Program Management Office (PMO)
The primary vehicle for creating transformation benefits is a program management office (PMO). PMOs improve project management maturity by improving processes and ensuring compliance with best practice methodology in the areas of scope, time, cost, quality, resource management, risk, and integration to consistently and predictably achieve project delivery excellence.
PMOs deliver solutions for better IT governance, and provide processes, tools and resources that support selection of the most effective projects from an inventory of proposed project candidates. PMOs allocate resources among ongoing initiatives, evaluate project success from a strategic vantage point, and continuously align information technology project delivery and investments with business objectives. They prioritize projects from throughout the organization, standardize approaches to planning and executing projects, and facilitate communication to all stakeholders. They are a single center of excellence for resource management, project planning, project management, standard processes and methodology, enterprise project management applications, and training. A PMO provides consistency training to ensure that best practice standards are communicated, interpreted, and applied the same way across projects. Sustaining consistent application of best practice standards is an optimal way to be successful in a high-demand, resource constrained environment with complex initiatives.
PMO size and breadth of services is critical. A PMO may need to increase staffing size and/or reorganize in order to add capability. Capabilities should include resourcing, estimating, quality, tools, reporting, skills, project controls, portfolio management, and planning facilitation.
Methodology
The foundation upon which innovation and consistency are based is project management methodology. A project management methodology is the basic guideline for managing a project lifecycle. It is a methodical, multi-phased approach for completing feasibility, initiation, planning, execution, and shutdown activities in logical sequences. An effective methodology is scalable so that small projects incur less process rigor than complex and risky projects. An enhanced methodology utilizes more sophisticated tools with resource management and portfolio management capabilities to replace existing tools and project health reporting. PMOs should adopt a methodology that integrates risk management analysis, workflow, and resolution tracking into scheduling and resource management processes, and then aggregates at program and portfolio levels.
A PMO may supplement a standard methodology with processes that specifically suit the needs of each environment. Business-specific processes may include technical reviews to ensure product and vendor quality, privacy and data security reviews, software selection processes, and methodology scalability to ensure that project management adds value.
Once the right methodology is in-place, a PMO has an ongoing opportunity to frequently benchmark against industry standards with organizations like the Project Management Institute Project Management, and AACE International, and with market research from sources such as Gartner, Standish, and Forrester for continuous improvement.
Resource Management
A transformation includes people, processes, and tools to provide central resource management capabilities. Resource Management includes resource capacity planning based on a master database of available resources and associated skill sets that align with the pipeline of project resource requirements.
One of the innovative approaches is to focus on resource quality (i.e., higher skill levels and years of experience) as staffing increases. A PMO should develop requirements for project management capability, establish adequate funding for the right resources to meet those needs, prepare new position descriptions, design and conduct extensive recruiting and interviewing steps, and then complete hiring and orientation procedures. The result will be higher retention, faster ramp-up for immediate value, and improved ability to mature the organization.
A resource management system should also provide resource assignment capability to facilitate managing resource allocation to approved projects, and visibility into resource interdependencies between projects.
The resource management plan incorporates resource forecasting to communicate when resources will be available for assignment. It identifies the need to hire or shift resources across projects by monitoring forecasted workload that enables us to determine skill types that are required for current and future projects. It also enables real time “harvesting” of planned but no longer required allocated labor for other tasks and projects
Portfolio Management
The heart of transformation is portfolio management and reporting, and new tools that enable that capability. If not already in-place, a PMO should consider tool requirements, funding, evaluation and selection, design and configuration, architectural issues, reporting, change management issues, training, and integration with or replacement of existing tools.
The goal is to develop a portfolio of projects that achieves the highest value across the business by a) linking projects to business strategy, b) identifying the strategic value of each project, c) determining interdependencies, and d) identifying risks for each program. This puts an organization in a position of being able to identify projects to be deferred, b) quantify the value of projects that have ambiguous business benefits, c) eliminate projects that don’t fit, and d) define projects that are impacted by the outcome of others
In portfolio management, approved projects are reported and analyzed relative to each other, their position within a portfolio, their contribution to achieving business strategies, and their performance to plan. Those projects are ranked & prioritized so that new project requests can be evaluated relative to the existing portfolio of projects. Prioritization communicates what the project resource and schedule priorities are. The approved and prioritized list of projects is then reported by creating views of the list in time-based portfolios such as a fiscal year portfolio, queued project portfolio, and asset portfolio.
Quality
The real challenge for a PMO is to ensure consistent compliance with expected performance standards. A quality management system is one part of a transformation that can help accomplish that. In a quality program, project management practitioners report project status and health based on actual performance metrics. Then a quality team measures reporting and process compliance, and provides trend analysis to deliver targeted early intervention indicators.
A quality program includes project categorization into complexity and risk levels. Complexity levels are used as a basis for methodology application, and to determine the most appropriate engagement strategy. The quality program establishes project management competencies and certifications, and matches Project Manager assignments to help ensure that competencies are commensurate with risk and complexity. It also includes project planning certifications, and project health assessments. Checkpoints are embedded in all methodologies to foster realistic looks at project direction and performance at critical stages of projects.
Integration
To be most effective, a transformation should integrate the five major elements of an advanced strategic plan: new project initiation, initiative evaluation, prioritization and balancing, resource management, and portfolio management.
The initiation process develops information required to judge validity of new requests. The process helps determine whether a business case is sound enough that it should be funded. Invalidated project requests are reviewed for accuracy, referred to a queued project portfolio, deferred, or replaced by alternate solutions. Initiation deliverables include cost/benefit analyses, evaluation of alternatives, assumptions, preliminary cost estimate, expected benefits, rough implementation strategy, risks, and a preliminary schedule.
During a subsequent evaluation phase, the portfolio management process develops business value, financial return, strategic fit, technical fit, implementation risk, operational risks, and an overall probability of success. Projects are prioritized on the basis of this information. New projects are categorized by risk and reward to create a target portfolio that optimizes value and risk.
Treating projects as a portfolio helps ensure that the “right” work can be realistically completed with a reasonable likelihood of success. The process matches projects to resources, compares budgets, and staggers start and completion dates to resolve project interdependencies. Once projects are positioned for success, Project Managers put fundamental project management into practice. They emphasize project definition, requirements, and technical and functional design to accurately set performance baselines and to set project and product performance expectations.
Impact to the Business
The resultant impact of successful transformation on the business can be substantial. Realized IT capital project business benefits can exceed expected benefits, and project and organizational performance can be significantly improved. Cycle-times from requested start date to actual start date can be reduced, and on-time completions can also improve.
A transformation can enable the organization to assign Project Managers with high levels of qualifications and credentials, and provide a match between skill levels and project complexity.
Better planning and resource management allow an organization to do a better job of execution. Methodology lifecycle compliance scores and shared repository documentation improve. Consistent use of a shared data repository is important for use in leveraging project management knowledge and sharing lessons-learned.
The PMO should develop performance metrics and associated criteria, and chart progress to be able to document and demonstrate improvements in key areas. Effective project management governance is an ongoing effort. Transforming to a high-performance project environment will enable the organization to focus on continuous improvement for increasing capability maturity, and even greater levels of business value.