
By
Dino Eliadis [email protected] www.dinoeliadis.com
© 2003, 2005 Dino Eliadis, Inc.
Overview
• Who is Project Manager’s Corner?
• What is a Project Management Office (PMO)?
• What is the PMO’s value proposition?
• How do you implement the PMO concept?
• What functions make up a PMO?
• Where do you go from here?
© 2003, 2005 Dino Eliadis, Inc.
Where Did We Come From?
• Practical approach developed 1990’s in US Air Force.
• Doubled implementation productivity for future teams.
• Used in varying manners for process improvement with dozens of companies.
• Brought back to its roots 2001 – project management.
© 2003, 2005 Dino Eliadis, Inc.
Project Manager’s Corner Mission
Helping companies increase profits by
improving project management.
© 2003, 2005 Dino Eliadis, Inc.
PMO Guidelines
• Your Project Management Office can assume a variety of roles.
• To get maximum benefit, tailor it to your objectives, structure and culture.
• Start small, and grow functions gradually; do not start too many actions at once.
• It’s smart to start with things that help most.
© 2003, 2005 Dino Eliadis, Inc.
Why Improve Project Management?
• Improve resource utilization.
• Increase productivity.
• Improve consistency of project results.
• Increase profitability.
• Reduces stress and improves moral.
© 2003, 2005 Dino Eliadis, Inc.
ROI Impact - A Case Study
• What is the ROI of improved PM?
• Let’s look at an example
• Company PM Profile
20 projects for year.
Total project budget $2.1 million.
Average project 8 months in duration.
Projects average 20% over-budget.
Projects average 3 months behind schedule.
Financial Impact of Poor PM
Project Result Possibilities
86.5%
83.5%
89.8%
74.5%
72.2%
77.0%
91.4%
88.0%
95.1%
0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
On-Time/ On-Budget
On-Time/ Over-Budget
On-Time/ Under-Budget
Late/ On-Budget
Late/ Over-Budget
Late/ Under-Budget
Early/ On-Budget
Early/ Over-Budget
Early/ Under-Budget
Return on Investment
1st Year Impact on Profitability
First Year Profitability
$83,500
$74,544
$45,346
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
Project Results
Pro
fita
bil
ity
On-Time/ On-Budget
On-Time/ Over-Budget
Late/ On-Budget
© 2003, 2005 Dino Eliadis, Inc.
Company PM Profile
• 20 projects for year.
• Total project budget $2.1 million.
• Average project 8 months in duration.
• Projects average 20% over-budget.
• Projects average 3 months behind schedule.
What is the impact of a 20% improvement in PM?
Impact of Improve PDQsm
Improve PDQSM
Impact on Profit
$55,036
$268,238
$320,872
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
Possible Options
Pro
fits Improve Cost Control
Improving Schedule Control
Improve Cost & Schedule
Control
Improve cost from 20% to 16% over-budget.
Improve schedule from 3 months to 2.4 months.
© 2003, 2005 Dino Eliadis, Inc.
Real World Results
Robbins Gioia, Inc. reported 20% reduction in overhead by a major insurance carrier by implementing PM “best
practices” across the enterprise.
How Do You Get These Results?
Determine
Current State
Determine Delta of
Current & Desired State
Design Transition
Method to Desired State
Pilot Transition
Method
Measure Pilot
Results
Systematically
Transition the Enterprise
Define Strategic
Goals & Objectives
Goals Met Goals Not Met
The PMO Implementation Process
© 2003, Dino Eliadis, Inc.
© 2003, 2005 Dino Eliadis, Inc.
3 – Dimensions of Successful Implementation
Process
Tools People
© 2003, 2005 Dino Eliadis, Inc.
Dimensions Explained
• Dimensions are all very tightly integrated.
Process – tasks required to create desired outcome (best practices)
People – skilled human capital required to carryout task,
Tools – are resources that leverage performance of tasks
• Note that process must come first as it sets the requirements for people & tools
© 2003, 2005 Dino Eliadis, Inc.
Project Office Functions
A Summary of Functional Areas 1. Project Planning Support
2. Project Audit
3. Project Control Support
4. Project Team Support
5. PM Skills Development
6. Project Management Tools Support
7. PM Process Management
8. Project Manager Contracting
9. Executive Information Support © 2000, ProjectExperts
© 2003, 2005 Dino Eliadis, Inc.
The Next Steps
• Determine your companies goals & objectives for a PMO.
• Assess the state of your current PM practices.
• Prioritize the PM functions with your companies strategic direction in mind.
• Use the PMO implementation process to build and execute your action plan.
© 2003, 2005 Dino Eliadis, Inc.
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Contact Us:
Dino Eliadis
www.dinoeliadis.com
727-421-5579