Garter. Project Manager 2014

Project Manager 2014
Gartner Special Briefing for ENI University
“Why Should Anyone Be Led by a Project Manager?”

Ben Millrood
GVP
29 April 2011 Gartner Consulting
+44 7540012779
ben.millrood@gartner.com

GARTNER CONSULTING
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Topics We Will Consider

■ Future Trends and ―Project Manager 2014‖
■ Economic Conditions
■ Tools and Processes
■ New Technology
■ Governance, Portfolio Management Multi-Sourcing and Vendor
Ecosystems
■ Maturity Model and Performance Management
■ Key Take-Aways

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Future Trends in Program/Project Management, Our Point of View


Market Conditions and the Project Management Effect

■ Traditional project management (past 20 years) relies on isolating specific work, Implications and Recommendations
while holding all stable.
■ Project management is evolving
■ Due to the ―new normal‖ chancy economic condition, this mode is aggressively from a ―one size fits all‖ to a myriad
becoming counterproductive, because future business environment will require of approaches designed to meet
that change is always to be expected. As such: various internal needs.
– With fewer people doing more work, enterprises need to figure out what they can
deliver in a timely way. For example, instead of aligning 10 projects which may take
■ Significant projects and programs
a year to complete, it‘s better to focus on 3-4 that can be delivered quickly, and will create business change.
structure them into smaller pieces so that results can be demonstrated more Business change requires a different
frequently. brand of leadership perhaps than the
past and at the right times.
– People, not processes, drive success. Many enterprises have no plans to replace
those who left during the economic downturn, so those who remain need to lead in ■ Diversity of roles, tools and
their role and work together with greater flexibility. approaches will typify the next
– Governance and portfolio management will be focused first on lowering run costs generation of project managers
and driving high-impact business growth/transformational projects. (―2014‖).
– Projects and programs create business change, business change requires ■ PMOs and PMs will evolve as
leadership at the right time…something that companies still struggle to comprehend. ―facilitators‖ of strategic change to
– Disruptive technologies will force project managers to become more knowledgeable support high impact business
and fluid in areas such as Cloud (SaaS, PaaS, IasS), Unified Communications, AMI, programs/projects. Others will be
Smart Grid, etc. marginalized into tweaking and
– Multi-Sourcing will require project managers to manage a multitude of service optimizing existing processes or
providers (internal and external) in a collaborative ecosystems system environment dissolve completely.
focused solely on project outcomes.


Industry Relevance

■ The pace and scale of change in the Energy sector over the next five years will intensify—particularly in the
European Union, given the economic situation. This to shape the needs of the ―2014 PM.‖
■ IT project management as a discipline won‘t change that much from industry sector to sector. Gartner expects
to see more outsourcing of IT activities, so more management of external technology/IT resources and further
consolidation of the Business-IT PM role.
■ Changing focus of projects in the Energy & Utility industry sector from internal development (past), procurement
and deployment of COTS (present) to managing BPOs (or cloud or non-cloud BPO).
■ Governance and IS-Lite models is increasing, which means that the project manager role is going down
comparing to the vendor/ecosystem management role that is gaining more prominence.
■ Gartner sees big changes in Energy IT portfolios particularly in the power management solutions and
consequent potential large-scale projects (which most are chopping into smaller pieces). This would include
Smart Grid and potentially Smart Meter.
■ There‘s also the uplift that many companies are applying to their commodity trading environments (integration,
transaction pipeline streamlining, new regulatory requirements).
■ Upstream end there would also be digital oilfield and the related SCADA/OT/IT convergence.
■ The net conclusion is ‗new innovation‘ alongside the efficiencies of more conventional ‗cost optimisation‘. As
Gartner‘s CIO Agenda says—‗reimagining IT‘.


The Emergence of Enterprise Program Office (EPMO)

■ One of the most important trends for PPM. Organizations must consider Implications and Recommendations
moving beyond traditional IT portfolio management to align with mission-
critical business objectives. ■ Once again, use benefits realization
as an ongoing discipline to ensure
■ Key driver is the need to merge technology and business projects under the project managers are focused on the
same organization. EPMO bridges the gaps between tactics and strategies. right projects and doing the right
Furthermore, this permits mission-critical communication to allow organic things during projects. Ensure
alignment between technology, people, processes with business constant review between strategy
requirements. and tactics, enabling corrections to
■ EPMOs will adopt lean management. While PMOs often focus outward on take place quickly.
changing the enterprises they support, it is important to address internal ■ Consider setting up EPMO on a
efficiency as well. Lean PMO contribute value to portfolio management by strategic basis. The EPMO does not
avoiding high levels of inwardly directed support activities that deliver little attempt to do everything, but
or no value to the business enterprise or project. specifically focuses on ensuring the
■ EPMO Lean management targets unnecessary process steps, data that is project managers fulfilling program
collected and never uses and over engineered templates and review cycles. and project objectives and actually
As such program and project managers should be rewarded for identifying driving the fulfillment of established
all types of waste in the system, thus increasing the value of EPMO. strategy.
■ Inside EPMO, ensure that mature
PPM practices are established by
focusing in on project management
capability to institutionalize great
project management execution.


Punch-line

■ New techniques in project and portfolio management is a growing need for most large
organizations.
■ Investments need to be carefully selected in matching project managers to the right portfolio of
projects and carefully aligned to value of business impact.
■ Most companies carefully have ―projectized‖ these investments, as such, we find a traditional
structured project management and software tools and PMO structures are not delivering
expected results.
■ Program/project managers and the C-level executives they may report into should be change
agents employing a toolbox of approaches to fit particular work streams and different leadership
profiles for each program/project area.
■ Project managers need to manage a diversity of software tools, deployment styles and maturity of
use, because single-platform convergence will be difficult to achieve.
■ Project management value will not happen one project at a time, but in aggregate ability across
projects and programs, consistent delivery of value and overall benefits realization.
■ Project managers should not confuse means (standards and processes) with ends (higher
throughput, stakeholder satisfaction, shorter time to decision, etc.).


Planning for Project Manager 2014


Market Data For Strategy and Planning Assumptions

■ By 2014, companies will invest 30% less time and money in traditional
IT project management than in 2011.
■ By 2014, more than 30% of organizations will experience a proliferation
of software tools installed to support Project and Portfolio Management
processes and projects.
■ By 2014, less than 20% of today‘s PMOs will become an enterprise
unction centered on business change or strategy execution.
■ Since 2008, a high rate of PMO ―startup activity‖ has a correlated PMO
implementation failure rate of more than 50%.
■ Gartner survey 153 organizations in 2010 with revenue of $500+ on their
success and failure of the IT application development projects. Results
showed that smaller project almost always had higher project delivery
success rates than larger efforts.
■ 2010, project management effort on projects increased from 5% to 11%.
■ 2010, cost per function point increased from $38 to $56.
■ 2010, Defect removal increased from 4% to 6%.
■ 2010, use of agile increased from 9% to 15%. (Evidence traditional projects and waterfall development is
decreasing…thus the 30% decline in traditional, expect increase in ―alternative.‖)


Move from Traditional to Contemporary

■ Companies that adapt a linear, phase-by-phase project management will decline in
favor of faster, more iterative and ―lighter‖ approaches that are results, not process
driven. Making this shift is essential for companies like ENI, the current paradigm of
structure project management will not meet the needs of both business and your
personal success.
■ Projectized traditional project management relies on being able to manage work by
designing a specific beginning and ending with associated deliverables before the
project begins. Changes of requirements, scope, timing and budget are the bane of a
well-run project. Linear ―freeze the plan and the requirements‖ approach is the defaults
for almost all project work. This mode in the ―new normal‖ economic climate will
potentially damage achieving real results.
■ Why? Current and future business environment for companies like ENI will have to deal
with high levels of ongoing uncertainty, change needs to be expected, not eschewed.
Given the velocity of change is increasing, linear program and project management
methods will not keep pace.
■ Change needs to be expected, not avoided. As such, no matter how hard an
organization tries to do upfront initiative planning and estimation, rarely does Gartner
see organizations dramatically improve their project delivery success without shortening
the length of project, simplifying or eliminating requirements, or deferring functionality to
the future (which almost never gets delivered!).


Move from Traditional to Contemporary

■ ENI, like other companies, may endure a period of confusion as a variety of
approaches are tried. Success will mean return to focus on internal best practices
and leadership. The mantra of ―we need great project management leaders‖ will
rise. Companies like ENI will be mixing and matching internal and external people,
practices, processes, tools to create a rapid environment.
■ Vendors will approach Fortune 500 companies with vertical and
best-of-breed strategies or attempt to go broad and address many evolving styles
of work. ENI will need to publish project management standards and provide a
variety of certifications if they want to work with ecosystem vendors so that
vendors maintain relevancy and value.
■ Many companies will continue to spend money on getting work done efficiently
and effectively. Gartner predicts however, that the time of traditional project
management being the answer to every problem has ended. Results, value ―in
time‖ to meet rapidly moving opportunities are the only program/project
management drivers that successful companies will recognize.
■ Organizations need to move from traditional to contemporary, leveraging iterative
approaches. Project manager 2014 will be judged in terms of ―value in time‖ to
meet rapid moving business demands and opportunities to make a significant
impact.


Tools Impact

Tools
■ Vision of a single software platform for PPM will not be
achieved during the next three years. 30% of organizations
multiple tools will be installed to meet seemingly unique
needs. These tools will often be deployed even though
functionality clashes with, or redundant to, or could be
expanded from software already in your environment.
Decision should meet short or mid -term need.
Requirements. Focus on quickest path to establish
immediate value.
Implications and Recommendations
■ Tools focus will be to better enable visibility, planning,
analysis and holistic decision making. This is driving ■ Evaluate PPM software and tools based on speed and
organizational trends toward EPMO. This will support portfolio diversity of environments. This may mean standard difficult
and optimization of project management and resource to maintain.
planning/management. Today‘s tools are seen as inflexible,
■ Vendors will not react well to best-of-breed options and a
complicated and too granular.
range of emerging solutions for different deployment styles.
■ Layering effect of program and portfolio tools on existing
■ Focus on leaders first, than tools. Leaders need to have a
implementations can take longer than a user is willing to wait.
strategy on how to manage a diversity of tools and
■ New breed of SaaS PMO vendors will emerge, which could deployment styles. This will force focus on a
be great solution for short term needs. well-integrated toolset that provides converged reporting,
views and analytics.


PPM Magic Quadrant
challengers leaders

ability to execute Planview
Compuware CA
Planisware Oracle HP
SAP Microsoft

Sciforma Instantis
PowerSteering
EPM Live Daptiv
Tenrox AtTask
Innotas
Genius Inside EPK Group Serena Software
Atlantic Global Augeo Software
Automation Centre BMC Software
VCSonline Clarizen
Project.net Cardinis Solutions
Project InVision
Project Objects One2team
Onepoint Software
niche players visionaries

completeness of vision
Source: Gartner Research, June 2010


Role of the PMO…Should You Decide to Take The Journey

PMO Implications and Recommendations
■ 30% to 50% per year failure rate is due to distinctive ■ PMO leaders must focus on demonstrated progress and
mismatch between organization expectations of PMO (such value. This does not happen one project at a time but in the
as reliable results, value based prioritization and delivery of aggregate across multiple reject.
change through projects). ■ PMO leaders should not confuse means (process, standards)
■ Overemphasis of PMO on process, compliance and with the ends (higher throughput, stakeholder satisfaction,
standardization. shorter time to decision, etc.).
■ EPMO is future. Realistically three futures for PMOs— evolve ■ PMO need to define opportunities at an aggregate level and
into EPMO and become strategic, maintain current model and show up with the right ―end‖ metrics to indicate these
achieve success or dissolve. improvements.
■ New PMOs guided as much by soft skills and people ■ ―Just enough‖ approaches should be the rule on processes
leadership. Process and external advice is table stakes and and administration to meet business goals.
purely foundational.
■ External vendors will focus there advice on skills transfer and
on engagement models and communication plans which will
ensure their customers have successful project engagement
ends.
■ Most successful PMOs are in PPM maturity model starting at
level 3.


Maturity Models


Gartner PPM Maturity Model
Focus on Why and What, Before How?
Developing— Defined— Managed— Optimized—
Non-existent— Initial—Reactive Emerging Initial Integration Increasing Enterprise
Levels Ad hoc (0) (1) Discipline (2) (3) Efficiency (4) Orientation (5)
 Strategy unclear or  Overall vision, goals and  Clear business strategy,  Clear and articulated Strategy  Clear and articulated strategy  Clear and articulated strategy
unknown. direction for business, shared known and understood. IT by Pole shared and shared and understood at shared and understood across
at Executive level but no IT Project direction shared by understood at Executive level. Executive level. the organization.
People/  No workforce
project direction. Pole at Executive level.
management.  Appropriate staffing by Pole.  Appropriate staffing on a  Shared staffing and
Competencies/  Appropriate staffing by Pole  Appropriate staffing by Pole Group staffing on priority Group basis at the whole specializations.
for critical/priority projects with for critical/priority projects/programs with high enterprise level.
Organization high risk efforts or when crisis. project/programs with high risk efforts or crisis. Shared
risk efforts or crisis. services.

 No process.  Process only for  Processes for programs  Processes for Project and  Processes for Capacity  Processes for portfolio
critical/priority projects management Program Portfolio Planning and Business management extended to
management. Management, Application tracking. Business.
Processes Portfolio Management,
Enterprise Architecture,
Demand Management.

 No tool.  Individual tools.  Shared tools then  Centralized Group tools.  Shared Group tools.  Single integrated system.
collaborative tools on
Technology projects/programs and by
Pole.

 Individual.  High-level budget and budget  Annual focus by silo.  3–5 years focus on a Group  Mandated enterprisewide  Strongly mandated
estimate for projects. basis. financial management based enterprisewide.
on a portfolio model and
Financial  High-level budgeting.  Project cost and labor hours  Balance between Silo and
analytics.
 Programs have their own
captured, Business cases, Central. financial resources.
Management ROI, IRR.  Initiatives and benefits linked  Predictable ROI.
to strategy in the portfolio with  Risk mitigation.
arbitrations.

 None.  Inefficient decision making on  More efficient decision making  Decisions are driven by  Decisions are driven top down,  Decisions are made quickly
projects due to lack of for high risk efforts or in case constrained resources or based on a clearly articulated and dynamically in alignment
information. of crisis. compliance issues. strategy and guiding principles. with strategy.
 Project committees.  Program committees.  Portfolio committees.  Group and IT governances are  Group, Business and IT
 Governance is about fixing the  Annual alignment of IT well integrated but not on a governance integrated into
Governance/ business/IT relationship. investments on Business regular basis. on-demand decision making.
objectives (during the budget  Vendors, Internal and External  Social responsibility aspects
Reporting process). Shared services centers and are considered.
competency centers. Programs
and projects managed on a
Engagement: EngagementAlias behavior basis and rewarded
© 2011 Gartner, Inc. and/or its affiliates. All rights reserved. on improvements.

Maturity Model Benchmark Example


PPM Maturity Trends

■ Most IT organizations have not integrated
their processes to ensure better alignment
with demand side of PPM (prioritization and
valuing investment opportunities) with the Level 4
Level 5
Optimizing

supply side (a comprehensive view of Level 3
Defined
Managed
Increasing
Enterprise
Orientation

resources, money and time available to Level 2
Developing
Initial
Integration
Efficiency

Level 1
execute the projects resulting from these Level 0 Initial
Emerging
Discipline
Nonexistent
invests). Ad Hoc
Reactive

Dimensions

■ Clients are still in the early stages of PPM ■ People
■ PPM Processes
maturity. Typically between Level 1 and ■ Financial Mgmt.
■ Technology
Level 2 in the Gartner Maturity Model. ■ Relationships

■ Clients are still struggling with the basics of
Progression Toward Increasing Maturity

implementing good process, and leadership
necessary before good automation through
tools can occur.


Final Thoughts


Final Thoughts

■ Need for management of project-based work will change. Start changing now. Develop a
thoughtful and logical plan to get to 2014 which creates ―dynamic tension‖ and stretches your
capabilities, but does not break your company.
■ Economic conditions will create need for ―a series of small success projects‖ which promote agile
and flexible IT working with business. This dynamic will be reflected in the evolving or new
governance and portfolio management structures.
■ Process and tools are not as important as results and accountability.
■ Don‘t start a PMO unless is focuses on demonstrable results and business value, vs. process and
administrative burden.
■ The PMO software marketplace is still emerging. Don‘t confuse software with a solution. Use tools
on a project-by-project basis, avoid standardization for now.
■ Project manager 2014 ultimately will be judged and maybe bonused on business value result
against the delivery business objective….vs. not knowing tools, processes and a project plan.


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