Project Management Office Set-Up

Challenge

Firms invest hundreds of millions of dollars each year in project work, with little visibility into the ongoing health of these investments.  Off-the-shelf solutions fail to resonate with Fortune 1000 corporate culture, and non-scalable procedures, tools and documentation inhibit agility.  Without a common repository, ad hoc information needs result in “fire drills” that ironically divert project resources from delivering value. Without simple, automated collaboration procedures, a PMO becomes a burden to project managers and an unreliable resource to business and financial stakeholders.  Many established project management methodologies do not directly address the aggregate visibility and governance values that a PMO must deliver.

Solution

Tailor a PMO design to address immediate priorities and respect the organization’s change management capacity.  The design should include a long term vision to realize all targeted benefits.  Creating or renovating a PMO consists of two Phases:  Assessment and Design, and Implementation and Training. 

Assessment and Design

Assessment starts with a structured survey of the organization’s capabilities and project portfolio health, including a prioritized inventory of stakeholder goals and improvement suggestions.  That health can be measured along nine dimensions (listed below).  The assessment usually uncovers several “quick wins” that can be implemented on at a project level. 

Nine Dimensions of Project Portfolio Health

1.       Benefits:  collective visibility for estimating and tracking financial and strategic project benefits

2.       Selection:  the scalability, clarity and quality of project funding practices

3.       Issues, Risks and Dependencies:  issue escalation and resolution, aggregate risk management, and “air traffic control” over project inter-dependencies

4.       Change Control:  a practical level of business value protection and visibility

5.       Project Planning:  a repeatable, scalable framework for organizing project effort that uses common metrics and deliverables

6.       Financial Visibility:  a financial information framework that incorporates control and accountability without excessive data manipulation

7.       Communication and Reporting:  a procedural and  technical platform to collaborate on deliverables, coordinate schedules and resources, and effectively collect and use standardized project health metrics

8.       Training:  a set of training materials and standards to promote fundamental project management skills, enabled by automated workflows to simplify procedural gate-keeping

9.       Quality:  the criteria for deliverables quality, and the process for monitoring this quality

Design should be organized into Near Term and Long Term phases, appropriate for the organization’s priorities, capabilities and culture.  Both designs should be communicated to stakeholders in order to build a common vision.  Immediate concerns are invariably visibility and governance.  Visibility will require standardized project and financial metrics on a common repository, and governance can be enabled by scalable workflow automation with appropriate control gates.  A PMO that is structured on manual processes and fragmented repositories or files will fail. 

Design guidelines:

• Near term governance goals should introduce only modest policy changes.
• Focus instead on streamlining gate-keeping procedures.
• Standardize metrics for collective visibility before centralizing governance.
• Don’t require data unless it has a routine, constructive use.
• Use a workflow system to minimize procedural training.
• Coordinate a new PMO organization with existing project caretakers, offer centralized support to avoid overlaps and conflict.
• A federated PMO organization framework, having enterprise-wide metrics for visibility, with local governance over budgets and process, is a practical model for many organizations.
• Deploy repository tools, not document templates, to facilitate collective analysis and reporting.             
• Aggressively retire redundant forms, logs and databases.
• Define core data requirements, permit portfolio-level extensions.
• Project documentation and planning must be commensurate with project size, risk and complexity

Implementation and Training

Quick Hits Phase

This phase includes those deliverables that can be implemented in a relatively short timeframe and yield high business benefit.  Examples of what could be achieved in the first 4 weeks include:

• PMO objectives, scope and organization structure, defined and communicated
• Available information on the project portfolio data (e.g.  costs, timelines) collected
• High-level project plans constructed for key projects
• Skeletal processes set-up for progress reporting and issue escalation

Near Term Phase

This phase includes the implementation of recommendations that will significantly improve existing processes, tools and techniques.  Examples of what can be achieved in the near term include:

• Project plans constructed
• Project-level budget tracking initiated
• Project milestones and KPI’s defined, and tracking initiated
• Project Management processes and tools, including change management, risk analysis, project appraisal and closedown, project planning, defined and communicated to selected team
• Project benefits tracking and management plan initiated
• Documents library setup

Long Term Phase

The remaining activities are covered in the Long Term Phase, and are to be implemented within the first year:

• Benefits tracking system and management plan refined
• Establish a complete, aggregated view of project budgets and cost tracking
• Improve and augment PMO processes, tools and data
• Stakeholder feedback on PMO contribution
• PMO assessment of progress along the Nine Dimensions of Project Portfolio Health, and Next Steps

Conclusion

The proactive and experienced project management activities of a PMO can help ensure the benefits from project investments.   The technology that supports the PMO should reduce waste and uncertainty in the environment, not add to it.  A PMO can only be effective if its goals align with business priorities and its tactics are compatible with corporate culture and capabilities.  Your PMO must fit.