The Business Driven PMO

The Educause annual conference is the nation’s largest gathering for higher education IT professionals and Daptiv was present for the well attended 2012 conference in Denver.  Issues that attendees were concerned about were diverse but several interesting themes emerged over the course of attending sessions and having one-on-one conversations with end users and CIOs.  One particularly well attended discussion on Project Management was intriguing, many pain points seemed common across education IT departments and Project Management Offices. Here are some of our takeaways from the conference:

Increasing Demand Placed on IT: Demands placed on IT departments are becoming large and disparate with multiple university departments demanding conflicting projects from an increasingly resource strained IT staff.  With this increased pressure, CIOs and managers are looking for a way to streamline and manage their suite of projects.

Prioritization: Many attendees were seeking best practices and methodologies for prioritizing their portfolio of projects.  Several attendees shared their successes and failures but several threads were common though all successful processes:  easy to communicate and simple to deploy.  Many attendees sought visualizations and reporting that would allow them to quickly judge the size of a project vs. its projected benefit.  The easier it is to demonstrate relative importance and prioritize one project over another, the easier it is to communicate with and receive buy in from competing university departments.

Communication: Ensuring everyone is in the loop on project decisions is critical.  Lacking a single source of truth for project management, implementing an effective communication plan can be difficult.  Project Managers and IT needs to communicate early and often with stakeholders.  Schools and universities which emphasized their success in communication reiterated this point.  Every stakeholder needs to feel that they are part of the dialogue.

Flexibility vs. Standards: Project Management Offices, once built to solve the above issues often face their own hurdles.  Being flexible enough to maintain engagement with stakeholders while ensuring accountability with standards is itself a challenge.  Flexibility needs to be built into the DNA of the PMO and IT Department early and must be matched in any tool used to manage their projects.  It should be up to the department to develop the processes, not have an outside process thrust upon them.  In the words of one attendee, “The tool used should be process agnostic”.

This year the Daptiv team attended Gartner Symposium/ITxpo 2012 in Orlando for the world’s biggest industry conference focused on IT leaders with over 8,000 senior IT executives (including 2,000 CIOs). Here are some of our takeaways from the Gartner sessions at the event:

(1) Nexus of Forces: Gartner predicted the need for senior IT and business executives to re-imagine business as the result of a powerful nexus of forces — mobile, social, cloud and information. This Nexus of Forces reflects how people want to interact with each other and their information and will make many existing IT architectures, organizational structures and IT strategies obsolete. Gartner forecast that there would be 5 billion mobile devices by 2015 and an 18% annual growth of cloud-based solutions leading up to 2016.

(2) Four Styles of Strategic EPMOs: Donna Fitzgerald from Gartner gave a presentation discussing the four styles of EPMOs: (i) Strategic EPMOs, (ii) Business Transformation Offices, (iii) Reporting PMOs and (iv) Operational PMOs. The styles of PMOs reflect whether the PMO’s business context is business transformation or steady-state, and whether they or facilitating or controlling the resources in an organization. Donna predicted that in the next 24 months 60% of the Fortune 1000 will establish one of the 4 styles of an EMPO driven by financial accountability and continued issues with project coordination across silos.

(3) Gamification: Gartner predicted by 2015, 40% of Global 1000 organizations will use gamification as the primary mechanism to transform business operations. Gamifiication is the use of game mechanics in non-entertainment environments to motivate a change in participant behavior. Tactics include progress bars, rewards for effort, feedback and multiple long-term and short-term aims. Elise Olding gave an example of a digital media company that implemented a gamified project management tool with rewards for entering accurate status of projects in flight.

(5) PPM Tools – A New Magic Quadrant for Cloud-Based PPM Services: Dan Stang discussed the new Magic Quadrant for Cloud-Based PPM Services in the ITxpo theatre. The underlying infrastructure of these services is cloud computing — scalable IT-enabled capabilities are delivered as a service to external customers using Internet technologies. Dan outlined some of the benefits of cloud-based PPM services, including less time-to-value, less financial commitment and risk and the ability to rapidly configure, adopt and consume PPM capabilities. You can view the full Gartner MQ document here.

As you can see in the photo, our booth was front and center in the PPM show floor area. We met almost 200 PPM practitioners at the booth and had great conversations with attendees from all over the world. Our next Gartner event is Symposium/ITxpo in the Gold Coast, Australia 12^th-15^thNovember.

PMOs and project managers are faced with failing projects more often than they would like to and it often turns out to be a demoralizing experience for all stakeholders. Consequently, it is vital for PMOs to recognize the signs of a failing project and take corrective action before it is too late. In order to engineer a successful turnaround, PMOs and PMs need to watch for certain leading indicators of project failure.

Leading indicators of project failure

• Progressive scope creep:  While some scope changes may be necessary, constant updates to the project scope indicates that the project sponsor and other stakeholders don’t have their business case buttoned up or the assumptions under which the project was sanctioned are no longer valid.
• High rate of churn in project staff:  It is normal to have long projects to have planned rotation of staff.  However, you need to watch for unplanned attrition from the project team.  Each person who leaves in an unplanned way takes with him/her knowledge of the project.  Areas of the project can be put at risk and the team may need to revisit some past decisions because no one knows why the decision was made.  All this results in extra time and cost with no increase in value.
• High cash burn rate: Are you tracking your Cost Performance Index (CPI)?  CPI = Earned Value/Actual Cost.  If your CPI is trending less than 1, then you are not using your budget efficiently and are burning through cash.

Reversing the trend (Turning around a failing project)

• Revisit the scope statement periodically (say once a month) and verify if you are still delivering the same project.  If the nature of the scope change is so drastic that it will potentially change the deliverable, take it up with the project sponsor and decide if the project should be stopped in its current state.
• Review the staffing situation every month.  Evaluate how many unplanned vs. planned exits have occurred.  If a critical resource or a member of the project leadership team has left, it is a red flag.  Summon a meeting with all stakeholders and the project sponsor to assess the situation and plan to bring in an alternate equally capable resource who is committed to delivering on the project.
• If your CPI is trending less than one month over month, you are putting the project in a financially unsustainable situation.  You should jump into cost control mode and only approve critical expenses.  If you are buying from an outside vendor, use your purchasing team to negotiate a lowest possible price or do this yourself.

Walking away from a failing project

Pulling the plug on a project that is underway is often not an easy thing to do.  There usually are a lot of personal and political forces at play.   More often than not, people will waste money (and time) in order to justify costs they’ve already spent.  The key here is to maintain objectivity and avoid the Sunk Cost Fallacy.  Meet with your project sponsor and review the costs-benefits of the project and be prepared to justify why the project should be cancelled or stopped.

This is a question that has been posed many times and answered many times. Yet, we continue to see PMOs failing very often. Does it mean that the answers that have been presented are incorrect? Not necessarily. In fact, most answers surrounding metrics and value are relevant but don’t address the question of “fit”. The metrics that make sense for one business may not make sense for another.

At the end of the day it is about demonstrating value to the business as a whole. A successful PMO is a PMO that is focused on business value and helps the C-suite succeed in its strategic objectives. Daptiv’s four-part PMO Success Webinar series explores this in more detail. The goal of the webinar series is to provide real-world insights on how PMOs can become strategic assets to the business.

In an informative Q&A session with Daptiv, Joe Pringle Managing Director Project Delivery, Forum One sheds light into how Daptiv PPM helped his company gain better visibility into planning, scheduling and executing projects seamlessly across the organization. Pringle is responsible for overseeing operations and project performance, including resource allocation, client satisfaction and project finances at Forum One.

Q: When did you feel the need to graduate to a PPM solution? 

A: As we grew in size we realized that our existing solutions were limiting our capabilities to manage resources across the organization. It became difficult for us to manage people across geographies and gain insight into how projects were being implemented simultaneously. We knew that there was a better way to allocate resources and keep track of developments in real time.

Q: What were your next steps?

A: We were clear about the fact that we wanted to keep our staff focused on doing exceptional work for our clients rather than on overhauling an in-house project management solution. So before moving ahead, we gathered all the necessary information regarding process requirements/needs and improvement areas internally. Consequently, we examined various SaaS based alternatives for Project Portfolio Management. Having done that, we zeroed in on Daptiv as it offered the best feature set for our resource management, project management, and project performance needs.

Q: Can you discuss the key problem areas identified after the internal assessment?

A: One of the key process improvement areas identified up front was creating an integration between Salesforce.com and Daptiv.  At that time we were having difficulties transitioning a project from sales to delivery.  So we created an integration solution utilizing Daptiv Connect^TM that monitored an “opportunity” in Salesforce.com until it reached a specific stage in the sales cycle.  In addition to that, the other important area we needed was the ability to create real time reports and dashboards that reflected our business model.

Q: Can you elaborate a little more on the execution process?

A: We decided to get Daptiv on-board pretty quick and it took us about two months to transition completely to the new platform. We worked with Daptiv’s professional services team to configure, set up and migrate content from existing platform into the new system. One of the many things we liked about Daptiv PPM was its flexibility to accommodate our business model.

Q: Did the deployment of Daptiv PPM add value to Forum One processes?

A: We knew what we were getting into and had a clear idea about our needs. Before Daptiv, we had to used a home grown web application and  Excel spreadsheets to track staff utilization, performance across different groups in the company earlier. Daptiv PPM has helped us have a much more mature, robust way to measure and report on our whole portfolio of projects at any time. One major benefit for us was that we were able to understand resource requirements early in the process and could better plan/schedule the start of a project without being resource constrained.

Q: How has Forum One been able to sustain the momentum after implementing all the changes?

A: We’ve grown a lot since we implemented Daptiv PPM. We now have a process for continually evaluating whether our processes are being managed in the most effective way or not. We’ve managed to improve existing tools resulting in improved performances and strong momentum.