Building An Enterprise PMO
- 1. Establishing a Business Focused Project Management Office in a Large Organization Lacey Newbry, MBA, CSSBB, PMP, RDN/RD, LD Sr. Director of Tools and Standards, Enterprise Project Management Office Dignity Health Lauren Krikke, PMP, LSSBB Project Manager, Enterprise Project Management Office Dignity Health WHITE PAPER May 2016
- 2. Table of Contents I. Executive Summary......................................................................................................... 3 II. Mission and Vision......................................................................................................... 3 III. Timeline........................................................................................................................ 4 IV. Organizational Structure............................................................................................... 5 V. Governance .................................................................................................................... 6 VI. Intake Process ............................................................................................................... 7 VII. Models and Methodology............................................................................................ 7 VIII. EPMO Responsibilities.............................................................................................. 8 IX. Project Management Software...................................................................................... 9 X. Results............................................................................................................................ 9 XI. Lessons Learned ......................................................................................................... 10 XII. Conclusion................................................................................................................. 11
- 3. I.Executive Summary Dignity Health is made up of more than 60,000 caregivers and staff who deliver excellent care to diverse communities in 21 states. Headquartered in San Francisco, Dignity Health is the fifth largest health system in the nation and the largest hospital provider in California. For many years, Dignity Health has boasted a strong Information Technology (IT) Project Management Office (PMO) successfully executing IT projects across the enterprise. While this team is highly effective implementing IT focused projects, there was little project management support for high level operational business initiatives. Dignity Health’s Executive Leadership Team saw a need for enterprise wide project management support on governance, project portfolio management and standardization of tools and methodologies. The decision to create an Enterprise Project Management Office (EPMO), focused on strategic operational business needs, was made in December of 2014. The impetus for the decision was due in part to several poorly executed enterprise projects that created increased costs related to schedule delays, lack of thorough due diligence and weak coordination of facility and system resources. Once given the green light, Dignity Health was able to launch a fully functioning business focused EPMO in less than 3 months. This paper details the timeline, organizational and governance structure, delivery models, intake process, integration with the IT PMO and future direction/lessons learned for launching an EPMO in a large organization. II.Mission and Vision Performance Excellence (PE), a group within Dignity Health responsible for process improvement, was a core partner during the formation of the EPMO. The two groups are grounded in the core belief that through the contribution and engagement of staff, physicians, volunteers and patients, the provision of care and operational processes can be greatly improved. Together, PE and the EPMO focus on maximizing value-added activities by eliminating waste, variability and inflexibility through the application of Lean, Six Sigma, Project Management and Human Centered Design. Realizing the opportunity to create a new hybrid approach utilizing PE methods in combination with traditional PM methods, the leadership team for PE and the EPMO came together to craft a joint mission and vision in strategic alignment with the existing mission and vision of Dignity Health. EPMO/PE Vision Impact and deeply empower people to build a better working world.
- 4. EPMO/PE Mission Fueled by relentless optimism, we deliver things that matter in strategic alignment with the mission and vision of Dignity Health, trusting there are different ways to change together. III.Timeline The direction from leadership was to quickly build the EPMO to guide business operations in defining project vision and scope, initiation/planning and implementation from the highest level of leadership (see Figure 1). The core leadership team of the EPMO was in place within a few months of launch. A project management tool was adopted with a custom build specific to the EPMO and project managers (PM)s were hired into the newly formed group. The intake process, tools, standards and templates were all built while new projects came online, giving PMs the feeling the road was being built behind them as they trail blazed projects into new areas of Dignity Health. An innovator’s mindset was needed from the onset to immediately start accepting projects while core standards were built from lessons learned. There was significant work done to develop the culture of the EPMO, including a collaboration to establish a vision and mission with PE. New team members were given a customized gift from the most recent new hire along with assignment of a work buddy on their first day. Team building activities were part of all meetings, to build trust and collegiality among the new team members. Many of the new PMs were accustomed to a highly structured and stable environment, and thus were asked specific questions to gauge their cultural fit and comfort level in a less structured and more fluid project environment. PMs uncomfortable with the iterative improvement process and flexible nature of the EPMO were supported in transitioning to other roles. The first project in the EPMO started in February of 2015. The formal governance model and organizational structure was presented to the executive leadership team in May after project work had commenced. The EPMO leadership group identified early on to be successful, full support and collaboration with the IT PMO was crucial. Regular communications were established coordinating new and existing project efforts. While IT and the EPMO continue to track projects in separate tools, status reports for both PMOs are routinely communicated with future plans to integrate high level project data via a business intelligence dashboard. Figure 1
- 5. IV.Organizational Structure The organizational structure was built with the expectation that all members of the team are able to talk freely and openly with one another regardless of title or specific project work. This concept was established in the hiring and recruiting stage of the EPMO formation, it was imperative for members of the EPMO to be empowered to collaborate with one another free of title or position. The dual reporting structure for the leader of the EPMO was to the Chief Administrative Officer and Chief Operating Officer to enable regular communication with Dignity Health’s executive level leadership. The short chain of command allows for high visibility and enables the EPMO to become aware of strategic projects as they happen. The direct line of authority to an Executive Leadership team member allows barrier removal when PMs are faced with road blocks relating to schedule, cost and resources. Executive Vice President/ Chief Administrative Officer SVP Operational Effectiveness & Performance Excellence VP Enterprise PMO & Performance Excellence Executive Coordinator Senior Director, EPMO Project Manager Project Manager Project Manager Project Manager Senior Director, EPMO Project Manager Project Coordinator Project Coordinator Project Manager Executive Vice President/ Chief Operating Officer EPMO Director Figure 2
- 6. V.Governance The tight timeline to implement required a flexible governance model for success. Unlike a traditional IT PMO where governance is typically more strict and formalized due to the nature of the technical standards, the EPMO needed to be nimble, collaborative, creative and strategic. Many projects and initiatives at this level cross multiple operational and administrative levels which required a more fluid approach. The model adopted consists of two major directions: 1) top-down, where individual projects are managed and directed granularly and 2) bottom up so all projects are reported and escalated globally (see Figure 3). This structure allows for steering committees to direct executive sponsors when setting requirements and expectations for Project Managers. Project Managers report upward to the EPMO, where reports are vetted and provided to the executive leadership team for information and action. The decision was made to categorize projects by strategic pillars. Each member of the Executive Leadership Team has ownership over a pillar which allows for reporting by functional area. Figure 3
- 7. VI.Intake Process As the popularity grew for EPMO services based on successful outcomes of projects, the intake process was formalized. There were no limits to projects in the embryonic phase while the EPMO was building good will and trust throughout the organization. Once operational, the intake process illustrated below was adopted: Because the EPMO sits at the highest level of the organization, it was integral to the intake process to limit requests to Vice President (VP) or higher to both maintain the strategic importance of projects and to limit the overall volume of projects that the EPMO could successfully execute. The EPMO maintains a level of authority to approve projects within specific parameters, beyond the defined parameters projects need to be approved by executive leadership. Projects that do not meet the above criteria convert to the supported model discussed in the Models and Methodology section below. The goal is to not leave any project in the organization “stranded” without some level of support. Traditionally, only projects with an IT component benefitted from formal project management support. VII.Models and Methodology The EPMO introduced two models for meeting the business project management needs of the organization: managed and supported. The managed model is defined as all projects actively run and managed by the EPMO PMs. PMs are responsible for the final delivery and hand off of projects in this model. The EPMO ensures a standard methodology; tools and templates are maintained for all managed projects. VP or higher request project Initial Assessment and Discussion Build Business Case Review for Approval (based on $ and resources) Launch Project EPMO Intake Process Figure 4
- 8. The supported model is a way for the EPMO to extend its reach without running every project across the enterprise and relies on building project management capabilities throughout the organization. Individuals outside of the EPMO are given tools, templates and training for non-project managers to work independently. EPMO PMs provide mentorship and support as needed. Projects in the supported model are tracked in the EPMO project management software tool and reported as part of the overall project dashboard, providing senior leadership insight into the breadth of work across the system. The methodology used in the EPMO is unique. In addition to utilizing project management principles, all PMs are trained in Lean/Six Sigma methodology and Human Centered Design. PMs are given freedom to utilize the tools best suited to their project. The EPMO has developed templates, tools, processes, decision trees and a custom intake module that allows flexibility with multiple project types. The eventual goal is to use the tools, templates and learnings to provide consulting capability to external healthcare companies or other industries wishing to build a strategic business project management office. The EPMO, in partnership with PE, have developed a specialized methodology and common set of tools used on all projects regardless of type, creating a hybrid approach to traditional project management which includes the principles of Lean/Six Sigma, process improvement and design thinking. VIII. EPMO Responsibilities Like any traditional PMO, the EPMO has responsibilities to lead projects from inception to completion, assume accountability for project success, communicate effectively with stakeholders, manage the project team, remove obstacles and provide oversight. The EPMO PMs provide project management mentoring in the support Model. PMs are encouraged to spread knowledge and skills to non-project managers working on business projects. Supported projects are shorter in duration and smaller in scope. Non-project managers are assigned a PM mentor from the EPMO. The responsibility of the PM on a support project is to teach, train and provide information about the Project Management Life Cycle (PMLC) methodology, while helping to support the project from initiation to completion. The goal of the supported model is to provide the non-project manager with new skills to be able to better manage projects. The EPMO PM encourages the non- project manager to share the newly gained skills and knowledge within their own business units. One of the exceptional benefits of the EPMO is the team is closely aligned with the Performance Excellence (PE) department. By creating a partnership with PE, the EPMO is able to increase service offerings and provide support from various subject matter experts.
- 9. IX.Project Management Software Part of the success of the EPMO to date is the introduction of a project management software tool. The tool tracks projects allowing executive, sponsor and team reporting. The EPMO utilized a custom build to tailor the intake process and add custom workflows, decision trees, tools and templates based on the unique needs of a business- focused PMO without adding layers of extra work and approvals. The EPMO also provides the tools and training for non-project managers in the supported model. The deployment of the Project Management Software tool buffered by the custom development of tools, templates and methodology provided the basis for standing up an effective EPMO. The IT PMO currently uses a different project management solution; the plan is to utilize business intelligence software bringing all projects together in one dashboard to inform executive leadership on the extension of resources and the breadth of work being done across the system. The long term goal is to unify the IT PMO and the EPMO with one software solution while continuing to maintain separate governance models. X.Results Although very new, the EPMO already realized successes in the form of financials, key partnerships and collaboration with internal and external business units. Early on, the EPMO was asked to work on a project involving contracting external consultants. The original contract for outside consultants was $200,000. After reviewing the contract, the EPMO noted the majority of costs were related to project management fees. The contract was revised to $30,000 allowing external consultants to provide subject matter guidance and hand off implementation efforts to the EPMO at a significant cost savings to the business. The EPMO partnered on significant enterprise wide projects with internal process improvement resources. The unique skill sets of process improvement and project management are highly complementary and yield impressive results. The goal of entering into a relationship with a third party health provider for an existing geographic market significantly increasing hospital volumes in the emergency department, obstetrician and gynecology and surgery service lines proved ready made for the EPMO. The projected financial impact of the arrangement is $20-50 million in increased revenue. The success of this project created a tremendous amount of good will and confidence for the EPMO and highlighted the value of working with the PE group. The EPMO and IT PMO effectively collaborate as tactical business partners. Although always evolving, both teams agreed on clearly defined roles and responsibilities. The IT PMO is best positioned to manage processes such as IT security reviews, contracting and legal reviews and software implementations. The EPMO forms critical relationships, acts
- 10. as the voice of the customer, identifies detailed operational business requirements, process engineering and workflow improvement practices. The IT PMO and EPMO continue to create value for their collective customers. The groups are committed to honing the skills and expertise needed to support the overall business strategy of Dignity Health. “I have a great working relationship with IT on my projects. I utilize our project management software to tie our project plans together. They have responded really well to the tools in place. In a few scenarios, the IT PMO finished tasks significantly faster by using the EPMO as a resource. The EPMO is very lean and reactive and doesn’t have the bureaucracy or overhead that the IT PMO has, so some things are very simple and quick for us. This has worked as an advantage on both sides.” – EPMO PM “It has been a pleasure working alongside Dignity Health’s IT PMO. The close partnership that the Enterprise PMO and the IT PMO have created ensures the best for our internal customers. Together we are able to support both their technology projects and their business initiatives ensuring success for our organization.” –Senior Director, Enterprise PMO The number of projects directly managed by the EPMO increased 153% from the first 6 months of operation to the second 6 months without adding additional resources. The rate continues to grow as relationships are built with Dignity Health’s highest leadership level and financial, partnership, and collaborative successes are realized. XI.Lessons Learned The creation of the EPMO has been successful in supporting strategic business needs across the enterprise. With the success comes much learning. The phrase ‘fail fast’ has been used to describe how failures should not be viewed as mistakes but rather a force propelling you forward. Yet, who likes to fail? Instead, the culture of the EPMO has reframed missteps as learning and improving vs. failing fast or failing forward. The EPMO has learned and improved much in its short lifespan. The most important lesson learned is there is a need for a standardized approach. While all people appreciate some degree of structure, project managers tend to prefer a heightened degree of structure. They need to know they are checking all the boxes and meeting expectations. Everyone wants to feel like they are doing a good job. However, there is a difference between rigor in adhering to standards and rigidity. The process cannot be so rigid that it slows down work, creates additional tollgates or barriers and impedes progress. During the EPMO formation, because of negative experiences with overly structured PMOs in other organizations, the EPMO erred on the side of too little structure. The EPMO adjusted the approach over time to introduce a more clearly defined structure while affording the PMs flexibility and autonomy to get work done. Adjustments were made in real time versus waiting for a number of projects to close
- 11. before making changes. The flexible environment and unique methodology naturally allowed for the ability to insert and revise processes without major disruption to timelines and deliverables. The EPMO did not start out with a quality assurance process, partly because the need to get things off the ground was paramount and partly because the requirements were changing quickly in the early phases. Now that the dust has settled and a more robust process has been created, the rigor of a quality assurance plan is being implemented to protect the methodology and quality of projects. The EPMO uses methodology from the Project Management Body of Knowledge, Lean, Six Sigma and Human Centered Design. Knowing which tools or deliverables to use can be confusing when faced with hundreds of tools in the toolbox. A 5-S exercise, a common Lean Six Sigma tool used to organize the workplace, was conducted on the collective toolbox to determine the minimum required tools/deliverables for all projects. Outside of the minimum requirements, PMs are given the flexibility to use tools that fit their project needs. Because PMs are subject matter experts in all three modalities, they have the knowledge to determine what tools will most benefit their projects outside of the minimum requirements. The culture and acceptance of iterative improvement is the key driver of success for the EPMO. The ability to change quickly and continually try new things and improve is the reason for the positive results and trust the EPMO has gained across the organization. The people working in the EPMO create, promulgate and accept continuous improvement as part of their daily work. The EPMO leadership team provides a safe space that allows the group to iterate and innovate. It’s the culture which allows the creativity and individual pride in their work efforts. Finally, there is a major difference in a traditional PMO and an EPMO at the strategic level of an organization. Customers of the EPMO are the highest level executives at Dignity Health. Project managers working within the EPMO have direct interaction with these C-level leaders on a regular basis. Exposure to high executive leadership mandates specialized training, coaching, mentoring and hiring for the EPMO to foster meaningful relationships and gain trust at the executive level. These relationships are critical to the success and future growth of the EPMO. XII.Conclusion The formation of the EPMO was a strategic decision to help the organization move current and future strategic initiates forward that previously faltered without PM oversight. The accelerated pace of establishing a fully functioning EPMO in three months was challenging. Taking time initially to thoughtfully create a mission and vision was vital to the success of the EPMO and helped guide the development of the organizational structure, governance and methodology.
- 12. Finding the perfect structure is an iterative process and hiring PMs for culture fit versus skills is instrumental in building a nimble team that supports strategic priorities across the enterprise. In a relatively short time, significant results were realized in the form of partnerships, financials and internal and external collaborations. The structure continues to evolve as lessons from past projects are learned and the team is open to adjusting processes, workflow, and methodology. Looking ahead, the strong partnership the EPMO has forged with the Performance Excellence department compels focused attention. The two groups working closely together created so much value for the company, the next generation of the EPMO may involve joining forces in a new model embracing the iterative process to provide the best business services and expertise to the organization. In conclusion, to create a successful EPMO, the reporting structure must be at the highest level of the organization for visibility and clarity. Creating a mission and vision will guide the development and implementation of the EPMO and set the culture for the team. Providing a clear organizational structure, governance model, intake process, methodology, roles and responsibilities and hiring the right people have enabled the EPMO to gain early successes which are catalysts for future trust and support. ©2016 Dignity Health For inquires contact lacey.newbry@dignityhealth.org or lauren.krikke@dignityhealth.org