Project Management Office ( PMO ) MITM743 – Advanced Project Management

1. Project Management Office (PMO)MITM743 – Advanced Project Management

2. Time for Dilbert

3. What is the PMO?

4. What is the PMO? An organizational body … assigned various responsibilities related to the centralized and coordinated management of those projects under it’s domain. There in no such thing as a „universal solution“. To be effective, a PMO must be tailored to your organisation‘s project types, management/staff capabilities, and organisation culture

5. Why setup the PMO?

6. Time for Dilbert

7. What can the PMO be? • Supportive PMO • Generally provides support in the area of expertise, templates, best practices, access to information • Controlling PMO • It also requires that support to be used (pass the regular reviews, audits, …) • Directive PMO • Only professional project managers are assigned to the projects • High level of consistency across all projects because PMs are reporting back to the PMO

8. What would the PMO provide?

9. This leads to seizures, delays, insufficient resources,collisions, … Preffered way, eliminates disadvantages of the previous method, leads to better TTM and timing in general, could prevent teams from overloading Basic approaches Companies use the time-to-market metric to evaluate how products are developed and how a specific project handles external competition. Working on all projects at the time Working on projects which have apropriate resources

10. MITM 743 Advanced Project Management IT Project Management Office

11. Overview • Provide an overview and general understanding of PMO models, functions, success factors, and implementation • Introduce the CobiT PM CMM as a framework for establish and evolving the PMO Project Management functions

12. IT PMO Trends • 67% of IT organizations in 2003 have PMOs (Forrester Survey) • More than half established since 2000 (Forrester Survey) • Government is moving to standardize IT Project Management • Nov, 2003, Federal CIO Council recommends setting up Federal PMO to standardize PM practices • Jun, 2004, SC requires management of major and inter-agency IT projects to use standard practices and be managed by PMP • Jan, 2001, NY sets up PMO to standardize management of technology projects • Jun 2002, CA CIO established objectives for statewide project management standards • IT PMOs are becoming strategic • IT PMOs are gaining more influence

13. What’s Driving IT PMO creation? • Late and over budget IT projects • Lack of coordination of activities • Poor project management practices • Lack of standardization of PM methodology • Need for consolidated project reporting to drive prioritization/decisions • More focus on IT project ROI • More focus on alignment of IT projects with business strategy • Strategic value and dependency on IT applications/technologies

14. What’s Driving IT PMO creation? • Increase in IT Project workload • Proliferation of IT project proposals • Delays in getting projects approved • More complex IT environment and solutions • Enterprise solutions/cross-functional projects • Distributed development organizations • Outsourcing and contracting out of IT projects

15. PMO Benefits • Companies that implemented successful PMOs achieved: • 80% ROI • 20% reduction in project time • 30-35% successful project delivery • Companies without a PMO experience 74% project failure rate Source: Forrester Research

16. PMO Models • One size does not fit all • PMO drivers/business needs • PM maturity • Vision and goals of sponsor • Business/organization mission • Organization size • Number of projects • Political and cultural environment • Tactical vs. strategic • Internal vs. external focus • Single vs. multiple

17. Key Considerations • PMO charter • Culture change • Implementation strategy • Staffing • Metrics/Performance • Success factors • Maturity of Project Management Practices

18. PMO Charter • Charter Scope • Business Needs • Sponsor • Public vs. Commercial • PM Maturity • Charter Document • Mission/Vision • Goals/Objectives • Sponsor • Service Offering • PMO Governance • Key Performance Metrics • Funding model

19. PMO - Culture Change • Natural resistance to change • Political landscape • Winners/Losers • Management Support • Degree of cultural change • PM maturity • PMO charter • Existing skill level • Key driver implementation strategy • Change Management • Assess impact of change • Inform • Educate • Involve

20. PMO Implementation Strategies • Strategy drivers • PMO charter • PM maturity • Sponsor and management support • PMO drivers • Perception of value • Political environment • Culture/Value System

21. PMO Implementation Strategies • Evolutionary/Incremental • Lower implementation risks • Lower start up costs • Will take longer to demonstrate ROI • More suitable if high resistance to change and low management support • Revolutionary/Wholesale • Higher implementation risks • Higher startup costs • May be able to demonstrate ROI quicker • More suitable if crisis or recognition at high level that change is imperative

22. PMO Staffing/Skills • Staffing Approaches • In-house resources • Hybrid (In-house/contractors) • Ad hoc contractors augmentation • Skills • PMO Director/Manager • Project Manager • Project Portfolio Manager • PM Process/Methodology Trainer • Relationship/Account Manager • Tools Support/Administration • Administrative Support • Librarian/Document Control

23. PMO Performance Metrics • PMO vs. Project metrics • Less that 15% of PMOs employ formal metrics program (Source: Forrester Research) • Metrics are essential for growth and support – demonstrate progress, value, and productivity • Performance metrics are driven by charter – no such thing as typical metrics • Business value metrics • Executive focus - Measure and demonstrate value to business • Help justify existence during downsizing • Expressed primarily in dollars savings/revenue or ROI • Tend to be few and harder to derive

24. PMO Performance Metrics • Functional performance metrics • Internal focus - Measure and demonstrate performance or quality of PMO functions • Help justify PMO budget • Help improve PMO performance • May require baseline or benchmark to demonstrate performance • Expressed primarily in percent or counts • Tend to be many depending on functions performed • Must be selectively chosen so as not to overwhelm • Service level metrics • Customer focus - Measure and demonstrate service level or quality of service to customer • Help improve and maintain customer satisfaction • SLA/SLO • Expressed in a variety of ways • Select on key and most important value to customer community

25. Success Factors • Clear Charter • Creates clear expectations • Defines boundaries for implementation • Top-Down Support • Bottoms up Buy-in • Sponsor - Reporting to senior executive • Strong line-of-balance (LOB) representation • Communication/PR • Promotion of services • Education of value • Performance metrics that demonstrate business and customer value

26. PM Capability Maturity Models • Valuable tool for establishing PMO and help define objectives, charter, and processes • Assess current status • Compare against best practices • Develop strategy and road map for PMO • Help communicate vision and get buy in • Different models (CobiT, OPM3, ISO 15504, CMM/CMMI)

27. CobiT ® Capability Maturity Model • CobiT® CMM is valuable and comprehensive framework for assessing maturity of IT organization • CobiT® CMM • International Open Standard for IT Governance • IT Governance Institute (ITGI®) • Information Systems Audit and Control Association (ISACA®) • ITIG ® not associated with Software Engineering Institute (SEI), Carnegie Mellon • CobiT® CMM uses same conceptual framework as SEI’s CMM • Defines maturity of IT organizations in four domains • Planning and Organization • Acquisition and Implementation • Delivery and Support • Monitoring • PM CMM part of CobiT® Planning and Organization domain Sources: WWW.ISACA.ORG and WWW.ITGI.ORG

28. CobiT® Maturity Levels • 0 Non-Existent – Not applied • 1 Initial – Ad hoc and disorganized • 2 Repeatable – Follow regular pattern • 3 Defined – Documented/communicated • 4 Managed – Monitored and measured • 5 Optimized – Best practices followed/ automated Source: CobiT 3rd Edition, Management Guidelines

29. CobiT® Model Components • Defines processes within each domain • Defines high-level control statement for each process • Defines maturity levels • Defines success factors for each process • Defines key goals for each process • Defines key performance indicators Source: CobiT 3rd Edition, Management Guidelines

30. CobiT® Project Management Process Control Statement • Control of project management process with the business goal of setting priorities and delivering on time and within budget • Is enabled by the organization identifying and prioritizing projects in line with the operational plan and the adoption and application of sound project management techniques for each project undertaken Source: CobiT 3rd Edition, Management Guidelines

31. Level 0 – Non Existence • PM techniques not used • Organization does not consider business impact of poor project performance Source: CobiT 3rd Edition, Management Guidelines

32. Level 1 – Initial/Ad Hoc • Aware of need for project structure and risks of poorly managed projects • Use of PM techniques left to the individual • Projects are generally poorly defined and do not incorporate business or technical objectives of the organization or stakeholders • Lack of management commitment and project ownership • Critical project decisions are made without user management or customer input • Little or no customer and user involvement in defining IT projects • No clear organization within IT projects and roles/responsibilities are not defined • Project schedules and milestones are poorly defined • Project staff time and expenses are not tracked and compared to budgets Source: CobiT 3rd Edition, Management Guidelines

33. Level 2 – Repeatable but Intuitive • Sr. Management has gained and communicated an awareness of the need for IT Project Management • Organization is in the process of learning and repeating certain techniques and methods from project-to-project • Projects have informally defined business and technical objectives • Limited stakeholders involvement in PM • Some PM guidelines developed, but left to discretion of project managers Source: CobiT 3rd Edition, Management Guidelines

34. Level 3 – Defined Process • PM process and methodology formally established and communicated • IT projects defined with appropriate business and technical objectives • Stakeholders are involved in the management of IT projects • Defined project structure with roles and responsibilities • Defined and updated project milestones, schedules, budget and performance measurements • IT Projects have formal post systems implementation procedures • Informal project management training provided • No established policies for using combination of internal and external resources • Quality assurance procedures are defined Source: CobiT 3rd Edition, Management Guidelines

35. Level 4 – Managed and Measurable • Formal and standardized project metrics • PM measure and evaluated throughout organization not just IT • PM process enhancement formalized and communicated, and project team members are trained on all enhancements • Risk management performed as part of PM • Stakeholders actively participate in projects or lead them • Project milestones and criteria for evaluating success at each milestones are established • Value and risk are measured and managed prior to, during, and after project completion • Management has established a program management function within IT • Projects are defined, staffed, and managed to address organizational goals, rather than only IT specific ones. Source: CobiT 3rd Edition, Management Guidelines

36. Level 5 - Optimized • Proven full life-cycle project methodology is implemented and enforced, and integrated into organizational culture • On-going program to institutionalize best practices has been implemented • Strong and active project support from Sr. Management sponsors and stakeholders • Implemented project organization structure with documented roles, responsibilities, and staff performance criteria • Long term IT resources strategy is defined to support development and operational outsource decisions • Integrated Program Management Office is responsible for projects from inception to post implementation • Program Management Office is under the management of the business units and requisitions and directs IT resources to complete projects • Organization-wide planning of projects ensures that users and IT resources are best utilized to support strategic initiatives Source: CobiT 3rd Edition, Management Guidelines

37. CobiT® PM Success Factors • Experienced and skilled project managers are available • Accepted and standard project management process in place • Sr. Manager sponsorship of projects, and stakeholders and IT staff share in the definition, implementation, and management of projects • There is an understanding of the abilities and limitations of the organization and the IT functions in managing large, complex projects • Organization-wide project risk assessment methodology is defined and enforced • All projects have a plan with clear traceable work breakdown structures, reasonably accurate estimates, skill requirements, issues to track, quality plan, and transparent change process (my note – effective PM methodology enforced) • Transition from implementation team to operational team is a well-managed process • System development life cycle methodology has been defined and is used by the organization Source: CobiT 3rd Edition, Management Guidelines

38. CobiT® PM Key Goal Indicators • Increased number of projects completed on time and on budget • Availability of accurate project schedule and budget information • Decrease in systematic and common project problems • Improved timeliness of project risk identification • Increased organization satisfaction with project delivery services • Improved timeliness of project management decisions

39. CobiT® Project ManagementKey Performance Indicators • Increased number of projects delivered in accordance with defined methodology • Percent stakeholders participation in projects (involvement index) • Number of project management training days per project team member • Number of project milestones and budget reviews • Percent of projects with post-project reviews • Average number of years of experience of project managers

40. Conclusion • IT PMOs can improve IT project delivery performance • One size does not fit all • PMO Support/Control model most useful • Clear charter, top down support, & bottom ups buy is key to PMO success • PMO performance metrics should focus on value to key stakeholders • CMM valuable framework for establishing and evolving PMO