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Presentation Objectives
Provide an overview and general understanding of PMO models, functions, success factors, and implementation Introduce the CobiT PM CMM as a framework for establish and evolving the PMO Project Management functions
OutlineIT PMO TrendsPMO Models PMO Key Considerations– Charter– Culture Change– Implementation Strategies– Staffing/Skills– Performance Metrics
Critical Success FactorIntroduction - CobiT® CMM
IT PMO Trends67% of IT organizations in 2003 have PMOs (Forrester Survey)
More than half established since 2000 (Forrester Survey)
Government is moving to standardize IT Project Management– Nov, 2003, Federal CIO Council recommends setting up Federal
PMO to standardize PM practices– Jun, 2004, SC requires management of major and inter-agency
IT projects to use standard practices and be managed by PMP– Jan, 2001, NY sets up PMO to standardize management of
technology projects– Jun 2002, CA CIO established objectives for statewide project
management standardsIT PMOs are becoming strategic IT PMOs are gaining more influence
What’s Driving IT PMO Proliferation?
Late and over budget IT projects– Lack of coordination of activities– Poor project management practices– Lack of standardization of PM methodology
Need for consolidated project reporting to drive prioritization/decisions– More focus on IT project ROI – More focus on alignment of IT projects with business strategy– Strategic value and dependency on IT applications/technologies
Increase in IT Project workload– Proliferation of IT project proposals– Delays in getting projects approved
More complex IT environment and solutions– Enterprise solutions/cross-functional projects– Distributed development organizations– Outsourcing and contracting out of IT projects
PMO BenefitsCompanies that implemented successful PMOs achieved:– 80% ROI– 20% reduction in project time– 30-35% successful project deliveryCompanies without a PMO experience 74% project failure rate
Source: Forrester Research
PMO ModelsOne size does not fit all– PMO drivers/business needs– PM maturity– Vision and goals of sponsor– Business/organization mission– Organization size– Number of projects– Political and cultural environment
Tactical vs. strategicInternal vs. external focusDepartmental vs. enterprise (IT vs. LOB)Single vs. multipleStaff vs. line organization
SUPPORT CONTROL
Project administrative support
PM standards, methodology, processes
Project Consulting and mentoring
PM coaching/training/certification
Integrated Project Reporting
Issue Tracking/Reporting
Master Project Schedule
Project Document Repository
PM tools and tools support
Project Audits
Cost and Schedule Control
Business Case
Project Approval
Project Prioritization
Project Management
Resource Management
IT Asset Management
Project Portfolio Management
PMO Support/Control Model
Key Considerations
PMO charterCulture changeImplementation strategyStaffingMetrics/PerformanceSuccess factorsMaturity of Project Management Practices
PMO CharterCharter Scope– Business Needs– Sponsor– Public vs. Commercial – PM Maturity
Charter Document– Mission/Vision– Goals/Objectives – Sponsor– Service Offering– PMO Governance– Key Performance Metrics– Funding model
PMO - Culture ChangeNatural resistance to changePolitical landscape– Winners/Losers– Management Support
Degree of cultural change– PM maturity– PMO charter– Existing skill level– Key driver implementation strategy
Change Management– Assess impact of change – Inform– Educate– Involve
PMO Implementation StrategiesStrategy drivers– PMO charter– PM maturity – Sponsor and management support– PMO drivers– Perception of value– Political environment– Culture/Value System
Evolutionary/Incremental– Lower implementation risks– Lower start up costs– Will take longer to demonstrate ROI– More suitable if high resistance to change and low management
supportRevolutionary/Wholesale– Higher implementation risks– Higher startup costs– May be able to demonstrate ROI quicker– More suitable if crisis or recognition at high level that change is
imperative
PMO Staffing/SkillsStaffing Approaches– In-house resources– Hybrid (In-house/contractors)– Ad hoc contractors augmentation
Skills– PMO Director/Manager– Project Manager– Project Portfolio Manager– PM Process/Methodology Trainer– Relationship/Account Manager– Tools Support/Administration– Administrative Support– Librarian/Document Control
PMO Performance MetricsPMO vs. Project metricsLess that 15% of PMOs employ formal metrics program (Source: Forrester Research)Metrics are essential for growth and support – demonstrate progress, value, and productivityPerformance metrics are driven by charter – no such thing as typical metricsBusiness value metrics
– Executive focus - Measure and demonstrate value to business– Help justify existence during downsizing– Expressed primarily in dollars savings/revenue or ROI– Tend to be few and harder to derive
Functional performance metrics– Internal focus - Measure and demonstrate performance or quality of PMO functions– Help justify PMO budget– Help improve PMO performance – May require baseline or benchmark to demonstrate performance– Expressed primarily in percent or counts – Tend to be many depending on functions performed– Must be selectively chosen so as not to overwhelm
Service level metrics– Customer focus - Measure and demonstrate service level or quality of service to customer– Help improve and maintain customer satisfaction– SLA/SLO– Expressed in a variety of ways– Select on key and most important value to customer community
Success FactorsClear Charter– Creates clear expectations– Defines boundaries for implementation
Top-Down SupportBottoms up Buy-inSponsor - Reporting to senior executiveStrong LOB representation Communication/PR– Promotion of services– Education of value– Performance metrics that demonstrate business and
customer value
PM Capability Maturity ModelsValuable tool for establishing PMO and help define objectives, charter, and processes Assess current statusCompare against best practicesDevelop strategy and road map for PMOHelp communicate vision and get buy inDifferent models (CobiT, OPM3, ISO 15504, CMM/CMMI)
CobiT ® Capability Maturity ModelCobiT® CMM is valuable and comprehensive framework for assessing maturity of IT organizationCobiT® CMM – International Open Standard for IT Governance– IT Governance Institute (ITGI®)– Information Systems Audit and Control Association (ISACA®)
ITIG ® not associated with Software Engineering Institute (SEI), Carnegie MellonCobiT® CMM uses same conceptual framework as SEI’s CMM Defines maturity of IT organizations in four domains– Planning and Organization– Acquisition and Implementation– Delivery and Support– Monitoring
PM CMM part of CobiT® Planning and Organization domain
Sources: WWW.ISACA.ORG and WWW.ITGI.ORG
CobiT® Maturity Levels0 Non-Existent – Not applied1 Initial – Ad hoc and disorganized 2 Repeatable – Follow regular pattern 3 Defined – Documented/communicated4 Managed – Monitored and measured5 Optimized – Best practices followed/ automated
Source: CobiT 3rd Edition, Management Guidelines
CobiT® Model Components
Defines processes within each domainDefines high-level control statement for each processDefines maturity levelsDefines success factors for each process Defines key goals for each processDefines key performance indicators
Source: CobiT 3rd Edition, Management Guidelines
CobiT® Project Management Process Control Statement
Control of project management process with the business goal of setting priorities and delivering on time and within budget Is enabled by the organization identifying and prioritizing projects in line with the operational plan and the adoption and application of sound project management techniques for each project undertaken
Source: CobiT 3rd Edition, Management Guidelines
Level 0 – Non Existence
PM techniques not usedOrganization does not consider business impact of poor project performance
Source: CobiT 3rd Edition, Management Guidelines
Level 1 – Initial/Ad HocAware of need for project structure and risks of poorly managed projectsUse of PM techniques left to the individualProjects are generally poorly defined and do not incorporate business or technical objectives of the organization or stakeholdersLack of management commitment and project ownershipCritical project decisions are made without user management or customer inputLittle or no customer and user involvement in defining IT projectsNo clear organization within IT projects and roles/responsibilities are not definedProject schedules and milestones are poorly defined Project staff time and expenses are not tracked and compared to budgets
Source: CobiT 3rd Edition, Management Guidelines
Level 2 – Repeatable but IntuitiveSr. Management has gained and communicated an awareness of the need for IT Project ManagementOrganization is in the process of learning and repeating certain techniques and methods from project-to-projectProjects have informally defined business and technical objectivesLimited stakeholders involvement in PMSome PM guidelines developed, but left to discretion of project managers
Source: CobiT 3rd Edition, Management Guidelines
Level 3 – Defined ProcessPM process and methodology formally established and communicatedIT projects defined with appropriate business and technical objectivesStakeholders are involved in the management of IT projectsDefined project structure with roles and responsibilitiesDefined and updated project milestones, schedules, budget and performance measurementsIT Projects have formal post systems implementation proceduresInformal project management training providedNo established policies for using combination of internal and external resourcesQuality assurance procedures are defined
Source: CobiT 3rd Edition, Management Guidelines
Level 4 – Managed and MeasurableFormal and standardized project metricsPM measure and evaluated throughout organization not just ITPM process enhancement formalized and communicated, and project team members are trained on all enhancementsRisk management performed as part of PMStakeholders actively participate in projects or lead themProject milestones and criteria for evaluating success at each milestones are establishedValue and risk are measured and managed prior to, during, and after project completionManagement has established a program management function within ITProjects are defined, staffed, and managed to address organizational goals, rather than only IT specific ones.
Source: CobiT 3rd Edition, Management Guidelines
Level 5 - OptimizedProven full life-cycle project methodology is implemented and enforced, and integrated into organizational cultureOn-going program to institutionalize best practices has been implementedStrong and active project support from Sr. Management sponsors and stakeholdersImplemented project organization structure with documented roles, responsibilities, and staff performance criteriaLong term IT resources strategy is defined to support development and operational outsource decisionsIntegrated Program Management Office is responsible for projects from inception to post implementationProgram Management Office is under the management of the business units and requisitions and directs IT resources to complete projectsOrganization-wide planning of projects ensures that users and IT resources are best utilized to support strategic initiatives
Source: CobiT 3rd Edition, Management Guidelines
CobiT® PM Success Factors Experienced and skilled project managers are availableAccepted and standard project management process in placeSr. Manager sponsorship of projects, and stakeholders and IT staff share in the definition, implementation, and management of projectsThere is an understanding of the abilities and limitations of the organization and the IT functions in managing large, complex projectsOrganization-wide project risk assessment methodology is defined and enforcedAll projects have a plan with clear traceable work breakdown structures, reasonably accurate estimates, skill requirements, issues to track, quality plan, and transparent change process (my note – effective PM methodology enforced)Transition from implementation team to operational team is a well-managed processSystem development life cycle methodology has been defined and is used by the organization
Source: CobiT 3rd Edition, Management Guidelines
CobiT® PM Key Goal IndicatorsIncreased number of projects completed on time and on budgetAvailability of accurate project schedule and budget informationDecrease in systematic and common project problemsImproved timeliness of project risk identificationIncreased organization satisfaction with project delivery servicesImproved timeliness of project management decisions
CobiT® Project ManagementKey Performance Indicators
Increased number of projects delivered in accordance with defined methodologyPercent stakeholders participation in projects (involvement index)Number of project management training days per project team memberNumber of project milestones and budget reviewsPercent of projects with post-project reviewsAverage number of years of experience of project managers
ConclusionIT PMOs can improve IT project delivery performanceOne size does not fit allPMO Support/Control model most usefulClear charter, top down support, & bottom ups buy is key to PMO successPMO performance metrics should focus on value to key stakeholdersCMM valuable framework for establishing and evolving PMO
