11.00 - Michael Cooch

Evolving your PMO
30th September 2010
Michael Cooch Adam Cowmeadow

Copyright 2010 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Seminar Structure
The Theory of Evolution Introduction to the concept of maturity and summary of the Value of a PMO
The Evolutionary Process Differing views of evolution and iterative steps to improve PMO maturity
Evolutionary Aspiration Understand the business motivation behind PMO aspirations
Environmental Assessment Going beyond the functional to build a platform for PMO success
Evolutionary Plan Defining activities to improve PMO functionality and mitigate environmental risks
Copyright 2010 Accenture All Rights Reserved.
The Theory of Evolution

Sources Background
In our previous Value of a PMO presentation we demonstrated that*: PMO uptake is increasing (from 47% in 2000 to 77% in 2006) but project performance is not** Deploying a PMO does not lead to performance improvement in itself. It is only when the PMO increases maturity that tangible improvement occurs***
Gartner White Papers
Accenture Knowledge Base Published Works & Articles
LinkedIn PMO Groups
Center for Business Practices (CBP)

*Source: Value of a PMO Keynote at Project Challenge Spring Show 2010 **Source: Project Management The State of the Industry, Centre for Business Practices (CBP) Study ***Source: Value of Project Management Centre for Business Practices (CBP) Study ****Source: Making the Business Case for a Highly Focused and Effective PMO Michael Hanford, Gartner 2010
The key to obtaining an approval to form a PMO rests with the identification of solid benefits, and value, to the organization and their quantification that will accrue to the organization if a PMO is enabled and functioning****.
3
What is PMO Maturity?

PMO Maturity levels indicate the effectiveness of project execution support
Level 3: Grown-up/Defined Standard Processes A solid PMO which experiences more successes than failures. Most processes have consistency, most key project data is collected but only basic analytics are done and reporting has introduced some metrics. Plays a role in some project successes (and failures).
Level 4: Mature/Managed A very successful PMO which has good sponsorship. All core processes are consistent, all key project data is collected, solid analytics are undertaken and reporting is primarily data-driven. Plays an important role in the success of the project environment.
Level 5: Best in Class/Optimised A world-class PMO which has complete sponsorship. All core processes are consistent and continuously improved, all key project data is collected, analytics are comprehensive and reporting is completely data-driven. Plays a critical role in the success of the project environment.
PMO Maturity
Level 2: Established/Repeatable A recognised PMO is operating but is in need of improvement. Some processes have consistency, some project data is collected but little of it is analysed and reporting is still primarily commentary based. Plays a limited role in project success.
Level 1: Immature/Initial A named entity (identified as a PMO) is operating but, in general, processes are inconsistent, project data isnt collected/used and reporting is broadly qualitative. Has little influence on project success.
Level 0: Absent - No identifiable PMO operating. No influence on project success. Copyright 2010 Accenture All Rights Reserved.
0 0: Absent 1: Immature / Initial 2: Established / Repeatable 3: Grow n-up / Defined 4: Mature / Managed 5: Best in Class / Optimised
How does building PMO maturity help?

A recent global survey demonstrates the performance differentiation (against schedule, budget and quality) between high and low maturity PMOs. This includes a 24% improvement in customer satisfaction between Level 1 and Level 3 PMOs (Level 4 and 5 are not included due to lack of statistical data at these points, however extrapolation clearly trends positively) and a 65% improvement in the optimal allocation of resources
Level 3 (Grown up) PMOs support project delivery on schedule & to budget 64% more often that their Level 1 (Immature) PMO competitors.
Organisational Performance Improvement between Levels of PMO Maturity

Performance Improvement
70% 60% 50% 40% 30% 20% 10% 0%

Organisation financially successful Shareholders satisfied Projects aligned to strategy Project customers satisfied Organisation w orks on the right projects Strategy executed to plan
64% 43% 24% 10% 0% 0% 0% 0% 10% 0% 11% 0% 18% 0% 0% 44% 36%
65%
39% 23% 11% 0% 0%
27%
Projects on Resources allocated schedule & budget optimally
Maturity Level
Measures of Performance
*Source: The State of the PMO - 2007-2008 A Benchmark of Current Business Practices
Copyright 2010 Accenture All Rights1 2 3 Reserved.
Center for Business Practices (CBP) Report
How mature are organisational PMOs?

Less than 1 in 10 PMOs are considered high-performers (Level 4 or 5) Less than 1 in 100 is considered Best in Class (Level 5)
Maturity Levels of PMOs

Evidence suggests the cost to implement a Level 3 to 5 PMO is heavily outweighed by the delivery benefits realised within an organisation.
60% of all organisations could substantially benefit from improving the maturity of their PMO.
Level 5: Best in class 0.7% Level 4: Mature, very successful 8.7%
Level 1: Immature 25.7%
Level 3: Grow n up, more successes than failures 30.4%
Level 2: Established, in need of improvement 34.4%
*Source: The State of the PMO - 2007-2008 A Benchmark of Current Business Practices Center for Business Practices (CBP) Report
Seminar Structure
The LinkedIn PMO Maturity Case Study*

Over 150 responses** Lots of vigorous debate Highest proportion of responses - it is Impossible Nearly 7 in 10 said it was Impossible or Very Challenging
How realistic is it to move a PMO from Level 0 to Level 4 in 12 months?
44% 45% 40% 35% 30% 24% 25% 20% 15% 10% 5% 0% Impossible Very Challenging Difficult Intermediate Simple
* Responses were categorised according to our interpretation i.e. This was not a formal survey ** Multiple responses, from the same contributor, were unified where possible (but it is possible that some slipped through the net)
18% 12%
2%
The Evolutionary Process

Match the pace of evolution with the knowledge of the ongoing (and possibly changing) organisational conditions
Define Aspiration
Track PMO Value
Assess Environment & PMO Maturity
Implement Change
Design Integrated Plan
Seminar Structure
10
Business Driven Aspiration/Motivation of Project Sponsor

Aspiration/Motivation
Level 1
Focus on tracking all work (no off-radar activity) Understand high-level project risk
Level 2
Controlled progress through formal checkpoints Process standardisation Hub of best practice Improve PM competency Enhance ROI from Level 1
Level 3
Comprehensive process standardisation Data-driven decisionmaking Manage project interdependencies Monitor and manage scope/change control Use risk to calculate project contingency Enhance ROI from Level 2
Level 4
PMO provides analytics & intelligence Project prioritization (in Portfolio environments) Integrated resource management (and capacity planning in Portfolio environments) Enhance ROI from Level 3
Level 5
PMO Organisation is self-iimproving Enhance ROI from Level 4
11
Seminar Structure
12
PMO Functional Maturity Assessment
3. Findings and Recommendations
1. The Interviews
2. The Quantitative Results
3. Findings & Recommendations
4. Improvement Log
5. PMO Functional Plan
The Accenture Model is based on quantitative assessment of functional capability in 11 key areas over 261 questions:
Assessment of PMO functional capability against a 5 tier scale for each Functional Area
Functional Maturity by area determines the main focus areas.
Based on Knowledge-base and prior, collective, lessonslearned, the assessor will define a series of specific improvements
Improvements are then crafted into a project plan for implementation.
13
Sample PMO Maturity Assessment (1/2)
Maturity is a concept to help frame improvement. It is not the panacea to all ills
Whilst this maturity representation is staged there are also models that are continuous which are equally valid and beneficial as frameworks
Project Management Maturity Models can be substituted in lieu of PMO models The maturity spectrum was established by benchmarking a number of PCS-controlled PMOs
Copyright 2010 Accenture All Rights Reserved. 14
Maturity Model Examples

Portfolio, Programme and Project Management Maturity Model (P3M3) cross referenced to P30
OPM3 Organizational Project Management Maturity Model
Project Management Maturity Model J Kent Crawford

Kerzner Project Management Maturity Model (KPMMM) Harold Kerzner Gartner PPM Maturity Model Accenture PMO Maturity Assessment
Copyright 2010 Accenture All Rights Reserved. 15
Structural considerations for PMO

Structural Legacy The Socio-political factors affecting a PMOs organisational environment
When creating a PMO...first clearly articulate the main business problem you are trying to solve, and then define some key goals for the PMO in addressing that problem **
(The PMO) must drive much higher ROI than the projects it oversees. In this sense, it becomes a value machine... (it) must help executives meet their strategic goals by providing a single point of knowledge for PM intellectual property... (it) must help executives execute*
* Source: Advanced project portfolio management and the PMO (paraphrased), Gerald I. Kendall, Steven C. Rollins, J. Ross Publishing, 2003 ** Source: Clearly Define Your Goals Before Creating a PMO Clearly Define Your Goals Before Creating a PMO Daniel B. Stang Gartner 2009 ***Source: PMOs: One Size Does Not Fit All Donna Fitzgerald Gartner 2008
PMOs fail, by some estimates, more than 50% on their first try... We believe that this is the direct result of not matching the PMO mission and objectives to the real needs of the organization***
16
Functional considerations for PMO

Functional Legacy The operational factors that influence PMO processes and tools
In low-performing organisations project management performance (and PMO performance) is not measured nor is appropriate accountability for outputs assigned**
It has been shown that deploying a PMO does not lead to performance improvement in itself. It is only when the PMO increases maturity that tangible improvement occurs*.
*Source: Value of Project Management Center for Business Practices (CBP) Study **Source: The State of the PMO - 2007-2008 A Benchmark of Current Business Practices Center for Business Practices (CBP) Report *** Source: Closing the Gap - Economist Intelligence Briefing Unit
To prove that a project was a success, it is necessary to measure more than timeliness and adherence to budget; companies should also measure outcomes against project goals, determine whether the project delivered bottom-line results and assess the satisfaction of clients and stakeholders with the project. ***
17
Resource considerations for PMO

Resource Legacy The level of information, expertise and finance available for PMO activities
A project staffed with uniformly very low-rated personnel on all capability and experience factors would require 11 times as much effort to complete the project as would a project team with the highest rating in all the above factors**
In low-performing organisations PMO staff are much less likely to have formal project management qualifications, hands-on-experience and extensive project management knowledge*
*Source: The State of the PMO - 2007-2008 A Benchmark of Current Business Practices Center for Business Practices (CBP) Report **Source: Software Engineering Economics Prentice Hall, Englewood Cliffs, NJ, p431 Boehm B (1981) *** Source: Closing the Gap - Economist Intelligence Briefing Unit
Training, mentoring and other development activities for project management professionals should be tied to specific skills gaps and career planning.
18
Cultural considerations for PMO

Cultural Legacy The level of organisational understanding of, and appetite for, PMO activities
In low-performing organisations PMOs face much greater difficulty in being accepted as a real value-adding proposition, at all levels of their organisation, when compared to highperformers *
To maintain a competitive advantage, and maximise value, leaders must link every PM decision to the strategic goals of the organisation. Leaders who continue to focus on improving PM strategies and methodologies will garner the greatest long-term success. **
*Source: The State of the PMO - 2007-2008 A Benchmark of Current Business Practices Center for Business Practices (CBP) Report ** Source: Closing the Gap - Economist Intelligence Briefing Unit
In low-performing organisations executive sponsorship is approximately 60% less likely to have an appreciation of the strategic value of a PMO *
19
PMO Environmental Assessment Framework

Level of readiness/effectiveness of governance construct (e.g. unified vs. siloed) Level of project/programme/portfolio complexity Size of the delivery organisation (headcount) Level of implicit PMO power Type of organisational structure (projectized/matrix/functional) Level of alignment to enterprise strategy Level of distributed working Required PMO functional blueprint Level of methodology constraint on PMO Level/value of supporting PM software (and configuration) in place Breadth of PMO delivery lifecycle responsibilities (e.g. benefits realisation included?) Level of policy/contractual constraint on PMO
Structural Legacy
Functional Legacy
Operational PMO Maturity
Cultural Legacy
Level of understanding of the Value of a PMO Level of executive buy-in Level of alignment between goal-setting > results/behaviour > performance assessment Level of organisational buy-in Type/magnitude of the cultural/behavioural change (e.g. distributed teams) Copyright 2010 Accenture All Rights Reserved.
Resource Legacy
Level of organisational resource competency (e.g. change management/project management etc) Level of investment (budget/FTE) available for change Level of PMO team resource competency Level of PMO leadership experience (to drive change) 20
Seminar Structure
21
Structural Risk Mitigation

Structural Legacy Functional Legacy
Cultural Legacy
Resource Legacy
Structural Risk Mitigation
Develop PMO Charter
Understand PMO Role Integrate Disparate PMO Functions Develop Functional Relationships
Align PMO to Enterprise Strategy Design Fit-forPurpose Governance
Position the PMO to enable Strategy execution through full involvement in Programme/Project Governance
22
Functional Risk Mitigation

Develop Business Case
Leverage / Record Lessons Learnt
Cultural Legacy
Resource Legacy
Functional Risk Mitigation
Tooling for automation
Regularly Assess PMO Maturity
Define Performance Metrics
Establish and Baseline WBS Effective Knowledge Management Tailor / Waiver PMO Scope
Publish Metrics
Improve PM Methodology
Develop a PMO Business Case that harnesses Management Information to evolve Project/Programme operations
23
Resource Risk Mitigation

Recruit Experienced PMO Manager

Align Roles to PMO Objectives Develop PMO Training Curriculum
Cultural Legacy
Resource Legacy
Resource Risk Mitigation
Build Project Team Relationships

Build Qualified Team
Ringfence Sufficient PMO Budget
Build and maintain a qualified and relevant team using all the resources at the PMOs disposal
24
Cultural Risk Mitigation

Send PMO to the coal-face Collaborate & Support (not police) Embed Value of PMO Concept Create Competitive Spirit Establish PMO Survey
Secure and Maintain Buy-In
Cultural Legacy
Resource Legacy
Cultural Risk Mitigation
Manage Stakeholder Expectations Design Value Based Project Training Develop Systems & Process Evangelists Embed Cultural Flexibility in Team
Create a PMO value culture on the Programme/Project and constantly evaluate stakeholder expectations and satisfaction levels
25
Accelerating your PMO Evolution*

PMO Functional Maturity Assessment Results Environmental Assessment Results
Accelerated Plan Enhances the functional improvement plan with a defined environmental risk mitigation activities to accelerate PMOs improvement Baseline Plan Only takes into account the activities needed to address the functional gaps and risks are dealt with on an ad-hoc basis
L5 PMO Maturity Level
text
L4 L3 L2
text
Logo
text
Q1 Q2 Q3 Q4 Q5 Q6
PMO Functional Plan
Risk Mitigation Plan
L1
L0 Timeline
* NB: The graphics and statistics on this page are indicative and used to demonstrate approximate proportions and trends
26
Summary
Evolving PMO maturity drives real value
Be clear on the sponsors aspiration

Assess beyond the functional Create an integrated plan
(process improvement and risk mitigation)
27
Follow-ups, Questions and Answers
28

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Evolving your PMO

30th September 2010

Michael Cooch Adam Cowmeadow

Evolutionary Aspiration Understand the business motivation behind PMO aspirations

Copyright 2010 Accenture All Rights Reserved.

The Theory of Evolution

Gartner White Papers

Accenture Knowledge Base Published Works & Articles

LinkedIn PMO Groups

Center for Business Practices (CBP)

Copyright 2010 Accenture All Rights Reserved.

What is PMO Maturity?

How does building PMO maturity help?

Organisational Performance Improvement between Levels of PMO Maturity

70% 60% 50% 40% 30% 20% 10% 0%

64% 43% 24% 10% 0% 0% 0% 0% 10% 0% 11% 0% 18% 0% 0% 44% 36%

39% 23% 11% 0% 0%

Projects on Resources allocated schedule & budget optimally

Copyright 2010 Accenture All Rights1 2 3 Reserved.

Center for Business Practices (CBP) Report

How mature are organisational PMOs?

Maturity Levels of PMOs

Level 5: Best in class 0.7% Level 4: Mature, very successful 8.7%

Level 1: Immature 25.7%

Level 3: Grow n up, more successes than failures 30.4%

Copyright 2010 Accenture All Rights Reserved.

Level 2: Established, in need of improvement 34.4%

Evolutionary Aspiration Understand the business motivation behind PMO aspirations

Copyright 2010 Accenture All Rights Reserved.

The LinkedIn PMO Maturity Case Study*

How realistic is it to move a PMO from Level 0 to Level 4 in 12 months?

Copyright 2010 Accenture All Rights Reserved.

The Evolutionary Process

Track PMO Value

Assess Environment & PMO Maturity

Design Integrated Plan

Copyright 2010 Accenture All Rights Reserved.

Evolutionary Aspiration Understand the business motivation behind PMO aspirations

Copyright 2010 Accenture All Rights Reserved.

Business Driven Aspiration/Motivation of Project Sponsor

Copyright 2010 Accenture All Rights Reserved.

Evolutionary Aspiration Understand the business motivation behind PMO aspirations

Copyright 2010 Accenture All Rights Reserved.

PMO Functional Maturity Assessment

3. Findings and Recommendations

2. The Quantitative Results

3. Findings & Recommendations

5. PMO Functional Plan

Functional Maturity by area determines the main focus areas.

Improvements are then crafted into a project plan for implementation.

Copyright 2010 Accenture All Rights Reserved.

Sample PMO Maturity Assessment (1/2)

Maturity Model Examples

Project Management Maturity Model J Kent Crawford

Structural considerations for PMO

Copyright 2010 Accenture All Rights Reserved.

Functional considerations for PMO

Copyright 2010 Accenture All Rights Reserved.

Resource considerations for PMO

Copyright 2010 Accenture All Rights Reserved.

Cultural considerations for PMO

Copyright 2010 Accenture All Rights Reserved.

PMO Environmental Assessment Framework