Raise Your PMOs Effectiveness to a Higher Level

1
Raise Your PMOs Effectiveness to a Higher
Level The 5 x 5 Approach Stephen A. Moritz,
Vice President Sogeti USA, LLC
2
Agenda

• Common Challenges facing PMOs
• Can PMOs add Value ?
• A Constructive Solution The Benefit Oriented
  PMO
• The 5x5 Approach
• Business Focus
• Knowledge Management Focus
• Methods Focus
• Resource Focus
• Risk Focus
• A Footnote On Sarbanes - Oxley

3
Why are You Here Today?

• You have a PMO, but desire better results
• You dont have a PMO, but are considering one and
  want insight on how to design and implement
• Project results (time, cost, quality) are less
  than desirable
• You are being asked to do more with less
• Project challenges (e.g. evolving requirements,
  complex projects, vendor dependent initiatives,
  matrixed resources, etc.) exceed the current
  management schedule to deliver
• Supervisors, peers and subordinates question the
  business value of a PMO
• For the dinner

4
Whats Wrong with a PMO ?

• In working with numerous clients, we have found
  that too many PMOs are audit-based organizations

• Focus on what happened, versus what should/could
  happen
• Request information, not providers of information
• Detailed, but inaccurate metrics
• Work checker, not work helper

• Methodologies are abstract and complicated
• Fear inhibits honest communication
• Lack of user/business input
• Inability to deal with changing requirements
• Unrealistic expectations (time and resources)

5
The Expectations are High

• PMOs can provide a solution to a rather pervasive
  set of problems (Center for Business Practices,
  Standish Group, Gartner, Carnegie Mellon
  University, PMI)
• Only 16 of all IT projects are successful
• 84 of them fail in some way
• 53 of IT projects come in late or over budget
• 31 were cancelled prior to completion
• Some studies suggest that the average project
  goes over budget by 189
• The average project lasts 222 longer than
  estimated
• However, there ARE documented examples of where
  PMOs have generated business value
• A Survey by Robbins-Gioia of companies
  implementing an ERP system found those which had
  a PMO experienced a 30 higher rate of project
  success than those which did not have a PMO
• The 50 of the respondents in the CIO-PMI survey
  who reported that their company has implemented a
  PMO, also reported a higher rate of project
  success (average reported increase was 46.4)
• 67 of organizations that had a PMO for more than
  4 years reported a significant increase in the
  rate of project success
• Increase the rate of project success
• Implement standard practices leading to higher
  project quality
• Reduce costs
• Align projects to company strategies and
  priorities
• Increased project quality, visibility and
  accuracy

The Problem
The Solution
6
How can my PMO Generate Business Value ?

• The 5x5 approach
• Emphasis on constructive support oriented towards
  consistency and repeatability consumers consume
  because it is in their best interest (not because
  they have to)
• Follows a consulting model the PMOs
  discernable value must exceed its cost
• Sensitive to customer/business needs the
  services are based on need and problems with a
  sensitivity to delivery and consultation
• Embraces a fixed price model instills a culture
  that budgets are rigid and motivates adoption of
  PMO tools to assure delivery stays consistent
  with constraints

7
Five by Five Model Enables a Consultative PMO
PMO as Value-Added Consultant
PMO as Auditor

• Implement Methodologies
• Consultative Support to Enhance Process and
  Deliverables
• Proactive Analysis of Metrics and Statistics
• Leadership
• Coaching
• Career development
• Training and education
• Service-oriented
• How can we help?
• Business Value

• Define Methodologies
• Process and Deliverable Audit
• Collect Metrics and statistics
• Publish Documents and Forms
• Audit / Review Projects
• Do as we say

8
The Tip of the Iceberg

• The 5x5 PMO model provides specification for best
  practices across five most-important
  disciplines
• Yet, not all aspects of this model fits the
  culture, maturity and setting of each client
  (one size does not fit all)
• These ideas are but a small sub-set of best
  practices that arise from the PM Body of
  Knowledge, our experience, CMM and Six Sigma

9
The Five by Five Approach
Business Focus
KM Focus
Methods Focus
Resource Focus
Risk Focus
10
Business Focus

• Implement project charter process
• Implement project portfolio management practices
  and tools
• Design and implement benefit realization
  practices
• Establish a customer feedback loop and use
  information for continuous improvement
• Implement Vendor Management Standards and Monitor
  Performance, Contracts and Service Levels

11
Business Focus
IT Strategy

• Implement project charter process
• PMO helps create I.S. / businessalignment
  through a charter process
• PM must complete project charter while
  keepingthe needs of the business in perspective
• PMO evaluates and quantifies charters
• Outcomes
• Project is in alignment
• Project not in alignment
• Project must be reconfigured to be in alignment
• The PMO must asses the value of the I.T.
  investment at every stage of the project
  (Business Value Realization)
• This information feeds back into the project
  charter

BusinessStrategy
ProjectCharter
Justification
12
Charters and Alignment

• Project sponsor documents key strategic
  characteristics and evaluation is also undertaken
  by IT Leadership
• Charter requires subjective assessment of project
  attributes versus business and technical strategy

13
Business Focus

• Project Portfolio Management (PPM) practices and
  tools
• Portfolio Management enables intuitive
  categorization, valuation and assessment of
  project and asset portfolios (and views) to
  optimize business impact
• A 360 view of what is in queue, what is being
  worked on, what resources are committed and
  available and how the IT investment correlates
  with business strategy
• By 2006, more than 50 of IS organizations will
  have adopted a mix of project portfolio
  management application services for managing team
  collaboration, allocating resources, and tracking
  utilization and costs (0.7 probability) -
  Gartner
• Elevates the information technology discussion to
  business terms
• Helps the organization achieve I.S. / business
  alignment goals
• Improves allocation of resources (people, money,
  technology)

14
PPM A Graphic Example
15
Business Focus

• Design and implement benefit realization
  practices
• Benefit realization activities should be an
  important component of a project plan
• What benefits are expected?
• How will they be tracked?
• Who will track them?
• How will results be communicated to affect future
  decisions?
• The old model PMO measures project success in
  terms of on-time and on-budget delivery of
  software as designed
• The value-added PMO ensures projects are not only
  completed on-time and on-budget, but also meet
  the expected business benefit
• PMO must evaluate, assess, monitor and optimize
  actual benefits versus expected benefits
• Example - SAP is implemented on-time and
  on-budget but the expected benefit of supply
  chain optimization or cost savings of legacy
  application decommissioning is never measured or
  realized

Benefit realization
Benefit realization
Benefit realization
Benefit realization
Benefit realization
16
Business Focus

• Establish a Customer Feedback Loop
• PMO should ask the I.S. organization and business
  users to complete a satisfaction survey
• What better way to stay customer focused?
• Establish expectations before a project begins
• After the completion of the project, the I.S.
  team and business rank the PMO and project team
  on its fulfillment of expectations
• Establishes a continuous feedback loop to drive
  education, improvement and statistical quality
  evaluation (e.g., Six Sigma)

17
Business Focus a Customer Feedback Example
18
Business Focus

• Vendor Management Standards and Monitor
  Performance,
• Contracts and Service Levels
• IT Services are often enabled by a quilt of
  vendor products that require a comprehensive and
  coordinated approach to manage services
• The PMO should work with the business and I.S.
  areas to
• Negotiate vendor contracts and entitlements
• Measure performance statistics
• Facilitate better vendor relations
• Look for economies of scale
• Ensure vendor strategies and procurement are
  consistent
• Vendor management support may help Business and
  IT buyers ensure that their vendor purchases are
  well-integrated into the existing and planned IT
  strategic direction

19
Knowledge Management Focus

• Develop an inventory of KM assets
• How created
• When created
• Why created
• Where stored
• Create an easy to use knowledge repository and
  evolve the system to meet changing needs,
  processes and methods
• Instill an information sharing culture
• Ensure knowledge cycle is integrated into
  processes
• Ensure KM supports collaboration across common
  jobs, functions and technologies

20
Knowledge Management Focus

• Develop an inventory of KM assets
• Perform an analysis of the documentation
  associated with
• projects and installed IT assets
• Documentation is no longer a discretionary
  complement to project execution
• Sarbanes-Oxley, HIPAA and other key regulations
  mandate that audit trails of project development,
  maintenance and production turnover be
  documented, included
• Control Points
• Separation of Duty
• Validation
• KM assets are valuable corporate assets that need
  to catalogued and made available for
  complementary project and program initiatives

21
Knowledge Management Focus

• Create an easy to use knowledge repository
• A knowledge repository is only effective if it
  adds value
• The knowledge repository must be focused on
• supporting the open flow of project information
  and
• documentation
• A knowledge repository may contain
• Project documentation
• Forms and templates
• How to articles and online training
• Auto-population of forms and templates based on
  known project factors
• Workflow to enable processes
• Access to previous and current project lessons
  learned and best practices
• Ability to search for similar projects
• Knowledge repository should support not only the
  project team but also all organizational
  stakeholders and in some instances, customers

22
Knowledge Management Focus
Make the content easy to find and use ..
23
Knowledge Management Focus

• Instill an information sharing culture
• The knowledge repository is the tool to enable
  sharing, but the culture must adopt an
  environment where project information is shared
  openly and honestly
• KM must support the needs of the users, not model
  the structure of the organization
• Employee evaluations should include an area for
  information sharing
• Processes and tools used in knowledge sharing
  must be setup to encourage, not discourage
  sharing
• Ranking of content
• Ensure quality control
• Content Collection Campaign
• Celebrate contributors

24
Knowledge Management Focus

• Ensure knowledge cycle is integrated into
• processes
• The knowledge cycle is
• Origination, internalization, organization,
  dissemination, cognition
• All processes should focus on ensuring project
  knowledge flows fluidly through this cycle
• If the process is not routinely adopted,
  knowledge will be lost and benefits are
  minimized
• Example If there is no way to organize project
  knowledge, there is no way for one to find and
  re-use the information
• Example If project team members do not
  understand (cognition) how to use the
  information, the knowledge will never be re-used
  either.

25
Knowledge Management Focus

• Ensure KM supports collaboration across
• common jobs, functions and technologies
• Connect people with information
• Connect people with people
• The KM infrastructure must support
• problem solving among like groups
• areas for online discussion
• a way to share best practice documents
• the ability to match projects based on like
  characteristics
• multi-dimensional classification of intellectual
  capital
• Collaboration can be one of the most powerful
  implementations of KM

Cows like cows !
26
Methods Focus

• Create a diverse set of methods models that can
  be applied to different types of IT projects
  (e.g., IAD/RAD, Infrastructure, Large vs. Small)
• Instill a culture of accountability with Project
  Managers and support their ability to meet
  requirements
• Establish a PM career path that addresses
  qualifications, training and performance
  standards
• Be a trusted advisor to I.S. projects by
  providing
• Acceleration Plans
• Risk Mitigation Plans
• Estimating Support
• Project Rescue Support
• Expand PM practices to address, embrace and
  implement change management that includes
• Technical considerations
• Business considerations

27
Methods Focus
Create a diverse set of methods models that can
be applied to different types of IT projects
(e.g., IAD/RAD, Infrastructure, Large vs. Small)
Methodology Toolbox CMM Rational Six
Sigma IAD Agile Prince 2 SDLC ERP
Maintenance Architecture Development
IAD
Project 1 Develop corp. website
Rational
Project 2 Migrate mainframe data
SDLC
Project 3 Develop data warehouse
28
Methods Focus

• Instill a culture of accountability with Project
• Managers AND all project team members
• Ensure project managers have the tools and
  know-how to succeed, but hold them accountable to
  deadlines, targets and budget goals
• Do the same for team members who have been
  delegated to
• Incentive outstanding project success.
• With poor performing projects
• Debrief and collect lessons learned
• Hold PMs partially accountable (circumstances
  dictate the level of accountability)
• Run like a sales organization. Encourage
  cooperation and competition at the same time.

29
Methods Focus

• Establish a PM career path
• In most organizations, there is no definitive
  career
• path to become a project manager. Most
  organizations
• assign people to manage a project based on an
  individuals past project successes
• Educate on enterprise-wide programs, such as
• Sarbanes-Oxley
• Security Model
• Enterprise Data Model
• A career path of PMs will help encourage more
  people to take PM track
• By knowing who is most interested in becoming a
  PM, the organization can focus its efforts on
  those people by giving them the proper training
  and experience necessary to hone their PM skills
• The best methodologies dont mean a thing unless
  projects are led by competent project managers

30
Methods Focus

• Be a trusted advisor to I.S. projects
• Consult with project leadership to address
  methods for key areas that complement project
  activities
• Acceleration Plans
• Communication Plans
• Risk Mitigation Plans
• Estimating Support
• Help project teams with issues and be proactive
• in helping them avoid project bumps and
  disasters
• Establish a positive, helping relationship
• Project Rescue Support

31
Be a Trusted Advisor
Help Project Teams implement all of the methods
that are appropriate to a project (may extend
beyond the SDLC)
32
Methods Focus

• Expand PM practices to address, embrace and
  implement
• change management
• The PMO should assure that projects incorporate
  change management into implementation plans
• Resolve all elements of change management
• Does the system mandate / require process changes
  ?
• Does the corporate data model need to be
  reconciled ?
• What are the effects on legacy systems and data
  archiving ?
• What will be required in terms of education and
  support ?
• What is the benefit to the user and have they
  been adequately sold on the new project / system
  ?
• Do not underestimate the resources required to
  make change happen
• Implementation should mean that users are using
  what was designed for them in the way intended

33
Resource Focus

• Analyze supply and demand of all IT resources
  required (people, network, architecture, testing,
  etc.)
• Implement processes to assure that resource
  allocation can be tracked and forecast
• Educate business resources on methodologies
• Assess, design and deliver education programs for
  current and future skills
• Functional
• Technical
• Establish a performance appraisal system for I.S.
  employees that
• Establishes expectations
• Provides 360 degree feedback
• Sets a path for future career growth within I.S.

34
Resource Focus

• The PMO has the proper view to assess supply and
  demand
• People - understand skills, availability, project
  allocation, time lines and needs in the future.
• Technical Environment - understand how a project
  may impact the need to increase/decrease, augment
  or build
• Development tools and platforms
• Testing environment
• Production resources
• Infrastructure
• Network
• Advise on shortages and excess capacity

35
Resource Focus
Implement processes to assure that
resource allocation can be tracked and forecast

• People on projects must provide information
  pertaining to their time
• Project time tracking should be reconciled with
  individual reports
• Apply scrutiny to project completion and time
  lines
• Ensure that peoples profiles are maintained and
  accurate
• Update profiles as projects are completed
• Use all available information to allocate,
  recommend, and assign resources as projects are
  being planned
• Project plans may need to be updated based on
  allocation

36
Resource Focus

• Work with business areas and provide basic
  education on
• PM methodologies and I.S. processes
• Project Methodology training should be given to
  all I.S. stakeholders
• Customers, users and senior management must
  understand how systems are developed and deployed
• If the business better understands the
  development process, they are more likely to
  proactively assist throughout the project
• This builds open dialog between the I.S.
  organization and the business areas

37
Resource Focus

• Design, Develop and Deliver Education Programs to
  I.S. resources that reflect

• The quality and performance statistics obtained
  via the feedback loop
• The existing technology platform
• The future technology platform
• The desired methods for building and managing
  systems

• Soft skills required to be successful
• Facilitation
• Problem solving
• Communication
• JAD

38
Resource Focus

• Establish a performance appraisal system
• for I.S. employees
• Establishes expectations
• Describes delivery expectations
• Describes education expectations
• Sets a path for future career growth within I.S.
• Better employee retention
• Tied to customer service / client feedback loop

39
Risk Focus

• Support the analysis and mitigation of business
  risk
• Support the analysis and mitigation of technical
  risk
• Quantify risk and plan appropriately
• Accept it
• Mitigate it
• Outsource it
• Understand and implement strategies to deal with
  regulatory/governance regulations
• Basel II
• Sarbanes Oxley
• Implement a Corporate Security framework

40
Risk Focus

• Business risk involves the potential impact the
  project has on the business, and may include such
  areas as

• How dynamic are the requirements
• Is there a definitive project sponsor and owner
• Are the requirements based on a consensus
• The project is directly linked to the
  organizations existing or future business
  strategy
• The project time line is inflexible or
  unrealistic
• The project involves multiple parties or vendors

41
Risk Focus

• Technical risk addresses the technology involved
  in architecting the project, and may include

• New technology to the organization
• Technology requirements that are not proven
• Limitations on available technical resources
• Estimates are not detailed or validates
• Work breakdown structures are not well defined
• The technical architecture has not been developed
  from business requirements (e.g., it has been
  prescribed or forced based on legacy settings)

42
Risk Focus

• Business and technical risks must be quantified
  and decisions made

• Accept it - then factor in the cost
• Mitigate it - then develop the mitigation
  plan.There still will be costs
• Outsource it - then ensure the transfer is a fair
  exchange and well-documented
• Not Proceed risks are too high
• and mitigating tactics to costly
• to move forward

43
Risk Focus

• Implement a corporate security framework
• Design and implement a corporate security program
  for IT
• Drive the technical and functional requirements
  for security across all data and applications
• Implement security procedures into methods
• Support through knowledge management
• Support through resource education
• Evaluate risks and mitigate
• Develop the program across
• People
• Process
• Technology

44
Risk Focus

• Understand and implement strategies to deal with
  regulatory/governance regulations
• The PMO has the perspective and view across the
  organization to drive ITs compliance with key
  regulations
• Sarbanes Oxley (SOX) - has significant
  consequence to the IT organization
• Section 302
• Section 404
• Section 409
• The PMO can design, implement and test for
  Control Objectives for IT
• The PMO can drive the technical and business
  requirements for other key regulations and audit
  needs

45
A Footnote on Sarbanes - Oxley

• SOX requires financial controls.
• Which requires IT controls.
• Which requires a Controls Framework be evaluated
  for IT (COBIT)
• Which requires standards, structure and
  compliance to standards
• Which can be achieved by a rigorous application
  of methodology

46
How Sogeti Helps Clients Implement
The 5 x 5 QuickStrike
As Is
To Be
47
The Five by Five QuickStrike

• We have developed specifications for five best
  practices in each of the five key disciplines
• We quickly assess the relevance of each best
  practice to a clients environment, maturity and
  culture or
• We determine maturity using the model provided by
  the Capability Maturity Model (CMM) Initial
  Repeatable Defined Managed
  Institutionalized
• Implementation plans are developed at a detailed
  level to close gaps and drive accountability
• An example

Relevant ?
Assessment ?
What Level Should We Be ?
48
Summary

• This model presents the what of a best practice
  PMO
• We recommend that diligence be applied to design
  the which and the how
• Each recommendation of the 5 x 5 model should be
  accompanied by detailed specifications to
  facilitate implementation
• Sogeti can help
• QuickStrike Analysis - a possible first step to
  engage
• Assesses the relevance of each best practice
• Identifies gaps, strengths and weaknesses
• Develops detailed specifications for all relevant
  best practices
• Develops implementation plans to enhance / build
  the PMO
• Steve Moritz 443-865-7713
• Questions