Setting Up A Project Management Office

IT Project Management OfficePaul R. Astiz, MBA, PMP, CDPPaul.Astiz@Mitretek.org(703-610-2435)

Presentation ObjectivesProvide 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 ConsiderationsCharterCulture ChangeImplementation StrategiesStaffing/SkillsPerformance MetricsCritical 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 ManagementNov, 2003, Federal CIO Council recommends setting up Federal PMO to standardize PM practicesJun, 2004, SC requires management of major and inter-agency IT projects to use standard practices and be managed by PMPJan, 2001, NY sets up PMO to standardize management of technology projectsJun 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 projectsLack of coordination of activitiesPoor project management practicesLack of standardization of PM methodologyNeed for consolidated project reporting to drive prioritization/decisionsMore focus on IT project ROI More focus on alignment of IT projects with business strategyStrategic value and dependency on IT applications/technologiesIncrease in IT Project workloadProliferation of IT project proposalsDelays in getting projects approvedMore complex IT environment and solutionsEnterprise solutions/cross-functional projectsDistributed development organizationsOutsourcing and contracting out of IT projects

PMO BenefitsCompanies that implemented successful PMOs achieved:80% ROI20% reduction in project time30-35% successful project deliveryCompanies without a PMO experience 74% project failure rateSource: Forrester Research

PMO ModelsOne size does not fit allPMO drivers/business needsPM maturityVision and goals of sponsorBusiness/organization missionOrganization sizeNumber of projectsPolitical and cultural environmentTactical vs. strategicInternal vs. external focusDepartmental vs. enterprise (IT vs. LOB)Single vs. multipleStaff vs. line organization

PMO Support/Control ModelSUPPORTCONTROLProject administrative supportPM standards, methodology, processesProject Consulting and mentoringPM coaching/training/certificationIntegrated Project ReportingIssue Tracking/ReportingMaster Project ScheduleProject Document RepositoryPM tools and tools supportProject AuditsCost and Schedule ControlBusiness CaseProject ApprovalProject PrioritizationProject ManagementResource ManagementIT Asset ManagementProject Portfolio Management

Key ConsiderationsPMO charterCulture changeImplementation strategyStaffingMetrics/PerformanceSuccess factorsMaturity of Project Management Practices

PMO CharterCharter ScopeBusiness NeedsSponsorPublic vs. Commercial PM MaturityCharter DocumentMission/VisionGoals/Objectives SponsorService OfferingPMO GovernanceKey Performance MetricsFunding model

PMO - Culture ChangeNatural resistance to changePolitical landscapeWinners/LosersManagement Support Degree of cultural changePM maturityPMO charterExisting skill levelKey driver implementation strategyChange ManagementAssess impact of change InformEducateInvolve

PMO Implementation StrategiesStrategy driversPMO charterPM maturity Sponsor and management supportPMO driversPerception of valuePolitical environmentCulture/Value SystemEvolutionary/IncrementalLower implementation risksLower start up costsWill take longer to demonstrate ROIMore suitable if high resistance to change and low management supportRevolutionary/WholesaleHigher implementation risksHigher startup costsMay be able to demonstrate ROI quickerMore suitable if crisis or recognition at high level that change is imperative

PMO Staffing/SkillsStaffing ApproachesIn-house resourcesHybrid (In-house/contractors)Ad hoc contractors augmentationSkillsPMO Director/ManagerProject ManagerProject Portfolio ManagerPM Process/Methodology TrainerRelationship/Account ManagerTools Support/AdministrationAdministrative SupportLibrarian/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 metricsExecutive focus - Measure and demonstrate value to businessHelp justify existence during downsizingExpressed primarily in dollars savings/revenue or ROITend to be few and harder to deriveFunctional performance metricsInternal focus - Measure and demonstrate performance or quality of PMO functionsHelp justify PMO budgetHelp improve PMO performance May require baseline or benchmark to demonstrate performanceExpressed primarily in percent or counts Tend to be many depending on functions performedMust be selectively chosen so as not to overwhelm Service level metricsCustomer focus - Measure and demonstrate service level or quality of service to customerHelp improve and maintain customer satisfactionSLA/SLOExpressed in a variety of waysSelect on key and most important value to customer community

Success FactorsClear CharterCreates clear expectationsDefines boundaries for implementationTop-Down SupportBottoms up Buy-inSponsor - Reporting to senior executiveStrong LOB representation Communication/PRPromotion of servicesEducation of valuePerformance 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 GovernanceIT 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 domainsPlanning and OrganizationAcquisition and ImplementationDelivery and SupportMonitoringPM CMM part of CobiT® Planning and Organization domainSources: 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/ automatedSource: CobiT 3rd Edition, Management Guidelines

CobiT® Model ComponentsDefines 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 indicatorsSource: CobiT 3rd Edition, Management Guidelines

CobiT® Project Management Process Control StatementControl 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 undertakenSource: CobiT 3rd Edition, Management Guidelines

Level 0 – Non ExistencePM techniques not usedOrganization does not consider business impact of poor project performanceSource: 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 budgetsSource: 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 managersSource: 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 definedSource: 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 initiativesSource: 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 organizationSource: 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 IndicatorsIncreased 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

Setting Up A Project Management Office

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