THE PROJECT MANAGEMENT OFFICE A culture change in business… Presented By José A. Rodríguez López, PE, PMP Quality Assurance Manage Puerto Rico Industr...
THE PROJECT MANAGEMENT OFFICE A culture change in business… Presented By José A. Rodríguez López, PE, PMP Quality Assurance Manage Puerto Rico Industrial Development Company
Objectives • Establish the need for Project Management • Define what is a Project Management Office • Suggest a proven path
Project Management…
THE ART OF GETTING THINGS DONE
Why Project Management? • Project Management is the means used by organizations today to turn their vision and mission into results • Promotes creativity and innovation • Maintains the organization integrated and focused on the business priorities
Project Management Facts • Poorly management project cost U.S. Companies and Government $145 billion/year. CIO magazine ,“ When Bad things Happen to God Projects”, October 1997
• The cost of failed projects in U.S. is more than twice of money spent in all training and performance improvements in 1999($62.5 billion). Training Magazine,1999 • 17% of the 62.5 billion was spent on Project management training. Training & Development Magazine “1999 State of the Industry Report”, 2000 • 40% of IT application development projects were cancelled before completion. CIO magazine ,“ When Bad things Happen to God Projects”, October 1997
• 30% of organizational projects are cancelled before completion
and half of them run as far as 190% over budget. PM Network Magazine, January 2001
Project Management Facts • Organizations which operate 15% percent and higher effectiveness rely heavily on PMOs. • 66% of projects at organizations with PMO were successful. • 78% of high-performing organizations have a PMO PM Network, “Unleashing the power of the PMO”, June 2013
Inadequate Governance and Poor Planning the Root Cause of Failure Why Projects / Programs Fail
Large Programs Success Rates
Others Successful 16%
Technical Problems Problems with Suppliers
11% 4%
4% 36%
Insufficient Project Personnel Resources
53%
10%
31% 15%
Cancelled Under Perform
20%
Ineffective Project Planning Poorly Defined or Missing Project Objectives
Source: Standish Group International, Survey from 2500 personnel attending project management training
Poor Organization and Project Management Practices
Standish Group: Success Rate Score of IT Projects Still the same problems…. 199 4
Business Competiveness • Successful development of new products and services ,require that organizations foster a culture of innovation. • Innovation is a key ingredient for business and organizational productivity and competitiveness.
Project Management Impact on Economy Dr. Donncha Kavanagh
Why is difficult to implement? • Upper management thinks that project management is a software tool • Organizations don't value the upfront (planning) investment of time • Its perceived as a burocratic process • Lack of commitment • Organizations don't know how to implement culture change
What is a PMO? • Dedicated Resource to serve project needs – – – – – – – –
Start-up Support Monitoring and Control Develop Templates Cultural Change Personnel Development Professionalism in PM Efficient Use of Resources Etc……..
When do we need a PMO? • Poor project delivery track record • Projects are highly complex and time sensitive • Lots of simultaneous projects and project managers • Impact of project failure is high
Reasons to Establish a PMO The PMO helps to manage the organization’s future through: • An emphasis on ensuring consistency and uniformity in projects • Comply with regulations and business trends • An organizational desire to excel • An enterprise focus on improvement in project management competency • A reduction in project overruns • An increase in the delivery speed of projects • An increase in customer satisfaction
Role of Project Office • Development – Recruiting – Training – Development of PMs
• Support – Procedures – Policies – Reports-Priorities
• Control Functions – Evaluation – Assignment – Ensure deliverables
PMO Primary Targets • Establish Methodology • Provide Tools • Choose the Project Portfolio Mix • Prioritize the porfolio • Provide executive portfolio cockpit • Mentor Project Managers • Establish Data Archives • Market its services
• Drive down project cycle times • Track and report progress • Help desk • Focus corrective action • Facilitate project governance • Provide training • Assist troubled projects
The functions of the PMO have evolved… It is not just an organization to provide support for scheduling and monitoring activities on a single project It is becoming an essential component for the future success of the organization It provides services and organizational focus in core and supporting areas of project management
Where does the PMO belong in the organization? Depends on its scope The broader the scope the higher its visibility and impact
Where to Position a PMO? • Corporate Office – Project Support Office
• Business Unit • Program – A single project or business program
Components of a PMO* • What the PMO does • Mission • How it is done and for whom • Strategy • Sponsor • Alignment with business value • Stakeholders • Vision statement • Clients • Principles/Goals • Objectives • Products/Services " The PRIDCO Project Management office manages and supports industrial projects that promote the economic • Transitional Activities development of Puerto Rico”
Mission • Requestors of PMO service Strategy • Others the PMO helps achieve their project and Sponsor business goals Stakeholders Clients Objectives Products/Services Transitional Activities
Mission • Creating the PMO • Recruiting Strategy • Systems and Procedures Sponsor Stakeholders Clients Objectives Products/Services Transitional Activities
Vision answers… PMO purpose and goals?
What you need to do to get there?
Where do we see the PMO’s future objectives?
Mission answers… • What the PMO does? • How is done? • For whom? • Compares PMO to its business value
Deploying a PMO • • • • • • •
Create (or buy) a project methodology Provide training and coaching Conduct project audits/assessments Provide consolidated metrics Consulting firms can fill gaps Culture change Deploy in waves
Deploying a PMO • Culture change – People will have to do things differently – Requires different behaviors – More than teaching new skills – Evaluate aspects driving behavior • Reinforce positives • Eliminate/change negatives • Consultants can drive change sometimes
Deploying a PMO • Culture change – First do a gap analysis to show need • Culture • Enablers/Barriers/Attitudes • Success rates • Roles • Skills • Standards • Work environment
Deploying a PMO • Culture change – First do a gap analysis to show need • Use a cross section of staff • Interviews • Surveys • Focus groups
– Use the gap analysis to define the future look of the PMO
Deploying a PMO* • Deploy in waves – – – – – – – –
Don’t change things all at once General awareness sessions Project management training Standards/Templates Reward/Recognition system Get management buy-in Audits and evaluations PMO support organization
Not all PMO’s are created “ Equal” Organization Area A
Organization
Customer PMO
Area B
Area C
Internal PMO
External PMO
The Program Management Office : Craig J. Levatec, PMP
The PMO Implementation Roadmap
PMO Challenges & Opportunities Examples of Challenges Project mission and tasks are poorly defined Lack of a clear process for escalating risks to senior management Insufficient reporting to support topmanagement decisions Ineffective enforcement of project controls and policies
Opportunities of PMO Identifies gaps in realization of strategic objectives Escalates current risks and identifies potential risks earlier Ensures proper communications to relevant stakeholders Improves monitoring and control of projects
Conflict between line, project managers
Mediates issue resolution
Projects do not meet deadlines / milestones
Increases efficiency in tracking progress of projects
Lack of standardized reports and reporting frameworks for all projects - Fragmented project plans
Integrates project plans for all projects – Standardizes progress reporting
WHAT TO MEASURE? • CUSTOMER SATISFACTION • DURATION SLIPPAGE • EFFORT SLIPPAGE • COST OF DURATION SLIPPAGE • COST OF EFFORT SLIPPAGE
Project Portfolio Management and Project Selection Establish a Projects Portfolio Management System – Senior Management Involvement • Project – Program Selection • Business Strategy
– Scorecard Evaluation • Development • Action Plan
Project Screening Matrix
End User
New Project Identified
PMO
Project Manager
Project Request Received
Project Manager Assigned
Project Scoped
Budget Developed
Project Feasibility document
To Approval Process
The Added Value of an Effective PMO Value ($) Efficient Program Management Office Value 2: Delivers Incremental Value
Traditional Program Management
Implementation
Planning & Set-up
Value 3: Reduces Risk of Failure
Validation& Detailing, Planning Assessment & Concept Developmen t
Time Value 1: Accelerates Progress
FOCUS - FUNDING • FOCUS – Tactical : Product Development – Strategic: Business / Function
The Cost of implementing a PMO • PROJECT MANAGERS and SUPPORT PERSONNEL SALARIES • TRAINING COSTS • MENTORING COSTS • FACILITIES • PROJECT MANAGEMENT SOFTWARE
