The Business Driven PMO

Lean.org characterizes Lean as:

“Eliminating waste along entire value streams, instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business systems. Companies are able to respond to changing customer desires with high variety, high quality, low cost, and with very fast throughput times. Also, information management becomes much simpler and more accurate.”

Lean.org defines Lean as:

“To accomplish this, lean thinking changes the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flowof products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers.”

Building a Lean and effective IT governance should not be transformational but transitional.  It is a major shift for an organization whose only governance is the command and control of the organizational chart.  Simply implementing a PPM tool is not the answer. In the book “The Information Paradox”, by John Thorp  Copyright 2003, McGraw / Hill, states that there are three necessary conditions for an effective governance:

• Activist Accountability
• Relevant Measurement
• Proactive Management

Well technology can’t deliver these three conditions, they’re organizational. However a PPM can contribute to sustaining the knowledge, specifically with Relevant Measures.  It can be the single source-of-truth. Implemented correctly the PPM system IS the repository of the decisions the organization has made in the past.  This means that any governance placed in IT investments must also have the same scrutiny place on the ‘relevant measures.’  Relevant Measures must evolve with the rhythm of business.

As I said earlier, a governance needs to be transitional, it is a continuous improvement process and needs to be implemented at the rate the organization can absorb the change.  Activist Accountability!  Commitment needs to up and down the organization with strong leadership.

To start with the governance needs stewardship. This classically comes from the PMO, but as it has been will documented this isn’t the process/methodology police.  The PMO needs to be open and clearly communicate the “vision of the end” at the beginning.  A lean effective governance is more than how you run a project or any investment for that matter. That’s why it is important to recognize that governance is a combination of two major processes; the first being the project life cycle; the second is the portfolio process.  Your transitional strategy needs to take both of these into mind. And these processes should be instantiated in the PPM tool. Another key to governance is the roles in the governance and the exchange of information and dialog between them.  Oh and this is NOT an organization chart! But is a make-up represented cross-functionally. The roles are:

• PMO – Is the steward of the governance.  The make of this is more that just project managers.  It needs vision and leadership capable of being the “trusted advisors” for the complete governance. The PMO is the champion for change. Not only does the PMO
  require the PMs but needs the vision and the moxie to champion the “roadmap” for the governance’s evolution.
• Decision Board – Represents the needs and priorities of the governance.  It’s made of the business leaders accountable for the introduction of change from the investments in the portfolio. The Decision Board is accountable for the decisions of the portfolio make-up and the Relevant Measures.
• Steering Committee – Represents the needs of the project, program or investment.  This is different from the decision board its scope IS narrow, but necessary.  I’m not going to elaborate on the Steering Committee; its role is well documented in project methodologies like the Project Management Institute’s Project Manager Book of Knowledge (PMBOK).
• Project Manager or Program Manager or Initiative Manager or Investment Manager – They all fulfill the same role – Investment Steward, one of the most important roles in the governance.  The investment steward is accountabledelivering on investment outcomes.  Againthis is a well-documented role.
• Project Members – Yes they are considered as part of the governance and are sometimes left out. Their role in the governance is to deliver capability as prescribed by the investment steward and communicate progress on that delivery.

Those are the primary roles, however in more mature organizations there exists two more roles, they are:

• Portfolio Manager- In highly evolved governances the Portfolio Manager is accountable for the performance targets or outcomes of the portfolio. The Portfolio Manager is part of the decision board and advises the decision board on investment scenarios and portfolio adjustments.
• The Architecture Review Board – In conjunction with the Steering Committee this board is counseled for any impact to the enterprise architecture. Now wait, this not the standards police! The architecture board is made up of enterprise architects and is accountable to ensure that an investment does compromise the direction of the enterprise architecture.  Enterprise Architecture is a topic in of by itself and there is much written but in no means is the scope of the blog post.

This post is about Building and Maintaining a Lean and Effective IT Governance Board, I’ve touched on mostly the building part, but maintaining?  I’m not going to fool you that is the hard part. But the key to remember, this is a continuous improvement process.  People are likely to move on, especially in the leadership, that’s why keeping the governance going is not one person responsibility.  How does that saying go…? “It takes a village…” and change is good!

By keeping up with the rhythm of the business you are always ensure the portfolio is working on the Right things, the Right way, things are getting done, and the governance is realization the full benefit and potential.

People and organizations all over the world continue to embrace and adopt “Lean Management Principles” in their work. What started with Edward Deming in the 1950s and later found its way into the Toyota Production System has now made inroads into software development. You will notice that IT organizations and software development teams often talk about “Lean” software development or “Kanban” as it pertains to how they work. It is therefore essential that today’s Project Management Office (PMO) understand this old new way of project execution in order to stay relevant in today’s business climate.

Before we go any further, let us first understand what Lean is all about and whether PMOs should embrace this concept as well. Lean in a nutshell, is a set of tools that help in the identification and elimination of waste. As waste is eliminated, quality improves, consequently, reducing time and cost of production. While elimination of waste can seem to be a simple subject, it is often easier said than done. Organizations often have a difficulty classifying a process or activity as waste and often tend to be conservative when identifying/defining waste. Toyota defines Lean as the reduction of three types of waste:

1. Non-value-adding work
2. Overburden
3. Inconsistency/Unevenness as it pertains to flow of work

Lean aims to make the work simple enough to understand, execute and manage, and I believe that all PMOs should strive for this. Let us now get down to brass stacks and examine how a PMO could strive to be Lean. Here are some steps a PMO could take:

1. Prioritize projects based on business value. A project is a vehicle for change in an organization, which means that the business does not like the current state it is in and constantly evolves to move to a new state. Be willing to question the assumptions that drive any decision to change and make sure that the scope of the project is in line with the desired
   change/objective. This will help PMOs avoid/eliminate non-value-adding work.
2. Keep the internal PMO processes simple to start with and make changes as you mature. This will help the Project Managers and the PMO director to focus on delivering business outcomes rather than following mundane procedures.
3. Level out the workload among the Project Managers so that they can provide each project the required attention. Take the help of automation tools such as Project Portfolio Management software to help with collaboration, resource management, project prioritization, and reporting.
4. Use a “pull” system as your project intake process. In such a system, the sponsor of the project would place an initial project request. This request in-turn would trigger a project prioritization request, which in turn triggers subsequent
   requests (such as resource request). This will encourage a “just-in-time” process and will discourage a “just-in-case” process (common in a “push” system) wherein resources are often under-utilized.

To conclude, as projects and project executions take on a lean posture, it is imperative that PMOs do so as well. With this blog I have just scratched the surface of the lean PMO concept. Stay tuned for more! In the meantime, I welcome your comments and feedback.