Business Driven PMO Setup: Practical Insights, Techniques and Case Examples for Ensuring Success

by Mark Perry

Overview

Extending upon the many traditional program/project management office (PMO) books that present theoretical concepts and knowledge, Business Driven PMO Setup presents practical experiences and wisdom for those responsible for, belonging to, and served by a PMO. This book is rooted in the shared experiences and business settings of all PMOs and it is organized to provide the reader with actionable solutions to the problems and execution difficulties that PMOs face.Most PMO books are written by academics, trainers and consultants from the PM community and present academic or theoretical approaches and models that too often fail. The more sophisticated books tend to be limited in application to the larger or more advanced project management organizations. This unique reference presents new material not available in other books that is applicable to PMOs of all shapes and sizes. It challenges and calls into question various traditional approaches and strategies for the PMO citing examples and explaining when and why such academic and theoretical approaches are wrong. Business Driven PMO Setup was written by over 20 contributing authors that are veteran line executives who either directly manage PMOs, have PMOs reporting to them, or are subject matter experts that service them. These veterans with centuries of business acumen managing both US and foreign companies, divisions, and departments provide valuable insights into ensuring the PMO is setup correctly and remains focused on meeting the needs of the business for which the PMO was created to serve.Many PMOs are often vulnerable in terms of their continued existence. PMOs with a business mindset never have to sell or promote themselves internally, explain what they do, or worry about funding or their existence. This book establishes a clear bottom-line business mindset and practical approach that any PMO can adopt.
 

Product Details

ISBN-13:	9781604270136
Publisher:	Ross, J. Publishing, Incorporated
Publication date:	05/01/2009
Edition description:	New Edition
Pages:	528
Product dimensions:	6.00(w) x 9.00(h) x 1.30(d)

About the Author

Mark Price Perry is a subject matter expert in the practical application of project portfolio management (PPM), collaboration platforms, and PMO content assets. Over the past 13 years, he has become a widely recognized expert in PMO setup as Senior Vice President of Operations at BOT International. Mark has been author of BOT International's PMO Tips of the Week column for the past 12 years, sharing experience-based practical insights as a service to thousands of project management professional subscribers. Mr. Perry is a distinguished contributor at Projectmanagement.com, the leading online professional site for the project management community, and the author of the Projectmanagement.com blog, PMO Setup T3 - Tips, Tools, and Techniques. Mark Perry is also the host of The PMO Podcast, the leading podcast for PMOs of all shapes and sizes, and a sought after speaker. In addition to formal project managers and members of PMOs, Mr. Perry has helped tens of thousands of informal and accidental project managers apply the knowledge and techniques of the PMBOK Guide and is also the author of Business Driven Project Portfolio Management.
 

Read an Excerpt

CHAPTER 1

Mission, Goals, and Objectives: Business Driven vs Theory-Driven

For many project management offices (PMOs), Figure 1.1 paints an all too familiar picture. Rather than focusing on mission, goals, and objectives like the other business units in the company must do, many organizations skip this important step altogether during the initial setup of the PMO, delving right into strategies and tactics. Far too often the first order of business is to evaluate and select the best-fit PMO model from the many theoretical approaches that are presented and discussed at length within the project management community. Then, based upon the PMO model selected, there is a thorough discussion and debate about what the roles and responsibilities of the PMO should be. This, of course, produces a list of requirements and needs regarding people, process, and tools. Since setting up, managing, and improving a PMO is a journey and not a destination, the final step in the PMO setup process involves laying out a roadmap of phases, activities, and tasks for the PMO to implement in order to take root, evolve, and achieve higher levels of organizational project management maturity. To the project management practitioner and PMO enthusiast, this all makes sense and the value of the PMO to the company is intuitively understood. However, to the business executive with financial and budgetary responsibility to whom the PMO reports, as well as to those throughout the company for whom the PMO exists to serve, in the absence of defined and measurable goals and objectives, the value of the PMO is far less understood. There is no better way for the PMO to snatch defeat from the jaws of victory than to go about its initial setup without a clear focus, collaborative development, and an unambiguous declaration of its mission, goals, and objectives.

One way to succeed is to avoid traditional thinking about the mission and goals of the PMO in terms of the PMO models, roles and responsibilities, and paths of maturity. A new multi-dimensional construct needs to be presented, not to replace the existing constructs and typical ways of thinking about PMOs, but to complement them. The addition provides a wider perspective that has practical applicability to PMOs of all shapes and sizes, enabling them to be business driven and goal-oriented. This need has stimulated an ongoing discussion among chief information officers (CIOs), PMO managers, project management thought leaders, and colleagues for years. What has collectively emerged from these numerous perspectives is that there are multiple dimensions — five altogether — of project management that exist within an organization. Therefore, these dimensions need to be understood so that an organization can establish the optimal and business driven mission, goals, and objectives for the PMO.

Much like the way in which dimensions are described in classical physics — a line describes one dimension, a plane describes two dimensions, a cube describes three dimensions — time is often referred to as the fourth dimension. The fifth dimension is occasionally referred to as probability, or all of the possibilities such as alternate realities; so too the dimensions of project management can be described this way. In a project management context, the five dimensions are: (1) myopic, (2) ubiquitous, (3) size, (4) intervals of time, and (5) chance. These five dimensions, known as The Project Management MUSIC Model, are shown in Figure 1.2 in an organizational project management context.

Myopic Dimension

There are numerous factors that contribute to a myopic view of project management. In many cases the manner in which these factors come about is similar to the chicken or the egg causality dilemma. For example, standards organizations, including the Project Management Institute (PMI) with nearly 300,000 members in virtually every country, advocate the profession of project management. In the last four decades PMI has advanced project management from a skill set to a valued profession, and companies of all shapes and sizes have benefitted from more effective techniques and approaches to project management. Additionally, an unintended consequence of the formal establishment of project management as a profession has occurred. The informal development of "The Project Management Community" consists of not only the practitioners of project management but also the consultants, vendors, trainers, educators, and pundits, who, in one way or another, weigh-in, shape, and influence the profession. For the most part this is beneficial because these organizations have tremendous value to provide in terms of knowledge, products, and services. However, a noted problem of this community is thetendency to think from inside its own box in terms of project management — especially PMO models and strategy — with a perspective and bias that is often more theoretical than practical and in some cases self-serving. The result of this kind of thinking spans from the undoable to the outrageous.

Myopic project management, inside-the-box thinking, is not difficult to recognize. Thomas R. Block and J. Davidson Frame (1998, p. 7) suggest, "If an organization carries out projects only occasionally, there is no need to develop systematic capabilities to engage in project efforts. In this case, establishing a project office would be analogous to killing mosquitoes with a shotgun." For many organizations, especially smaller companies and information technology (IT) departments, nothing could be less advantageous. These firms do not regularly carry out projects; therefore, it is important that the project managers have a supporting project office or PMO from which they can access advice. These project managers are frequently informal or accidental project managers. That is, they have a full-time job and occasionally manage projects. These workplace professionals are not project managers by title and probably have not had, nor do they have the time to attend, project management training. Therefore, useful direction and helpful guidance with respect to project management tips, tools, and techniques is welcome. There are several options for setting up a PMO. A PMO doesn't have to be a large organization with a dedicated staff, a formal portfolio of programs and projects, a complex and expensive project portfolio management system, nor an overly detailed and bureaucratic methodology and set of procedures that is all too often the conventional thinking typically espoused by those in the project management community. To these people, project management is extremely one dimensional and it is only formally recognized at a few levels, such as within an IT department or a strategic project management organization. Even the PMO, as an organization model, is viewed to have only a limited number of constructs and styles. But even in the smallest of organizations, the decision to have a PMO or virtual PMO can offer tremendous benefits. Such a PMO or virtual PMO can be setup and managed as one of many duties by a manager or even a non-manager, such as a subject matter expert within any part or at any level of an organization. To categorically dismiss the value of a PMO or to suggest that only a large organization that routinely manages projects can benefit from establishing a PMO is an example of the myopic dimension of project management. At best this is a theoretical perspective limited to a narrow view and, at worst, it is bad business judgment that lends itself to missed opportunities for achieving business results through better and more effective approaches to managing projects.

In another example of the myopic dimension of project management, Kerzner (2001, p. 72) advises, "Develop an ongoing, all-employee project management curriculum such that the project management benefits can be sustained and improved upon for the long term." In his book about strategic planning for project management, Kerzner does not suggest that some or even many employees get trained in project management, rather he states that all employees should be trained in project management. For most organizations this is simply not possible. The financial impact to an organization as well as the time required to train every employee in any skill, not to mention project management, is simply prohibitive with the possible exception of mandatory equal opportunity, employee harassment, and organizational safety and health training programs. In theory, training all employees in project management might sound like a good idea to those who are strong and outspoken advocates of project management, but for most companies and organizations it is neither a practical nor a viable option.

The myopic dimension of project management is the conviction that certain techniques always be applied in the management of projects. Earned value management (EVM) is an example. EVM is a project management technique for measuring the accurate progress of a project, and its value for some projects is not debatable. However, there are those in the project management community that suggest if earned value management or some kind of earned value analysis is not used, then the project performance is not accurately reported nor is the project managed properly. While this might be technically correct in theory, the practical reality is that many projects, especially smaller, short-term projects often do not require overly complex approaches or techniques for project reporting and, in many cases, such techniques cannot be effectively applied. For example, minor projects, including the installation of a test server for an application, efforts to conduct competitive market research, or the development of management reports all serve as examples of projects that usually have a limited number of tasks and are quickly completed. For such projects, effective earned value management analysis might not be possible because the duration of the project is too brief. Additionally, such projects might be managed using simple tools like Microsoft Word or Excel or even a visual mapping tool like MindMapper. Hence, there is no ability to perform earned value analysis native to the tool used. Minor projects that do not require earned value management represent a large percent of the projects that most PMOs have in their active projects mix. Thus, there needs to be practical guidelines, as a matter of PMO policy, for when such techniques as earned value management can or should be used as opposed to the theoretical mindset that all projects, regardless of shape and size, should employ the technique.

Kendall and Rollins (2003, p. 316) state that the PMO should increase the number of projects (throughput) that it completes year-over-year and that the completion-of-projects percentage should be a key measurement of the PMO. Although their book, Advanced Project Portfolio Management and the PMO, is arguably one of the best books on the PMO, a personal favorite and one I recommend, the perspective of the book is often myopic and one-dimensional. Much of this can be attributed to the fact that the book is written for the advanced PMO audience. It provides well thought-out insights and strategies for achieving high levels of value and measurable return on investment for an organization's (strategic) PMO. For a number of PMOs, especially strategic PMOs within an enterprise, this book has an exciting, practical value. But for many PMOs it is a theoretical read. The idea that the number of projects completed by the PMO year-over-year should be a key measurement for the PMO sounds reasonable in theory; however, in an actual business setting it is not practical. For example, most PMOs, especially at the time of setup, seek to reduce the number of projects that the organization is attempting. Too many organizations take on more projects than they can successfully deliver and oftentimes there is significant duplication. The first order of business for most PMOs is to inventory the project mix, both formal and informal, and to cut away at the number of duplicate, failing, and unnecessary projects. In this case, a measurement that suggests a PMO is doing poorly unless it increases the year-over-year number of projects that it completes might not be the most beneficial. Additionally, many PMOs search for ways to perform fewer projects overall by selecting potentially effective projects and removing ineffective projects from the project pipeline and active projects portfolio. Moreover, most PMOs are not immune to the natural business cycles that companies face and if a firm is in a troubled industry or business segment — the current U. S. financial services mortgage sector — the needs of the business might dictate an immediate reduction in the number of projects of the PMO. Likewise, if a PMO is in a high-growth, high-profit industry or business segment — the U. S. energy industry presently — the needs of the business might dictate and provide for significant increases in project investment and the overall number of projects of the PMO. Project count as a PMO measurement could easily lead to gamesmanship in which large projects are broken down and reported as multiple smaller projects, or, worse, a situation in which a number of small projects are selected over a large project motivated by the desire to achieve the project count measurement for the PMO. Even with value and resource-based weightings and adjustments, for most PMOs the measurement of projects completed year-over-year is likely to be one of those approaches that sounds good in theory in terms of a key business measurement but in practice cannot be effectively applied or might not be sensible to attempt.

Should PMOs be measured? Absolutely. But the measurement should be based on the needs of the business for which the PMO exists to serve, not an inwardly focused, game-like, manufactured measurement.

Ubiquitous Dimension

Simply put, project management is ubiquitous. Projects exist in every corner of today's business organizations and project management is an activity undertaken by all kinds of business professionals and in organizations, divisions, anddepartments of all shapes and sizes. Examples of these projects are plentiful, including:

* A product manager's project to conduct a market segmentation analysis for a new offering

* A sales executive's project to hire and train a regional sales team

* A business development executive's project to recruit and enable an international business partner

* A customer service executive's project to design and perform a customer satisfaction survey

* A financial executive's project to perform due diligence for a potential acquisition

* A human resources executive's project to develop a performance planning, compensation, and evaluation program

* An administration manager's project to streamline the accounting process

* A manufacturing engineer's project to perform shop-floor maintenance

* A marketing staff person's project to manage the annual customer conference

* A sales operations manager's project to conduct strategic account reviews

* A trainer's project to improve or develop a new curriculum

* A security officer's project to test existing systems and policies

As illustrated in Figure 1.3, these ubiquitous projects are invisible to the formal PMO much like the part of the iceberg that is below the water is invisible to an ocean liner.

Regrettably, the project management community at large, and many PMOs, do not recognize such invisible projects as "real" projects. These ubiquitous projects rarely show up on the list of formal projects that the PMO is undertaking, nor should they. However, the PMO should be aware of the ubiquitous dimension of project management. Deliberate action and care should be undertaken to ensure that those in the organization who have projects to manage have the ability to access support and guidance. That support might be in the form of right-sized and intuitive project management processes, tips, tools, and techniques for the project efforts. Otherwise these business professionals can be left out of the project management club altogether thus denying them the project management goodies. In fact there are those that would argue that the collective estimated monetary value of these ubiquitous projects throughout an organization might be as substantial as both the formal project portfolio of the strategic PMO and the projects of the IT PMO. Therefore, business driven PMOs should have specific goals and objectives in their mission to meet these ubiquitous project management needs.

(Continues…)

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Excerpted from "Business Driven PMO Setup"
by .
Copyright © 2009 Mark Price Perry.
Excerpted by permission of J. Ross Publishing, Inc..
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Dedication,
Acknowledgments,
About the Author,
Contributors,
Preface,
Introduction,
Chapter 1 Mission, Goals, and Objectives: Business driven vs Theory-Driven,
Chapter 2 Organization: Constituent-Oriented vs Inwardly Focused,
Chapter 3 Managing Projects: Think Process, Not Methodology,
Chapter 4 Managing the PMO: Embracing Flexibility vs Mandating Conformance,
Chapter 5 PMO Tools: Establishing a PMO Architecture vs Implementing a Tool,
Chapter 6 Executive Reporting: Keep It Simple,
Chapter 7 Project Management Office Leadership: MBWA 2.0,
Chapter 8 Project Management Leadership: Servant-Leader vs Subject Matter Expert,
Chapter 9 Creating High-Performance Teams,
Chapter 10 Establishing a PMO: A Practical Roadmap,
Chapter 11 Line of Business PMOs: The Ubiquitous Nature of Project Management,
Chapter 12 Advancing Organizational Project Management: From Theory to Practice,
Chapter 13 Project Management Office Passion: Where Does It Come From?,

Editorial Reviews

"Business Driven PMO Setup is the most practical book available on this often confusing subject. Use it as you set up a new PMO or revitalize an existing one. Each chapter will get you laser-focused on what's really important. In today's competitive environment, that's the ONLY way to get it right." —Dave Garrett, PMO 2.0 Visionary and CEO of gantthead.com
 


"The PMO is the bridge between projects and business. With his five-dimensional approach, Mark Perry defines the roadmap for a PMO that operates in strategic corporate space, as well as in functional departments. A practical guide supported by true expertise and in-depth considerations." —Gunes Sahillioglu, PMO Expert and President of Excellix
 

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