Why Is A Pmo Valuable To Your Organization

IIL's Webinar Learning Series
Why is a PMO valuable to

your organization?
By
Dr. Harold Kerzner
© 2009 International Institute for Learning, Inc.
IIL-Webinar Version 5.0
WWW.IIL.COM
Participant’s Notes:
IIL-Webinar © 2009 International Institute for Learning, Inc. 1

Governance Issues
Poor alignment between project

objectives and broader business goals
Poor business case development
resulting in the go-ahead of projects
that provide limited or no value
Badly specified project outcomes
measured in real business terms

WWW.IIL.COM

2
Benchmarking
“Benchmarking and ongoing monitoring are part

of the success metrics required for optimization
of project processes. Customer-defined measures,
such as project order responsiveness, etc., are
benchmarked against industry standards (best
and average). …. Implementation of the standard
project process will enable the implementation
this business unit’s ‘best practice’ into the
standard project process for enterprise-wide
improvements.”
(Bill Marshall, Formerly Director, Nortel Networks)

WWW.IIL.COM

3
Benchmarking
“In 1996, we began looking at our

business from the viewpoint of its
core processes…… As you might
expect, project management made
the short list as one of the vital, core
processes to which quality principles
needed to be applied.”
(Martin O’Sullivan, Vice President, Motorola)

WWW.IIL.COM

4
Process Champion
“Benchmarking resulted in our

Group assigning a process champion
and process action team to project
management.”
(Martin O’Sullivan, Vice President, Motorola)

WWW.IIL.COM

Growth at American Greetings
According to Jeff Weiss, President and Chief

Operating Officer:
The program management office provides the

structure and discipline to complete the work
that needs to get done. From launch to
completion, each project has a roadmap for
meeting the objectives that were set.

WWW.IIL.COM

Growth at American Greetings
According to Zev Weiss, Chief Executive Officer:
Through project management, we’ve learned

how to make fact-based decisions. Too often in
the past we based our decisions on what we
thought could happen or what we hoped would
happen. Now we can look at the facts, interpret
the facts honestly and make sound decisions and
set realistic goals based on this information.

WWW.IIL.COM

Activities for a PMO
Strategic planning for Education and training

project management Assessing risks
Benchmarking Disaster recovery plans
Cost reduction and Customer relations
continuous management
improvements
Portfolio management
Mentorship
Capacity planning
Lessons learned files
PMIS
Problem-solving hotline
Guardian of project
Templates management intellectual
Career path property

WWW.IIL.COM

8
Project Office versus COE
Project Office Center of Excellence

Permanent line function May be a formal or
for project managers informal committee (may
be part-time)
Focuses on internal Focuses on external

lessons learned activities benchmarking activities

WWW.IIL.COM

9
Project Office versus COE
Project Office Center of Excellence

Champion for the Champion for continuous
implementation of the improvement activities
methodology (driving it and mainly external
from the top down) benchmarking
Expertise in the use of the Expertise in the

project management tools identification of project
management tools

WWW.IIL.COM

10
PMO Implementation Risks

WWW.IIL.COM

11
The Project Office (COE)
Companies are now struggling with

the organizational reporting location
for the Project Office/COE.

WWW.IIL.COM

12
The PMO’s Charter
Is the charter for the PMO to manage

the present or to focus on the future?

WWW.IIL.COM

13
Mission
Drive continuous improvement
through successfully managed
projects delivering bottom-line
results
Goals
1. Opportunity 2. Project 3. Change
Identification Management Champion
Facilitate Develop and Champion and enable
identification of
Text institutionalize
Textprogram change
opportunities to grow management processes
revenue, reduce costs and tools
and optimize assets
Guiding Principles
Out-of-the-box thinking Teamwork
Big, hairy, audacious goals Open and direct communication
Fact-based decision making Results orientation
PMO’s mission, goals and guiding principles
WWW.IIL.COM

14
Value-Added Activities for the PMO
The project manager focuses heavily

upon customer value-added activities,
whether it be an internal or external
customer.
The PMO focuses on corporate value-
added activities.

WWW.IIL.COM

15
Ways for a PMO to Fail
Focusing on profitability or cost

reduction of a single project
Not understanding the cost of
paperwork

WWW.IIL.COM

16
PMO Questions
Is the PMO overhead or a direct labor

charge?
Can we measure the return on
investment of a PMO?

WWW.IIL.COM

17
Measuring the ROI on a PMO
Tangible measurements include:

 CSF: Customer satisfaction
 KPI: Projects at risk
 KPI: Projects in trouble
 KPI: The number of red lights that need recovery, and
by how much added effort
 Throughput of work year over year
Intangible elements may also exist and these
may not be able to be measured
 Early-on identification of problems
 Quality and timing of information

WWW.IIL.COM

18
More Critical PMO Evaluation Questions
Is the PMO becoming more productive

year-over-year?
If so, is it causing the rest of the
organization to become more productive
as well?
Are we convinced that we are working
on the right projects?

WWW.IIL.COM

19
Types of Project Offices
Functional Project Office: resource

management
Customer Group Project Office: customer

management
Corporate Project Office: strategic and

operational issues

WWW.IIL.COM

20
Benefits of a Project Office
[for the executive levels of management] (1 of 2)
Standardization of operations
Company rather than silo decisions
Better guidance on resource allocations (i.e.
effective capacity planning)
Access to and quality of information reporting
systems
Effective project prioritization process
Company efficiency and effectiveness

WWW.IIL.COM

21
Benefits of a Project Office (2 of 2)
Elimination of silos
Less need for restructuring
Fewer meetings (i.e. better time management)
Development of future general managers
Retention of quality resources
Horizontal career path and horizontal decisions

WWW.IIL.COM

22
Project Office Risks
Excessive headcount
Potential burnout of talented people
Using the wrong people as leads
Reliance on excessive paperwork
Going “to the well” too often
Focusing on job descriptions rather than
competencies
Unnecessary restructuring for control of the
project managers/project office

WWW.IIL.COM

23
When to Involve the PMO
Threshold:
 Dollar value of the project
 Duration of the project
 Risks to the company
 Criticality of the project (i.e. cost
reductions)
 Amount of cross-functionality

WWW.IIL.COM

24
Project Office Growth
According to Jim Triompo, Group Senior

Vice President at ABB:
“The project office does not deliver projects.

The projects managed by the project
management office are limited to process/
tools development, implementation and
training. The project management office is
sometimes requested to perform reviews,
participate in division level risk reviews and
operational reviews in various countries.”
WWW.IIL.COM

25
Exel’s Networking PMOs
CEO
CEO
Americas
Americas
Senior
Senior
Director
Director
Solution
SolutionDesign
Design
EPM
PMO Mexico
PMO Mexico PMO Brazil
PMO Brazil PMO UK/Europe
PMO UK/Europe PMO Asia
PMO Asia

WWW.IIL.COM

26
Master vs. Regional PMOs (EXEL)
Activities for the regional PMOs include:

 Promoting use of the methodology
 Promoting use of the tools
 Project execution and delivery
 Subject matter expertise (which may
support the Master PMO)

WWW.IIL.COM

27
Star Alliance
How does an organization coordinate the

efforts of fifteen or more regional PMOs that,
when combined, carry annually 405.7 million
passengers to 975 airports in 162 countries?

WWW.IIL.COM

28
Star Alliance Membership
Air Canada Tap Portugal

Air China Singapore Airlines
Air New Zealand United Airlines
All Nippon Airways Asiana Airlines
Austrian Airlines South African Airways
bmi british midland Spanair
Egypt Air LOT Polish Airlines
Lufthansa Thai Airways Int.
Turkish Air Other airlines?
Scandinavian Airlines  Air India
(SAS)  Brussels Airlines
Swiss Air  Continental
 TAM
Shanghai Airlines
WWW.IIL.COM

29
Star Alliance
The projects carried out for the business

units include such topics as information
technology, marketing, sales, products,
services and frequent flier programs.

WWW.IIL.COM

30
More Critical Questions

WWW.IIL.COM

31
PMO Skills
Are all people (PMP®s) qualified to work

in a PMO?
What skills are important?
Will the required skills change if the
PMO is involved in multinational
activities, or with networking PMOs?

WWW.IIL.COM

32
Questions Involving P&L Responsibility
Are there risks in assigning a PMO P&L

responsibility?
What if the PMO is now identified with
P&L rather than the line organization?
Will the line organization “surrender”
P&L responsibility easily?
Will the line organization allow their
best project managers to be transferred
to the PMO, either permanently or
temporarily?

WWW.IIL.COM

33
Questions on PMO Governance
How should a PMO handle compliance

audits?
If poor compliance is discovered, is the
PMO authorized to enforce corrective
action?

WWW.IIL.COM

34
Questions on PMO Toolkits
What is a PMO toolkit?

Are there different tools based upon the
type of PMO?

WWW.IIL.COM

35
Project Selection
What projects should we

work on now?

WWW.IIL.COM

36
PMO Involvement in Projects
HIGH BREAKTHROUGH
TECHNOLOGY / RISKS PLATFORMS
ENHANCEMENTS
MAINTENANCE
PROJECTS
LOW
HIGH PMO INVOLVEMENT LOW
WWW.IIL.COM

37
Strategic PMO Issues
Determining the staffing tolerance for

projects
Analyses of the number of change
requests
Validate funding, schedules and
deliverables on existing projects
Bringing some projects to closure at a
quicker rate

WWW.IIL.COM

38
View from the Top (EDS)
Most organizations have a PMO established

and this was generated from the view that
their individual projects required oversight.
This is a significant jump for many
organizations that ten years ago did not see
value in project managers and are now funding
a PMO. But most of them are paying the price
to staff the PMO, but still do not see the value;
they see it as a necessary evil. In other words,
things would probably be worse if we did not
staff the PMO.

WWW.IIL.COM

39
According to Ron Kempf, Director PM

Competency & Certification, HP Services
Engagement PMO at Hewlett-Packard:
“For large, global companies the need for

project management standardization and
support is essential. To solve this problem,
companies have developed a network of
global project management offices all
coordinated from a single source. At Hewlett-
Packard, this network is referred to as the HP
Services Project Management Office.”
WWW.IIL.COM

40
According to Ron Kempf, Director PM

Competency & Certification, HP Services
Engagement PMO at Hewlett-Packard:
“HP Services PMO structure supports more

than 8000 project managers in 160 countries
with regional offices located in Americas, Asia
Pacific, Europe, Middle East, Africa, and Japan.
Three focus areas are – health of the portfolio,
project management development, and
processes.”
WWW.IIL.COM

41
PMO Mission
The PMO provides an enterprise-wide approach to identify, prioritize and

successfully execute a portfolio of IT initiatives, aligned with the business
units’ strategic objectives.
Consideration PMO Tool/Process
 Are we (Company,  Are projects aligned with strategic  Objective strategic fit analysis
IT) doing the right
Question goals? (e.g., shareholder value,
customer satisfaction, etc.)  Effective project prioritization
things?
 Are resources deployed against
projects with the highest strategic  Consolidated resource planning
value?
 Given our strategic objective, will we

meet our strategic goals? (e.g., SVA  Rigorous benefits tracking
 Are we doing
= $100M improvement)
enough of the right
things?  Will we hit current fiscal year targets
or should we manage expectations of  Accurate portfolio reporting
stakeholders?
 Are we doing the  What are the necessary capabilities

 Common tools and processes for
right things right? to effectively manage the technology
projects (e.g., standard status
portfolio (e.g., benefit realization)?
reporting, issue & risk management,
etc.)

WWW.IIL.COM
What is the PMO - its mission

• The PMO assists in defining a standard Project Management methodology to use with IT
projects. It supports the consistent application of this methodology to all IT projects.
• The PMO evaluates IT projects against strategic plan regardless of the owner (responsible
business unit).
• The PMO assures that only the projects with the most value are allocated resources.
• PMO processes and tools complement and support standard FE IT Project Management
processes.
Why does it exist - the business need for the PMO
• Ensures that only highest value projects are completed.
• Optimizes resource allocation.
PMO “Guiding Principles”
• Complements traditional project management.
• Complements the merger benefits tracking process.
• Authorized to manage, allocate, and ensure availability of resources.
• Manages project interdependencies.
• Measures project performance.
IIL-Webinar © 2004 International Institute for Learning, Inc. 1-‹#›

42
PMO and Project Life Cycle
Project
Project Project
scoping &
initiation delivery
planning
PMO evaluates projects PMO prioritizes projects PMO monitors delivery
 Standard opportunity  Prioritize based  Resources (dollars &

form to capture established criteria FTEs) go to projects
P projects tied to strategic goals with strategic value
& KPIs
M  Standard business case  Standard status
O rigor  Formalized detailed reporting
project planning
 Link to strategic  Monitor/Document
objectives benefits realization

WWW.IIL.COM
Participant’s
In Notes:
the Initiation phase of a project, the PMO
evaluates projects.
• Should further analysis be done (develop a
Business Case)?
• Should IT resources be allocated for
planning?
In the Planning phase of a project, the PMO
prioritizes projects
• Should IT resources be allocated for
development & delivery?
• Integrate the project into the Master
Schedule (the IT project portfolio).
In the Delivery phase of a project, the PMO
monitors across projects.
• Identify impacts on Master Schedule and
take action.
• Track benefits realizations after project
completion.

43
Evaluate
projects
Ideas are generated …then evaluated using a

throughout the entire standard business case…
organization… •Opportunity options
•Resource requirements
•Refined project costs
•Refined savings
Filter
•Benefits (financial,
Business
strategic, payback)
Case
•Project metrics
•Benefits realization
•Risks
•Exit strategies
•Refined people, process,
technology impacts
•Schedule/milestones
•Complexity
•Standard technology?
NON-VALUE ADDED
BUSINESS CASES
…non-value added opportunities & projects
are eliminated…
WWW.IIL.COM
Participant’s
The Notes:
PMO evaluates projects
• Ideas are generated.
• Captured using an Opportunity Form.
• Determine if resources should be
allocated to evaluate further.
• Develop a Business Case.
• Determine if resources should be
allocated for project planning.

44
 Prioritize
All Business Cases . . .

Business
Business
Case Business
Case
Business Case . . . are be evaluated relative to Understand
Case
their strategic impact. . . resource availability
. . . to prioritize initiatives
and allocate resources. . .
e
tiivve
Cumulative Cumulative
Strategic Expense Expense Capital CumulativeResource Resource
trraat
Programs Value Cost Cost Cost Capital Cost Reqmt Reqmt
PowerOn Remote 147 $ 10 $ 10 $ 10 $ 10 2 2
usst
Website for Vendors 100 $ 8 $ 18 $ 23 $ 33 0.5 2.5
B2B Pantellos 86 $ 13 $ 31 $ 4 $ 37 2 4.5
IIllllu
Understand Strategic Goals SAP for IT
Energy 2000 Reorg
Dereg Bill Ready
70
90
71
$
$
$
4
6
4
$
$
$
35
41
45
$
$
$
2
45
32
$
$
$
39
84
116
2
0.5
2
6.5
7
9

SAP 4.6 Upgrade 55 Resource Driven
-Off Cut 28
Financial (SVA,EPS) Disaster Recovery 44 $ 3 $ 48 $ 23 $ 139 7 16
CCS Test data 26 $ 87 $ 135 $ 3 $ 142 2 18

MVS - Retire unused applications55 $ 2 $ 137 $ 23 $ 165 1 19

Multi-Function Devices 20 Capital Driven
-OffCut 7.5
Customer (Index) Ethernet Back bone 10 $ 12 $ 149 $ 231 $ 396 0.5 19.5
Upgrade to Windows 2000 Server 10 $ 3 $ 152 $ 3 $ 399 1 20.5

Lotus R5 Rollout 10 $ 1 $ 153 $ 4 $ 403 0.5 21

Expense Driven
-OffCut
Operational(Index) . . . resulting in a Master

 Employee Development
Program Plan.
(Index) Understand
Project Complexity
 Relationship w/other projects
 Technical complexity
 Risk

WWW.IIL.COM
Participant’s
The Notes:
PMO prioritizes projects
• Project plans are developed for Business
Cases.
• Project plans are are prioritized relative
to their strategic impact.
• Resources are allocated for execution.
• Projects become part of the Master
Program Plan.

45
Monitor
delivery
Master Program Plan Each project will be delivered using defined standards
outlined in the PMO Guide and project management best
practices.
Scoping and Planning Project Delivery
Project Plan
Status Issues/ Change Resource Benefits

Reporting Risks Control Allocation Tracking
PMO Database
WWW.IIL.COM
Participant’s
The Notes:
PMO monitors projects
• Status reporting.
• Managing issues and risks.
• Change control.
• Resources use is monitored.
• Tracking the benefits.

46
Project Manager Identification
• Leadership
• Judgment
• Flexibility
Soft • Sound business knowledge
• Credibility
Skills • Communications
• Team building
PM
Hard
Skills Attitude
• Independent
• Accountable
• Define project • Willing to work
• Solve problems within process
• Project management
• Business knowledge
• Technical understanding © 2009 International Institute for Learning, Inc.
WWW.IIL.COM

47
PMO Process:
Projects Portfolio Reductions
($ millions)
$240M
$80M
Reductions
$80M or 35%
$160M Reductions based on

PMO Process Business Case criterion:
Reductions
 Financial
 Corporate Safety
 Customer Service Excellence
 Operational Performance
 Employee Development
Starting Final
Portfolio Portfolio

WWW.IIL.COM

48
Evaluations

WWW.IIL.COM
Participant’s Notes: We really appreciate your attendance and

participation in this webinar.
If you found this to be a valuable experience,
please recommend the course to your friends
and coworkers!

Why Is A Pmo Valuable To Your Organization

Enviado por

Dados do documento

Descrição original:

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Why Is A Pmo Valuable To Your Organization

Enviado por

Direitos autorais:

Formatos disponíveis

IIL's Webinar Learning Series

Why is a PMO valuable to

IIL-Webinar © 2009 International Institute for Learning, Inc. 1

Poor alignment between project

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 2

“Benchmarking and ongoing monitoring are part

(Bill Marshall, Formerly Director, Nortel Networks)

IIL-Webinar © 2009 International Institute for Learning, Inc. 3

“In 1996, we began looking at our

(Martin O’Sullivan, Vice President, Motorola)

IIL-Webinar © 2009 International Institute for Learning, Inc. 4

“Benchmarking resulted in our

(Martin O’Sullivan, Vice President, Motorola)

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 5

Growth at American Greetings

According to Jeff Weiss, President and Chief

The program management office provides the

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 6

Growth at American Greetings

According to Zev Weiss, Chief Executive Officer:

Through project management, we’ve learned

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 7

Activities for a PMO

Strategic planning for Education and training

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 8

Project Office versus COE

Project Office Center of Excellence

Focuses on internal Focuses on external

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 9

Project Office versus COE

Project Office Center of Excellence

Expertise in the use of the Expertise in the

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 10

PMO Implementation Risks

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 11

The Project Office (COE)

Companies are now struggling with

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 12

The PMO’s Charter

Is the charter for the PMO to manage

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 13

IIL-Webinar © 2009 International Institute for Learning, Inc. 14

Value-Added Activities for the PMO

The project manager focuses heavily

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 15

Ways for a PMO to Fail

Focusing on profitability or cost

© 2009 International Institute for Learning, Inc.

IIL-Webinar © 2009 International Institute for Learning, Inc. 16

Is the PMO overhead or a direct labor

© 2009 International Institute for Learning, Inc.