Implementing a value-driven

Project Management Office

a business value proposition for integrating

Project Management as a core capability across
the enterprise
Topics

n Project Management: existing situation

n The missing link: PMO
n Roadmap for a successful PMO
implementation
Project Management:
existing situation
Project Environment

n Projects are executed in isolation, across various

business units
n Different approaches in managing projects across the
enterprise
n Lack of common understanding/ language:
n Link between business strategy and projects
n Project Management terminology
n Project business value
n Successful projects, but poor business results
n
Business needs

n Changing environment, need to adapt quickly:

n More competing market
n Changes to the operational model
n Product diversification based on market
segmentation
n Mergers/ Acquisitions
n Integrating different business models
n Assimilating different cultures
n Economic slowdown
n Increase resource usage: do more with less
n Cost reduction initiatives
Expectations

n Business Executives
n Better connection between business goals and
projects results
n More value with less resources
n Project Managers
n Common approach on managing projects
n Enough resources
n Functional/ Unit Managers
n Better control of resources
n Improved reporting capabilities
Overall conclusion

n Projects are not delivering maximum value to the

organization
n Project Management is not yet a core business practice
across the enterprise
n Executives don’t perceive Project Management as a
business enabler
n There is a missing link between project execution
environment and business strategy
n
n
The missing link: PMO
PMO: the VALUE LINK
Solution: PMO is the VALUE LINK

Corporate/ Division
Strategy

Project Mix Alignment Governance and Prioritization

PMO Project Portfolio Board

Consolidated Reporting

Project Execution Environment

What is a PMO?

n Chartered organizational structure: “Dept. of Project Mgmt.

Practice”
n Set of processes
n Functional model of the PMO
n Project and Portfolio Mgmt. methodologies
n Process Assets Library
n Pool of resources (project managers, tools and applications)
n Competency Center (training, coaching. Technical support for
Project Managers)
n Shared Services Provider for the enterprise
n “executive cockpit”

Major components of a PMO
PMO’s Mandate

n Maximize project benefits

n Connect strategy with tactics
n Implement rigorous PM practice across the organization
n Integrate:
n Processes and practices
n People
n Departments/ organizational structures
n Executive radar screen
n Support for portfolio governance and alignment

Two major types of PMO

n Cost Control Model

n Focused on reducing cost an delivering on-time
n Limited or no impact on project alignment
n Performs only on the project execution level
n Limited or no visibility to executive management
n Throughput Model – The ROI engine
n Focus on business value maximization
n Executive radar screen
n Business integrator (horizontal/vertical, internal/
external)
n Major role in Project Portfolio Governance
Benefits of the Throughput Model

n More projects with the same resources (20%-50%)

n Reduced completion time (up to 25%)
n Increased business performance (depending on selected
KPIs)
n Allows for more accurate measurement of the PMO value
across the organization (both top and bottom levels)
n Increased forecasting capability
n Agility –responsivness to the changing environment
n
Major functions areas (high-level)

n Practice Management (processes, know-how,

methodologies)
n Infrastructure Management (software tools, organizational
support functions, logistics)
n Resource Integration (project managers, team members,
other shared resources)
n Technical Support (training, coaching, mentoring to
project managers and project support personnel)
n Business Alignment (helps prioritization and governance
of Project Portfolio based on business goals)
Staged PMO

n PMO is designed for progressive evolution through stages

n Each function area is divided into specific functions,
based on the Gap Analysis result
n Each specific function can be executed to different
performance levels
n The overall PMO Function Model defines:
n Specific functions to address
n Expected performance level on each function
n Timeline to achieve specific stages of
development

Roadmap for a successful
PMO implementation
PMO Conceptual Lifecycle
Most successful PMO implementations go through these four
main phases—and repeat as necessary

Analysis

Design and
Evaluation
Planning

Implementation
Implementation phases (high level)
Design and
Gap Analysis Operate
Build
1.Understand current 1.Select PMO model 1.Perform assigned
status functions:
2.Design functional model
2.Document requirements A.Process
3.Issue PMO Charter
and expectations developm
4.Assign responsibilities ent and
3.Validate alignment with
and authority deployme
business strategy
nt
5.Develop processes
4.Document constraints
(PAL) B.Consolidat
and assumptions
ed
6.Select software tools performa
7.Develop capabilities nce
based on functional reporting
model C.Training
8.Establish budget and center
cost/revenue model D.Audit
9. 2.Provide feedback for
10. Portfolio Management
3.Integrate business
processes
4.Organizational
integration
(vertical/horizontal,
internal/external)
 Typical timeline
Duration may vary based on specific conditions

3 months 6 months 12 months 6 months

Project kick-off Design

Deployment
Assessment and validati

PMO up and running

Approve concept and detailed plans
Validate
Gap analysis
Analysis report, PMO Charter, High-level Plan

Continuous Improvement
Critical success factors

n Executive’s involvement and commitment: continuous

n Right (balanced) positioning within the organizational
hierarchy – sufficient authority
n Choosing appropriate PMO type for the given business
model
n Access to adequate competencies, skills and know-how
in building a PMO
n



Questions?