building and managing the right pmo_06feb2010v2

8/3/2019 Building and Managing the Right PMO_06Feb2010v2

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PROJECT MANAGEMENT INSTITUTE - AGC

06 10 February 2010

Crowne Plaza Hotel

Jeddah, Saudi Arabia

Building & Managing the Right

PMO

By

Ibrahim Mahmoud Ibrahim, PMP, MBA


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2 Building & Managing the Right PMO IBRAHIM MAHMOUD IBRAHIM

Introduction

The Instructor

The Participants

Name

Job Information

Seminar Expectations

Starting Time, Breaks, and Adjourn

Class Rules


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Course Objectives

Learn the key concepts related to Project Management Offices asper the PMI standards

Understand the different PMO Models

Determine the right PMO model based on your organizationalneeds

Understand where the PMO fits in the organizational context

Design the right PMO Organization

Learn how to define the PMO value proposition & PMO services


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Course Objectives

Understand the concepts of portfolio management and programmanagement as per the PMI standards

Discuss and learn in a workshop environment how to build theright PMO (Case Study)

Understand the Organizational Project Management MaturityModel

Learn the secrets for maintaining a successful PMO

Get an overview of the current PMO tools in the market


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Course Contents at a Glance

Understanding Key PMO Concepts1

The PMO Environment2

Implementing the Right PMO3

Conclusion

4 Understanding Program Management

Conclusion

5 Understanding Portfolio Management


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Course Contents at a Glance

Conclusion

6 Introduction to OPM3

PMO Software Tools

7

Sustaining a Successful PMO8


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Chapter 1

UNDERSTANDING KEY PMOCONCEPTS


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What is a PMO?

Pfor Project or Program

M for Management

O for Office

Other interpretations


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What is a Project?

PMI PMBOK defines a project as a temporary endeavorundertaken to create a unique product, service, or result

Temporary means have definite time frame

Unique means the deliverables are somehow unique


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Characteristics of Projects

What are the general characteristics of a project?

Projects are non-routine (one-time)

Have specific products (physical or intangible)

Normally used as instrument of change

Have limited time frame

Involves a sequence of activities demanding different resources andskills

Resources are grouped to achieve a particular aim

Requires professional commitment (some one/agency is fullyresponsible for the project single point of responsibility)


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What is Project Management?

Project management is the application of knowledge, skills,tools, and techniques to project activities to meet projectrequirements


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Project Management Process Groups

Initiating Planning

Monitoring&

Controlling

Executing

Closing


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Project ManagementKnowledge Areas

TimeManagement

HRManagement

ScopeManagement

Communication

Management

RiskManagement

IntegrationManagement

CostManagement

QualityManagement

ProcurementManagement

AS per the PMI PMBOK(2004)


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SEQ SCOPE MANAGEMENT

PROCESSES

PM PROCESS GROUP

1 Collect Requirements Planning

2 Define Scope Planning

3 Create WBS Planning

4 Verify Scope Monitoring & Controlling

5 Control Scope Monitoring & Controlling

PROJECT SCOPE MANAGEMENT


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SEQ TIME MANAGEMENT PROCESSES PM PROCESS GROUP

1 Define Activities Planning

2 Sequence Activities Planning

3 Estimate Activity Resources Planning

4 Estimate Activity Duration Planning

5 Develop Schedule Planning

6 Control Schedule Monitoring & Controlling

PROJECT TIME MANAGEMENT


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PROJECT COST MANAGEMENT

SEQ COST MANAGEMENT PROCESSES PM PROCESS GROUP

1 Estimate Cost Planning

2 Determine Budget Planning

3 Control Cost Monitoring & Controlling


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PROJECT QUALITY MANAGEMENT

SEQ QUALITY MANAGEMENT

PROCESSES

PM PROCESS GROUP

1 Plan Quality Planning

2 Perform Quality Assurance Executing

3 Perform Quality Control Monitoring & Controlling


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PROJECT HR MANAGEMENT

SEQ HR MANAGEMENT PROCESSES PM PROCESS GROUP

1 Develop Human Resource Plan Planning

2 Acquire Project Team Executing

3 Develop Project Team Executing

4 Manage Project Team Executing


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PROJECT COMMUNICATION MANAGEMENT

SEQ COMMUNICATION MANAGEMENT

PROCESSES

PM PROCESS GROUP

1 Identify Stakeholders Initiating

2 Plan Communications Planning

3 Distribute Information Executing

4 Manage Stakeholders Executing

5 Report Performance Monitoring & Controlling


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PROJECT RISK MANAGEMENT

SEQ RISK MANAGEMENT PROCESSES PM PROCESS GROUP

1 Plan Risk Management Planning

2 Identify Risks Planning

3 Perform Qualitative Risk Analysis Planning

4 Perform Quantitative Risk Analysis Planning

5 Plan Risk Responses Planning

6 Monitor & Control Risks Monitoring & Controlling


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PROJECT PROCUREMENT MANAGEMENT

SEQ PROCUREMENT MANAGEMENT

PROCESSES

PM PROCESS GROUP

1 Plan Procurements Planning

2 Conduct Procurements Executing

3 Administer Procurements Monitoring & Controlling

4 Close Procurements Closing


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SEQ INTEGRATION MANAGEMENT

PROCESSES

PM PROCESS GROUP

1 Develop Project Charter Initiating

2 Develop Project Management Plan Planning

3 Direct and Manage Project Execution Executing

4 Monitor & Control Project Work Monitoring & Controlling

5 Perform Integrated Change Control Monitoring & Controlling

6 Close Project or Phase Closing

PROJECT INTEGRATION MANAGEMENT


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Defining Project Management Office

Project Management Office (PMO) is an organizational body orentity assigned various responsibilities related to the centralized andcoordinated management of those projects under its domain

The responsibilities of a PMO can range from providing projectmanagement support functions to actually being responsible for thedirect management of a project


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What is a Program?

A programs is a group ofrelated projects managed in acoordinated way to obtainbenefits and control notavailable from managing them

individually. Programs mayinclude elements of related

work outside the scope of thediscrete projects in theprogram.

Examples of other Work?

Program

Programs Projects Other Work

Project Projects


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What is Program Management?

Program Management is the centralized coordinatedmanagement of a program to achieve the programs strategic

objectives and benefits


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What is Program Management Office?

Program Management Office (PMO) is the centralizedmanagement of a particular program or programs such thatcorporate benefit is realized by the sharing of resources,methodologies, tools & techniques, and related high-level project

management focus.


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Dont Judge a Book by its Title

Other names given to the PMO entity includes: Project Support Office

Project Office

Enterprise Project Office

Project Management Center of Excellence

Strategic Project Office

Project Management Competency Center

Studies show that existing PMOs vary significantly in theirstructure, roles assumed, and the perceived value


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When Do We Need a PMO?

Large number of projects performed but few are completed

Projects are not aligned with business strategy

We celebrate project completion and reward project teammembers even if the project did not deliver the full scope,exceeded the budget, exceeded the deadlines, and compromisedthe quality

Same problems recur in most projects


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When Do We Need a PMO?

Difficulty in tracking project progress

Poor project documentation

Lack of unified project management methodology

Fire fighting mode and management by crisis approach (i.e.urgent issues takes priority over important issues)


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Is PMO a Panacea?

According to a Forrester report (2003), PMOs are on the rise buttheir effectiveness is dubious

Studies show that departmental PMOs has little acceptanceoutside their span of influence

A PWC survey (2004) conducted on 10640 projects valued at $7.2 billion across a range of industries showed that only 2.5% ofglobal businesses achieved 100% project success and over 50% of

the projects fail

The relevance or even the existence of the PMO has beenseriously questioned in recent years in 42% of organizationssurveyed by PMI in 2006


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PMO Models

Models allow us to envision, in advance, what the final outcomewill be. It also allow us to exchange ideas, conversations, anddebate if the model is suitable for usage or not

The PMO literature is full of high level PMO classifications orcategorizations called PMO models


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PMO Models

Full Control PMO

PM reports to PMO

Full responsibility of

deliverables Assign resources

Enforce discipline

Advisory PMO

Awareness

Training

NewslettersGuidelines

Full Control

versusAdvisory Board


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PMO Models

The easy to visualize model Control Tower

Establish standards

Educate Standards

Enforce Standards

Improve Standards

Weather StationReport progress status to the executives (budget, risk, issues,progress)

Track events without influencing them

Resource PoolSupply of project managers

Experts are hired in the pool

Internal clients normally pay for the service


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PMO Models

The How Good Can We Be ModelBased on number of project management processes applied and level of

sophistication

Basic PMO

Advanced PMO

Center of Excellence PMO


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PMO Models

The Where to Focus Model Strategic

Tactical

How We Do Things Model Supportive: Train, Coach, and Rescue

Controlling: Monitor, Audit, and Report

Directive: Share some responsibility (plan, manage, and provideresources)


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PMO Models

The Organizational Chart Model Enterprise Level PMO

Departmental PMO

Project Control Office


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Gartner PMO Models

The Repository Model Serves as a repository for information on project management

methodology and standards

Some staff are assigned formal, part-time roles for maintaining therepository

Suitable for organizations with weak central governance orempower distributed, business-centric project ownership

Does not provide project oversight within organization


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Gartner PMO Models

The Coach Approach Builds on the repository approach

Best practices are documented and shared by the PMO

Project performance is actively monitored. Poor performing projectmanagers are trained and coached

The office is permanently staffed.

The office has some supervisory & reporting responsibility for mostof the projects

The office act as a trainer, consultant, and information provider onproject processes


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Gartner PMO Models

The Enterprise Approach (Manager Model) Builds on the repository and coach models

Concentrates project management capabilities and responsibilitieswithin the PMO. Project managers are staffed within the sharedservices and assigned to projects as needed

May provide direct management of selected projects (act as acontracted project manager)

Sometimes called PM Center of Excellence


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Gartner PMO Models

What are the perceived advantages & disadvantages of each ofthe three Gartner PMO models?


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PMO Competency Continuum

Stage 1Project Office

Achieve projectdeliverables andobjectives for cost,schedule &

resources. 1 or moreprojects 1 ProjectManager

Stage 2Basic PMO

Provide standardand repeatable PMmethodology Multiple Projects Multiple ProjectManagers Program Manager Part time PMOSupport Staff

Stage 3Standard PMO

Establish capabilityand infrastructureto support andgovern a cohesiveprojectenvironment Multiple Projects Multiple PMs Program Mngrs Full time& parttime PMO SupportStaff

Stage 4Advanced PMO

Apply integrated &

comprehensiveproject managementcapabilities toachieve businessobjectives PMO Director Dedicated PMOtechnical & supportstaff

Stage 5Center of

Excellence

Manage continuousimprovement andcross departmentalcollaboration toachieve strategicbusiness goals Multiple programs VP or Director ofProject Management Enterprise widesupport staff

Project Oversight

Process Control

Process Support

Business Maturity

Strategic Alignment

Source: Hill (2008)


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PMO Models

Which is the best model for your organization?

What are the factors that help in deciding the right PMO model?

What if my organizational needs are not covered by the generalPMO models?


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Which Model is the Best?

Model Selection tips Who is the main customer of the PMO?

What is the maturity level of the project management community?

What is the level of cooperation and teamwork at the executiveslevel?

Where is the greatest pain?

Will the PMO be funded and sourced sufficiently by the executivesto address opportunities and threats?

What is the level of support for a strong PMO role?


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Chapter 2

THE PMO ENVIRONMENT


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The PMO Stakeholders

A stakeholder is any one whose interests may be positively ornegatively impacted by the PMO establishment project (i.e. hassomething to gain or lose by implementing the PMO)

Key stakeholders include CEO, CIO, CFO and other corporateexecutives, project managers, customers, PMO project sponsor,PMO team members, project team members, vendors, owners,fund providers, and sellers


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The PMO Stakeholder Expectations

Stakeholder Expectations

Executives

Accurate, relevant & timely reports and views on projects andportfolios to support the decision making process and to facilitatethe selection of the right investments (projects) that give sustainedcompetitive advantage or improve the market share

ProjectManagers

More advanced and stable processes for planning and managingprojects.

Team MembersImproved methods to track their project participation and lower

conflict between projects & their operational duties.

BusinessManagers

Enhanced project delivery, improved quality, lower project budgets,and gain competitive advantage


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47 Building & Managing the Right PMO

IBRAHIM MAHMOUD IBRAHIM

PMO & the Organizational Context

CEO

CIO COOVP

Marketing

GM ITSolutions

GMProduction

MarketingPMO

Operation Mgr Logistics Mgr

EPMO

Product APMO

Product BPMO

GM ITOperations

IT PMO

ERP PMOMission CriticalProject Level

Golden Rule: The PMO should be located nearthe main customer of the PMO

Corporate Level

Business Unit orRegional Office

Level


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PMO & the Organizational Context

The closer the PMO to the top, the higher its level of autonomy,authority, and responsibility

Lower resistance

Strategic nature


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Exercise 1

Who are the major stakeholders in your organization?

Where should the PMO be placed in your organization? Why?


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Important Environmental Factors

Sponsorship

CultureOrganization Structure

Personalities


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Factors to Consider: Sponsorship

Dont start a PMO initiative without executive sponsorship

Does management provide tangible support or just some lip-services? (talk the talk but do not walk the walk)

The higher the level of the sponsor, the less work required toovercome obstacles

Again: Dont start a PMO without a strong executive

sponsorship


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Factors to Consider: Culture

What is the organizational culture? How success is defined in theorganization?

Does it reward team work or the super heroes?

Does it promote cooperation? Or does it encouragecompetition?

Does it support process-oriented initiatives?

dont tell me how to do my job environment requires extracommunication effort from the PMO


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Factors to Consider: Culture

The culture the PMO should promote is one of Cooperation

Teamwork

Shared success

Process orientation

Doing it right the first time, rather than doing it over

A research by BIA conducted on 750 PMO organizations showed

that 60% of the PMOs are not supported by their corporateculture


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Factors to Consider: Organization

What is the organizational structure? Weak Matrix or Functional

Strong Matrix

Projectized


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PROJECTIZED

FUNCTIONAL

STRONG

MATRIX

BALANCED

MATRIX

WEAK

MATRIX

PROJECTMAN

AGER

FUNCT

IONAL

MANAGER

AUTHORITY

AUTHORITYORGANIZATION STRUCTURE TYPE



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PMO placement

PMO leadership

Project management maturity of the organization

Where do all the project managers go?

Ability to move towards a strong matrix or projectized

organization


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Factors to Consider: Personalities

What are some of the dominant personalities of both thepeople leading the effort of creating the PMO and of the keystakeholders?

Start with your self

Diversity is not only dealing with people of different cultures,ethnic backgrounds, religions, but also with people withdifferent styles, skills and strengths

If you want to get out of the box thinking, you might need tohave people who are not in the box


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The Purpose of the PMO

Speed up project deliverytime without impactingquality (doing projects right)

Facilitate choosing the right

project mix (doing the rightprojects)

Track & report progress tothe executives

Provide project managementmethodology

Provide technical support forproject management tools

Focus efforts on correctiveactions

Provide or manage projectmanagement training

Manage project portfolios


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Mentor project managers

Help projects in trouble

Keep project archives in one place (i.e. maintains lessons learned)

Help desk services


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Asurvey on PMO implementation varieties - Hobbs (2006) -published at PMI website revealed the following:

PMO Function % of PMOs where

important

Report status to upper management 83%

Develop & implement standard methodology 76%

Monitor & control project performance 65%

Develop competency of personnel including training 65%

Implement & operate Project Information System 60%

Provide advice to upper management 60%Coordinate between projects 59%

Develop & maintain project scorecard 58%


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PMO Function % of PMOs whereimportant

Promote PM within organization 55%

Monitor & control performance of PMO 50%

Participate in strategic planning 49%

Provide mentoring for project managers 49%

Manage one or more portfolios 49%

Identify, select & prioritize new projects 48%

Manage archives of project documentations 48%

Manage one or more programs 48%

Conduct project audits 45%


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Exercise 2

What are the main purposes of the PMO in your organization &why?


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The PMO Environment

ProjectPortfolio

Processes /Methodologies

ResourcePortfolio

AssetPortfolio

Scorecards /Dashboards

Knowledge /Change Mgmt

VendorManagement

ProjectDelivery

Support FunctionsHR Legal

Purchase Training

Admin Program / ProjectManagers

SolutionVendors

GovernanceBoard

SeniorManagement

Data

Feedback/Direction

InformationInformation Direction(Strategy)

Direction(Governance)

MentoringData

FeedbackRequest

Support

PMO


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The PMO Environment

What information the PMO delivers to the Governance Board?

What type of support Legal, Purchasing, and HR provide toPMO?


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Chapter 3

IMPLEMENTING THE RIGHT

PMO


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High Level Implementation Roadmap

Business Case

Project Selection

Project Charter

Assess Current Situation

PMO Value Proposition

PMO Services

PMO Team Setup

PMO Tool ImplementationBuild the PMO (phase 1)

PMO Organization

Operate to achieve the

required maturity level

Specify Priorities


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Maturity Takes Time

Manage

Enhance

TransitionManage

Manage

PMO: Stage 4

PMO: Stage 3

PMO: Stage 2

PMO: Stage 1


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Example: Phased Implementation

High Level Implementation Plan

PMProcesses

ToolSupport

SkillsDevelopment

PortfolioManagement

Stage

1

Stage2

- Define standardmethodology tomanage scope,

time, HR,communications,and risk

- Install MS EPM

- Automate forms,

templates, andsome processes

- Define standardmethodology tomanage

procurement,quality, cost, andintegration

- Conduct ProjectmanagementConcepts

Training

- Conduct PMOawarenesssessions

- Conduct ProjectmanagementConceptsTraining

- Conduct PMOawarenesssessions

- Conducts MSEPM Training

- MS EPMCoaching

- MS EPM first levelSupport

- Establish electronicproject repository

- Design initial

dashboard & web-based reporting

- Design repositoryupdate mechanism

- Maintain projectrepository

- Finalize dashboard& web-basedreporting

- Design resourceportfolio analysis &reporting

GovernanceSetup&Proj

ect

Manag

ementMaturityPla

ns


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Phased PMO Implementation

Q: Which approach is better: implement the PMO tool beforeoperating the first phase of the PMO or at a later stage when thePMO role is accepted by all parties and automation requirementsare more precise?


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The PMO Project Charter

The charter should include the following elements: PMO objectives

High level business justification

High Level Business Requirements

High level deliverables

Major Stakeholders

Assumptions & Constraints

Summary Milestones

Summary Budget

Name of the Assigned Project Manager


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Assess the Current Situation

Where are the major pain areas?

Assess the project environment

Organization & People Assessment

Process Assessment Delivery Assessment


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Organizational assessment

Organization type (projectized, strong matrix, weak matrix,functional)

What resources are working in what projects?

Which business unit has more projects, which region, & whichtime of the year?

What resources can work as PMO champions?


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Process Assessment

Identify the organizational processes that are in place for projectselection, initiation, planning, monitoring & controlling, andcloseout

Identify gaps in project management knowledge areas

Plan to achieve targeted project management maturity usingphased approach


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Building & Managing the Right PMO IBRAHIM MAHMOUD IBRAHIM

Process Assessment

Statement 1 2 3 4 5

1 A Project Scope Statement is created for every project.

2 Project Scope Statements are prepared with customer

input throughout the development process.

3 Management and the customer reviews all projectprogression alternatives and recommendations.

4 Potential changes to the SOWs are processed accordingto a documented Change Control Procedure.

5 Approved changes to the Scope Statement arecommunicated to the project team and the customer.

6 The Statement of Work (SOW) contains all deliverablesand is reflected in the Project Plan.

Example: Assessing Scope Management Processes


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Process Assessment

Statement 1 2 3 4 5

1 The projects WBS and resource estimate areused to develop the projects baseline schedule.

2 The project schedule identifies scheduleconstraints driven by the customer, technology,

suppliers, or management.3 Project schedules are updated on a regular basis

with progress status updates, which are measuredagainst the baseline plan.

4 All project schedule work elements havedependencies, effort, and resources assigned.

5 A critical path analysis is performed on theproject schedule during each progress updatecycle.

6 Schedules are optimized to conform to contractrequirements.

Example: Assessing Time Management Processes


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Delivery Assessment

CostAre we delivering on budget?

TimeAre we delivering on time?

Customer SatisfactionHow satisfied are our customers? Are wemeasuring their satisfaction level regularly? How?


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Getting Executive Approval

Face to Face presentation Distribute the slides a head of time to allow for constructivediscussions

Set the right expectations The PMO Setup will follow a phased implementation approach

All deliverables & business objectives will not be delivered in phase- 1

Explain current project management challenges

Present the PMO opportunities

What resources required to do the job & when do you need them (high level)

Initial Budget

High level milestones and project duration

Present the PMO value proposition


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The PMO Value Proposition

Clearly specify the expected benefits by establishing the PMO Life before and after the PMO

What problems and pain areas will be addressed by the PMO

How the PMO will expedite the delivery process

Be realistic, show how the PMO will function to meet its obligation Specify the timeframe required for building the PMO


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PMO Services: Defining the Right Mix

Provide Standardization Develop a unified project management methodology based on PMI

PMBOK

Process Standardization (templates, policies, procedures)

Document best business practices

Benchmarking


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Report Status to Management Provide insight / analysis on resource utilization , availability, and

performance in all projects

Project Scorecards at periodic executive meetings

Detailed performance analysis at major milestones

Monthly Resource Utilization Analysis Report

Project Health Check

O S i fi i h i h i


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Participate in Resource Management Monitor resource performance

Ensure proper staffing in all projects

Re-assignment

External Scanning / Sourcing

Outsourcing versus In-sourcing criteria

Project selection and project funding

PMO S i D fi i th Ri ht Mi


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Participate in Cost Management Vendor Management

Purchasing

Monitor and report on project cost performance



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Project Portfolio Management Participate in project selection process to ensure alignment with

business strategy

Provide key stakeholders with timely assessment of portfolio andcomponents performance

Participate in program and project reviews

Measure the value of the portfolio through ROI, NPV, or any otherquantitative or qualitative technique



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Training & Mentoring - Leverage the skills of the staff in projectmanagement through

Training

Coaching

Certification Project Reviews



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PMO Tools Support Ensures the integrity of all data captured through the PMO tool

Ensures that all staff involved in project management are capable ofutilizing the PMO tool to the maximum through coaching and formaltraining

Trouble-shooting (first level support) Dashboard & Reporting Support

Maintain corporate-wide project repository (project documentation)

Tool Administrator

Th PMO T


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The PMO Team

PMO Director

Project Portfolio Administrator

Project Management MethodologyConsultant

Project planners/Schedulers

Project Administrators/Coordinators

Technical PMO Tool Support

Resource Analyst

Th PMO T


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The PMO Team

Project Management Training

Officer

Contract Management Administrator

Legal Advisor

Financial Analyst

Librarian / Documentation Specialist

S lli th PMO V l P iti


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Selling the PMO Value Proposition

Awareness & Marketing Sessions (why should everybody supportthe PMO?)

Which group should be addressed first & Why?

Executives

Project ManagersTeam Members

Business Managers

Be a spokesman

Selling the PMO Val e Proposition


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Selling the PMO Value Proposition

Be passionate about the potential

Engage upper level management

Show examples of successful PMO implementations

Exercise 3


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Exercise 3

Read the case study then work on groups to identify thefollowing:

The most suitable PMO model

The PMO value proposition

PMO position in the organization structure The PMO organization structure (roles & responsibilities)

The PMO Services to be delivered

Implementation Phases (PMO stages) and what to be delivered ineach phase

Do we need more than one PMO? Where?


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Chapter 4

Program Management

Role of the Program Manager


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Role of the Program Manager

Responsible for the coordinated planning, management, and execution of aprogram which is defined as multiple, related projects directed towards strategicbusiness benefits & objectives

Ensure program management processes enable the component teams tosuccessfully complete their work

Ensure proper integration of project deliverables into programs end product.

Ensure projects are organized and executed in a consistent manner fulfilling

established standards

Important Program Management Themes


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Important Program Management Themes

Benefits Management

Program Stakeholder Management

Program Governance

Benefits Management


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Benefits Management

The definition and formalization of the expected benefits aprogram is intended to deliver

The benefits are normally identified & formalized at portfolio level beforebeing delegated to the program for realization

Some programs deliver incremental benefits to the organization. Others

deliver all of the benefits at the very end of the program. Examples?

Benefits Management includes

Definition of each benefit and how to realize it

Mapping of benefits to program outcomes

Metrics and procedures to measure benefits

Roles, responsibilities, and Communication plan for benefit management

How to sustain the benefit at the end of the program (on-going operation)

Program Stakeholders Management


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Program Stakeholders Management

Defines the individuals and organizations whose interests may beaffected by the program outcome

Stakeholders can either help or hinder the program depending onthe opportunity or threat they see

Proper communication skills are required to manage stakeholders

Stakeholders include Program Director, Program Managers,Program Sponsor, PMO, Program Team Members, ProgramGovernance Board, Suppliers, and Consumers

Program Governance


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Program Governance

The process of developing, communicating, implementing,monitoring, and assuring the policies, procedures, organizationalstructures, and practices associated with a specific program

Program governance should fit within the wider picture

(corporate governance)

A governance board (or Steering Committee) is the forum whereissues related to the program are discussed.

The Governance Board controls the investment and monitor thedelivery of benefits as the program progresses

Program Governance


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Program Governance

Functions of the Governance Board include: Initiating the program

Approvals of program plans and authorizes deviation from the plans(when needed)

Review programs progress, benefits delivery, and cost

Problem solving in issues the Program Manager cannot solve.

Ensure compliance with corporate and legal policies, procedures,and requirements

Program Lifecycle


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Program Lifecycle

1.Pre-

ProgramPreparation

2.ProgramInitiation

3.Program

Setup

4.Delivery ofProgramBenefits

GR1 GR2 GR3

GR45.

ProgramClosure

GR: Gate Review

Program Lifecycle & Benefits Management


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Program Lifecycle & Benefits Management

Pre-Program

Preparation

ProgramInitiation

ProgramSetup

Delivery ofProgramBenefits

ProgramClosure

BenefitIdentification

BenefitsAnalysis &Planning

BenefitRealization

BenefitsTransition

Identify &qualify business

benefits

Derive & prioritizecomponents

Define benefit metrics Define benefitrealization plan &monitoring Map benefits toprogram plan

Monitorcomponents

Maintainbenefits register Report benefits

Consolidatebenefits

Transfer theongoingresponsibilities

Program Governance

Phase 1: Pre-Program Preparations


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Phase 1: Pre-Program Preparations

The main objective of this phase is to establish a firm foundationof support and approval for the program

Activities include:

Understanding the strategic value of the proposed business change

Study expectations of the key decision makers and stakeholders

Define program objectives and their alignment with business strategicobjectives

Conduct feasibility / justification study (also answer the question: whyprogram approach is better than individual projects)

Passing the selection process by the portfolio review board

Developing Program initial Plan including check points to ensure theprogram is on track

Phase 2: Program Initiation


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Phase 2: Program Initiation

Defines detailed program roadmap on how the program is to bestructured & managed and defines program key deliverablesi.e.the focus is on program-level planning processes

The main outcome is an approval authorizing execution of the

program charter

Justification Vision Strategic Fit Outcomes Scope Benefit Strategy Assumptions & Constraints

Components Risks & Issues Timeframe Resources Stakeholders Program Governance High-level Roadmap

Phase 3: Program Setup


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Phase 3: Program Setup

The purpose of this phase is to progressively elaborate theprogram charter and establish an infrastructure that will supportthe program and its constituent projects

The desired outcome is approval authorizing execution of the

program plan

The program management plan should answer the following:

What are the deliverables and when they will be ready

How much will it cost? What are the risks and issues?

What are the dependencies, assumptions, and constraintsincluded?

How will the program be managed? What are the other servicesrequired?

Phase 4: Delivery of Program Benefits


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The purpose of this phase is to initiate the component projects ofthe program and manage the development of program benefits

This phase is iterative in natureends only when all plannedbenefits of the program have been achieved

Activities at this phase include:

Ensure program governance is in action

Initiate projects

Ensure project deliverables meet the program requirement

Measure benefits realization Analyze progress to the plan



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Activities at this phase include (Cont.): Communicate with stakeholders

Manage dependencies and shared resources

Manage program level risks and issues

Ensure adherence to methodologies, polices, and procedures

Manage transition from current as-is state to required to-be state

Review change requests and approve as appropriate

Phase 5: Program Closure


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Phase 5: Program Closure

Ensure proper closing of program organization and infrastructurewhen all work is completed and benefits are realized.

Activities include:

Document lessons learned

Archive program repository

Manage transition to operations

Disband the program organization

Provide feedback and recommendations on changes identifiedduring the program lifecycle

Program Management Knowledge Areas


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Program Management Knowledge Areas

Program IntegrationManagement

Program Scope Management

Program Time Management

Program Cost Management

Program Quality Management

Program Human ResourceManagement

Program CommunicationManagement

Program Risk Management

Program Procurement

Management

Program Financial Management

Program Stakeholder

Management

Program Governance


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Initiating Process Group


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Initiate Program

Establish Program FinancialFramework

Planning ProcessGroup

Planning Process Group


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g p

Initiate Program

Define Goals & Objectives

Develop Management Plan

Plan for Audits

Plan Program Quality

Plan Risk Management

Identify Program Risks

Analyze Risks

Plan Risk Responses

Plan Program ProcurementDevelop Program Schedule

Estimate Program Costs Budget Program Costs

Plan & Establish GovernanceStructure Identify Program Stakeholders

Develop Program Infrastructure

Develop Program Requirements

Develop Program Architecture

Develop Program WBS

Develop Program Financial Plan

Plan Stakeholders Management

Plan Communications


Executing Process Group

Closing Process Group

Monitoring & ControllingProcess Group



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Direct & Manage ProgramExecution


Manage ProgramResources

Manage ProgramArchitecture

Manage ComponentInterfaces

Engage ProgramStakeholders

Distributeinformation

Conduct ProgramProcurements

ApproveComponent

Initiation


Monitoring & Controlling Process Group


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o o g & Co o g ocess G oup

Initiating ProcessGroup

Monitor & ControlProgram Performance

Monitor & ControlProgram Scope

Monitor & ControlProgram Schedule


Monitor & ControlProgram Financials

Manage StakeholderExpectations

Monitor & ControlProgram Risks

Administer ProgramProcurement

Report ProgramPerformance

Monitor & ControlProgram Changes

Manage Program Issues

Provide GovernanceOversight

Manage ProgramBenefits

Planning ProcessGroup

Executing ProcessGroup



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g p

Close Program



Approve ComponentTransition

Close ProgramProcurements


Skills of the Effective Program Manager


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g g

High communication and relationship-building skills

Excellent risk and conflict management

Has strategic vision and broad organizational management skills

Political

People

Leadership

Has excellent project management skills

Ability to conduct effective questioning

Project Management & Program Management


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j g g g

What are the similarities and differences between programmanagement and project management?

Program Management Project Management

Business & Technical in nature Technical in nature

Aligned to strategic objectives of thebusiness Aligned to program objectives

Focuses on interdependencies amongprojects and feasibility of delivery

Focus on milestone, deliverables of asingle project

Handle program level risks Focus on project level risks

Broad range of business, leadership,and management skills required

In-depth project management skillsrequired

Focus on consistent usage of commonprocesses among projects

Focus on effective usage of processesin a single project

Role of the PMO in Program Management


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g g

The role of the PMO in program management variesdepending on several factors. What are these factors?

A standard PMO supports the Program Manager by

Providing the Program Manager with accurate and timelyinformation to make the right decisions

Providing administrative support in managing schedules, budgets,risks, issues, procurement and human resource

Exercise 4


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Q: What type of services a Program Management Office (PMO)can provide to the Program Manager?

Define the program management processes that will be followed

Manage schedule and budget at the program level

Define the quality standards for the program and its components Provide document configuration management

Provide centralized support for managing changes and tracking risks andissues

Provide central repository for all program deliverables


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Chapter 5

Project Portfolio Management


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Q: Have you ever cancelled a project that is on-timeand on-budget? Why?

Defining Project Portfolio


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g j

A collection of projects and/or programs and other work that aregrouped together to facilitate the effective management of thatwork to meet strategic business objectives.

The projects and programs within a portfolio may not be

interdependent or directly related



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A portfolio represents a view the organizations set of activeprograms, projects, sub-portfolios, and other work at a specificpoint of time

A portfolio represents the work selected to be done, but not

necessarily the work that should be done

Common features of portfolio components include:

They represent investments made or planned by the organization

They are aligned with the strategic goals of the organization

They can be measured, ranked, and prioritized

Are portfolios temporary like projects and programs?



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Portfolio

Portfolio Projects Programs

Program Projects Program Projects Other Work

Projects Projects Projects



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PortfolioName

Give an exampleof a portfolio ?

Defining Project Portfolio Management


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The centralized management of one or more portfolios, whichincludes identifying, prioritizing, authorizing, managing, andcontrolling projects, programs, and other related work to achievespecific strategic business objectives.

The focus of portfolio management is to ensure that theorganization is doing the right work rather than doing work

right

The Organizational Context of PPM


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Management of AuthorizedPrograms & Projects

(Increasing value production capabilities)

Management ofOn-going Operations

(Producing Value)

Project PortfolioPlanning & Management

High-Level OperationsPlanning & Management

Organizational Strategy & Objectives

Mission

Vision

Organizational Resources

The Organizational Context of PPM


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Vision, Mission, Strategy, and Objectives help definingorganizations performance targets

Portfolio Planning & Management establishdistinctinitiatives required to achieve the organizations

performance targets

PPM ensures that the critical organizational resourcesare consumed in achieving high priority initiatives.

PPM & Organizational resources


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Some project managers are frustrated by lack of resources or byother groups stealing their resources

These frustrations are symptoms of an unbalanced (orunacknowledged) project portfolio.

The frequent complaint of "not enough resources," is simply anotherway of saying that there are too many projects!

Someone should be sorting them out, prioritizing them, and "killing"the projects that aren't high priority.

PPM can help project managers have enough resources toaccomplish projects that are perceived to be valuable and enjoyplenty of support throughout the organization

Exercise 5


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Compare project management, program management, andportfolio management.

Portfolio Management Process Groups


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Aligning ProcessGroup

1. Identify components2. Categorize components3. Evaluate components4. Select components

5. Identify portfolio risks6. Analyze portfolio risks7. Prioritize components8. Develop portfolio risk

responses9. Balance portfolio10. Communicate portfolio

adjustment11. Authorize components

Monitoring &Controlling

Process Group

1. Monitor & control portfoliorisks

2. Review & report portfolioperformance

3. Monitor business strategychanges

Portfolio Management Process Groups


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StrategicChange

No

Yes

Current strategicPlan

Goals Definition Key performancecriteria CapacityDefinition

Strategic PlanningProcess Output

Aligning Process Group

IdentifyComponents

CategorizeComponents

EvaluateComponents

SelectComponents

PortfolioReporting &

Review

Monitoring &Controlling Process

Group

ComponentExecution &Reporting

ComponentProcesses

Identify

Portfolio Risks

AnalyzePortfolio Risks

PrioritizeComponents

DevelopPortfolio Risk

Responses

BalancePortfolio

CommunicatePortfolio

Adjustment

AuthorizeComponents

Monitor Bus.StrategyChanges

Monitor &Control

Portfolio Risks



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Identify ComponentsTo create an up-to-date list, withsufficient information, of ongoing and new components that willbe managed through portfolio management

Categorize ComponentsTo group identified components

into relevant business groups to which a common set of decisionfilters and criteria can be applied for evaluation, selection,prioritization, and balancing.

Hint: Components in each group relate to a common strategic goal



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Evaluate ComponentsTo gather necessary information toevaluate components with the purpose of comparing them inorder to facilitate the selection process

Qualitative & quantitative information

Iterative process until you reach the required accuracy and

coverage level Graphs, charts, documents, and recommendations are produced to

support the selection process



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Select ComponentsTo select components based on theevaluation process. Produces a list of categorized, evaluated, andselected components. Also recommendation report of acceptedand rejected components is produced

Identify Portfolio RisksTo identify portfolio risks anddetermine which risks could affect the portfolio and documenttheir characteristics. The impact of a risk on different portfoliocategories vary

Analyze Portfolio RisksTo prioritize the identified risks forfurther action based on their probability of occurrence and theirimpact on portfolio performance or objectives such as ROI



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Prioritize ComponentsRank components within eachstrategic or funding category, investment time frame, risk versusreturn, and organizational focus according to established criteria

Develop Portfolio Risk ResponsesTo develop options and

determine action to enhance the opportunities and reduce threatsto the portfolio objectives. Risk response planning includesassigning risk owners and inserting resources and activities intothe budget, schedule, and portfolio management plan.



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Portfolio BalancingDevelop the portfolio component mixwith the greatest potential to collectively support the strategicinitiatives and achieve strategic objectives

includes the following activities:

Add new components that have been selected and prioritizedfor authorization

Eliminating components to be suspended, reprioritized, orterminated based on the review process

Identifying components that are not authorized based on thereview process

Selecting the right mix to achieve the desired returns should take into

consideration: interdependencies, similarities, and synergies that existbetween components



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Communicate Portfolio AdjustmentsCommunicateportfolio changes to the stakeholders to provide clearunderstanding of the impact of the change on portfolioperformance goals and the larger business strategies

AuthorizationTo formally allocate financial and humanresources to either develop business case or execute selectedcomponents and to formally communicate portfolio-balancingdecisions to stakeholders

Starting and / or terminating decisions Budget and resource reallocation for inactive and terminated

components



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Monitor & Control Portfolio RisksTo determine if:

Portfolio assumptions are still valid

Risk, as assessed, has changed from its prior state

Proper risk management policies and procedures are beingfollowed

Contingency reserves of cost or schedule are modified in line withthe risks



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Review & Report Portfolio PerformanceGather and reportperformance indicators and review the portfolio at an appropriatepredetermined frequency to ensure alignment with theorganizations strategy and effective resource utilization

Each review cycle may contain several reviews with a different

focus and depth of analysis.

What is the ultimate purpose of the reviews?

Portfolio contains only the components required to supportachieving the strategic objectives

What elements to be reviewed?

Scope, Risks, Resource Utilization, Financial Performance,policies &Standards, etc.



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Monitor Business Strategy ChangesTo enable portfoliomanagement to respond to changes in business strategy. Asignificant change in business strategic direction will impactcomponent categorization or prioritization and this will require re-

balancing the portfolio

Portfolio Management Knowledge Areas


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PORTFOLIO MANAGEMENT PROCESS GROUPS

Monitoring & Controlling

Process GroupAligning Process

GroupProcess Knowledge

Area

Review & Report PortfolioPerformance

Identify Components

PortfolioGovernance

Monitor Business Strategy ChangesCategorize Components

Communicate Portfolio AdjustmentsEvaluate Components

Select Components

Prioritize Components

Authorize Components

Monitor & Control Portfolio RisksIdentify Portfolio RisksPortfolio RiskManagement

Analyze Portfolio Risks

Develop Portfolio RiskResponses

Pipeline Management


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The process of determining if and how a set of projects in theportfolio can be executed by a company in a specified time, givenfinite development resources in the company.

The organization should have the tools to estimate the efforts planned foreach project

Role of the Portfolio Manager


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Typically a senior manager or senior management team

Provide stakeholders with timely assessment & timelycommunication of portfolio and component performance

Participate in program and project support to reflect senior levelsupport and leadership

Re-evaluate portfolio components on regular basis

Performance review

Benefit realization

Strategic direction & priorities

The PMO as a Portfolio Manager


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Project Portfolio Management is the responsibility of senior executives in the

organization. PMO facilitates and coordinates the involvement of theexecutives in the project oversight

Develop and implement processes and procedures for each project portfoliomanagement activity based on the organizational maturity level

Furnish executive management with reports indicating the organizationportfolio overall health

How each component is performing against predefined KPIs

Level of contribution of each component to achieving strategic objectives

Composite risk level of the portfolio

Resource capabilities and utilization

Financial Performance

Example: Defining Business Priorities


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Defining Business Priorities


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Assess Competing Investments


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Measure Strategic fit (how?)

Financial Return (how?)

Risks (how?)

Architectural fit (how?)

Operational Performance (how?)

Example: Measuring the Strategic Fit


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Portfolio Management Success Factors


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Does your organization have clear, communicated strategic goals& objectives?

Does your organizations have the following symptoms?

No formal process to define goals & objectives

Long-term planning is not as important as fire-fighting

There is no measurement process to validate status

Only those at the top know about the goals & objectives

Goals & objectives are not qualified or quantifiable

Accountability to achieve the goals doesnt exist


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Chapter 6

INTRODUCTION TO OPM3

Maturity Models


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The term Maturity Model has become widely recognized withthe advent of CMM (Capability Maturity Model) for softwareengineering in the late 1980s

Maturity indicates capabilities grow over time to produce

repeatable success

Without existence of mature processes, organizations are forcedto use talent and heroic efforts alone to accomplish tasks

Defining OPM3


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Organizational Project Management (OPM) is the alignment of

an organizations projects, programs, and portfolios to its stated

strategic goals

Organizational Project Management Maturity Model (OPM3)is a

standard developed by PMI designed to help organizations translatestrategy into successful outcomes, consistently and predictably(PMI, 2003,p. ix)

Defining OPM3


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OPM3 standard has three key elements:

Knowledge: Describes the organizational project managementmaturity

Assessment: Methods, processes, & procedures that anorganization can use to self-assess its maturity

Improvement: A process for moving from current maturity toincreased maturity

Defining OPM3


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OPM3 focuses on alignment of projects, programs, andportfolio resultswith the organizational strategicobjectivesachieved by continuous improvement through the adoption andenhancement ofbest practices

Other maturity models such as CMM focus on producingconsistent products and consistent support for products

OPM3 defines a continuum of maturity as opposed to discrete

maturity levels

The OPM3 Cycle


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1

The OPM3 Cycle

2 3 4 5

OPM3 Vs CMM


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CMM model has five levels

Level 1: Initial ad-hoc processes employed based on the strengthof individual team leaders

Level 2: Repeatable basic processes are informally established

Level 3: Defined documented processes are standardized and

integrated into daily operations

OPM3 Vs CMM


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Level 4: Managed process adherence is measured through

established metrics and evolutions are based on these metrics Level 5: Optimizing continuous process improvement is

practiced and documented; organization culture is continuousimprovement

OPM3 Domains


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OPM3 model has three different domains

Project Domain

Program Domain

Portfolio Domain

Project Domain


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The main responsibilities of the project manager in the projectdomain are:

Managing stakeholder expectations at a project level

Managing project constraints

Identifying inter-project contentions

Prioritizing Tasks

Ensure project objectives support program strategies

Program Domain


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The main responsibilities of the program manager in the programdomain are:

Managing stakeholder expectations at a program level

Coordinating activities of multiple project managers & teams

Managing conflicts among projects to achieve organizational goals

Prioritizing projects

Ensure program objectives support portfolio strategies

Portfolio Domain


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The main responsibilities of the portfolio manager in theportfolio domain are:

Translating organizational strategies into specific initiatives orbusiness cases that become the foundation for programs & projects

Identifying and initiating programs and projects

Providing, allocating, and reallocating resources to programs,projects, and other activities

Maintaining a balanced project portfolio

Supporting the OPM environment

Process Improvement Stages


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S = Standardize: The organization uses the process acrossfunctional boundaries

M = Measure: The process is standardized and measurements aretaken

C = Control: A process is in control if all measurements arewithin the upper and lower boundaries

I = Improved: If the process is controlled and data is collected &used to improve the process

Best Practices


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An optimal way currently recognized by industry to achieve a stated goal or

objective. Best practices are incorporated into mature project managementcapabilities in organizations

All BPs are categorized by stage & domain dimensions. OPM3 has around 586OPM BPs

BP

Number

BP Name BP

Description

Domain Stage Process Process

Group

1030

Project Scope

Planning

ProcessStandardization

Project Standardize 5.1 Planning

Capability


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CapabilityA specific competency that must exist in anorganization in order to execute project management processesand deliver project management services and products.

Capability is an element of BP. Every BP has several Caps.

OPM3 has around 3000 capabilities

Best Practices & Capabilities


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BP 1030 with constituent and pre-requisiteCapsBP Diagram with constituent and pre-requisite Caps

Best Practice 1030 Project ScopePlanning Standardization

Constituent Cap 1030.10 ProcessManagement Governing Body

Prerequisite Cap 1000.10 EstablishedStandardization Policies

Constituent Cap 1030.20 Project ScopePlanning Process Development

Constituent Cap 1030.30 StandardizedProject Scope Planning Process

BP 1030 BP 1000

Cap1030.030

Cap1000.030

Cap1000.020Cap

1030.020

Cap1030.010

Cap1000.010

Other Important OPM3 Terms


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OutcomeA tangible or intangible result of applying a capability.

A capability may have one or more outcomes

Key Performance Indicator (KPI)A criterion by which anorganization can determine, quantitatively or qualitatively, whetherthe outcome associated with the Capability exists or the degree to

which it exists.

The difference between a Cap and an Outcome of a Cap is ademonstrated competency in the organization

Other Important OPM3 Terms


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BP 1030 Caps & OutcomesBP Diagram with Outcome and KPI

Best Practice 1030 Project ScopePlanning Standardization

Constituent Cap 1030.020 ProjectScope Planning Process Development

Outcome 1030.020.10 DocumentedProject Scope Planning Process

BP 1030

Cap1030.030

Cap1030.020

Cap1030.010

Outcome1030.020.10 KPI

How Does OPM3 Work?


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1. Standardize

2. Measure

3. Control

4. Improve

Standardize


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The process is implemented and standardized in the organization

Documented (Caps, outcomes, policies, checklist, templates, guidelines,tools, etc.)

Communicated

Implemented consistently

Governing body established

Use a formal process model for documentation such as:

SIPOC (Suppliers-Inputs-Process-Outputs-Customers)

ETVX (Entry Criteria, Task, Verification, and Exit Criteria)

IDEF (Integrated Definition) CIMOSA (Computer Integrated Manufacturing Open System Architecture)

Measure


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Critical steps of the process and all inputs to the process are identified,

mapped, and measured

Variations are identified

Quality Audit group measures performance of the process (attributemeasurement & variable measurement)

Did the project team conduct kick-off meeting? Did the kick-off meeting had a clear agenda and minutes?

Number of scope changes

Cost Performance Index

QA produces Non Compliance Report (NCR) that PMO will investigate

Metrics dashboards might be used in some organizations to highlight vitalmeasurements

Control


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A process is controlled when it stays within process specifications

A controlled process has predictable future performance basedon past performance

A process is controlled in the organization if acontrol plan for the process has been developed, in action, and

describes how it address variations

The process has upper and lower limitations

Control tools include: control charts, Standard deviations

Who controls the processes?

Improve


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A series of actions taken to identify, analyze, and improve existingprocesses within an organization to meet new goals and objectives

A process in control is the primary target for improvement

An improved process has the following characteristics Root causes for problems within the process are documented

All parties participate in the improvement process

The improvement is sustainable (enforced by PMO, training,

building and managing the right pmo_06feb2010v2

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