Professional Documents
Culture Documents
Louise Worsley
Projman cc lworsley@projman.co.za
ABSTRACT
One of the most important strategic inputs for the design and set-up of PMOs is the clarification of who the PMO stakeholders are, and what their needs are. For any PMO structure there is a hierarchy of needs, with each requiring different types of activity and information. In some, where the hierarchy is unstable, the PMOs suffer from the attempt to be all things to all people, which, given that different types of PMOs demand different combinations of function, style and resource capability, puts them firmly in the zone of the infeasible. This paper summarises the trends in PMO style and structure as reported in the professional and academic literature and presents a design approach which looks at the strategic and tactical demands placed upon a PMO, mapped against a characterisation of two main PMO stakeholder groups - those who demand information and services and those who supply information and services. Drawing upon data collected in special interest forums and through an internet-based questionnaire, we look at the impact of the key stakeholders concerns on the PMO approach and style. A preponderance of interest from the demand side, i.e. senior management, seems to skew the PMO towards control; whereas interest mainly from the supply side, i.e. the project manager community, skews it towards, guidance and consultative approaches. Case studies are used to support the argument that stakeholder demands should influence the design of the PMO and will ultimately influence its implementation and its ability to survive within the organisation. This paper provides a review of the literature on PMO design and gives readers a stakeholder-centric approach to defining the style, structure and function of a PMO.
INTRODUCTION
The project management office (PMO) has emerged in a various forms in organisations. Early references were to PCOs project control offices; the PSO project support office became popular but also stood for programme support offices, which muddied the picture as these had different roles and histories. There was a short-lived spate of PPSOs project and programme support offices, which has evolved into and there is now a general move to standardise on the term, PMO the project management office. The changing names almost reflects the evolving and expanding responsibilities of these organisational structures, as they and their organisations attempt to understand the position, power and business value the PMO genuinely has. In this paper we use the term PMO to refer to all programme and project office support functions.
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Where the academic press differs from the professional press is in seeing PMOs as transient rather than permanent or long-term structures. Hobbs (Hobbs, Aubry, & Thuillier, 2008) found that over half the PMOs they researched were less than two years old. Those that had existed for longer were under continuous pressure to renew and update their services and rarely survived for longer than a few years in their original forms. There are several possible explanations reasons for this. Despite the increased prevalence of the PMO, the PMOs value to their organisation is still not easy to establish. PMOs often find themselves hunting for services that will be recognised as valuable and hence will be funded by the business. It is interesting to note that after the first few months of what might be considered to be core PMO services, such as project status reports and audits, many PMOs find themselves being regarded as too bureaucratic and not adding value. Research on the topic does not provide any firm evidence that specific PMO services really do result in improvement in project performance. Illustrative recent findings are: In 2004 (Xiaoyi Dai & Wells, 2004) looked at a range of PMO services and how they correlated with overall project performance. They cited the implementation of project methods and the provision of historical data on projects as having the greatest impact upon overall project performance. In 2007 (O'Leary & Williams, 2008) examined the Centres of the Excellence (CoE) initiative as implemented and supported (at considerable cost) by UK Government. They compared the implementation of a best practice CoE focused on providing standards and processes with the implementation of a consultative support service for projects. the case study supports the view that the conventional CoE approach of embedding best practice control processes may have little success in improving project delivery This is supported by (Milosevic & Patanakul, 2005) who looked specifically at the impact of standardisation on projects and found that increasing level of standardisation across projects did not necessarily lead to improved performance on projects.
What does emerge from the academic press is the view that how PMOs add value is context-dependent, and therefore their structure and function should, inevitably, vary across and even within organisations. This view of the PMO is that it is a transient structure which changes in line with the changing demands of the organisation and its stakeholder groups. Pellegrinelli goes so far as to suggest that the PMO should be regarded as a change agent subject to the classic change lifecycle. Thus once the practices it introduces have become embedded within the organisation, the PMOs existence is no longer required. This provides explanation for the transient nature of the PMO and the need for it to continuously reinvent. arguably, a PMOs value lies in fighting battles that make a major difference in the performance of the organisation (Pellegrinelli & Garagna, 2009).
Strategic
Selector
Team coach
Conversely the supply side is the project managers, the people who provide status and other information about projects. Their interests may be parochial, they just need a hand to get the necessary paperwork done, or it may be more professional, they are interested in developing their own and the general capability in project management of the community of which they are a member. They want to professionalise project management. The two groups and their type of interest can be represented as the 2x2 grid shown in Figure 2, with the names indicating the aspirations of the four groups.
Tactical
Scorekeeper
Bag carrier
Demand
Supply
Clearly, these different stakeholders have different interests, and it is necessary to design the PMO that meets their disparate needs. To create an appropriate blueprint the model analyses out the two crucial dimensions: the controlsupport axis and the secureimprove axis. This gives rise to the four fundamental types of PMO - Figure 3. Administration PMOs focus primarily on the collation of data, reporting on aggregated data and information handling. It supports individual projects and is mostly passive in operation, but can undertake asset-audit style reviews. These are typically staffed by administrators. Control PMOs focus on information management, being the preferred conduit for project status reporting to senior management. Often regarded as objective; by senior management and hostile by projects, they concern themselves with project variance reporting, can be interventionist, performing project audits. They usually have functional specialists included in the staff and they often have some authority assigned to them.
Guidance PMOs are set up as centres for excellence and as change agents within the project community. They are staffed by process specialists, and are proactive in influencing project performance. They tend to provide or enable training and development of project managers as well as undertaking value-adding reviews of projects. This type of PMO sometimes owns pools of project managers for assignment to projects. Partnership PMOs are involved in establishing strategic direction by advising on the enterprise project portfolio. They are responsible for determining the do-ability of candidate portfolios, they monitor portfolio performance and maintain a view on the project capability and capacity of the organisation. These PMOs are led by a senior manager, and are staffed by people competent in project management, but not necessarily by ex-project managers. They tend to be more reactive than guidance PMOs and are demand side driven.
When you combine model 1 the stakeholders level and type of N N N Y Y Y N Y Demand interest with model 2 type of PMO, it is possible to design a fitN Y N N N Y Y Y Supply for-purpose PMO. In Table 1, Y N N Y N Y N Y Y PMO indicates active interest by the stakeholder group, and N means Table 1: Outcome of stakeholder interests analysis low level or disinterest. Where: A is Admin, C is Control, G is Guidance and P is Partnership, it is possible, by plotting the level of interest and activity of the stakeholder groups, to predict what type of PMO tends to be implemented. (The third stakeholder group listed in the table is PMO and reflects the fact that there often is a champion usually in the PMO that promotes the cause of the PMO, and they can be influential.).
A A A C C G G P
Choosing the appropriate model, therefore, is determined by our ability to select an archetype that reflects the stakeholder outcomes in a balanced and practical fashion. The challenge for the PMO designer is to identify the primary drivers for the PMO and balance what are often competing agendas from the different stakeholder groups. One of the biggest problems for the designer is where the needs have not yet been clarified and instead the stakeholders are offered a menu of what can be done by the PMO. With this approach the most likely response is lets have a bit of everything. Apart from the obvious problems this gives the PMO manager in managing priorities it is also the case that the style of the PMO dictates the support functions offered and the capability and resourcing required.
Mixed models 4 These ten were then asked to review a list of PMO functions (derived from (Office of Government & Commerce, 2004) and (Hobbs & Aubrey, A multiphase research programme investigating project management offices Table 2: Forum -the PMO types (PMOs): the results of Phase 1, 2007)) and indicate how much time and how much importance their PMO attributed to each one. The results of this analysis were cross-checked between the companies to check for uniformity of interpretation creating a list of the functions characteristic of each PMO type. Table 3 lists the rationalised results of this process for three of the types it was found to be difficult to get consensus on the view of the partnership type and this is therefore not included.
Planning
The PMO keep copies of project plans The PMO maintains a procedures/ templates library
Procedures
Budgeting
Procedures
The PMO collects standard measures (metrics) and analyses them to assess performance on projects The PMO routinely analyses and tracks variances from the plan/ schedule or in cost/ productivity.
Performance
Quality
The PMO maintains project records and archives them for use in future projects
Audit/review
The PMO conducts project audits and follows up to ensure that identified corrective actions are taken The PMO helps establish qualifications and criteria to recruit and assign project managers
Capability
Risks
The PMO monitors risks and risk trends to ensure that they are being kept under control The PMO conducts final project reviews (Post Implementation Reviews) and publishes the record of this to all participants
Project closure
Results from a wider survey During 2008/2009 the profiles derived from these consultations was made available for interested groups to identify the type of their own PMO, via the internet. In total 282 data items were collected via this questionnaire approach. A common problem with freely available unsolicited questionnaire responses is that it is not clear why or with what intent and mind-set the questionnaires were completed. While we know that some respondents were members of the CITI Centre of Excellence Club, and had been guided towards the site others were completely unsolicited, and some of the responses clearly show evidence of trying out the questionnaire with no intent of filling in real data. The data presented here has had removed from it: those responses where no name or company have been identified; and/or where there is evidence that the responses were random (e.g. the same column was filled in each time). Multiple responses from the same company were consolidated into one response, and where there is disagreement on the PMO type within a company, the data from the manager has been used in the summary data. Data items from 142 different companies were left for analysis. Of those responding to the data, 63% are working in a PMO either as the manager or as a member of staff. The rest may be assumed to be users or stakeholders of the PMO with 17% being project or programme managers and the remaining 20% identifying themselves in the other category.
PMO Types
Admin Control Guidance Mixed
21%
27%
31%
21%
Using the categorisation already described, we are able to characterise the different type of PMOs. Figure 4 illustrates the percentage split of PMO types in the population surveyed. Where the questionnaire results did not conclusively indicate a particular PMO profile the type has been identified as mixed. A fifth of the companies participating in the survey sit in this category. This indicates that the functions they are performing range from purely administrative tasks through to providing centre-ofexcellence type support. As expanded upon later in the paper, this creates major challenges for the positioning and resourcing of the PMO. In total, 15 different industry sectors are presented in the data. Figure 5 shows the PMO types for eight of the sectors, each of which has at least 6 items of data represented in the analysis. It appears from the results that there may be difference in the types of PMOs adopted in different sectors. Guidance type PMOs and project maturity of the organisation do not correlate. If, on the other hand, the type of PMO is driven by the demands of the stakeholder group than the results suggest that the groups and demands vary across sectors.
In Table 4 we have re-summarised the stakeholder interests from the demand side and supply side stakeholders and identified the top three sectors for each PMO type Stakeholder interests Strategic interests from the demand side with strong influence from members of the PMO community Tactical interests from the demand side are typical where senior managers feel unsighted, and need to understand the status of projects and/or projects are perceived to be out of control Tactical interests from the supply side are found where the project management community needs more resource just give us a hand.... PMO type Governance Top three sectors for PMO type Government Central Non-profit institution Finance & Banking Engineering Technology Government Central
Control
Admin
Table 4: Stakeholder interests, PMO types and sectors From experience in working with stakeholders in the different sectors, these findings seem intuitively correct. In the UK, the Centre of Excellence initiative has resulted in a proliferation of central PMOs with strong central governance. This structure predisposes the organisation to a guidance approach. Whether it is a result of, or results in, a more mature and successful project environment is unclear (O'Leary & Williams, 2008). There is evidence that the government project environments do have difficulty in retaining experienced, high performing project managers (Worsley, 2008). In this circumstance there is a need for a supportive, guidance structure to help develop project capability within the project community. The engineering and technology environments are generally distinguished by the focus on delivery of projects. The demand side is very much interested in ensuring visibility of the safe and predictable delivery of projects. In the engineering environment, PMOs are often set up around specific programmes it is not uncommon for there to be several programmes offices each servicing the individual needs of their own business-unit stakeholders. The experience and technical capability of project managers in the engineering sectors is generally high (Worsley, 2008) and the engineering culture encourages local mentoring and support. Attempts to centralise project control and guidance are often resisted as out-of-culture. The admin PMO is, arguably, the least valuable of all the PMO types to the overall business. This said, where project management expertise is hard to find, then administrative support can be used to ensure that the limited PM capability is focused on the higher value tasks. It is not surprising therefore, that in resourcestrapped environments such as local government; we commonly find the admin PMO type. It is less obvious why Utilities should have them though, as we shall see in the case studies that follow, PMOs sometimes end up in admin type not because of overt strategy but because they revert to it as a result of lack of continuing interest from the stakeholder groups.
CASE STUDIES
In a follow-up to the questionnaire-based research, several organisations were approached to participate in structured interview sessions. The aim of these sessions was to explore further the history of the PMO how it had come into being and why and the nature of the stakeholder demands. Four of these are presented as mini-cases here.
Case study 1 Loss of purpose PMO type: Mixed with skew to admin PMO size: > 20 staff Age: > 3 years
This PMO had been in existence for eight years. It had originally been set up to meet the needs of a major change programme. It supported this programme for three years, starting with a staff of 3 and growing to a FTE staff of 12. The major stakeholders during this period were the programme team, in particular the programme manager and the Main Board. The programme was extremely high profile and therefore reporting at the most senior levels was required both within the organisation also to external groups (Central Government). During this period the PMO type was closest to control. The PMO was considered a major contribution to the successful delivery of the programme outcomes and when the programme completed it was decided to transform the local PMO in to a central business-wide PMO. A new Head of the PMO was recruited, and the stakeholder group for the PMO hugely expanded to include interested project managers across the organisation. Senior management and Board level interest in the PMO, however, was noticeably less. Enterprisewide financial and project monitoring systems were introduced across a much wider group of projects as was the project governance processes. This increased the administrative overhead on projects and in response to project manager demands for support the PMO increased in size to over 60 staff. Many of the PMO staff had low levels of experience in project management, and the support offered to project managers was primarily administrative and secretariat services. While demand for the PMO services seems inexhaustible from the project manager community, there is at the same time decreasing interest in it from the community and increasing unease from the senior management community as to its value.
Case study 2: Focus on value Sector: Financial services History: PMO size: > 5
This PMO has been in existence for 5 years. It came about as a result of a sharp increase in mandatory projects within the financial services and insurance sectors. Project management and the efficient delivery of high profile, potentially high risk projects raised the awareness to Board level for the need for a safe project delivery process. With much of the IT handled by an external service agency it was felt important to have a powerful internal control PMO. The Head of the PMO was an experienced line manager who had over twenty years experience in the business. Initially, the stakeholders for the PMO were the Board and the small but professional project management community the Head of the PMO reported directly to the Board and sat on all business prioritisation committees. In the first three years of existence the PMO had 3 permanent staff and its focus was on disseminating project best practice through training and the setting up of an internet repository of project management lessons learned. More recently, training and the dissemination and policing of standards have been transferred to local PMOs, and the focus of the central PMO has been on ensuring projects deliver the desired outcomes. Its stakeholders are now project sponsors and the Board. Resourcing has remained constant (not counting resources associated with satellite local support process), although the type of resourcing has changed. The PMO is now staffed by experienced project managers, some of whom work part-time, or are seconded in to the PMO.
Case study 3: Success doesnt mean longevity Sector: Public corporation History: PMO size: < 5 staff
This was a PMO specifically set-up to provide visibility of a global change programme. The stakeholders were the programme manager and the Board, which required high visibility on the progress of the programme. This information was used by the Board to apply pressure to regional district managers to ensure that the operational changes required were made. The PMO was staffed by external contractors with considerable experience in managing and running PMOs all of them had at least 7 years experience in project management. The PMO was set up at the beginning of the programme and disbanded at the end, following the successful roll-out of the business change. The PMO was considered to be a major contributor to this success. No PMO has been set up to replace
Case study 4: Low value to no value Sector: Finance History: PMO size: < 10 staff
The PMO was set up within IT to monitor and provide information on IT projects. The stakeholders were the Head of IT, the CIO and the various project boards. The project managers were required to supply data but were otherwise uninvolved. The PMO staff was a mix of low experience project managers, and administration staff. An IT project portfolio control system was implemented alongside a financial costing package, but they were very poorly integrated. All projects were expected to provide fairly detailed low level data to these two systems. The PMO activities were largely associated with the collection of data, and the preparation of reports which attempted to reconcile the data across the two systems. Although originally conceived as a control PMO, the burden of administration, the calibre of staff and the interest levels of senior management in the data provided after the first few months, resulted in it becoming an admin type. The PMO stumbled along in this form for 4 years and was then disbanded.
Case study commentary It is not possible in this paper to report in detail on the follow through discussions. A summary of the essential findings have been listed below: Mixed type PMOs occur either at the start of the life of the PMO or where the major stakeholder is the PMO with the other stakeholders groups less interested and the PMO seems to be in a permanent state of transition. We found no mixed PMOs which had existed in this form for more than 2 years. Admin PMOs can be valued by the project manager community though often seen as an overhead by the senior management group. Once embedded in the organisation they may survive for surprisingly long periods of time. Control PMOs tend to be set up in response to a specific need such as a programme or major project. Control PMOs which have existed for more than 2 years often transform either to admin or guidance, depending upon stakeholder interest, the PMO positioning in the organisation, and the experience and capability of the staff in the PMO. The cause of the change can be traced to the reducing value of the information as project performance stabilises. An exception to this rule is where the organisation does contract project management. Guidance PMOs generally start their life with the embedding of best practices and project methods. Their longevity varies and seems to be related to the ability of the PMO to engage with stakeholders outside of the PM community. This PMO is particularly likely to have its value to the business questioned. This is possibly because of the combination of high impact upon the business (sets project governance and rules around projects generally) and the tendency to be seen as serving the PM community rather then the business concerns.
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DISCUSSION
The incidence of PMOs in business has grown rapidly over the last five years, but the professional and academic press agree that the actual form a PMO takes and its utility to the business varies widely and is dependent upon the business context in which it is implemented. In the project professional, and in particular the IT, publications (Forrester Research, 2004), (Pole to Pole Communications on behalf of CA, 2009) there is an increasing trend to regard the PMO as an enduring business functional structure. Enterprise PMOs are commonly promoted as an essential tool to any organisation which wishes to control and monitor its investment in projects. For this to be credible, then a permanent home for projects and the project community is necessary. Thus, this view could be interpreted as being in response to commercial pressure to establish organisational structures which warrant expensive IT portfolio systems support. Whether the PMO will eventually become a functional unit, like IT or HR, is debateable however the need for project championship, support and guidance does seem well established. Mixed type PMOs rarely survive the test of time possibly because it simply is not possible to be all things to all people. Other types of PMO may also have a limited life, but some do endure. To do so successfully usually involves the purposeful transformation of the PMO to meet changing stakeholder constituents and shifting demands. The transformation though is not a gradual evolution of process and staff, but a step change with changes to mind-set, systems, resourcing and people capability. In the most successful examples the change involved a change in leadership and positioning in the organisation. Academic research points to instability and transience in the role and longevity of PMOs. Perhaps the model of the PMO as a change agent (Pellegrinelli & Garagna, 2009) is appropriate. In which case, we will need to understand more about the lifecycle of the PMO how it comes into being, creates value and is successfully terminated leaving enduring benefits in the organisation. Our models, presented here, suggest that in common with all business change, the PMO is ultimately defined by the needs and desires of its stakeholder community. Anecdotal evidence from PMO cases suggest that is the PMO is most likely to be perceived as successful and gain organisational acceptance when it is clearly aligned with the agendas of well-defined stakeholder groups. Having a PMO is no longer unusual, making a good one remains hard, but getting the right one is the real challenge. Even when the works been done well and the PMO has delivered against its promise, the needs of the organisation and the project community will change hopefully because of the success of the PMO itself, and so it will have to re-invent itself. The touchstone of when and how will be, who is interested and what they are interested in.
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Works Cited
Forrester Research. (2004, June 14). The PMO And Value Realisation. Retrieved September 20, 2009, from Forrester Research: www.pmi-ssc.org/presentations/PMO-Presentation-Color-Final.ppt Halman, J., & Burger, G. (2002). Evaluating effectivess of project start-ups: an exploratory study. International Journal of Project Management , 81-89. Hobbs, B., & Aubrey, M. (2007). A multi-phase research programme investigating project management offices (PMOs): the results of Phase 1. Project Management Journal 2007:38(1) , 74-86. Hobbs, B., Aubry, M., & Thuillier, D. (2008). The project management office as an organisational innovation. International Journal of Project Management , 547-555. Milosevic, D., & Patanakul, P. (2005). Standardized project management may increase development projects success. International Journal of Project Management , (23) 181192. Office of Government & Commerce. (2004). CoE Information Pack V3.1. Retrieved January 2009, from Centres of Excellence for Project and Programme Management: CoE Information Pack V3.1: www.ogc.gov.uk/documents/Centre_of_excellence_pack_v3.1.pdf O'Leary, T., & Williams, T. (2008). Making a difference? Evaluating an innovative approach to the project management Centre of Excellence in a UK government department. International Journal of Project Management 26 , 556-565. Pellegrinelli, S., & Garagna, L. (2009). Towards a conceptualisation of PMOs as agents and subjects of change and renewal. International Journal of Project Management , 27, 649-656. Pole to Pole Communications on behalf of CA. (2009, March). The value of the project management office. Retrieved September 20, 2009, from CA: http://www.ca.com/Files/IndustryResearch/ca_valueofprojectmanagementoffice_201174.pdf Worsley, L. (2008). KASE Profiling: Improving practices in the selection of project managers. PMSA Conference Proceedings. Johannesburg: PMSA. Xiaoyi Dai, C., & Wells, W. (2004). An exploration of project management office features and their relationship to project performance. International Journal of Project Management , 523-532.
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