What goes into the set-up, build-out, and sustainability of PMOs, the drivers, the benefits, and the know-how? Managing the PMO Lifecycle talks through the PMOLC (PMO Lifecycle) and steps to help set-up, build-out, and sustain PMOs. The book's main purpose is to be a guide for all those wishing to know about PMO. Alongside practical advice and ideas the author includes elements of her research from a survey conducted through PMO leaders to provide results on PMOLC complexity and flow. The text also takes on controversial topics such as virtual PMO's, PPM practices, and outsourcing along with case studies from well-known organizations that shed light on existing and emerging practices.
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MANAGING THE PMO LIFECYCLEA Step-by-Step Guide to PMO Set-up, Build-out, and Sustainability
By WAFFA KARKUKLY
Trafford PublishingCopyright © 2012 Waffa Karkukly
All right reserved.
Chapter OneThe PMO Lifecycle
This chapter will explain the various PMO types, the models available, and their functions. It introduces the reader to the PMO Lifecycle and its phases: PMO set-up, PMO build-out, and PMO sustainability. Figure 1.1 above describe the three phases at high level illustrating the main activities required to set-up, build-out, and sustain PMOs. In the subsequent chapters, the complete PMO lifecycle will unfold and every step in each phase of PMO set-up, PMO build-out, and PMO sustainability will be explained in details. All three major phases in the PMOLC have their description and can be seen in Figure 1.2.
Otherwise known as the assessment phase, or the discovery phase; the purpose of this phase is to define the organization's objective in creating a PMO; identifying the goals and determining the short term and long term plan in the form of a defined roadmap.
This phase may be referred to as the deployment or implementation phase of PMO and it involves establishing an execution plan for implementing the approved roadmap activities which include building the required functions leading to PMO rollout
This phase may be referred to as continuous improvement which describes the on-going support of the PMO functions to sustain the performance of the PMO and contribute to the success of the PMO in the organization.
While the first two phases can be grouped and can be treated as a projectized in nature (in other words, the set-up and build-out of PMO can be treated as a project with delivery PMO roadmap, execution plan, proposed functions, etc. The sustainability phase may be seen as the operationalization of the PMO; (in other words, running the day-to-day activities) and addressing the continuous improvement.
In every phase, whether set-up, build-out, and sustainability an iterative three step process will ensure continuous flow between assessment, implementation, and support.
There are a number of major stages within the PMOLC
Identify PMO requirements
Work with the executive team and senior management of the organization to establish the short term and long term goals. What is the vision of the PMO, what is the budget, and what are the parameters for success?
Establish the PMO roadmap
Based on the requirements gathered from executives and senior managers and the objectives required from the PMO, agree a roadmap document which should detail how the PMO will be established; the cost, resources, and finally timeframe for the build-out.
Execute the PMO roadmap
As per the roadmap, establish the functions described in the road map. The PMO may have as many or few functions as it needs depending on the organizations direction and its constraints. The build out is an execution of the approved roadmap.
Operate the PMO roadmap
It is during this phase that the PMO establishes all the supporting services that allow for development and continuous improvement and the feedback loop that incorporate organization voice into these improvements
Prior to unfolding the details of each phase, the author provide information pertaining to PMO types, roles, and differentiate the PMO's based on their authority and structure and provides the various functions PMOs have been tasked to do.
PMO Types and Roles
Literature suggests that not all PMOs are created equal in terms of their types and the functions performed. The terms in some organizations are used interchangeably to refer to activities that a PMO performs. Some organizations only focus their PMO on basic PMO-type functions, while others are more mature with more advanced project and portfolio functions (Crawford, 2004).
The basic type functions include: project methodology, project reporting, project tools, and project training. While advanced project and portfolio functions include: Portfolio analysis and priority, benefit realization, and quality risk management.
The PMO often has a dual role of ensuring compliance in relation to using the methodology, tools and templates and also supports individual business units. The PMO often monitors project progress and reports on this progress and accompanying risks to the organization's senior managers. Another form of PMO finds the office actually managing projects on behalf of the organization and forming project teams. In this structure the PMO typically manages a project from Initiation to Closeout and is responsible for achieving successful project outcomes (Kerzner, 2004).
Letavec (2006) suggests that PMOs may work in any of the following roles:
1. Consulting Role—advisor to project/ program teams on how to manage their projects and programs through tools and methodology; 2. Knowledge Management Role—Capturer of project related information, and manage the dissemination of these information; 3. Compliance Role—Set process, tools, and reporting standards (Letavec, 2006).
While Light and Berg (2000) suggest that PMOs may have other roles:
1—The PMO as a repository—custodian of the project methodology and is not involved in the decision making process; 2—The PMO as a coach—providing guidance on projects, performing project reviews on request, establishing and supporting project planning, monitoring and reporting on projects but does not order corrective action; and 3—The PMO as manager—operating as an agent of senior management, managing the project portfolio, managing the master resource plan, reviewing project proposals and is accountable for the portfolio (Light and Berg, 2000).
Kerzner (2004) describes project offices as three types/ levels.
1—Functional PO, this is typically at the departmental level addressing functional area needs, such as IS. 2—Customer Group PO, this is typically to handle customer management and can act as a company within a company. 3—Corporate PO, this typically services the entire organization and focuses on corporate strategic alignment (Kerzner 2004, p. 278).
Successful PMOs take on responsibility for different project-related functions and core tasks related to development of shared methodology and processes for handling of projects, training and competence development within project management, proposing of new projects, and quality assurance of projects. The success of a PMO is related to ensuring the necessary authority of the PMO: real organizational authority as well as academic and social credibility, top management support, and that the PMO covers true needs in the organization (Anderson et al., 2007, P1).
Recent research and studies classify PMO's into a two types: single project organization and multi project organization. Within each there are different set-ups ranging from a project office centralized around a project to a center of excellence. The table below (Table 1.1) illustrates the type of functions performed and expectations based on the type of PMO. Each author has defined the type of PMOs and different functions from the perspective of an organization's needs.
Understand the "P" in the PMO
As a starting point, it is helpful to establish what type of PMO your organization requires, whether it is a Project, Program, or Portfolio Management Office.
The focus of a project-based PMO is on project level deliverables; how to initiate, plan, execute, monitor and control, and close-out a project. The attention is on the project details pertaining to the specific project milestones and deliverables. The areas of focus include:
Building the project management methodology
Promoting standard project management templates and tools
Ensuring standardization in project delivery
Improving project delivery and performance
Allocating and assigning project resources
Planning project budget as well as tracking variances
Monitoring project risks and issues
Project status reporting, dashboard, and KPI
Project-based PMOs can be local, or national, IT-or business-based.
In some organizations IT reports into a business unit, for example in some industries every business unit has its IT function while in other organizations IT is considered a business unit such as Finance, or Marketing would be. In large organizations, many Project-based PMOs can be found embedded in departments responsible for direct delivery of projects. Some organizations that have multi PMO's, will have an overarching PMO with a specific governance role to ensure that the overall corporate standardization, communication, performance assessment and measurements are consistent.
The focus of program-based PMO's is, as the title suggests, on program level outcomes; how to integrate projects and sequence them, resource management, stakeholders change impact management, and rollup of groups of projects. The attention is on the program deliverables which include business case and program base benefit. The areas of focus include:
Promoting standard program management methodology
Ensuring standardization in project delivery across dependent and independent projects
Performing project benefits as well as looking at program benefit realization
Budgeting and tracking program level cost/value and ROI
Addressing resource planning across multi projects with the aim to ensure appropriate allocation
Monitoring risks and issues at a program level
These PMO's can be local, but more frequently national, or at an enterprise level They are most common in large organizations where various projects either cross geographic locations or company departments and there are strong dependencies between these projects; including ultimately securing delivery as part of a specific program; hence, a PMO may run single or multiple programs.
Because of the way some organizations are structured politically some Portfolio based PMO's encompass a project and program delivery component; while others remain as a portfolio function only. These kinds of PMO may have various names if they are a separate function from the PMO (Enterprise Strategy, Corporate Strategy, Strategic Portfolio Office, Corporate Portfolio Office, Portfolio Management Office) The focus of these PMO's is on portfolio level outcomes and how to align organization strategic initiatives to realize benefits. The areas of focus include:
Creating an organization portfolio process
Promoting standards across PPM selection, monitoring and controlling
Evaluating and prioritizing all initiatives against strategic key indicators
Performing demand management
Aligning an organization's budget requests and approvals along with the PPM initiatives
Implementing on-going governance models to monitor and control PPM health checks
Performing benefit realization and monitor KPI's and reporting.
Monitoring risks and issues at a portfolio level
These PMO's are predominantly at a national, or enterprise level; many of them can be found in large organizations in which each business unit may have a delivery base PMO that oversee the execution of a multi projects or programs While the delivery base PMO involved in carrying out projects, they report into the Portfolio base PMO. This PMO has oversight at the macro level of all initiatives generating from the various business units and their objectives is more of portfolio oversight for selecting and prioritizing projects across the entire organization as well as track the benefit realization.
Identify the right level of PMO Authority
If your organization is ready to create a PMO, there are some pre-requisites to ensure you set up the right type of PMO. The assessment can be either through their PMO head, or through a consulting firm hired for this purpose. PMO types and the level of authority need to be vetted before embarking on the creation of the PMO function; for example:
* Consulting /Services—Proposes, advises teams on how to run project
* Knowledge Management—Manages, archives project details and lesson learning
* Compliance—Creates and sets project management standards and monitors and controls adherence to these standards
These levels of authority need to tie in with the PMO types as in table 1.1 (PO, basic PMO, advanced PMO, CoE). While all these authority types can share similar PMO models and create similar functions, the level of authority of a PMO determines its ability to influence change management and project management adoption in an organization.
The author's research indicates that those PMOs given the level of authority required to implement change management and encourage project management adoption within an organization have produced higher results in encouraging project management adoption. In other words, the less empowered the PMO, the less its influence on change management and project management adoption. Table 5.7 in Chapter Five shows results of the correlation of level of authority and project management and change management adoption.
The correlation between levels of authority and different types of PMO functions:
1. Project delivery.
For the consultative and knowledge based type of authority PMO, project delivery is rarely a main functions (See Table 1.2.) While nothing prevents an organization from creating any type of PMO under any level of authority, the fact remains that there is a stronger correlation between some types of PMO and their level of authority as can be seen in chapter 5, table 5.15-5.17. For example, enabling a project delivery function in a consultative or knowledge based PMO without giving the PMO the authority to run or kill projects would not work in the consulting services context.
The success in driving project delivery and building a culture that is accountable to delivery remain depends on how empowered a PMO is to oversee and action projects and enforce rigor that allows sponsor to make decisions in killing projects, continuing with projects. If PMO lacks the authority to take action, then the PMO recommendations will be ignored. Therefore, the best suited type of PMO is an authoritarian PMO to ensure that projects not delivering are auctioned. While project delivery can still be run under PMO of the type consultative or knowledge base; however, the mandate of these types of PMO are not to oversee delivery and delivery oversight in these two types happen to be in the business units in which PMO would lack the authority to make a call over the impact on delivery; hence, PMO is not equipped with the authority to hold owners accountable. PMO is likely to be challenged and there will be tension between the PMO and the business units in terms of accountability; consequently, the PMO's delivery responsibility will be at risk.
2. Project manager development vs. project manager training. In some organizations, project managers are contracted to or work as consultants for specific projects and they are expected to be up to the standards of the hiring organization; hence, investing in project manager training or project manager development function may not be required. However, in those organization that invest in their people, developing employees skill sets is a feature that is looked upon very positively when project managers are making career moves.
Some organizations may view project manager development and training as synonymous. This is a mistake. Project manager training is a function that is most suited to the consultative and knowledge based PMO authority type because in the consultative role, training is assumed to keep the project managers abreast of standards; the PMO provides training on tools, methods, templates, and the rollout of any updates but is not necessarily responsible for career progression for the project manager. In the case of a compliance based PMO where project managers have a solid reporting line into the PMO, the PMO is accountable for defining the project manager career path (i.e. project manager development).
In some organizations there is a function within the PMO, Project Manager Development, which is responsible for training, providing a career path, and bridging any skill gaps for all project staff and this can only happen when PMO has the authority and the funding to spend and provide on the job or advanced certificates to evolve the develop the skills of its project managers. When PMO has the authority and the required funding, to develop programs tailored to project managers' career paths, the level of authority of PMO does correlate of how much it has influence over the education, mentoring, and guidance of project management within an organization.
3. Project repository.
All PMOs, regardless of type, need to maintain project data for reporting and auditing purposes. While the project repository function is a core function of the knowledge management type PMO or the compliance type PMO, it is not a core function of the consultative PMO. Knowledge type PMOs are accountable for storing all sorts of project artifacts such as project schedule data, cost data, resource allocation, methods, KPI's, lessons learned for the purpose of providing organization with data that turns into knowledge to assess and bench mark project performance. Compliance type PMOs are accountable to delivery of projects; hence, understanding past performance, current project performance allows prediction of future performance leveraging data from lessons learned to improve project delivery time, quality, and expectations in an organization. While consultative PMO is accountable for providing project management standards, methodology, templates for other departments to use, it is important that this type of PMO is expected to maintain some data on which decision makers will base their decisions.
Excerpted from MANAGING THE PMO LIFECYCLE by WAFFA KARKUKLY Copyright © 2012 by Waffa Karkukly. Excerpted by permission of Trafford Publishing. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
ABOUT WAFFA KARKUKLY, PH.D....................xv
APPENDIX A—Interaction Model....................169
APPENDIX C—Web-Based Survey letter....................173
APPENDIX D—Web Survey Questions....................175
APPENDIX E—Case Studies Interview Questionnaire....................183
APPENDIX F—List of All Tables....................187