The Business Driven PMO

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.

Early this week we announced the launch of our upcoming PMO Success Webinars for 2012, aimed at offering real-world guidance on how to build and run a successful Project Management Office.  This free educational series will provide insights and perspectives from PMO Directors and Consultants at organizations running successful PMOs as well as Daptiv’s professional services team.

According to research performed by industry analysts such as Project Management Institute (PMI), the Gartner Group, and Forrester Research, 25% of all PMOs closed within one year and 50% closed within two years. Clearly, PMOs face significant challenges within their organizations. On the other hand, the need to successfully complete projects has never been greater.  Most companies recognize that projects are a major vehicle by which companies grow, improve and meet their business objectives.  The need to plan, monitor, and execute projects has never been greater. Companies decide to setup PMOs to do just that but they often fail to get the desired results from them.  Daptiv’s PMO Success Webinar Series will shed light on how companies can prevent the fall of PMOs and instead turn them into a strategic asset.

We kick off our first webinar titled, “Are You Ready for a PMO” on Tuesday, September 25. It will focus on how organizations can assess the need for a PMO and how they should go about setting one up. Come join the discussion with 250 industry professionals who have already signed up for the series. Panelists will include Mark Perry of BOT International and Dave Blumhorst of Daptiv Solutions, LLC.

To find out about more the Daptiv PMO Success Webinar Success Series, click here.

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.