Creating a Sustainable PMO for Achieving Effective Business Results

Creating a Sustainable PMO
for Achieving Effective
Business Results

Presented By: DENNIS L. BOLLES, PMP
OSPMI Chapter Meeting
March 8, 2012
© DLB Associates, LLC – All Rights Reserved 0

AGENDA

• Why is a PMO needed – especially now?
• Why is Project Business Management (PBM)
the right sustainability solution?
• How is a sustainable PBMO created?
• What are the values and benefits of a PBMO?
• Conclusions


Why is a PMO needed – especially now ?

A study by the American Productivity and
Quality Center finds:
 44% of new product projects fail to meet their profit objectives
 49% are launched late to market.

Fewer resources available
Surviving in today's economic downturns
Gartner Analysis and The Standish Group
research reports indicate large numbers of
projects failed in most organizations when
market conditions were good


PMI - PMO Research Results

• No clear consensus of what constitutes a PMO.
• Lack of executive support, and focused purpose
• Lack of consensus as to the value (50% are
valued – rest are being challenged)
• PMO is isolated entity, not an integral part of
organization’s PM practice, and majority are
stand-alone
• Lack of training of executive sponsors and
functional managers

Dr. Brian Hobbs -- 2007 White Paper: “The Multi-Project PMO: A Global Analysis of the
Current State of Practice.”


Poor Distribution of Limited Resources

Limited
Resources
Capacity
And
Capability
To Do Work

New Opportunities
Require Reprioritization
of the Portfolios, Programs,
and Projects


Customer Value Management
CVM links quality, value, loyalty and project
management. CVM support comes from:

Life Cycle Costing
Risk Management

CVM
Project Management Quality Management

The project manager must be more business-oriented.
The project manager must link project management
activities to the client’s business decisions which
includes the client’s customers. The use of metrics is
essential.
APQC Study entitled “Customer Value Management: Gaining Strategic
Advantage” - The American Productivity and Quality Center [APQC],
©1998, p.8):

Slide from Dr. Harold Kerzner’s book PM Metrics, KPI’s, and Dashboards

© 2012 DLB Associates, LLC – All Rights Reserved 5

Operations and Project Management Integration


Project Business Management

•PBM integrates and harmonizes PMI Project,
Program, and Portfolio Standards
PBM integrates strategic & tactical planning
of operational and non-operational
objectives
•PBM directly aligns resources with strategic
initiatives & business objectives
•PBM is adjustable to various types and sizes of
enterprises


Project Business Management (PBM) Concept (1)

• PBM uses General Business Management
and Project Management knowledge, skills,
tools, and techniques
in applying portfolio, program, and
project management processes to meet
or exceed stakeholder needs.
• PMB derives benefits from and captures
value through
any project-related actions and activities
used to accomplish the enterprise’s
business objectives and related
strategies

(1) © 2007-2008 DLBALLC & DGHELLC


Project Business Management Office Concept

•PBMO is a mindset, which needs to be held
organizationally at an enterprise level.
•PBMO is a way to manage, communicate, and
perform work that is supported by technology
•PBMO organizes, applies, and manages an
enterprise’s resources in direct alignment
with the enterprise’s vision, mission,
strategic initiatives, and business objectives
(VMSO)
•PBMO enables the enterprise to translate the
VMSO into executable portfolios, programs,
and projects


PBMO House of Excellence
A Seamless Integration and Harmonization of
General Business Management, Operations
Management, and Project, Program, and Portfolio
Management Principles, Policies, Processes, and
Procedures (1)

Four PBMO components are
required for sustainability


Project Management Enterprise-wide

Plan to Achieve Your Desired State of
Enterprise-wide Project Management

 Assess the Current State
 Define the Future State
 Plan to Fill the Gap


Establishing PBMO for EWPM
Critical Success Factors for
Enterprise-Wide Project Management
 Establish Governance
• Sets Policies
• Charters the organization

 Define Standardization
• Identifies, documents, and
integrates
five standard models
 Develop Capability
• Improves human skills and knowledge
• Enhances business operational abilities

 Enable Execution
• Facilitates strategic and tactical planning
• Improves business objectives development
• Drives the execution of portfolios,
programs, and projects


PBMO Development Process

P M B
P C M O
O E

Establish Asses Standardize
Charter Establish
Corporate Current PBMO
PBMO Capabilities
Support Situation Processes

Execute
Implement Roll-Out
With
PBMO PBMO
PMB3

Project Business Management Maturity


PBMO Development Steps

1. Establish Corporate Support
• Create executive & senior management support for
PBMO initiative
• Get middle management commitment & support
• Obtain top executive formal commitment &
support
2. Charter PBMO
• Develop PBMO strategic initiative business case
with business objectives
• Prepare and authorize PBMO charter and get it
formally adopted by the senior management team


3. Assess the current situation; PBMO requires
cultural, organizational, process, and technical
capabilities
• Mission (Governance)– Degree to which enterprise
knows why it exists and what its direction is.
• Consistency (Standardization) – Enterprise’s systems
and processes which support efficiency and
effectiveness in reaching business objectives.
• Commitment (Capability) – Degree to which
individuals at all levels of the enterprise are engaged
in and hold the PBMO directions as their own.
• Agility (Execution) – Ability of enterprise to know
what Customers want, and degree to which enterprise
can respond to external forces and demands.



4. Standardize PBMO Processes
• Create and establish PBMO policies, practices, and
procedures
• Implement PBMO standards
• Establish how Key Performance Indicators (KPI)
will be defined, used, and evaluated
5. Establish Capability
• Identify and select personnel,
• Provide PBM education & training,
• Set-up management systems
6. Implement PBM
• Have PBMO apply the enterprise’s version
of a PBM3 Methodology



7. Roll-Out PBMO
• Make a big splash to get everyone’s attention
• Announce the PBMO and its management and staff
• Distribute the PBM3 Standard Practices
8. Execute with PBM Model
• Begin execution of work with PBM methodology

Establishing Project Business Management
Enterprise-wide Is Not A Trivial Pursuit!


Develop PBMO Governance

First Component
that establishes a
sustainable PBMO


PBMO Vision and Mission

PBMO Vision
Create an organizational environment that enables
world-class proficiency in applying
PBM enterprise-wide.
PBMO Mission
Provide leadership that guides the enterprise in
implementing PBM enterprise-wide utilizing
‘Good Practice’ PBM processes, tools, templates,
and technology to accomplish the enterprise’s
Business Objectives.


Creating The PBMO Charter

Prepare and Issue PBMO Charter
 Purpose
 Vision
PBMO  Mission
 Strategy
Charter  Goals & Objectives
 Methodology
Management  Critical Success Factors
Sign-off  Roles & Responsibilities
 Accountability &Authority
 Organizational Structure


PBMO Positioning

PBMO Organizational positioning is
Critical to Sustainability
 Position is equated with Authority
 Position establishes level of Acceptance
 Position enables enterprise-wide Adoption
 Position defines level of Autonomy

21

PBMO Organizational Structure

Enterprise Project Business
Corporate PBMO Management Office
Level - Strategic Planning
- Forecasting
- Business Objective Development

Division PMO
PMO
DPMO Divisional PMO
Level - Overview
- Master Project Planning

PMO
PMO
BUPMO Business Unit PMO
Business Unit - Planning, Scheduling, Reporting
Level
Project PMO
Level PMO
PMO Project Management Office
- Planning, Scheduling, Reporting
- Mission-Critical Strategic Projects


PBMO Reporting Structure Large Enterprise

PBMO PBMO = Executive
Level

DPMO DPMO DPMO DPMO = Division Level

BUPMO BUPMO BUPMO BUPMO = Business Unit level

PMO PMO PMO PMO = Mission Critical
Project Level


PBMO Reporting Structure Small Enterprise

PBMO = Executive Level
PBMO • Strategic Planning
• Business Objective Development
• Portfolio Management
• Master Schedule Review
• Forecasting

PMO
PMO = Department Level
PMO PMO
• Program & Project Planning,
Scheduling, Reporting
• Mission-Critical Strategic
Projects


PBMO – Value and Benefits
• PBMO is an independent executive-level
business unit for project / program /
portfolio management
• Is organizationally an equal player in company
politics and executive power, thereby assuring
the enterprise is doing the right things at
the right time
• Maintains enterprise level focus on achieving
all approved non-operational business
objectives and related strategies
• Assures deliverables for authorized
portfolios, programs, and projects stay
aligned with their approved business
objectives

Develop PBM Standards

Second Component
that establishes a
sustainable PBMO


Establish Five PBM Integrated Standards

PBM Methodology Models (1)



Document PBM Standards

Standards Documentation Content

 Introduction
 Authorization
 Initiation
 Planning
 Execution
Manuals  Monitor & Control
Handbooks  Closing
Work Instructions  Education & Training
Templates  PM Templates
The five PBM Methodology standard models are closely aligned with product or service
development processes.

PNM Standard Development Processes

◄ IPECC
Strategy Strategy Planning Strategy Executing Strategy Monitoring & Controlling Strategy Closing
Initiating Processes Processes Processes Processes
Processes (B) (C) (D) (E)
(A)

1A-1 Update Enterprise 1B-1 Prepare Strategic Business Plan 1C-1 Implement Strategy 1D-1 Manage Strategy Change 1E-1 Close Strategy
Process
Vision and Mission 1B-2 Prepare Business Cases 1C-2 Perform Strategy Status 1D-2 Monitor Strategy Metrics
1A-2 Develop Business
Strategies for Next
Business Cycle
1B-3 Prioritize Business Strategies Reviews Performance
Groups
1A-3 Identify Applicable
Enterprise Environmental
Factors
1A-4 Define Strategy
Prioritization Criteria
1A-5 Develop Strategy
Accomplishment Metrics


Develop PBM Execution

Third Component
that establishes a
sustainable PBMO


Develop Capabilities Through
Education & Training Programs

Project Management Career Path
• Qualification Advanced
• Certification
Intermediate

Entry


PBM Education and Training Program

General Project Program/ Executives &
Project Functional
Population Teams Managers Managers

Knowledge Objectives

Learning Objectives

Assessment Methods


 Templates, Tools & Techniques
 Manuals, Procedures, Instructions
 Databases
 Information & Management Systems
 Project Cost Accounting
 Safety & Quality Management
 Financial Resources
 Enterprise Environmental Factors
 Organizational Process Assets


Develop PBM Execution

Fourth Component
that establishes a
sustainable PBMO


PBM Execution Roadmap (1)

(1) © DLBALLC & DGHELLC

PBM Execution Stages

• Strategic Planning – Create business-plan
based strategic initiatives with KPIs
• Tactical Planning – Develop Business
Objectives with KPIs
• PBM Based Planning – Identify portfolios,
programs, and projects and associated KPIs
PBM Initiation – Select, prioritize, and
authorize portfolio, programs, and
projects and set final KPIs
PBM Execution – Manage the portfolios,
programs, and projects to meet KPIs


Apply PBM Business Strategy Development Model (1)

First business action in PBM is to
The first move perform the transformational
often processes that focus on being
determines the effective in identifying &
outcome of the documenting the right strategic
business game business initiatives.



Strategic Metrics Processes

PBMM Business Strategy Metric
Development & Measurement Process


Prepare PBM Enterprise’s Strategies (1)

First
Step
From
Purpose,
Mission, &
Vision to Last
Ranked Step
Business
Cases



Create the PBM Business Plan

• Annual packaging of executive management
approved strategic initiative business cases
• Prepared in a simple format: Table of
Contents; Executive Summary; each
Approved Business Case; and Appendix of
Supporting Materials for each case
• Executive Summary provides the context
for understanding the relationship among
business cases


Document the Business Cases

• Articulates the intent and desired benefit and value
of a business strategy in a feasibility study format
• Documents any associated business threat or
opportunity related to the strategic initiative
• Is the common basis and format for use by business
management, operations management, and PBM
• Typically divided into specific sections that reflect
the type and style of business case being created
• Provides basis for authorizing further planning and
analysis activities


Apply Tactical Planning Model (1)

Second business action in PBM is to
perform the transformational processes
that focus on being effective in identifying
the right supporting business objectives,
portfolios, programs and projects.



Business Objectives Metrics Process

PBMM Business Objective Metrics Development &
Measurement Process


Perform PBM Business Objectives Development (1)

First
Step

Last
Step



Prioritize and Select Work (1)

Last
Step

First
Step



Authorize the Selected Work (1)

Management authorizes and initiates work to
ensure the resources used are in alignment with
enterprise strategic initiatives and supporting
business objectives.

First Last
Step Step



Execute PBM Methodology Models (1)
Third business action in establishing PBM is performing
the transactional processes focused on being efficient
in performing the work and completing each selected
portfolio, program and project



Performance Metrics Processes

PBMM Portfolio / Program / Project Performance Metrics
Development & Measurement Processes


PBMO Readiness Checks

Portfolio, Program, or
Project Readiness Check
Initiating Phase Capture Lessons
Review learned
Gate
Planning Phase
Review Capture Lessons
Gate learned
Executing Phase
Review Capture Lessons
Gate learned
Closing Phase

Lessons Learned Review


PBMO Sustainability

Foundation Component
that supports a
sustainable PBMO


PBM Maturing Model

Continuous improvement and
innovation is common 4. Sustained
PBM is a core competency
enterprise-wide
3. Distributed

2. Managed PBM fully integrated

1. Repeatable PBM standards applied to all portfolios,
programs, and projects

Baseline
A baseline - an PBMO is established


PBMO Sustainability Conclusions

• Strategic and Tactical Planning are well
established tools in the business management
discipline and are becoming recognized and used
as tools by successful organizations.
• PBM provides a standardized methodology, that
incorporates strategic and tactical planning
• PBM allows management to ensure projects are
selected and completed in alignment with their
business objectives and strategic initiatives
• PBM processes allow executive and portfolio
management to assure correct business
objectives, programs, and related projects are
authorized or terminated


Questions?

Name: Dennis L. Bolles, PMP
Email: dbolles@dlballc.co
Website: www.dlballc.com
Phone: (616) 392-2292


Creating a Sustainable PMO for Achieving Effective Business Results

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Destaque

Destaque (20)

Semelhante a Creating a Sustainable PMO for Achieving Effective Business Results

Semelhante a Creating a Sustainable PMO for Achieving Effective Business Results (20)

Creating a Sustainable PMO for Achieving Effective Business Results