Project Management Office (PMO) fundamentals Part V

– – IDENTITY- Strategy & Structure: stakeholders need to know what the purpose of the PMO is, its value proposition, how it will impact current and future capabilities, and what products and services it will offer. This is the foundation of the PMO and failure to build a strong foundation can be catastrophic; as Gilbraith states “misalignment of strategy [and] structure, and processes will cause activities to conflict, units of work at cross-purposes, and organizational energy to dissipate over many frictions;” the PMO must be reconfigurable with “a series of short-term advantages” that quickly demonstrate business value and build credibility and sustainability (Designing Organizations, 2002, p.75). We begin with the PMO mission: a sample mission statement.

MISSION:
To improve capability in the delivery of products and services by reinforcing core competency with both assurance and governance in project management practices and principles.

Here Assurance means building confidence, building competence, capability and Governance instills sound management upon the expectations and performance in delivery. Certainly a PMO could have a mission that focuses on finance, continuous improvement, Six Sigma—this is a generic mission for this blogs illustration.

GOALS:
Effectiveness: The PMO will build and leverage customer capital, customer/market measures, ensuring an understanding of customer’s needs and wants, building those products and services, and ensuring satisfaction that builds loyalty and high retention.

Efficiency: The PMO will build and leverage process capital, process measures, in organizational efficiency and improvements understanding its capability internally and in the industry.

Evolvement: The PMO will build and leverage innovation capital, preparing for the future, in its strategic planning, alliances and partnerships, change management and investments with foresight into the future.

Expertise: The PMO will build and leverage human capital, people development, in personnel development, leadership, readiness in understanding current capability and capacity and future state to drive organizational success.

Execution: The PMO will build and leverage financial capital, financial measures, in driving business value, profitability, return on investment, to drive organizational success.

– – Our goals provide a high level understanding of what we wish to accomplish, our objectives must be more specific, i.e. according to Pearce & Robinson, they must “clearly and concisely state what will be achieved and when it will be achieved. Thus, objectives should be measureable over time” (Strategic Management, 2007, p. 193). On technique used to delineate objects is called SMART: Specific, Measurable, Attainable/Achievable, Realistic and Timebound. In this blog I will not go delineating objectives as it would directly relate to the PMO products and services. With goals and objectives written with alignment to strategic initiatives and metrics considered, we can think of measuring the current organizational capability.

– – Two industry services in measuring organizational capability have been available for several years now proving their test of time: here are two.

MEASURING PROJECT MANAGEMENT CAPABILITY
Kerzner Project Management Maturity Model Online Assessment

PMI's Organizational Project Management Maturity Model - OPM3

Both models provide a diagnostic tool that provides an understanding of current capability and with consulting, to understand your organizations desired future state, a structured development plan can be created to determine both cost, schedule, resources and risk in implementation. I am pleased to state that I wrote the forward for Dr. Kerzner’s 2nd edition to his companion text as well as implemented his approach at Microsoft Services. One additional mention is Carnegie Mellon’s People Capability Maturity Model Integration (CMMI): another innovation with emphasis in software systems and processes. Know we have the ability to understand what the PMO will be dealing with, the advantages of leading indicators and opportunities for growth on the lagging.

– – The last area within Identity is stating the products and services the PMO will offer and when they will be available. With our goals in mind, our products and services have a focus on: outcome; productivity; growth; people; and valuation in terms of the customer and the organization. Each of these categories, as a product aligns to the Dynamic Multi-Dimensional Performance (DMP) framework for organizational performance (a derivative of the balanced scorecard). Moreover, each also aligns to Edvinsson & Malones extensive research on intellectual capital at Skandia which published its first IC Annual Report in 1995; and Shenhar & Dvir’s extensive research in reinventing project management with their diamond approach to successful growth and innovation. It is important to note that I have created a menu approach for the senior management level that combines this research with additional references creating a simple pick-list that should satisify many C-Level executives in meeting their enterprise PMO needs (too detailed for this blog, but will be introduced subsequently). Here are a sample of three:

PRODUCTS AND SERVICES
1) Project Management Methodology: establish, implement, and manage maturity of practices and methodology; develop and manage life cycle solutions.
2) Project Management Tools: evaluate, select, implement projecttools and job aides.
3) Standards and Metrics: Implement standards; determine project metrics requirements; introduce and use metrics

– – This completes our discussion on Identity-Strategy & Structure and in Part VI I will focus on Relationships-People.

Project Management Office (PMO) fundamentals Part IV

– – The PMO has emerged from the construction and defense sectors providing a half century of services to its customers. However, PMOs are not always well built or well understood, i.e. according to the PMO Executive Council (A function in transition: emerging organizational models for the PMO, 2006, V), “more than 70% of PMOs have reorganized in the past three years” illustrating a need to better understand and explore their organizational posture, or as the Random House Dictionary states, the PMOs “position, condition, or state, as of affairs.” Reflecting back on the PMO Supplier-Customer Relationships (Part II) recall the five PMOs aligned within the value chain. Our drawing (upper right) illustrates three primary domains: identity, relationships, and information. Wheatley and Kellner-Rogers state that “from these simple dynamics emerge widely different expressions of organization;” and from my work with PMOs over the last 15 years it is these expressions that can cause a PMO to fail or succeed. As they also assert: “the domains of identity, information, and relationships operate in a dynamic cycle so intertwined that it becomes difficult to distinguish among the three elements.” I’ve broken down each of the three domains to contains three areas of focus: three activities that will build structural capital that is clearly discerned by its stakeholders (sponsors, supporters, users and representatives). Weaknesses in efficiently executing these activities will impact the PMOs effectiveness and ultimately the interpretation of its outcomes and satisfaction ratings.

“Almost all work today is organized into bite-sized packets called projects…today you have to think, breathe, act, and work in projects." Tom Peters
Think of your PMO as a project—here are three bite-sized packets!

– – Identity: stakeholders need to know what the purpose of the PMO is, its value proposition, how it will impact current and future capabilities, and what products and services it will offer. This is marketing 101—if customers don’t perceive value they will not buy into the PMO, you need to deliver products and services customers will value.

– – Relationships: who are your stakeholders, who is funding the PMO, who is critical to its success, who do you need to keep satisfied, informed and engaged? Are there standards organizations and communities of practice to support the PMO to build credibility and critical mass? If you haven’t identified those critical to your success and are not talking to those that could value you most—the PMO may be destined to be out of commission before the ink is dry on its business plan. It is imperative that the PMO work closely with business stakeholders to help align to a strategy that meets its customer’s needs while satisfying scalability, reliability, performance, and cost.

– – Information: it has been said, is the “medium of the organization.” How will you communicate with your stakeholders, where is the information to help create the basis for making decisions, and the nuggets of knowledge that can be used and reused to improve margins and satisfaction metrics? Knowledge is power and according to Bill Gates, “every new project should directly build on the learning from any similar project undertaken anywhere else in the world.” The PMO should help “raise your corporate IQ.”

– –In Fundamentals Part V we will focus on Identity with a sample mission statement, goals and objectives, an easy approach to measuring organizational capability and suggested PMO services.

Project Management Office (PMO) fundamentals Part III

– – According to Tenner & DeToro (Process Redesign, 1997, 17), organizations “can be described as a network of processes that can be identified, documented, controlled, and improved…a network of processes identifies the internal as well as external supplier-customer relationships that generate products or services.” Reflecting back on the PMO Supplier-Customer Relationships from the previous discussion, our drawing (upper right) illustrates the business process model—a process, according to Wesner, Hiatt, & Trimble (Winning with Quality, 1994, 38) define a process as “one or more tasks that transform a set of inputs into a specified set of outputs (goods or services) for another person [customer] or process via a combination of people, procedures, and tools.” If we look back to the operations PMO-Services which spanned into finance and marketing we could see several processes this PMO might focus, e.g. Proposal Management in order to staff, build, and publish while optimizing the Cost of Sales (marketing); moreover, the monitoring and control of pro-forma invoicing to ensure accurate time and expenses and acceptable variance to safeguard gross margin (finance). These two processes initially could observe levels of efficiency and effectiveness. Burton, DeSanctis, & Obel (Organizational Design, 2006, 11) state: “efficiency is a primary focus on inputs, use of resources, and costs…focusing on minimizing the costs of producing goods or services [and] effectiveness is a focus more on outputs, products, services, and revenues…focusing on generating revenues or seizing leading edge innovation in the marketplace.”

– – While the Director of Microsoft Consulting Services worldwide PMO I had the opportunity to work with the People & Organizational Capability organization, as I was the owner for the Consulting Project Management role/discipline. With over one hundred accredited project managers globally Microsoft needed to determine high-value or essential-to-the-business processes. RoleGuide was then created out of this need, i.e. roles would have 3 to 7 processes with identified deliverables broken into tasks, and mapped to competencies and success criteria—all of this inside an e-business portal that project managers could use, anywhere, anytime. RoleGuide allowed self assessment on these processes and was capable of provided suggested structured development to help build capability, just-in-time. Imagine an inventory by role of what your current capabilities and capacity to deliver are! I also worked with ESI International, the International Institute for Learning (IIL), and Novations Services to map their curriculum to these processes which allowed project managers’ on-demand and scheduled on-site courses—continuous learning supporting process excellence.

Example for Process X
Deliverable + Success Criteria
Task 1 + Success Criteria
Competency + Level
Task 2 + Success Criteria
Competency + Level

– – Quick wins for the enterprise PMO could be as simple as focusing on a few pain-points in the business, processes that are either broken or don’t exist, that once addressed could improve efficiency, effectiveness, and satisfaction metrics. In Fundamentals Part IV we will discuss organizational posture fundamentals, i.e. value-chain alignment by creating the enterprise PMO identity, relationships, and information components—nine minimum areas to success.

Project Management Office (PMO) fundamentals - Part II

– – When building the enterprise PMO we must think of the stakeholders that will sustain its operation, i.e. those that have a share in, or interest in, the products and services offered by the PMO that will provide benefit—provide value. Reflecting back on our value-chain discussion, our drawing (upper right) illustrates five PMO’s within a single organization supporting both primary and support activities. Who’s the customer?

Finance: the PMO-SOX was established to provide compliance with the Sarbanes-Oxley (SOX) act of 2002, i.e. as a publically traded company this PMO provides assurance in accounting oversight, corporate responsibility and financial disclosure. The customer is the board of directors and shareholders.

Operations: the PMO-SERVICES spans into finance and marketing by providing internal services that help sales in preparing proposals and statements of work; by reporting time and expenses and monitoring invoices/costs; and providing project managers with best-practices, process and tools. The customer is finance, operations and marketing helping control cost of sales, gross margin, and satisfaction metrics.

Law and Corporate Affairs: the PMO-PL01, or PMO for Product Line 01, to provide compliance with the European Union (EU) and Department of Justice (DOJ) prior to Release-to-Manufacture of their software product. The customer is the product group.

Information Technology: the PMO-IT provides assurance and governance in anaging the IT portfolio of capital and operational investments—building the right projects and building them right. The customers are the customers, partners, employees and shareholders.

Customer: the PMO is positioned to assist in the rapid deployment of technology and its productive use—to assure that the products that they purchased are deployed with minimum risk and attainment of business value. Important customer capital is
built in this relationship. The customers are the end-users and sponsor.

– – From a marketing standpoint, as Kotler & Armstrong (Principles of Marketing, 2010) state—customer-driven companies research current customers deeply to learn about their desires, gather new product and service ideas, and test proposed product improvements.” The PMO Architect must ask if they are relevant in their current offerings and if there is additional value to be had in their enterprise through building and supporting competency in project management. So the answer is one-to-many, i.e. an enterprise may begin with a single PMO and evolve to have those that may specialize, as in our examples, to facilitate a unique focus on the organization from building human capital, gleaning new perspectives in process and innovation capital, and deeper relationships through customer capital. In Fundamentals Part III we will discuss: how any one of the five PMOs discussed here could quickly provide value through a collection of high-value or essential-to-the-business business processes.

Project Management Office (PMO) fundamentals - Part I

– – The Project Management Institute (PMI) states that a PMO “can range from providing project management support functions to actually being responsible for the direct management of a project.” Even the definition of a Program Management Office adds to the complexity by stating that “corporate benefits [are] realized by the sharing of resources, methodologies, tools, and techniques, and related high-level project management focus.” OK. I empathize with the CXOs and businesses trying to make sense of this complicated, all-encompassing, acronym—so let’s review the PMO fundamentals:

At its core, its most basic level, the PMO offers competency in project management fundamentals that assist within and around the activities of an enterprise’s value chain.

– – Our drawing (upper right) illustrates nine knowledge areas from the PMI’s PMBOK® Guide with the addition of standards, methods, process and tools; supporting PMI’s notion that “other standards on organizational project management maturity, project manager competency, and other topics that address what is generally recognized as good practices in those areas” may supplement the PMBOK® Guide.

– – A key learning here is that the PMO should be customer-driven, i.e. any or all of the illustrated fundamentals must, according to Kotler & Armstrong (Principles of Marketing, 2010), “solve customer problems and create more customer-satisfying experiences;” the perceived value of the PMO must provide “the customer’s evaluation of the differences between all the benefits and all the costs” in creating and sustaining the PMO whether it is a single individual or a department. In Fundamentals - Part II we will discuss: Who is the customer? Can you have more than one customer? Can you have more than one PMO?

Project Management Office (PMO) and the Organizational Value Chain

– – According to Porter (1985), “every firm is a collection of activities that are performed to design, produce, market, deliver, and support its products.” Our drawing (upper right) illustrates the organization as a minimum of primary and support activities helping deliver value and margin to customers and shareholders respectively. Primary activities are “involved in the physical creation of the product and its sale and transfer to the buyer as well as after-sale assistance.” Support activities “support the primary activities and…various firmwide functions.”

– – According to Stevenson (2007), “business organizations typically have three basic functional areas…Finance is responsible for securing financial resources at favorable prices and allocating those resources throughout the organization, as well as budgeting, analyzing investment proposals, and providing funds for operations. Marketing and operations are the primary, or ‘line,’ functions. Marketing is responsible for assessing consumer wants and needs, and selling and promoting the organization’s goods or services. Operations is responsible for producing the goods or providing the services offered by the organization.”

– – If you search many of the online job boards for “PMO” in the title of the job description you will find that they are everywhere in the value chain helping transform in efficiency (doing things right) and effectiveness (doing the right things). Nevertheless, those job descriptions often look like a silver bullet using the PMO as a change agent destined to fail, i.e. according to one study; more than 70% of PMOs have reorganized in the past three years.

– – Nearly half a century ago the PMO emerged from the construction and defense sectors initially providing planning and scheduling services—today they are built anywhere within the value chain, across a value chain, and even built to address strategic customers.

– – Keep in mind, when building your next PMO:

At its core, its most basic level, the PMO offers competency in project management fundamentals that assist within, and around, the activities of an enterprise’s value chain.

– – Whether the PMO has a focus on individual development (training/mentoring in building project management capability) or on organizational development (building capacity, competitive advantage, or strategic competency aligned to core)—the PMO must understand its value-add and its alignment to the value chain, otherwise it will lose its own efficiency and effectiveness and become destine to fail. Addressed in my upcoming book Design Considerations for Building the Enterprise PMO—this text helps today’s CXOs recognize project management as a strategic competency, how to create a multi-generational strategy and plan for their PMO, and how to evangelize PMO’s as a means of performance transformation within their organizations.

Take the Time to Estimate and Plan

– – At its most fundamental level, project management is about “time” where tasks occur in an apparently irreversible succession from the past through the present to the future. The Project Management Institute (PMI) defines project management as “the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.” I have had the experience of reviewing Statements of Work (SOW), Requests for Proposal (RFP) and work with cross-functional delivery teams and customers on progress, customer satisfaction and team satisfaction (three minimal touch points in many CXOs dashboards).

– – According to Mike Cohn (an Agile thought-leader and founder of Mountain Goat Software) 2006:

Nearly two-thirds of projects significantly overrun their cost estimates (Lederer and Prasad 1992)

Sixty-four percent of the features included in
products are rarely or never used (Johnson 2002)

The average project exceeds
schedule by 100% (Standish 2001)

– – In a recent web poll released by the Computing Technology Industry Association (CompTIA) nearly 28 percent chose poor communications as the number one cause of project failure. My experience is that this comes from management, i.e. bad management decisions. Failure to communicate the need and risk of not staffing an SOW or an RFP with the right resources “will” cause an impact on progress, customer satisfaction and team satisfaction. While this may increase Cost of Sales (COS) your get this back in gross margin, satisfaction points, and retained customers and employees. Time is irreversible so communicate the need to properly resource your SOWs and RFPs so that you can Estimate and Plan Well, Start Well, and End Well.

For one company these practices and principles helped:

Increase business development efficiency up to 19% by creating a Pursuit Services Desk that streamlined SOW and RFP processes improving both cost of sales and customer satisfaction.

Increase gross margin up to 6% by implementing a portfolio governance / assurance framework.