In previous posts, we've discussed the must-haves of establishing a project management office (PMO) and the basics of a PMO implementation plan. After digging deeper into the PMO implementation plan, it's time now to discuss how to keep the PMO focused, effective and providing value.
Having a framework that allows you to model the PMO's processes and tailor them to match organizational needs can make corporate project management more valuable. This approach is based on a proven methodology named Business Model Generation, a strategic management canvas for developing new or documenting existing business models visually. We are now going to apply it to a PMO.
This is important, because many PMOs start small. Their main concerns are usually tied to monitoring and reporting project results to assist senior-level decision-making. However, as time passes, people think the PMO must absorb new features and responsibilities to remain competitive.
But growing a PMO in size doesn't necessarily mean we're improving project governance and corporate results. Maturity is the key to success. And a lean PMO is much better than a large bureaucratic PMO. Take a look at The Project Management Office in Sync with Strategy to see examples of this in practice.
Setting up a lean PMO is easier than keeping it lean. If you followed the steps mentioned in previous posts, you already have a strong PMO implementation plan with all the basics. Don't be tempted to add new functions to your PMO unless they are strictly necessary to the value you want to provide.
The most important characteristic of a lean PMO is that it is customer-centered. So, the first step is to identify your customers. Then, you have to uncover their needs to define the PMO's value proposition.
In my organization, for example, we can spot five customer groups that our PMO wants to serve:
Once you know your customer groups, the next step is to identify their needs. These audience needs could look something like this:
Once we understand our stakeholders and their needs, we can develop a value proposition, which we will discuss in the next post.
Meanwhile, I invite you to review the following business model canvas and consider how this could be used to build a lean PMO:
Courtesy of Alexander Osterwalder and Yves Pigneur
For instance, does the PMO have revenue streams? If not, can we think of something better to substitute instead? What about channels and customer relationship -- do these apply to PMOs? Can a PMO develop alliances? Find out in my next post.
For more on planning a PMO, read PMI's Pulse of the Profession®: PMO Frameworks, which was developed by PMPs and provides information o five types of PMOs.
In my last post, we discussed the five basics of a PMO implementation plan. Here, I'll delve deeper into those five:
1. Current State Assessment
When assessing the current state, it might be helpful to hire an external consultancy, as internal initiatives may lose momentum along the way. The people internal to an organization might not be able to ask the right questions or they might even resist due to a fear of change. An external consultancy can assist in overcoming political issues by adopting a structured approach. Usually, consultants force or drive change because that's what they are hired to do. In the end, a good diagnosis will point out issues and opportunities for improvement.
2. Future State Vision
Based on the assessment, it is possible to design a future state vision, describing how projects, programs and portfolios should be managed in order to fulfill organizational needs. That's because when the current state is clearly understood, it is easy to compare to benchmarks. Consequently, the organization can realize what is missing or what is done but could be improved. Ultimately, the future state vision details exactly what the organization wants to become.
3. Gap Analysis
The next step is to carry out a gap analysis by comparing the current state to the future vision. This analysis has to focus on three factors:
A successful gap analysis clearly identifies what is missing or what could be improved, prioritizing which features, processes and structure the PMO should have, according to effectiveness (cost x benefit), desirability (sponsorship; what the company want to implement) and feasibility (what is realistic and what is possible to do). We have to select and prioritize based on cultural and organizational feasibility, not only based on resources available.
For example, imagine an organization wants to implement enterprise project management (EPM) software. There are plenty of options in the market. Some have fancy features and are more expensive. It might be desirable to have top-notch software, so we won't have to substitute or upgrade it for years. However, it is effective to choose software that offers the simplest solution and satisfies future state needs. Finally, it might be feasible to start with familiar software to overcome people's resistance and rejection to the PMO implementation.
In this particular case, project professionals might desire the best EPM in the world (desirability) -- but the company could do well with a free version or simpler software (effectiveness). Finally, considering that people unfamiliar with project management practices will have to use the software, it might make sense to get something familiar or similar to other software they already use (feasibility).
4. Implementation Strategy
After the gap analysis, introduce stakeholder requirements to define the implementation strategy. I recommend thinking of the PMO like a new business unit or a small new company. The PMO should have its own mission, vision and goals. We have to identify who are its stakeholders and customers, so we can define its value proposition and its services. Personally, I use the Business Model Generation canvas to do that.
The implementation strategy defines the approach to implement a PMO, major expected results and the overall framework, considering organizational strategy and corporate project management governance. Consequently, the PMO business model must support and enhance strategic alignment by selecting, prioritizing and managing portfolios of projects that sustain and boost organizational strategy.
5. Implementation Plan
Finally, the implementation plan is the detailed project management plan for implementing the PMO. While the implementation strategy is the approach chosen to implement the PMO, the implementation plan puts that strategy into action.
We start by defining its scope and work breakdown structure. Then we create a schedule of tasks to deliver the project scope. Resource needs are identified and a budget is set. Other subsidiary plans are created to manage integration, scope, time, cost, quality, communications, human resources, risks, procurement and stakeholders.
The implementation plan should be as detailed as you need. I want to emphasize the importance of defining a business model for your PMO, allowing for performance measurement and improvement after the implementation.
In my next post, I'll provide a framework for sustaining and improving your PMO, once it is set up and running. Do you have any tips or examples of PMO implementation plans?
For more on PMOs, check out the PMI® Thought Leadership Series: Strategic Initiative Management - The PMO Imperative.
I often say that establishing a project management office (PMO) is not for the faint of heart. It is a very difficult endeavor -- not just because it involves advanced knowledge, but also because it challenges status quo in the organization.
In my previous post, we discussed The Must-Haves of Establishing a PMO. Now we are going one step further by laying out an implementation plan. Implementing a PMO involves five basic -- but essential -- sets of decisions:
1. Current State Assessment
2. Future State Vision
3. Gap Analysis
4. Implementation Strategy
5. Implementation Plan
Not following these steps can result in serious problems. For example, if we don't conduct a gap analysis, we will probably end up with an unfeasible plan, disconnected from reality.
I once participated in a PMO implementation that was doomed to fail under the original plan. The future state vision was nearly impossible to reach, considering the current state of the organization. While conducting the gap analysis, it became clear that we should lower our expectations to implement that PMO. In that particular case, it was necessary to implement a rudimentary PMO to kick-start a cultural change to embrace project management. That was the chosen implementation strategy, which led to a feasible implementation plan supported by key stakeholders.
In my next post, we'll dive deeper into these five steps with best practices and examples on how to carry them out.
What other questions do you think are helpful to ask of your organization when building a PMO implementation plan?
For more on PMOs, check out the PMI® Thought Leadership Series: Strategic Initiative Management - The PMO Imperative:
Seventy percent of organizations had a project management office (PMO) in 2013, according to PMI's Pulse of the Professionâ„¢ In-Depth Report: The Impact of PMOs on Strategy Implementation. That compares to 61 percent in 2006. Despite the increasing number of PMOs, many of them still fail. The first step in effectively establishing a PMO is figuring out if your organization even needs one. Only then can you ask, How can we establish one successfully?
Part of determining if a PMO would be a good fit for your organization is knowing what a PMO's functions are. A PMO is an organizational structure, like a department or group, responsible for helping the enterprise achieve its strategic goals through effective project management results. Therefore, a PMO usually delivers three main objectives:
Obviously, implementing and sustaining a PMO is not cheap. Usually, there is some capital investment in setting up a PMO, particularly because it will add management overhead in addition to existing projects' costs. For a company whose core business involves only a few projects, if any, it might not make sense to implement a PMO. And while there's no formula to determine when organizations need a PMO, most do when they have:
So let's say it's been determined that your company needs a PMO. How do you lay the foundation to establish it effectively? First, it is important to know that there are different types of PMOs. These include but are not limited to:
Keep in mind that implementing a PMO involves a lot of change management, because it entails a new organizational structure, which affects the balance of power and culture in an organization. I recommend organizations invest more in change management tools or talent.
Finally, to tailor the best PMO for your organization from the start, I recommend following these key steps:
In my next post, I'll outline a plan to implement a PMO. We will also talk about maintaining a PMO and continuous improvement to keep it sustainable.
Do you have advice for determining if your organization needs a PMO or basic tips for establishing a strong, sustainable PMO?
Closing the gap between initiatives and strategy is a hot topic among PMO Symposium 2013 attendees and executives alike. But one of the creators of Balanced Scorecard -- keynote speaker Robert S. Kaplan, professor emeritus, Harvard Business School -- devised an elegant solution: Organizations should be able to describe their strategy in 50 words or less. Keeping it concise makes it easier to map out how that strategy connects to measures, targets and initiatives.
That kind of focus on strategy should be happening right out of the gate. Ed Hoffman, PhD, CKO and APPEL Director at NASA, a PMI Global Executive Council member, suggested in a panel discussion that PMO leaders ask: "What's the problem we're trying to address in our organization and what are we doing that really helps?"
"The solution doesn't have to be elaborate and high-tech," said Ruth Anne Guerrero, PMP, senior vice president, PMI Global Executive Council member TD Bank, N.A., and head of TDBNA PMO. Complex solutions may actually distract more than help, said Tony Gayter, vice president, IT and strategy, HP, a PMI Global Executive Council member. "Pick six metrics that really matter. Don't overcomplicate it."
Taking a deeper dive into PMI's Pulse of the Professionâ„¢ In-Depth Report: The Impact of PMOs on Strategy Implementation, PMI's vice president, IT Frank Schettini said high-performing PMOs share three qualities:
The most successful PMO directors think and communicate like senior executives, Mr. Schettini said.
Part of that comes down to a shift in language, said keynote speaker and author Daniel Pink. "This is where smart people often go awry," he said. "They use their own language instead of that of the people they're persuading. Use the language of the C-suite when you need to 'sell' up. Convince less technical people with less specialized jargon."
Mr. Pink also recommended that PMO leaders learn to curb their power. "You'll get better results by understanding others' perspectives and finding a common ground."
Read more from symposium.