Project Management Office: Seeing the Whole Picture

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1 Cloud Solutions for IT Management WHITE PAPER Project Management Office: Seeing the Whole Picture Project Portfolio Management gives PMOs the tools and techniques to get lean in lean times. Executive Summary A Project Management Office (PMO) rarely achieves its full potential. Project managers find themselves short on resources and budget, and/or incapable of delivering projects on time. Without visibility into business goals, the PMO is unable to align project priorities with the long-term strategic requirements of the enterprise. And some PMOs even fall short on their initial promise to define and standardize processes and practices, which makes it difficult to leverage institutional knowledge or to reduce the effects of common operational challenges. This white paper examines why some PMOs fail to deliver much beyond modest increases in efficiency and tighter monitoring of projects, while others become a centralized hub for integrating general business management processes and enabling the free flow of information across the organization. The paper also describes a more strategic approach to the PMO, one that provides visibility into sustaining operations for a clearer picture of the demands on financial and human resources. Reading this white paper will give you insight into how your company can put an enterprise PMO, or even an IT department PMO, into practice and achieve strategic results. Being more strategic requires PMO applications, or support tools, that provide visibility, accountability, and control, including resource, request, and time/ financial management. You will also learn the importance of implementing a technology solution that provides governance controls, facilitates communication between project managers and corporate stakeholders, and promotes consistency in terms of methodology and best practices. The paper concludes with a look at some of the reasons why an enterprise should consider choosing, for its support application, a Software-as-a-Service (SaaS) delivery model to speed implementation, reduce risk, and increase the odds of success. 1

2 2 Introduction In the mid-2000s, there was a major push in corporations to establish Project Management Offices with the goal of instilling muchneeded project management discipline in every department across the enterprise, but especially in IT groups. This trend was partly driven by the Sarbanes-Oxley Act, but more often by the desire to define and standardize project management practices and facilitate project portfolio management, as well as determine methodologies for repeatable processes. From an organizational perspective, a Project, Program, and Portfolio Management Office can be one of three types: Enterprise PMO: Spans multiple departments; integrates processes across business units. Departmental PMO: Typically established in Information Technology (IT) departments, but also found in marketing, R&D, and other departments. Special purpose PMO: Created for a single major project, or set of projects. There is also a wide variety of governance and organizational structures. Some enterprises have PMOs that operate as a unique entity within their organizations, while other enterprises have some combination of multiple PMOs that are operating independently, are organizationally aligned, or are based on the division of PMO functional responsibilities. What is the purpose of the PMO? The basic definition of the PMO in a business or professional enterprise is a permanent Source: PM Solutions Research, 2012 organization tasked with one or more of the following objectives: Define and maintain the guidelines, policies, processes, and standard documentation around projects. Encourage and sustain repeatability related to project management. Provide central, coordinated management/oversight into the initiation and strategic planning of projects. Coordinate and develop project management training for continuous organizational improvement. Offer a broad range of services from budgeting, to product management, to direct project leadership, to support functions such as coaching, consulting, and marketing. Support the prioritization of strategic projects to ensure that the

3 organization is working on initiatives aligned with strategic business goals. Provide oversight across the resource pool to support the assignment of resources to the highest prioritized initiatives. Enterprise PMOs can have an even wider scope of responsibilities that includes all planned work and comprehensive resource management, including operations. Enterprise PMOs can have an even wider scope of responsibilities that includes all planned work and comprehensive resource management, including operations. What are the challenges of the PMO? Each of the business management services listed above is aimed at one goal -- delivering the highest priority projects on time, on budget, and within scope. This is the first and most important challenge of the PMO, and the best measure of a PMO s effectiveness. If projects Source: Wikipedia are being delivered late or over-budget or do not meet objectives, then the PMO has room for improvement. Unfortunately, this is the case at most companies. According to the Standish Group s most recent report, CHAOS Summary 2011, 34% of all IT projects succeed, which mean they were delivered on time, on budget, with required features and functions; 44% were challenged, which means they were late, over budget, and/or with less than the required features and functions; and 22% failed, which means they were cancelled prior to completion or delivered and never used. One of the biggest determining factors in the success of a PMO is its relative level in a process maturity model (see below). As the PMO matures, its general effectiveness increases accordingly. Level 1 Most business processes are informal or undefined. Level 2 Most business processes are defined, but not well adopted. Level 3 Most business processes are defined, repeatable, and followed. Level 4 Most business processes are aligned and performance is measured. Level 5 Most business processes are optimized and continually improved. Maturity comes not only with time, but also with the ability to overcome a host of other challenges, which include but are not limited to: Insight into ongoing operations Ability to support methodologies Departmental silos 3

4 4 Alignment with enterprise strategy and priorities Effective technology Infrastructure Determining requirements Financial management Communications Making the PMO Successful The PMO can successfully deliver on strategic initiatives, see the whole picture, and achieve more strategic results. For most companies, it begins with the realization that in addition to managing projects and methodology, the PMO must also manage resources that are shared across projects and sustaining operations. Source: PM Solutions Research, 2012 In order to clarify demand on available resources and define and enable prioritization, the PMO needs to be able to see the impact of sustaining operations, as well as strategic projects, to understand total demands on resources, budgets, etc. This is impossible to achieve using a point solution such as Microsoft Project Server. Key missing elements include resource management, which provides a full view into overall capacity for staffing projects and applications, even at the earliest planning stages. Also absent is request management to help the PMO prioritize and align with enterprise goals when projects are coming from all directions. Finally, time and financial management tools are needed to ensure that budgets are met and projects delivered on schedule. Why Innotas for PMOs The Innotas PMO solution is built on a strong foundation of Project Portfolio Management (PPM), enabling PMO managers to make strategic, productive, and cost-effective project management decisions. Innotas can quickly give the PMO: A central place to capture and approve project requests. A single system of record for projects large and small. Visibility across strategic initiatives and sustaining operations. An understanding of what people are doing now and in the future. Transparency to the business on what the PMO is doing for it. Connections with the needs of customers, the broader organization, and other stakeholders.

5 The Innotas solution is based on solid expertise in Project Portfolio Management (PPM) domain knowledge. PPM components include: Project Request Management to catalog and manage demand for new initiatives. Project and Program Management to control projects from initiation to completion. Portfolio Management to help prioritize new and ongoing initiatives. Resource Management to gain full visibility into resource supply and demand. Financial Management to complete initiatives on time and on budget. Innotas PMO Solution & Integration Platform A built-in IT Governance Solution The PPM side of Innotas is complemented by a strong foundation in Application Portfolio Management (APM), which provides visibility into and perspective on the IT component of the PMO. APM components include: Service Request Management to control and manage requests for new initiatives. Application Management to track and manage IT applications. Application Portfolio Management to maintain full visibility into IT applications. Resource Management to better understand who is doing what and for how long. IT Governance best practices are built into Innotas, with pre-populated content that supports a fast time-to-value and lays the foundation for achieving PMO objectives. Innotas ITG Best Practices support functional areas across Project Portfolio Management and Application Portfolio Management, such as managing project supply and demand, prioritizing the IT Portfolio, and effectively delivering projects and applications. Setting up Innotas for the IT constituency of a PMO is straightforward and quick because roles and skills are IT specific. Pre-defined IT project templates, a library of processes, predefined reports, and dashboards are all included with the software. This complete IT Governance solution provides PMOs with an easy to use, rapid to deploy, and cost-effective solution to manage resources and budgets across the inventory of IT initiatives and support items. 5

6 SaaS as Enabling Technology One of the biggest mistakes a PMO can make is to overcomplicate its technology infrastructure. The lowest risk, lowest cost strategy is to think simple, start small, and grow over time as the positive impact on business results become apparent to senior leadership. Software as a Service (SaaS), or cloud-based software, is a model of software deployment in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the Internet. This approach is revolutionizing the way enterpriseclass applications are implemented. The PMO is one of the newest areas to utilize the Software-as-a-Service delivery model. A New Customer-Vendor Relationship SaaS represents a new view of the relationship between vendor and customer. In contrast with on-premise (or installed) software licenses, SaaS customers are not buying a product, but instead are renting it by paying a subscription fee to use the software. If customers become dissatisfied with the software or vendor, they can cancel the subscription and will have spent money only for the value they have received. The subscription service model changes the vendor/customer relationship in another important way the SaaS vendor is more truly in a partnership with its customers. The on-premise (installed) license vendor usually makes one big upfront sale that accounts for the vast majority of revenue it expects to see from a customer. As a consequence, the long-term health of the customer s business is of little concern to the vendor. In contrast, a SaaS vendor will treat a customer like a partner because if the customer chooses not to renew, the vendor loses a continuous revenue stream. As a partner, the SaaS vendor is highly motivated to perpetuate shared success with the customer s business month after month, year after year. Faster, More Successful Technology Implementations SaaS customers enjoy a quicker implementation process, which means faster time to success and return on investment. The typical SaaS IT governance implementation takes less than four weeks, thanks to out-of-the-box best practices for IT and a robust implementation methodology designed to maximize value quickly based on immediately addressing a customer s challenge areas. With its SaaS delivery model, lnnotas takes all the critical PMO components and integrates them into one system, and supports a delivery model that creates customer success in days. SaaS vs. On-Premise Upfront investments Implementation time and risk Ongoing IT support SaaS NO NO NO On-Premise YES YES YES 6

7 Configuration and Continuous Improvement Another driver of accelerated implementation is the concept of configuration over customization. This means that the average business user should be able to modify a SaaS solution without custom development. Rather than trying to customize the application before users have had a chance to learn what works and what doesn t work, the SaaS vendor s goal is to deploy the application quickly, and then work with customers to configure it over time as customers learn more about the solution. This approach is more scalable and flexible, and aids in the continual improvement of processes. Another advantage of this approach is that vendors can continually improve their products, and the new features and capabilities are automatically available to users the next time they sign in, with little impact to their current implementation. This nimbler solution contrasts sharply with heavy installed software updates that can disrupt business flow, or require months of planning, testing, and reconfiguration. Lower Cost Software Delivery Model Companies do not need to hire new support staff or purchase new infrastructure equipment, such as servers, to utilize PMO SaaS solutions. Additionally, the upfront costs of perpetual licenses that are typical of installed solutions can be prohibitively high for some businesses. The SaaS subscription model allows everyone to get rich full-featured enterprise-class applications at a lower initial cost and with less risk of failure. In fact, study after study shows that SaaS is typically delivered at one-third the price of traditional on-premise applications. In terms of projects, the thing that Innotas really helped us with is having an understanding how we executed and are executing towards our annual plan what project we planned to do, what has been completed, what is suspended, what has been prioritized, and so forth. - Sara Holmberg Director of PMO New York State Workers Compensation Board Additionally, the financial benefits continue beyond implementation. SaaS solutions generally utilize the latest principles of good interface design, whereas legacy applications often carry forward cumbersome design principles of the past. Thus, SaaS solutions are usually easier to use than traditional software, and users require less training and are more productive. Integration with Enterprise Information Systems A SaaS solution can integrate with enterprise information systems as completely as any perpetually licensed program. With Innotas, a SaaS-based integration platform with prebuilt connectors and business logic enables integration with CRM, Service Management, HR, ERP and Business Intelligence and other applications to give PMOs the ability to: Enhance resource management by sharing resource attributes between Innotas and Oracle PeopleSoft or other HR applications. 7

8 Feed service requests from popular help desk systems such as Zendesk, Remedy, Pergrine, and others, into the Innotas Request Management System. Synchronize account and contact data between sales and delivery teams through easy integration with Salesforce and other CRM apps. Seamlessly feed critical data, such as timesheets, into financial systems. These integrated systems can help tear down departmental silos, giving the PMO a unique ability to look across corporate functions and business units and then align project priorities with overall enterprise strategies. In this way, IT-focused PMOs can extend their services out to the larger enterprise, while epmos can use Innotas to strengthen IT governance capabilities. Conclusion Whether at the enterprise or department level, the PMO has the potential to do much more than simply manage projects and standardize processes. With the Innotas Cloud Solution, PMOs can gain visibility into both strategic initiatives and sustaining operations, resulting in better decision-making and prioritization across the project portfolio. For the IT component of an enterprise PMO, or a PMO dedicated to the IT department, Innotas offers a worldclass IT Governance solution, with both Project Portfolio Management and Application Portfolio Management functionality. And its SaaS licensing and delivery model enables rapid, low risk, low cost implementation. About Innotas: Innotas provides a ground-breaking cloud-based IT Governance solution an easy-to-use, rapid-to-deploy, and cost-effective way to manage resources and budgets across an IT department s entire inventory of projects, portfolios, applications, assets, and service requests. With its strong foundation in Project Portfolio Management and Application Portfolio Management, Innotas provides CIOs and IT managers with visibility across both strategic initiatives and sustaining operations for improved decision making across the entire IT portfolio. 8 Innotas 111 Sutter Street, Suite 300 San Francisco, CA Tel: Toll-free: Cloud Solutions for IT Management Copyright 2012, Innotas. All rights reserved. Innotas is a trademark of Innotas, a California company. Other names used herein may be trademarks of their respective owners. Innotas_WP_PMO-SeeWholePicture_

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