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Implementing a value-driven
Project Management Office
a business value proposition for integrating Project Management as a core capability across the enterprise
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Topics
Project Management: existing situation
The missing link: PMO
Roadmap for a successful PMO implementation
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Project Management: existing situation
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Project Environment
Projects are executed in isolation, across various business units
Different approaches in managing projects across the enterprise
Lack of common understanding/ language:
Link between business strategy and projects
Project Management terminology
Project business value
Successful projects, but poor business results
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Business needs
Changing environment, need to adapt quickly:
More competing market
Changes to the operational model
Product diversification based on market segmentation
Mergers/ Acquisitions
Integrating different business models
Assimilating different cultures
Economic slowdown
Increase resource usage: do more with less
Cost reduction initiatives
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Expectations
Business Executives
Better connection between business goals and projects results
More value with less resources
Project Managers
Common approach on managing projects
Enough resources
Functional/ Unit Managers
Better control of resources
Improved reporting capabilities
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Overall conclusion
Projects are not delivering maximum value to the organization
Project Management is not yet a core business practice across the enterprise
Executives don’t perceive Project Management as a business enabler
There is a missing link between project execution environment and business strategy
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The missing link: PMO
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PMO: the VALUE LINK
Project Managemen
t Office - PMO
Shareholders
Resource and Line
Managers
Project Manager
s
Project Teams
Customers
Business strategy
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Consolidated Reporting
Solution: PMO is the VALUE LINK
Corporate/ Division Strategy
Project Portfolio BoardPMO
Project Execution Environment
Governance and Prioritization
Project Mix Alignment
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What is a PMO?
Chartered organizational structure: “Dept. of Project Mgmt. Practice”
Set of processes
Functional model of the PMO
Project and Portfolio Mgmt. methodologies
Process Assets Library
Pool of resources (project managers, tools and applications)
Competency Center (training, coaching. Technical support for Project Managers)
Shared Services Provider for the enterprise
“executive cockpit”
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Major components of a PMO
Strategy, commitment and support
PMO
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PMO’s Mandate
Maximize project benefits
Connect strategy with tactics
Implement rigorous PM practice across the organization
Integrate:
Processes and practices
People
Departments/ organizational structures
Executive radar screen
Support for portfolio governance and alignment
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Two major types of PMO
Cost Control Model
Focused on reducing cost an delivering on-time
Limited or no impact on project alignment
Performs only on the project execution level
Limited or no visibility to executive management
Throughput Model – The ROI engine
Focus on business value maximization
Executive radar screen
Business integrator (horizontal/vertical, internal/ external)
Major role in Project Portfolio Governance
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Benefits of the Throughput Model
More projects with the same resources (20%-50%)
Reduced completion time (up to 25%)
Increased business performance (depending on selected KPIs)
Allows for more accurate measurement of the PMO value across the organization (both top and bottom levels)
Increased forecasting capability
Agility –responsivness to the changing environment
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Major functions areas (high-level)
Practice Management (processes, know-how, methodologies)
Infrastructure Management (software tools, organizational support functions, logistics)
Resource Integration (project managers, team members, other shared resources)
Technical Support (training, coaching, mentoring to project managers and project support personnel)
Business Alignment (helps prioritization and governance of Project Portfolio based on business goals)
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Staged PMO
PMO is designed for progressive evolution through stages
Each function area is divided into specific functions, based on the Gap Analysis result
Each specific function can be executed to different performance levels
The overall PMO Function Model defines:
Specific functions to address
Expected performance level on each function
Timeline to achieve specific stages of development
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Roadmap for a successful PMO implementation
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PMO Conceptual Lifecycle
AnalysisAnalysis
Design and Planning
Design and Planning
ImplementationImplementation
EvaluationEvaluation
Most successful PMO implementations go through these four main phases—and repeat as necessary
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Implementation phases (high level)
Gap Analysis Design and Build Operate
1. Understand current status
2. Document requirements and expectations
3. Validate alignment with business strategy
4. Document constraints and assumptions
1. Select PMO model
2. Design functional model
3. Issue PMO Charter
4. Assign responsibilities and authority
5. Develop processes (PAL)
6. Select software tools
7. Develop capabilities based on functional model
8. Establish budget and cost/revenue model
1. Perform assigned functions:
A. Process development and deployment
B. Consolidated performance reporting
C. Training center
D. Audit
2. Provide feedback for Portfolio Management
3. Integrate business processes
4. Organizational integration (vertical/horizontal, internal/external)
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Typical timeline
Validate analysis report, PMO Charter, High-level Plan
Assessment and validation
Approve concept and detailed plans
Project kick-off
Design
6 months
Deployment
12 months 6 months
Continuous Improvement
PMO up and running
Duration may vary based on specific conditions
3 months
Gap Analysis
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Critical success factors
Executive’s involvement and commitment: continuous
Right (balanced) positioning within the organizational hierarchy – sufficient authority
Choosing appropriate PMO type for the given business model
Access to adequate competencies, skills and know-how in building a PMO
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Questions?