Project Office Establishing the Business Impact. Presented by: Mark Heitkamp

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1 Project Office Establishing the Business Impact Presented by: Mark Heitkamp 1

2 Project Office Establishing the Business Impact Outline of Material: Company Overview Evolution of Project Office (starting a Project Office) Enhancing our ability to reach organizational goals Project Office - Three Key Components Project Planning and Portfolio Management Project Execution The Art versus the Science of Project Management Key Take Away Items: How have we achieved our organizational goals 2

3 Evolution Project of a Office Project Office Establishing Company the Business OverviewImpact Organizational Background: Munich Re Group wholly-owned subsidiary: American Modern Insurance Group Approximately $1 Billion in Annual Revenues Core Competency - Specialty Lines +50% Manufactured Home Insurance Approximately 1200 Associates Headquartered in Cincinnati 3

4 Evolution Project of a Office Project Office Establishing Early the Key Business Milestones Impact Evolution of Project Office at American Modern: Established Information Systems - Project Office in March of Department Head - 5 Business Analyst Established Project Approval Committees in March of 2000 Established Project Management Certification Training in June 2001 Integrated into the Annual Planning Process in Oct for 2002 Plan Moved to Corporate - Project Office in June of 2002 Current Staff: - 1 Department Head - 4 Project Managers - 3 Directors, Project Management - 2 Senior Project Coordinators - 2 Senior Project Managers - 1 Administrative - 1 Part-Time Senior PM - 5 Business Transfers (2 Senior Project Manager - 3 Project Coordinators) - 47 Executive Level Sponsors Potential Project Managers Concept Note Can be be started as as a Virtual Project Office 4

5 Evolution Project of a Office Project Office Establishing the Business Impact Enhancing our ability to reach Organizational Goals Strategic Planning Process Quality Project Development CQM Methodology Process Setting the Direction Integrated Processes Mission Vision (One Pager) Long Range Planning - Critical Few (Five) Strategic Defining Establishing the the Problem Priorities Managing Insuring the the Solutions Quality Integrated Processes System Development Life Cycle Executing Technologies Strategy Lens Planning Initiatives - Upcoming Year Needs - Support for Long Range (Mission Critical) Profit - Growth - People Annual Planning Goals Other New Projects - New Business needs Due to Business Change Throughout the year Deploy Implement Tactical Operational 5

6 Evolution Project of a Office Project Office Establishing Three Key the Business Components Impact Portfolio Management Project Execution Art versus Science 6

7 Evolution Project of a Office Project Office Establishing Portfolio Management the Business - Planning Impact Project Portfolio Management Integrating into the Annual Planning Process Planning Portfolio Management Project Execution Presented by John Hayden, CEO at AMIG, in Pre-Planning Meeting Our Plan is only as good as our ability to collaborate with one another and align our resources so as to assure its successful execution. 7

8 Pre Planning Retreat August Annual Planning Process Planning Kick-off September 10 Sales POS Retreat August Sales Agency Retreat September Sales Strategic Alliance Retreat September Sales FSD Retreat September Operational Expense Budget Development September 30 *Commission, Loss Ratio Forecast October 7 *Final Premium Forecast October 14 *Final Approved Budget & Expense Allocation October 24 Product Planning Motorcycle September 5 Watercraft September 9 Site Built September 16 RV & Trav. Trailer Sept 18 Comm l/b&c September 19 Collector Car September 22 Mobile Home September 24 Initiative Planning September 5-30 Benefit Analysis Prioritization October 3 Resource Calibration October 4-17 Final Initiative List Project Portfolio October 22 Planning Committee Reconciliation October 31 Planning Celebration November 19-20

9 Evolution Project of a Office Project Office Establishing Portfolio Management the Business -Impact Planning Example: Resource Allocation for Typical Department of 15 People Other Initiatives Mission Critical #3 Mission Critical #1 Resource Shortage Gap 42 Person Months (3.5 FTE s) 3 FTE s Available 1 FTE Assigned 2 FTE s Assigned Required support for Initiatives of 78 Person Months (6.5 FTE s). Unsupported Initiatives of 42 Person Months Baseline needs for Day to Day activities 9 FTE s Assigned Concept Concept Note: Note: Can Can be be applied applied to to a department department of of 1 or or

10 Evolution Project of a Office Project Office Establishing Portfolio Management the Business - Planning Impact Priority Selection Criteria Sponsor / Business Area Resource Departments Estimated Person Month(s) Resource Constrained 10

11 Overview Evolution Project of a Office Project Office Establishing Project Selection the Business - Planning Impact Process to evaluate projects much like you would a stock portfolio Incorporate: Ability to track and measure success Return on Investment Probability of Success (Risks) Long Range Strategic Impact Annual Plan - Mission Critical Activity Supports existing selection and prioritization process Total Cost and Benefit 11

12 Evolution Project of a Office Project Office Establishing Project Selection the Business - Planning Impact Project Business Scoring Percentages X - Axis Y - Axis Probility of Success 50% Annual Plan Activity 25% Return On Investment (Percent) Strategic Value 25% Intersecting Criteria for Project Evaluation / Selection 12

13 Project Office Portfolio Project Selection Executing Organizational Goals 2006 Planning Initiative - Alignment Chart ROI Percent Blended Score 50% Probability of Success 25% Strategic Impact 25% Supports Annual Plan Omnipresence, Profitable Growth, Reduced Expenses, Top 15 States and Probability of Success HIGH Alignment LOW ROI LOW Alignment LOW ROI HIGH Alignment HIGH ROI LOW Alignment HIGH ROI Carryover Projects New Projects % 0% 20% 40% 60% 80% 100% 120% 140% Return on Investment >>Greater than 100% >>

14 Evolution Project of a Office Project Office Portfolio Establishing Management the Business - Prioritize Impact & Track Project Portfolio Management Ability to prioritize and track project activities Portfolio Management Project Execution Quote from Project Office in AMIG Year End Review Critical to maintain sense of urgency and follow-through on identified priorities 14

15 Evolution Project of a Office Project Office Portfolio Establishing Management the Business - Prioritize Impact & Track Project Approval and Oversight Committees Leadership Board (Executive Sub-Committee) - Meets on an Adhoc basis Projects over $100,000 Project Request Committee (PRC) -Meets bi-weekly - Projects under $100,000 determines priority Our Key Long Range Mission Critical Initiatives (sometimes referred to as Programs) are set up with a predetermined resource allocation with oversight and approval being provided by a designated Program Board. 15

16 Evolution of a Project Office Portfolio Management - Prioritize & Track 2007 Projects EOY Planning = 105 Other = 48 Total = 153 Key Note Eliminated Thrashing

17 Evolution Project of a Office Project Office Project Establishing Execution the -Business Development Impact Process Project Execution Using our internally developed Project Development Process for effective delivery Portfolio Management Project Execution Developed under the following philosophies How can we move the business forward (every day) Do not instill Process for Process sake Try to keep the process invisible to the Business Partner 17

18 Evolution Project of Office a Project Office Project Establishing Execution the -Business Development Impact Process Operational Stakeholder P r o j e c t O r g a n i z a t i o n - R o l e s a n d R e s p o s i b i l i t i e s (I.E. Cust. Care) Technical Area Vested Interest (I.E. IS Advisor) Project/Program Board (Advisors) Functional Area Stakeholder (I.E. Accounting) Guidance Decisions / Approvals Resource needs Business Sponsor (Owner) Mutual Accountability Project Manager Progress Cost and Benefits Issues / Solutions Risk / Contingencies Core Team Subject Matter Experts Business Resources Technical Resources Vendor Resources 18

19 Evolution of Project a Project Office Execution Establishing the Business Impact Project Development Process (Methodology): Based upon the Principles of: PMI - Project Management Institute - Project Management Body of Knowledge (PMBOK) Note:For Note:For more more Information Information PMI Process Groups Initiation Change Management Planning Execution Control Close - Out Basic Guiding Principles: Every project has four major phases Quality Control Processes run throughout all phases A Key-Added Principle: Change Management is a critical aspect of all projects 19

20 Project Office Executing Organizational Goals modernlink Project Key Criteria for Award: Business Value Return on Investment Return on Relationship Return on Recognition Project Complexity Innovation Quality

21 Evolution Project of a Office Project Office Establishing Art versus the Business Science Impact Balancing the Art versus Science Each activity and process must ultimately focus on the Business Goals - It s all about the BUSINESS! Portfolio Management Key Behavioral Aspects: Art versus Science Need to apply Rigor without the Rigidity Ability to Adopt and Change An effective PMO should be The Department of Simplification Common Sense is not that Common Project Execution 21

22 Agreeing Non-supporters Art Project versus Office Science Establishing the Business Impact Project Management is 70% Art and 30% Science 30% Science Tools &Techniques Art (soft) - Vision - Leadership - Communication - Judgement - Influence S 70% T R A T E G Y Hidden Agendas 22

23 Art Project versus Office Science Establishing the Business Impact Recognize Proper Process Balance - Applying Rigor without Rigidity Global Consistency S T R A T E G Y Local Responsiveness Formalized Structure Flexibility Standardized Process Customized Process 23

24 Art Project versus Office Science Establishing the Business Impact Understanding of and ability to Effectively Communicate News letter Intranet E- Mail Memo Meetings Voice Mail Face to Face Informal (Watercooler) S T R A T E G Y Least Effective Most Effective 24

25 Art Project versus Office Science Establishing the Business Impact Our People and Processes must prove themselves every day S T R A Our job is to prevent Problems from happening: This means the True Value can be misperceived / hidden What we instill in our Project Managers: - A key objective is to make our business partners look good - Our business partners should be your strongest supporter - Repeat business is a good measure of success - You are only as good as your last project - Be aware of heroes, they may not be in the best interest of the organization or your project - Get comfortable with being uncomfortable - A successful Project Manager is always a little paranoid Your antenna need to be up all the time T E G Y 25

26 Project Office Establishing the Business Impact And so, What does this all mean. 26

27 Project Office Establishing the Business Impact Key Take Aways: How have we achieved our organizational goals? Activities aligned with our business goals - Strategic Lens Collaboration and alignment of resources across departments - Portfolio Management Focus resources on key priorities - Eliminate Thrashing Process approach focused on delivery - Art vs. Science Project Office - Enable Execution 27

28 Project Office Establishing the Business Impact Questions? 28

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