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Lean, Mean PMO Machine

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In previous posts, we've discussed the must-haves of establishing a project management office (PMO) and the basics of a PMO implementation plan. After digging deeper into the PMO implementation plan, it's time now to discuss how to keep the PMO focused, effective and providing value.
Having a framework that allows you to model the PMO's processes and tailor them to match organizational needs can make corporate project management more valuable. This approach is based on a proven methodology named Business Model Generation, a strategic management canvas for developing new or documenting existing business models visually. We are now going to apply it to a PMO. 

This is important, because many PMOs start small. Their main concerns are usually tied to monitoring and reporting project results to assist senior-level decision-making. However, as time passes, people think the PMO must absorb new features and responsibilities to remain competitive. 

But growing a PMO in size doesn't necessarily mean we're improving project governance and corporate results. Maturity is the key to success. And a lean PMO is much better than a large bureaucratic PMO. Take a look at The Project Management Office in Sync with Strategy to see examples of this in practice.

Setting up a lean PMO is easier than keeping it lean. If you followed the steps mentioned in previous posts, you already have a strong PMO implementation plan with all the basics. Don't be tempted to add new functions to your PMO unless they are strictly necessary to the value you want to provide.

The most important characteristic of a lean PMO is that it is customer-centered. So, the first step is to identify your customers. Then, you have to uncover their needs to define the PMO's value proposition.

In my organization, for example, we can spot five customer groups that our PMO wants to serve:

  • Senior management
  • Project managers
  • Functional managers
  • Teams and team members
  • Suppliers and contractors
Once you know your customer groups, the next step is to identify their needs. These audience needs could look something like this:

  • Senior management: Reliable information that helps them make decisions
  • Project managers: Coaching, mentoring and support
  • Functional managers: Resource management
  • Teams and team members: Training and competence development
  • Suppliers and contractors: Logistical information and fair contract administration
Once we understand our stakeholders and their needs, we can develop a value proposition, which we will discuss in the next post.

Meanwhile, I invite you to review the following business model canvas and consider how this could be used to build a lean PMO:  

Courtesy of Alexander Osterwalder and Yves Pigneur

For instance, does the PMO have revenue streams? If not, can we think of something better to substitute instead? What about channels and customer relationship -- do these apply to PMOs? Can a PMO develop alliances? Find out in my next post.

For more on planning a PMO, read PMI's Pulse of the Profession®: PMO Frameworks, which was developed by PMPs and provides information o five types of PMOs.

Digging Deeper into a PMO Implementation Plan

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In my last post, we discussed the five basics of a PMO implementation plan. Here, I'll delve deeper into those five: 

1. Current State Assessment

When assessing the current state, it might be helpful to hire an external consultancy, as internal initiatives may lose momentum along the way. The people internal to an organization might not be able to ask the right questions or they might even resist due to a fear of change. An external consultancy can assist in overcoming political issues by adopting a structured approach. Usually, consultants force or drive change because that's what they are hired to do. In the end, a good diagnosis will point out issues and opportunities for improvement. 

2. Future State Vision

Based on the assessment, it is possible to design a future state vision, describing how projects, programs and portfolios should be managed in order to fulfill organizational needs. That's because when the current state is clearly understood, it is easy to compare to benchmarks. Consequently, the organization can realize what is missing or what is done but could be improved. Ultimately, the future state vision details exactly what the organization wants to become.

3. Gap Analysis

The next step is to carry out a gap analysis by comparing the current state to the future vision. This analysis has to focus on three factors: 

  • What is desirable? 
  • What is effective?
  • What is feasible?
A successful gap analysis clearly identifies what is missing or what could be improved, prioritizing which features, processes and structure the PMO should have, according to effectiveness (cost x benefit), desirability (sponsorship; what the company want to implement) and feasibility (what is realistic and what is possible to do). We have to select and prioritize based on cultural and organizational feasibility, not only based on resources available.

For example, imagine an organization wants to implement enterprise project management (EPM) software. There are plenty of options in the market. Some have fancy features and are more expensive. It might be desirable to have top-notch software, so we won't have to substitute or upgrade it for years. However, it is effective to choose software that offers the simplest solution and satisfies future state needs. Finally, it might be feasible to start with familiar software to overcome people's resistance and rejection to the PMO implementation.

In this particular case, project professionals might desire the best EPM in the world (desirability) -- but the company could do well with a free version or simpler software (effectiveness). Finally, considering that people unfamiliar with project management practices will have to use the software, it might make sense to get something familiar or similar to other software they already use (feasibility).

4. Implementation Strategy

After the gap analysis, introduce stakeholder requirements to define the implementation strategy. I recommend thinking of the PMO like a new business unit or a small new company. The PMO should have its own mission, vision and goals. We have to identify who are its stakeholders and customers, so we can define its value proposition and its services. Personally, I use the Business Model Generation canvas to do that.

The implementation strategy defines the approach to implement a PMO, major expected results and the overall framework, considering organizational strategy and corporate project management governance. Consequently, the PMO business model must support and enhance strategic alignment by selecting, prioritizing and managing portfolios of projects that sustain and boost organizational strategy.

5. Implementation Plan

Finally, the implementation plan is the detailed project management plan for implementing the PMO. While the implementation strategy is the approach chosen to implement the PMO, the implementation plan puts that strategy into action. 

We start by defining its scope and work breakdown structure. Then we create a schedule of tasks to deliver the project scope. Resource needs are identified and a budget is set. Other subsidiary plans are created to manage integration, scope, time, cost, quality, communications, human resources, risks, procurement and stakeholders. 

The implementation plan should be as detailed as you need. I want to emphasize the importance of defining a business model for your PMO, allowing for performance measurement and improvement after the implementation. 

In my next post, I'll provide a framework for sustaining and improving your PMO, once it is set up and running. Do you have any tips or examples of PMO implementation plans? 

Five Basics of a PMO Implementation Plan

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I often say that establishing a project management office (PMO) is not for the faint of heart. It is a very difficult endeavor -- not just because it involves advanced knowledge, but also because it challenges status quo in the organization. 

In my previous post, we discussed The Must-Haves of Establishing a PMO. Now we are going one step further by laying out an implementation plan. Implementing a PMO involves five basic -- but essential -- sets of decisions:

1. Current State Assessment

  • How many projects do we have today, and how are they being managed?
  • Are their results satisfactory? 
  • Do we really need a PMO? 
  • What type of PMO?
2. Future State Vision

  • What functions will be performed by the PMO?
  • What results do we expect from the implementation?
3. Gap Analysis

  • What do we have right now in terms of project governance, methodology, infrastructure, human resources and software?
  • What do we need to implement a PMO that delivers the expected results?
  • How are we going to handle change management, stakeholder expectations and cultural aspects?
4. Implementation Strategy 

  • What is the scope of the implementation?
  • What are the barriers, enablers and risks of this implementation, and how are we going to deal with them?
  • Are we going to hire a consultancy?
  • Do we start a small pilot and grow it through quick wins? Or do we set up for global, company-wide implementation?
  • What are the implementation's critical success factors?
5. Implementation Plan

  • What is our roadmap for implementation?
  • What are the implementation's phases and key milestones?
  • How many resources do we need? 
  • How much will the implementation cost?
  • How do we guarantee the PMO's sustainability? How are we going to measure its performance and improve it?

Not following these steps can result in serious problems. For example, if we don't conduct a gap analysis, we will probably end up with an unfeasible plan, disconnected from reality. 

I once participated in a PMO implementation that was doomed to fail under the original plan. The future state vision was nearly impossible to reach, considering the current state of the organization. While conducting the gap analysis, it became clear that we should lower our expectations to implement that PMO. In that particular case, it was necessary to implement a rudimentary PMO to kick-start a cultural change to embrace project management. That was the chosen implementation strategy, which led to a feasible implementation plan supported by key stakeholders. 

In my next post, we'll dive deeper into these five steps with best practices and examples on how to carry them out. 

What other questions do you think are helpful to ask of your organization when building a PMO implementation plan? 

The Must-Haves of Establishing a PMO

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Seventy percent of organizations had a project management office (PMO) in 2013, according to PMI's Pulse of the Profession™ In-Depth Report: The Impact of PMOs on Strategy Implementation. That compares to 61 percent in 2006. Despite the increasing number of PMOs, many of them still fail. The first step in effectively establishing a PMO is figuring out if your organization even needs one. Only then can you ask, How can we establish one successfully?

Part of determining if a PMO would be a good fit for your organization is knowing what a PMO's functions are. A PMO is an organizational structure, like a department or group, responsible for helping the enterprise achieve its strategic goals through effective project management results. Therefore, a PMO usually delivers three main objectives:

  • Efficient projects: better results
  • Reporting: information to support decision-making 
  • Standardizing: consistent and repeatable results
Obviously, implementing and sustaining a PMO is not cheap. Usually, there is some capital investment in setting up a PMO, particularly because it will add management overhead in addition to existing projects' costs. For a company whose core business involves only a few projects, if any, it might not make sense to implement a PMO. And while there's no formula to determine when organizations need a PMO, most do when they have:

  • A large number of projects -- a PMO manages interdependencies, resources and provides standardization
  • Very big projects -- they usually bring high complexity, which requires coordination and integration
  • Strategy that depends heavily on new projects -- a PMO in this instance provides strategic alignment, prioritization and selection.

So let's say it's been determined that your company needs a PMO. How do you lay the foundation to establish it effectively? First, it is important to know that there are different types of PMOs. These include but are not limited to:

  • Project office: Planning, monitoring and control functions for large and complex individual projects or programs
  • Departmental PMO: Integrating projects into one or more portfolios of projects, managing a shared pool of resources and providing consolidated reports 
  • Enterprise PMO: Ensuring strategic alignment by selection and prioritization of projects, programs and portfolios. (Read more on PMI® Thought Leadership Series: Strategic Initiative Management - The PMO Imperative.)

Keep in mind that implementing a PMO involves a lot of change management, because it entails a new organizational structure, which affects the balance of power and culture in an organization. I recommend organizations invest more in change management tools or talent. 

Finally, to tailor the best PMO for your organization from the start, I recommend following these key steps:

  1. Define a mission. What does your PMO do? 
  2. Define a vision. How do you want it to grow?
  3. Identify key stakeholders. Who are your clients?
  4. Select core functions and services. How does your PMO add value to stakeholders?
  5. Create proper metrics and key performance indicators (KPIs). How do you know your PMO is doing OK?
  6. Continuous improvement. Develop action plans based on metrics and KPIs
  7. Focus and value. Keep it lean. It is common for PMOs to start adding more services, processes and features. Sometimes they are only wasting resources because the organization doesn't need that.
In my next post, I'll outline a plan to implement a PMO. We will also talk about maintaining a PMO and continuous improvement to keep it sustainable.

Do you have advice for determining if your organization needs a PMO or basic tips for establishing a strong, sustainable PMO?

PMO Directors Should Think Like Executives

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Closing the gap between initiatives and strategy is a hot topic among PMO Symposium 2013 attendees and executives alike. But one of the creators of Balanced Scorecard -- keynote speaker Robert S. Kaplan, professor emeritus, Harvard Business School -- devised an elegant solution: Organizations should be able to describe their strategy in 50 words or less. Keeping it concise makes it easier to map out how that strategy connects to measures, targets and initiatives.

That kind of focus on strategy should be happening right out of the gate. Ed Hoffman, PhD, CKO and APPEL Director at NASA, a PMI Global Executive Council member, suggested in a panel discussion that PMO leaders ask: "What's the problem we're trying to address in our organization and what are we doing that really helps?"

"The solution doesn't have to be elaborate and high-tech," said Ruth Anne Guerrero, PMP, senior vice president, PMI Global Executive Council member TD Bank, N.A., and head of TDBNA PMO. Complex solutions may actually distract more than help, said Tony Gayter, vice president, IT and strategy, HP, a PMI Global Executive Council member. "Pick six metrics that really matter. Don't overcomplicate it."

Taking a deeper dive into PMI's Pulse of the Profession™ In-Depth Report: The Impact of PMOs on Strategy Implementation, PMI's vice president, IT Frank Schettini said high-performing PMOs share three qualities: 

  1. They create a project management culture at their organizations. 
  2. They continually evaluate the PMO's performance. 
  3. They evolve and improve through knowledge management and change management. 
The most successful PMO directors think and communicate like senior executives, Mr. Schettini said.

Part of that comes down to a shift in language, said keynote speaker and author Daniel Pink. "This is where smart people often go awry," he said. "They use their own language instead of that of the people they're persuading. Use the language of the C-suite when you need to 'sell' up. Convince less technical people with less specialized jargon."

Mr. Pink also recommended that PMO leaders learn to curb their power. "You'll get better results by understanding others' perspectives and finding a common ground." 

Read more from symposium.

PMOs Help Connect Projects to Strategy

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"We're not forming PMOs for the sake of forming PMOs. It's about helping organizations deliver initiatives or change in a way that's aligned with strategy," said PMI president and CEO Mark A. Langley during a panel discussion at PMO Symposium 2013. 

And organizations could certainly use the help. While PMI research shows that 88 percent of organizations say strategy implementation is important, less than half say they're good at it. "There's a major disconnect happening in organizations," noted Mr. Langley. 

That's where PMOs have a role to play. "All strategic change within an organization happens through projects and programs, so our job is to connect what we do to strategy," said Mr. Langley.

The need is greater now than ever for PMOs to step into that lead. The exponential acceleration of change today means nimble strategy matters more and more.

Panelist Margo Visitacion of Forrester Research encouraged PMO leaders to translate tactical project elements into the language of the C-suite. 

"Aim for smart simplicity," added panelist Perry Keenan of Boston Consulting Group. "Don't serve up 300 activity reports to the senior leadership team. Serve up milestones and key metrics instead." 

In a later session, Mr. Keenan discussed how PMOs can serve as powerful change agents. For change initiatives to really take root, organizations require a "change delta" composed of: 

  • Strong governance and sponsorship with an active PMO
  • Executional certainty, initiative owners with a transparent view of progress
  • Enabled leaders who are aligned and visibly own change 
  • Engaged employees who understand what the change means to them and are equipped to change behaviors 

"The world is changing at an unprecedented pace," Mr. Keenan said. "Almost every organization in almost every industry should be mindful of resisting temptation to think it's different for them."

For more on PMOs, check out the PMI® Thought Leadership Series: Strategic Initiative Management - The PMO Imperative:

Read more from symposium.

Wanted in the PMO: Strategic Thinkers

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Project management offices (PMOs) don't just change processes. They change their organizations, markets, industries and communities, said PMI president and CEO Mark A. Langley as he kicked off the PMO Symposium 2013 in San Diego, California, USA.

The 600 attendees -- representing 406 organizations, 30 industries and 29 countries -- heard just how powerful PMOs can be during the 2013 PMO of the Year Award.

The top honor went to Canada Health Infoway, a not-for-profit overseeing CA$2.1 billion in public funds. With a portfolio that has increased fourfold since 2005, the PMO acts as a strategic adviser on digital health-record projects. Proving the value of the PMO's strategic focus: Only 4 percent of projects in the portfolio have failed, and almost all of those failures occurred early in their life cycle, prior to significant expenditure.

"Their PMO is a clear demonstration of how organizations can and should implement their strategic initiatives," said Mr. Langley.

The other two finalists were:

  • Jones Lang LaSalle: The commercial real estate's PMO oversees 1,000 project managers. The PMO focused on strategic sourcing of suppliers, business intelligence, and strategic learning and development.
  • Bentley Motors: The luxury carmaker's Beyond 18 initiative aims to define and drive business strategy across the organization through 2018. After identifying 11 strategic projects, the PMO worked with project leaders to deliver best practices, tools and coaching to the areas guiding the organization's future.

The sessions that followed reinforced the growing focus on strategy. A PMO is the governor and facilitator -- the organization's glue, said Greg Miller, vice president at PMI Global Executive Council member CareFirst, Blue Cross Blue Shield.

PMO staff should go in armed with a comprehensive understanding of the organization's strategy, accept the executive game plan, maintain an orderly and expeditious flow, and unify the organization. "PMOs must take center stage and they must operate strategically."

Today's fast-paced project environment is accelerating the drive toward strategic alignment and change management at the heart of a successful PMO, said Michel Danon, senior vice president and CIO, Hawaii Medical Service Association independent licensee of PMI Global Executive Council member Blue Cross Blue Shield. "We need project practitioners who are really adaptable, who can understand and energize people and point them toward a common goal."

That means finding and fostering the right project talent -- within or outside of a PMO. Ed Hoffman, PhD, CKO and APPEL Director at NASA, a PMI Global Executive Council member, said PMOs can support talent management by:

  • Building individual, team and organizational capabilities
  • Providing checks and balances among project, engineering and safety communities
  • Institutionalizing knowledge of best practices 

"A PMO should be wrapped around the notion of knowledge and development," Dr. Hoffman said.

Lynn Batara, PMO director of Franklin Templeton Investments, spoke of the importance of developing project talent and engaging stakeholders: "The mystery of project success is people."

Does your organization's PMO focus on strategy and talent development? Read more about the PMO symposium on this blog or on Twitter, #PMOsym.

Strategy Lives or Dies by Projects

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Without proper implementation, strategy suffers — and so do results. That's one of the big takeaways in the Economist Intelligence Unit's 2013 Why Good Strategies Fail: Lessons for the C-Suite.

In the study, 65 percent of best executors — organizations that successfully completed 20 percent more strategic initiatives than others — report well above average financial performance and strategic implementation, compared to just 18 percent of peer organizations. Still, too many organizations stumble when making strategy happen, with 61 percent reporting difficulty bridging the gap between formulation and execution. 

While strategy typically is engineered at the top, it's with projects that it really comes to life. To help strategy thrive, smart organizations focus on selecting the right projects and then closely following their implementation. The study shows that 59 percent of best executors have the people who formulate high-level strategy involved in execution. 

Catholic Health Initiatives relies on five measures to determine the strategic value of a development project: business value, satisfaction, performance, cost and risk. And the U.S. not-for-profit tracks those measures not just during the selection process, but through the product's actual life cycle and even after the project is completed. The organization's teams continuously assess if a project strategically aligns with business goals by asking yes-or-no questions. If all the answers are yes, the project is marked green. If they see any red — meaning it's not strategically aligned — it's stopped in its tracks.

To truly deliver on strategy, organizations also need talent with the right skills to support strategic initiatives now — and in the future. Among the organizations surveyed for the EIU study, those that made significant investments in talent and skills saw 62 percent of their strategic initiatives come into fruition. That number dropped to 53 percent at organizations that did not provide as significant an investment in talent and skills.  

At U.S. financial services company Performance Trust Capital Partners, portfolio leaders regularly analyze if team members' skills align with the company's strategy. Based on that evaluation, they know whether its IT team can deliver on current projects, requires training to deliver future projects or if a project needs to be outsourced altogether.

Executives can come up with the most extraordinary strategy in the world, but it won't mean much unless they work with project professionals to get all those brilliant ideas executed.

Read the EIU's full report, Why Good Strategies Fail: Lessons for the C-Suite. How does our organization ensure strategy carries through into project implementation?

Can PMOs and Centers of Excellence Coexist?

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Project Management Centers of Excellence (PMCOE) are becoming increasingly popular as a solution for organizations to streamline their processes while increasing efficiency, profit and competitiveness.

Generally, a Center Of Excellence (COE) is a business unit that has organization-wide authority. It coordinates continuous improvement initiatives, ensures that value is achieved in all areas, and fulfils the role of organizational thought-leader or consultant.

COEs are also created to capture an organization's best practices, standards and industry benchmarks. The COE facilitates the approval, transfer and integration of these best practices across the organization. For example, in a global manufacturing company, the COE may identify a best practice used in its European plant, tweak it, and implement the practice in its Saudi plant, too.  

There seems to be confusion between the roles of a Project Management Office (PMO) and a PMCOE. Some argue that the PMO sufficiently leads the organization to project management excellence. So, why would an organization with a well-structured PMO need a PMCOE?

In his book, Advanced Project Management: Best Practices on Implementation, Second Edition, project management expert Dr. Harold Kerzner states:

"The definition of project management excellence must extend well beyond experience and success ... Success is measured by having achieved performance that is in the best interest of the whole company, as well as having completed a specific project."

PMOs and COEs are only successful when they achieve the objectives for which they are created. Leaders in the profession note that the number of projects or years an organization has been delivering projects can't define project management excellence. Neither can the methodology it follows.

Larger, complex organizations may need a PMO and a PMCOE -- but their roles should be clearly defined.

A PMO is an important central hub with a mandate to coordinate and deliver all project activities as determined by the organization's needs.

PMCOE executives would operate as part of the business decision-making process. These individuals would report on the organization's project portfolio as a whole and provide the organization with project consultancy.

The PMCOE also supports the PMO through research, innovation and leadership initiatives and bridges the gap between PMO teams and business units within the organization.

What do you think? Are PMO's and COE's the same? Is a PMCOE just a glorified PMO? Have you come across a PMO and PMCOE in the same organization? Is there clear role differentiation?

PMOs Aren't Just for Project Managers

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The project management office (PMO) is one of the fastest-growing concepts in project management today, but it's not the only answer.

The PMO was born to aid the project manager. Surely then, the PMO (and, as a direct result, you) would benefit if there were a parallel organization for the technical managers, consultants, architects, design specialists, gurus of the world of application configuration and so on.

The PMO is not and should not be an isolated body talking only to the project managers. It should be one of many business units leading the delivery of company strategy.

Align the PMO to a single technical body, no matter what it is, and then align the two through a common process or methodology.

Think about your own in-house project methodology for a moment. Is it just for project managers or does it extend to integrate the technical tasks? Does it recognize the non-project management roles and responsibilities? Does it involve the technical deliveries and control mechanisms? It should.

If you have a common method, have you trained each team in a way that they both respect and understand each other's skills and duties? Have you done so in a way that ensures that the highest level of communication? You should.

When your business assesses the value, benefit and simply whether a new project should go ahead at all, it won't just be the project manager's view that gets the budget approved, will it? So align the technical gurus and the project gurus as one to ensure that the lowest risk and highest ROI projects are commissioned.

Perhaps the future is the perfect pairing of a PMO with a TMO -- a technical management office. It may be that the TMO is formed as a separate entity but closely works alongside the existing PMO -- or even that the PMO embraces and includes the TMO function.

The specifics of how a PMO or TMO relationship would take shape depend on what's best for your own organization, but perhaps it is the future.

What do you think?

Should PMOs Come With an Expiration Date?

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Projects and programs aren't for life. So as the home for project managers, projects and programs, should we not consider the project management office (PMO) in the same light?

A Guide to the Project Management Body of Knowledge (PMBOK® Guide)--Fourth Edition contrasts projects with operational work by stating, "operations are ongoing and repetitive."

Without an end goal, the PMO will become purely a home for operational activity. And if the PMO is only seen as the home of process (methodology) and the body of control (policing) then it will become as exciting as working in -- well, I better not be specific -- but I'm sure you understand what I'm getting at.

I'm not saying PMOs should only be around for a very short time. I'm merely suggesting that because of the nature of what they contain, PMOs must continue to evolve and ensure they're really creating value.

Anyone leading a PMO has a responsibility to consider the end game. We typically know what it is that we are trying to improve, resolve, correct and direct -- but I don't believe that this should be done in a way that creates a permanent need for the PMO.

What we must avoid is the deliberate removal of a subset of project management skills and the replacement of these skills within a permanent overhead community: a PMO. In other words, a PMO should not regularly take on any of the project management tasks. For example, PMO leaders shouldn't say, "We'll look after the risk management and you, project manager, deal with the rest of the project manager's tasks."

It is said that operations end when they stop delivering value, and projects end when they do deliver value. The PMO should aim to end when there is no longer a need for it to exist because it has delivered the value. And that lack of need should be engineered into its strategy.

What do you think? Are PMOs meant to last forever?

The Synergy of a Well-Run Program

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In my last post, I used The Lord of the Rings to help explain the difference between a program and a project. And I also revealed the magical prize of a well-managed program: synergy.

Let's discuss an example in Taiwan: The country has been pursuing a series of e-government initiatives for some time, including an "e-Business" smart card.

Users insert the card into a reader, which then provides access to more than 30 different online government services. The options include business information, marketing and tax databases, tax return calculation, patent applications -- to name a few.

Business people no longer have to go to government offices, spend time telephoning officials or advisers, or print, collect or post physical documents.

The bottom-line savings are substantial. Over one year, a single business might save US$100. Multiply that by 5 million businesses, and the cost savings are around US$500 million. More importantly, it means businesses have access to information and their government whenever they want it.

This is the "synergy" I'm talking about.

But why does such an initiative have to be run as a program, instead of as multiple projects that need coordination?

In this case, more than 30 projects across different application areas are involved and they share a group of IT and telecom resources. With the need to exchange resources, and communicate both vertically and horizontally, a higher level of governance is needed.

Program managers and project managers have different focuses and see things differently. Program managers are primarily concerned with the coordination among projects, while project managers are primarily concerned with the management of their own projects. But working together, they can create that magical synergy.

One Program To Rule Them All

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Program management refers to the process of integrated governance of several related projects to achieve an aggregate result that cannot be delivered by conducting these projects separately.

It may not seem like it, but you can learn a lot about the synergy available through effective program management from The Lord of the Rings.

In the novels and films, the characters of Gandalf, Theoden and Aragorn inspire and command others to be courageous and achieve great feats. Even before a battle starts, these mythical leaders inspire confidence in their men, carefully positioning them in accordance with their skills. Each man has tasks for each stage of the upcoming battle. But they are only effective when coordinated with an understanding of their individual strengths and weaknesses, and knowledge of how they can be used to support and protect each other.

Under a wise leader -- acting as a program manager -- the power of these warriors can be multiplied when coordinated properly. This synergy ensures that every battle they engage in, and every war they fight, victory is at hand. Yet if badly coordinated, the strength and courage of these bands of cavalry, archers, spearmen or swordsmen -- the leader's resources -- is wasted, despite whatever heroic skills they possess individually.

Program management is mainly concerned with managing stakeholders, which in the case of an entire program is a larger, more diverse and more complicated group of than is involved in an individual project. Their interests are different, sometimes contradictory, and their individual impacts -- whether big or small, for good or bad -- may be very significant to the success or failure of the entire program.

The daunting scale of such programs are often not fantasy -- but may appear to demand wizards and heroes to manage them, let alone manage them so that a proper synergy takes place from the different projects involved.

What kind of projects can be managed through a program?
  • Projects with a common outcome, that can create collective capability and share the same resources
  • Projects that have the same tasks, that serve the same customer 
  • Projects where their risks can be reduced when managed together
In such cases, "One Ring (Program) To Rule Them All" can bring advantages, not hordes of rampaging orcs and trolls.

Proving PMO Value: Think Thin

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Amidst all the talk about the value of project management offices (PMOs), maybe organizations should be looking at size.
"PMOs do not have to be big", says Ardi Ghorashy, PMP, PgMP, a partner with 80/20 Consulting Inc., Markham, Ontario, Canada, told me in a recent interview.

"The biggest mistake I think that companies make is that they create a monster organization with a lot of overhead and they also bring all the project managers to report into a PMO. That creates a big lump sum of cost sink that becomes very visible at the executive level every year when you review your finances.

Then the question will always get asked, 'What's the return value on this investment.' And project management has traditionally been very difficult and notorious at quantifying its ROI.

... By its nature, a PMO has such an encompassing impact on the organization that it affects a lot of things. You can't really measure it very easily. .... These days we say PMOs need to be implemented extremely thinly. [Thin] PMOs will demonstrate the value very, very easily."  

What do you think? Are "thin" PMOs the way to go?

Are You Really Ready for a PMO?

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Organizations that have a project management office (PMO) show they are moving toward a centralized management of project resources and strategic alignment to business goals.

But I find a certain level of readiness has to exist in an organization for it to create the platform for a worthwhile and cost-effective PMO--the type of PMO that contributes to the business not by simply being an extension that offers extra resources, but that works and evolves with the business.

There are key issues in organizations that usually hinder this:

•    Senior teams do not understand the PMO or its purpose
•    Senior management teams do not understand what project management is all about and how it can help them lower the costs of implementing projects
•    The PMO is viewed as something you install without careful and business-aligned planning

In my mind, PMO implementation must be viewed and managed as a project. A company should know why it's seeking to implement a PMO in their organization, what business issues it's trying to fix and what inefficiencies it's trying to improve.

A company has to consider:

1.    Organizational Readiness

Organizational processes will require changes to ensure the process flows into and out of the PMO are integrated into the organization.
2.    Cultural Readiness
The organization has to assess its readiness based on current resource pools, whether the resources can be migrated to PMO teams, and how other members of community will be able to align with PMO requirements based on their knowledge, experience, skills and mindset.
3.    Strategic Alignment
The goal is not just to have another department, but to have a team of people agile enough to act quickly and in a focused manner. And planning of the PMO has to include reasons that align with direct impacts on strategic goals of the organization.

General Motor's PMO

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As director of the enterprise program management office at General Motors (GM), Paul Checkowsky oversees program management offices around the world in different functionary areas like sales, manufacturing and supply chain. He took some time to answer a couple of questions about the state of the project management office (PMO) at the auto giant and throughout the world.

How has the economic downturn affected the PMO at GM?
From an economic standpoint, we've got to be a lot more careful about getting the most value for our money. A couple of examples:
   In the past, we've focused a lot on quality assurance of the process--making sure that people are following all of the steps. That's very time-consuming and can be expensive. Now we've built the quality-assurance process into the steps. We no longer have checkers checking peoples' work. We basically built the quality into the process, so that at the end, we don't need to perform a final quality review.
   We are also doing more backward planning rather than forward planning. We are making timing and content commitments to our business community at the beginning of the year and we are holding the project teams to those commitments. We then plan backward to determine what and when we have to do to achieve the commitments. Many project teams are not comfortable with this approach but it does force teams to get off to a fast start and forces them to resolve issues in a timely and efficient manner.   
   The other thing we've been doing is instead of being a policing organization, [the PMO] is now much more involved with mentoring upfront-- making sure the project teams are aware of the processes and helping them know where they might encounter bumps in the road.

Do you think more organizations are realizing the value of the PMO?
They are.
   Actually, in the last six to 12 months, I've [received] a lot of feedback from individuals saying that this new approach--where the PMOs are actually part of the teams doing the work--is very effective.
   [Organizations] themselves are finding ways to leverage these PMO capabilities and this expertise especially helping to identify and resolve integration issues, mentoring of enabling processes and eliminating deployment roadblocks. So I think it's been very positive, and I think it's here to stay.

   Mr. Checkowsky says it's hard to say what is going to happen with GM's EPMO in light of the economic situation. At the time of this interview, news headlines speculated the organization's possible bankruptcy.
   Overall, however, he says that "people are going to expect more with less. That's not going to change. We're going to have to do a lot more with fewer people, less money and less time."
    Despite the challenges, however, he says there are exciting opportunities out there. "Because of the conditions that we're facing, this is really an opportunity for us to put some changes in place that we've considered in the past.
   "Before, there wasn't a burning platform. Now, there is. So people are much more open to changes and new ideas--where in the past, they'd be, "This has worked for us all of these years. Why change?" Now people are realizing they do need to change. It's actually an opportunity to put some of these new approaches in place. We've just got to make sure that they're effective."


The Brass Ring of PMOs

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All successful project management offices (PMOs) have one thing in common, while all failed PMOs lack this same thing. Indeed, if your PMO has this one thing it's next to impossible for it to fail; similarly, if your PMO lacks this, you will not succeed, not matter how much more, time and energy you invest. So, what is this "brass ring" of PMOs?
It's funny, too, because of the wildly divergent theories out there about how project management ought to be performed and advanced, and what manifestations of the organization are indicative of success or failure. Some believe that only cost and schedule baselines contained in one software represent a successful PMO, while others hold a rival software combination as the only acceptable setup.
    Many auditors will express outrage at the lack of internal procedures and guides, still others want widespread professional certifications. Many managers who, at some time, had been associated with what they perceived to be a successful PMO will have misidentified the primary casual factor that led to that success. As I discuss in my new book, Things Your PMO Is Doing Wrong, the idea that organizational clout can be leveraged to compel successful project management advancement is a myth, whether that clout-leveraging takes the form of forcing the tool (mandating the use of a certain software), issuing procedures and guides, or any of the other so-called coercive strategies.
    The only way your PMO will succeed is if you adopt a technical approach to advancing project management capabilities that centers on obtaining that brass ring--cooperation--from the other parts of the macro-organization. And that level of cooperation can be elusive, indeed, but consider what you, the PMO director, are asking: You essentially want everybody else to change the way they've been doing business, for decades in some cases. I would submit that asking anybody to change anything they've been doing a certain way for years, even in the face of overwhelming evidence that the new way is better for everyone involved, is difficult in the extreme.
    Difficult, but not impossible.
    How is it done? To find out, you can pose a question on the blog that leads me to tip my hand and disclose the optimal technical approach. But there are two problems with that:
1. You still won't know my take on things that can blow up your implementation, even with the optimal technical approach
2. I'm expecting people to try to get me to reveal this secret, so I'm on to you.

Editor's note: You can purchase Michael Hatfield's new book, Things Your PMO Is Doing Wrong, in the PMI Marketplace.

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