Creating an Enterprise PMO Global Mining IT and Communications Summit

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1 Creating an Enterprise PMO Global Mining IT and Communications Summit November 5, 2013 Sharon Gietl VP of IT and CIO

2 The Doe Run Company: Who We Are A global supplier of lead metal and alloys Second largest lead mine and largest single-site secondary lead smelter Missouri lead mining dates back more than 150 years Fabrication facilities create radiation shielding and construction materials

3 The Doe Run Company

4 Sustainability Principles Doe Run s approach to operations emphasizes sustainability and a balance of three areas of responsibility: 4

5 Top Challenges for Leading Mining Companies* 25% said managing capital projects was top priority for Workforce Safety 31% 2. Capital Projects 25% 3. Production Effectiveness -21% 4. Equipment Reliability 8% 5. Departments Work Together 4% 6. Mine Plan Variance 3% 7. Recruiting and Retaining a Skilled Workforce 2% * Ventyx Mining Executive Insights Annual Global Survey 2012

6 Drivers for an Enterprise PMO in 2005 Mine Painful ERP implementation Lack of Business owners IT s sole responsibility My Business Partners Delays in funding approval Lack of effective project management Over budget Late

7 Evolution of Doe Run s PMO PMO established in 2006 Responsible for project process companywide Sound, effective project management approach Recognition in 2010 Integration with strategic planning in 2014.

8 The Need for a PMO Approval Requirements Lesson Learned: Reason for PMO creation must be tied directly to business results

9 Assembling a Team Lesson Learned: Involve the people who will be using the system

10 Getting Started: Doe Run s Project Charter Treated implementation of office as a project Created a project charter outlining mission and vision Identified PMO objectives and critical success factors Determined resource and stakeholders needed Developed strategy Lesson Learned: Manage the PMO initiation as a project

11 Determining Baseline Metrics Percentage of Projects Meeting Objectives Baseline Year % 62.5% 25% Schedule within 20% Cost within 10% Business Goals > 80% achieved Lesson Learned: Capture metrics to measure performance

12 Setting Objectives Primary goal reduce surprises in projects Better planning Realistic expectations Improved information Selling point improvements in project delivery will reduce time for funding Lesson Learned: Don t define a path forward without first understanding the current situation

13 Choosing a Focus People Process Tools Understood where we were and where we wanted to go Identified three areas of focus Process People Tools Initial focus on process Lesson Learned: Select processes before selecting tools

14 Selecting A Methodology Lesson Learned: Select a methodology with flexible requirements based on complexity and size of project

15 Introducing Change Integrated lessons from Herold and Fedor (Authors) Provided a framework for assessing organizational change Raised questions about how best to pursue business imperatives within organization Lesson Learned: End-user adoption is key!

16 Structuring the PMO Doe Run Project Manager External Project Manager Doe Run Project Manager PMO Doe Run Project Manager External Project Manager Lesson Learned: Structure the PMO to fit the culture

17 The Role of the PMO Manage Serve as Project Manager of the project Mentor PMO is actively involved in the project, attending regular project status meetings and making sure project follows PDS guidelines. Scoping A business analyst provides assistance to the Project Manager on creating a business case. Lesson Learned: Tailor the PMO to the organization

18 Testing New PMO Processes Lesson Learned: Try new PMO processes on a pilot project first

19 Training the Organization Project Management Overview Building a Business Case Microsoft Project Scheduling Cost Estimation PeopleSoft Cost Tracking Project Closing Opportunity Framing Risk Management Leading Organizational Change Lesson Learned: Adapt training class exercises to actual project examples

20 Ten Best Practices For Managing A Project 1. Detailed project scope documentation 2. Communication of team roles and responsibilities 3. Project kickoff meeting 4. Scope change procedures 5. Monthly cost and schedule forecast 6. Monthly financial reports 7. Monthly risk register 8. Monthly project updates 9. Business objective metrics 10. Captured and leveraged project lessons Lesson Learned: Provide training for everyone involved in a project, not just the project manager

21 Making Tools Available Lesson Learned: Make project information easy to find

22 New Software Tools added in 2013 Project approval workflow automation Project artifacts reside in one location Automated portfolio management Lesson Learned: Continue to offer new tools that improve efficiency and effectiveness.

23 The Process for Project Selection List and Categorize Potential Projects Gather Project Information Apply Sustainability Hurdles Rank Projects Draw Cut Line Based upon Available Resources Discuss Lesson Learned: Have a standard process to allocate funding where it can have the greatest positive impact

24 Starting the Planning Cycle Begin gathering project information earlier Planning cycle may need to start months or years ahead of the budget cycle Align with company goals and strategic plan Lesson Learned: Make sure you have adequate project information; start planning process early

25 Creating The Business Case Determine scope, estimate resources and assess risk Evaluate the impact on environment, people and finances Conduct economic analysis of costs and benefits for each project Estimate rate of return and payback period Lesson Learned: Evaluate more than financial results when selecting projects

26 Increasing Future Business Value Non-Discretionary Discretionary Classify Projects Profit Improvement Strategic (High Potential) Sustaining Regulatory Increasing Business Value Now Lesson Learned: Understand the mix of projects in your portfolio Source: Corporate Executive Board

27 Prioritize Projects Project Ranking Description 2011 Spending 1 Project A $10,500,000 2 Project B $2,750,000 3 Project C $540,000 4 Project D $1,000,000 5 Project E $2,400,000 6 Project F $750,000 Lesson Learned: Having a ranked list of projects helps determine which projects to defer during economic slowdowns

28 Plan Resources Lesson Learned: Resource management is very hard in practice!

29 Coordination Of Projects Lesson Learned: Reviewing proposed initiatives with all senior leaders provides an opportunity for coordination and evaluation of competing demands

30 Benefits of Upfront Project Planning Lesson Learned: Late changes can be costly

31 Project Approvals Product Life Cycle Opportunity Identification Plan/Feasibility Realisation Operations & Maintenance Disposal Project Life Cycle Assess Select Develop Detail Verification Execute Closeout Review Go/No-Go Decision Lesson Learned: Decision gates prevent waste

32 Project Risk Management Identify risk categories Technical Project Delivery Operational Identify risks Quantify based on likelihood and consequence Develop control strategies Lesson Learned: Manage all risks, not just technical

33 Schedule Management Lesson Learned: A tool is only useful if it is used; make tools as simple as possible

34 Project Contingencies Lesson Learned: For a high level of certainty that you won t exceed estimate, you ll need a lot of contingency

35 Monitor Project Status Lesson Learned: Dashboards can help executives focus on projects that need the most attention

36 Project Status Review Where are we? (measurement) How can we get on track again? (correction) Are we where we planned to be? (evaluation) Lesson Learned: Provide management with information on project status so they can assist with resources and issues

37 Project Management Results Previous approach failed to track return on investment PMO conducts postimplementation audits Audits evaluate schedule, scope, and budget performance Schedule Lesson Learned: Project investments can cost millions; find a way to track project results

38 Business Results Lesson Learned: Impact on the business is more important than project schedule and cost performance

39 Results and Rewards Project delivery results tied to pay and performance evaluations Reward the project managers and sponsors for working effectively within processes Lesson Learned: The best way to encourage desired behavior is to tie personal rewards directly to results

40 Focus on Continuous Improvement Lesson Learned: Use lessons learned to improve processes used on future projects

41 External Vendors Contributions Gather documentation on: Scope of work Type of contract (fixed bid, time and materials) What provider did well What provider could have done better Recommendations on future engagements Lesson Learned: Share information on vendor performance with other project managers

42 Sharing Lessons Learned Understand the value of leveraging previous experience Provide project team with database of lessons learned Tie to current challenges Lesson Learned: Study previous lessons learned at kickoff meeting for new projects

43 PMO Impact on Project Results and % of Projects no more than 20% over schedule % of Projects no more than 10% over budget % of Projects meeting business objectives

44 PMO Impact on Project Results YTD % of Projects no more than 10% over schedule % of Projects no more than 5% over Budget % of Projects with actual NPV at least 90% of target NPV % of projects meeting at least 90% of business objectives

45 Doe Run s Success Approval Requirements

46 Expanded Role for the PMO Manager Strategic Planning Tactical Planning Work Execution

47 Questions? Sharon Gietl Vice President of Information Technology and CIO The Doe Run Company 1801 Park 270 Drive, Suite 300 St. Louis, Missouri USA

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