Creating a Best in Class Project Management Organization

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1 Creating a Best in Class Project Management Organization PMI Central Ohio Professional Development Day 2009 December 2, 2009 The Greater Columbus Convention Center Dave Lucas Leigh Anne Strahler American Electric Power

Day 2009 December 2, 2009 The Greater Columbus

2 Overview AEP - Major Generation Projects Group Developing a Project Management Training Program Importance of Internal and External Assessments Project Planning A Cultural Change Understanding Project Controls Standardization vs. Flexibility The Great Debate p.2

External Assessments Project Planning A Cultural Change

3 About AEP American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. p.3

4 AEP: Major Projects Group AEP Generation Major Projects Group is managing one of the largest construction programs in the United States Internal Assessment in : Rapid growth in number & size of projects (graph spending) Weak matrix organization established to manage projects Project Management group primarily technical engineers Project Controls heavily leveraged contracted labor p.4

size of projects (graph 2003 2010 spending) Weak matrix organization established to manage projects

5 AEP: Major Projects Group At the conclusion of select initial projects, managers and supervisors performed a gap analysis of current vs. desired state Results of gap analysis: Very few Professional Project Managers Matrix Organization Silo Mentality Inconsistent use of terminology & processes Lack of understanding of project controls tools p.5

desired state Results of gap analysis: Very few Professional Project Managers Matrix

6 Developing a Project Management Training Program Identify and commit to a Project Management process / philosophy Select a training facilitator that knows your application (preferably your industry) Spend time with your training facilitator Customize your program to your application Involve process owners in training development p.6

application (preferably your industry) Spend time with your training facilitator

7 Developing a Project Management Training Program Provide appropriate administrative support Get management involved in the program Revise your internal processes to incorporate training Ask for feedback p.7

management involved in the program Revise your

8 Benefits Recognized to Date from Training Over 100 Resources trained since new PMP s since training Broader understanding of Project Management More consistent use of Project Management terminology Increased confidence in interaction with contractors Generation Major Projects group adding additional value to AEP p.8

consistent use of Project Management terminology Increased confidence in

9 Importance of Internal and External Assessments Do not let progress stop with training Hold your organization accountable to put training in practice Internal Assessments Evaluate effectiveness of managing to defined processes Opportunity to evaluate individual project teams External Assessments Utilize experienced professionals in your industry Evaluate the overall program vs. industry best practice p.9

managing to defined processes Opportunity to evaluate individual project teams External Assessments

10 Project Planning A Cultural Change Step one to good Project Management Differentiate: The Project Planning Process vs. The Plan Greatest Value is in The Process Involve team members & stakeholders Communicate success criteria Discuss / debate strategy Communicate the updates to the plan The Plan must be a living document p.10

The Plan Greatest Value is in The Process Involve team members & stakeholders

11 Understanding Project Controls Overcoming the friend vs. foe mentality Creating a Project Manager toolbox Integrated project schedule Project cost tracking Project cost forecasting Performance metrics Understanding the audience Provide information that can be used to make decisions Program level decisions Project level decisions p.11

Project cost tracking Project cost forecasting Performance metrics Understanding

12 Standardization vs. Flexibility: The Great Debate Should every project follow the exact same process? Do repetitive projects each require a unique plan? How should we treat fast track projects? Can one plan be compiled for multiple simultaneous projects? p.12

13 Standardization vs. Flexibility: The Great Debate At AEP, these debates and questions still happen often These questions are HEALTHY questions... The debate is good Processes have defined minimum expectations The general philosophy we have adopted is: The planning process is critical to project success Project Controls metrics must be aligned with success criteria Communication with stakeholders and project team is essential Level of detailed planning is determined project by project p.13

.. The debate is good Processes have defined minimum expectations The general philosophy we have adopted is: The planning

14 What s Next? Providing continuing education opportunities for Project Management group Coordinating Focus Topics / Presentations by internal SMEs Project Planning Risk Management Project Controls Updating procedures / guidelines Perpetuating through Workforce Development p.14

group Coordinating Focus Topics / Presentations by internal SMEs

15 Summary Significant improvements in Project Management competencies as a result of: Educating & training our employees Being open to internal & external assessments Promoting planning and open dialogue Strengthening our understanding of Project Controls Allowing flexibility in implementation The last external assessment stated that the investments AEP has made in educating its Project Management group puts it in a Best In Class status in the US Electric Utility Market After (3) Years It Continues to Make a Difference p.15

Allowing flexibility in implementation The last external assessment stated that the investments AEP has made in educating its

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