The PMOSIG Program Management Office Handbook

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1 The PMOSIG Program Management Office Handbook EDITED BY Craig Letavec, PMP, PgMP and Dennis Bolles, PMP

2 Contents Foreword Preface About the Editors PMOSIG History xv xvii xix xxi Section I: PMO Governance Chapters 1-3 include roles in organizational governance, portfolio management, and organizational change management. Chapter 1 The PMO Role in Project Portfolio Governance 1 Introduction 1 Project Governance 1 Project Authorization Levels 2 Role and Responsibility Matrix 2 Alignment with Organization Strategy 5 Project Selection and Prioritization 6 Benefit Management 7 Project Management Methodology and Processes 9 Knowledge Database 11 Project Management Tools 12 Resource Management 12 Acquisition 13 Deployment and Redeployment 13 Training 13 Mentoring 13 Appraisal and Release 14 Risk Management 14 Project Review 15 Project Health Check 15 Management Reporting 15 Author Biography 17 References 17 iii

3 iv Contents Chapter 2 Program Types: Categorization and Its Benefits 19 Introduction Why Categorize? 21 Strategic Programs 21 Operational Programs 22 Product Programs 24 Functional Programs 25 Enterprise Programs 26 Enterprise Program Management Office 27 Which One? :-28 Author Biography...29 References 30 Chapter 3 The PMO as an Enabler for Large-Scale, Global Program Success 31 Case Study 31 PMO Tasks 32 Challenges Encountered 32 PMO Perception 32 Politics 33 Program Human Resources 33 Monitoring 34 Information Flow 35 Knowledge Management for the Program 35 Using the Right Tools Due to Size and Internationality 36 The Role of the PMO 36 PMO as a Business Case Provider 37 PMO as a Coordinator for Impact Illustration 37 PMO as a Governance Body 38 PMO as a Flexible Organization 38 Central PMO as a Local PMO Satellite Builder 39 PMO as a Resource Coordinator, On-Boarder, and Trainer 40 PMO as a Tool Owner 41 PMO as a Communicator and Information and Knowledge Manager 42 PMO Success Factors 44 Author Biography 45

4 Contents v Section II: PMO Strategy & Tactics Chapters 4-8 include examples of how PMOs have participated in the strategic and tactical management of programs and projects to achieve business benefits. Chapter 4 Stakeholder Relationship Management: Enhancing PMO Services Through Effective Engagement and Communication 47 Introduction 47 What Is a PMO, Really? 48 Measures of Success (and Failure) 50 Understanding Stakeholders 54 What Is at Stake? 54 The Right Stakeholders 55 Directions of Influence 56 How to Gauge Attitude 60 Examples of Engagement Profiles 60 Analysis of Stakeholder 3 Example 61 Targeted Communication 62 Communication Planning 62 The Most Appropriate Information 62 The Most Effective Message 63 The Most Efficient Methods 63 The Communication Plan 64 Effective Communication 65 Relationship Between Sender and Receiver 65 : Communicating with Unsupportive Stakeholders 66 Special Groups, Broadcast, or General Messages 66 Implementing Communication Plans 67 Changes to the Communication Plan 67 ' Monitoring the Engagement! Monitoring the Effectiveness of the Communication Plan 67 Continuous Review of the Stakeholder Community 68 Review of the Stakeholder Engagement Profile 68 Regular (Planned) Reviews 69 Some Examples of Results of Reviews 69 Monitoring Trends 71 Considerations for Stakeholder Relationship Management 72 Managing the PMO's Stakeholders : 72 Not Just the PMO's Stakeholders 72 Conclusion, 73 Author Biography 73 References 74

5 vi Contents Chapter 5 The PMO: Strategy Execution Office 75 Introduction 75 Processes that Support Strategic Execution 76 The Evolution of an Effective Organizational Structure for Project Execution 78 The Legacy of the Functional Organization 78 The Addition of Projects to the Organization 79 The Matrix Organization...Better, But Not Ideal 79 The Strategic PMO Today 80 The PMO's Rising Influence ; 81 The Impact of the Mature Strategic PMO 83 Ending the Failures of Strategic Projects 85 Functions and Roles of the Strategic Project Office 87 Best Practices in Organizational Structure 95 Author Biography 96 References 96 Chapter 6 Partnership, Persuasion, and Politics 99 Introduction 99 How Partnership is Traditionally Established 100 The Role of Partnership 100 How to Build the Partnership Pyramid 101 Foundation 101 Oversight Tools Ideation :..I06 Education 109 Process Ill Accountability Ill Training 112 Governance and Compliance 113 Mortar and Bricks 114 Perception 114 Making Friends, Influencing People, and Avoiding Political Landmines 117 Persuasion Tactics 118. Politics: How to Create Leverage 119 How Long Will This Take? 120 Conclusion 120 Author Biography 122 Chapter 7 The PMO Revolution The Strategic COE 123 Introduction 123 PMO Challenges. 124 WhyPMOs? 126

6 Contents vii Overall Project Success Rates Have Dropped Recently... But Improved Long Term 126 Evolution or Revolution? 127 Types of PMOs 128 Type 1: Department 128 Type 2: Cross-functional 128 Type 3: Enterprise 128 Type 4: Strategic 128 COEs Differentiators 129 Focuses on Creating Value 129 Ensures that Strategy is Translated into a Single Enterprise Project Plan of Record 130 Funnels Investments (Budget, People, Equipment] 131 Delivers Results Through Project Management Discipline 131 Transforms the Business 132 Leads Communications and Decision Making Across the Organization 135 Experts in Business Analysis, Domain, and Process 135 Maintains Knowledge Repository for the Organization 136 Manages the Value Chain 137 Establishes and Manages Strategic Multisourcing 137 Next Steps: A Four-phase Approach to COE Implementation 138 Phase 1 Initiation 138 Phase 2 Planning 138 Phase 3 Execution 138 Phase 4 Iteration 138 Author Biography 139 References 139 Chapter 8 Restoring Sanity: A Practical Guide to Getting Your PMO on the Right Path 141 Introduction 141 Answer These First 142 Who Are My Executive Sponsors? 142 'i. What Do We Expect to Gain from This PMO? 143 Have We Tried This Before? 143 Start Small and Be Patient 144 Saying No 144 Crawl, Walk, Skip, Jog, Run.! ; 145 Scenario One The New PMO 145 Scenario Two The Struggling PMO 146 Under Promise Over Deliver 147 Market Your Successes 148 Define Success : Do Not Toot Your Own Horn 149 Get Help Crafting Your Message 149

7 viii Contents Own Your Failures 149 Acceptance and Admission 149 Accountability 150 Action 150 Keep the Ball Rolling 151 Retaining Interest 151 Anticipating Demand 152 Try Not To Overreach 153 Author Biography 153 Section III: PMO Strategy & Tactics Chapters 9 and 10 include development and management of governance policies and procedures, standards, methodologies and processes, education and training programs, and tools and templates. Also covered are PMO technical systems, and program manager, project manager and portfolio manager assignments. Chapter 9 PMO Building Blocks A Practical Approach for Implementing PMO Services ; 155 Introduction 155 PMO Building Blocks The Concept 156 Overview of Typical PMO Services 158 Overview of PMO Organizational Structures 158 Why Size, Color, and Sequence Do Not Matter 159 Benefits of Using PMO Building Blocks 159 Project Management Building Blocks 160 Project Management Methodology and Processes 160 Proj ect Templates 161 Project Management Tools 161 Project Schedules 162 Project Communication 162 Project Management Education and Training 163 Program Management Building Blocks 163 Program Governance : :..163 Program or Project Valuation Assessment 164 Program Progress Tracking and Reporting 165 Portfolio Management Building Blocks 165 : Portfolio Governance 166 Project Selection 167 Project Valuation Assessment 167 Portfolio Benefit Management and Realization 167 OPM A Practical Framework for Success 168 Branding the PMO 170

8 Contents ix PMO Leadership The Glue That Holds It All Together 171 Author Biographies 171 References 173 Chapter 10 Creating and Proving PMO Value 175 Introduction 175 Approaches to PMO Justification 175 Cultural Alignment 178 J.. People 180 Politics 181 ' Power 182 Pressures 184 '* Policies 184 Process 185 Purpose 186 Alignment 186 Culture Conclusion 187 Importance of Execution 188 Killers of PMO Value and Avoiding Them 191 Poor Project Execution 191 Too Much Process or Methodology 191 No Responsibility for Project Execution 192 Lack of Consistency 192 Company Realignment 192 Lack of Neutrality 192 Taking on Nonprojects 193 Initiation Roadblocks 193 Conclusion 194 Author Biography 194 Section IV: PMO Strategy & Tactics Chapters include best practices and case studies for successfully aligning new PMOs to business objectives, delivering benefits/roi, and managing and expanding the PMO's scope of services. Chapter 11 Ambassadors, Skits, and Little Blue Books..195 Introduction 195 Why Worry About Compliance Now? 195 Background and Context 196 Current State: Getting a Realistic Assessment 196 Principles Used 197 The Solutions 199

9 x Contents Ambassadors 199 What Will These People Do? 199 What Kind of People Do You Need? 200 How Should You Recruit Them? 201 What Training Will They Need? 201 Why Were They Called Ambassadors? 202 What is the Advantage of a Group Like This? 202 Project Leadership Council 202 The Little Blue Book of Project Management 204 Internal Certification Program 206 Education Award 206 PMO Branding 207 Case Studies and Examples 208 Training Delivery 209 Communication 210 Model the Behavior You Want 211 Skits 212 Assist in Gaining PMI Certification 213 Rewards 214 Celebration 215 Addressing Non-PMO Issues Capitalization What if the Kinder, Gentler PMO Approach Does Not Work? 217 Conclusion 217 Author Biography 218 References, 218 Chapter 12 Enhancing PMO Success from the Start 219 Introduction 219 Elements of the Implementation Plan 221 Why 222 What 223 When 224 How 224 PMO Charter 225 Sponsorship and Stakeholders Organization Positions 228 Personalities and Attitudes 231 Advise 232 Aid 233 Advocate 233 Authorize 234 PMO Models and Alignment 234 Functions and Role Combinations 236 Transaction-driven Recruitment 238

10 Contents xi Summary 239 Author Biography 239 References 240 Chapter 13 How to Implement Project Management Methodologies in a Small Company 241 Introduction 241 The Challenges 242 Challenge 1 Small Number of Resources 242 Challenge 2 The Importance of Personal Interactions 242 Challenge 3 It Is All About Results 243 Challenged No Weak Links Allowed 243 Challenge 5 Dramatic Impact of Change 243 Strategies for Success 243 Strategy 1 Obtain and Maintain Executive Support 244 Strategy 2 Gather Project Stakeholders' Input 249 Strategy 3 Establish Project Metrics to Measure Success 252 Strategy 4 Define and Present the Project Management Framework to All Project Stakeholders 253 Strategy 5 Start With a Big Win 255 Strategy 6 Focus on Results Not Process 255 Author Biography 256 Chapter 14 Building a Ship at Sea: How to Set Up PMOs in the Dynamic Business Environments of Emerging Markets 257 Introduction 257 The PMO Identification Phase! :259 Project Definition 259 The PMO Sponsor 260 People in the PMO 261 Organizational Culture and Existing Processes.! 262 The PMO Definition 264 Stakeholder Analysis 264 Case Study Stakeholder Analysis 265 Problem Analysis! 266 Analysis of Objectives!.!.." The Framework for PMO Implementation The PMO Planning Phase. 274 Case Study 280 PMO Sponsor 282 People in the PMO : 282 Organizational Culture and Existing Processes 282

11 xii Contents Conclusion 285 Author Biography 285 References 286 Section V: PMO Strategy & Tactics Chapters include key performance indicators and processes used to manage the identification, recording, and analysis of PMO data. Also covered are PMO maturity and driving excellence that enhances the PMO's long-term sustainability as a business function. Chapter 15 Affording a PMO: An Approach to Establishing a PMO with Limited Resources 287 Introduction 287 Establish the PMO Approach 288 Chartering the PMO 290 Who Are the Sponsors and What Is Their Level of Commitment? 290 What Are the Motives for Launching a PMO Now? 291 What Are the Sponsors Envisioning When They Think of a PMO? What Benefits Do Your Sponsors Expect to Achieve? What Problems Are You Trying to Solve? 293 Completing the PMO Charter 294 Leading from Below 294 The Stealth PMO 296 Formulate the Value Proposition 296 Develop the Value Plan 297 Develop a Task Plan 298 Finding the Resources to Establish and Grow the PMO 298 Human Capital Resources 299 Tools, Techniques, and Process Assets 301 Look on the Web 302 Build Your Own Tools 303 Trial Versions! 303 Techniques and Process Assets 304 Evolving the PMO 305 Conclusion 306 Author Biography Chapter 16 Driving Your PMO in an Operations-driven Organization 309 The Organizational Focus Challenge 310 Types of Organizations 311 Degrees of Executive Support 311 Phase 1 Establishing the New Project Management Office 312

12 Contents xiii ' The Project Management Maturity Assessment 312 Phase 2 Expanding the Influence of the PMO 319 Three Challenges and Opportunities 319 Finance First 319 Sponsorship Second 321 On to Operations 324 Phase 3 Leading the PMO into the Future 328 Demonstrating Value 328 ; The Challenge of Sustaining a PMO 331 Leadership Is the Key 334 Author Biography 335 Chapter 17 A Methodology Improvement Process to Advance a Corporate-Level PMO 337 Introduction 337 A Case Study 338 Company Business Areas and Business Deployment: An Overview 338 Project Management Methodology and Information System 339 Project Definition and Sponsorship 340 Project Charter 342 Design Phase 343 Schedule Status Tracking 347 Issues Reporting 348 A Special Approach for Pending Scope Changes 348 Reporting the Status of the Project Automatically into the PMIS 349 Design Phase Summary 350 Project Implementation: Defining Success Criteria and Follow-up Indicators 350 Reporting of Initial Results : 350 Risk Coverage, Estimated Cost Impact, and Exposition 351 Level of Attention: Preparing the Watch List for the Portfolio Risk Status Report 353 Implementation Phase Summary: The New System at Work 355 Lessons Learned and Next Steps 356 Author Biography 361 Chapter 18 From Start to Flight Level: Implementing Project Portfolio Management at a Midsized Airline 363 Introduction 363 Description of the Project Landscape 364 Start Level: From Starting to Establishing Project Management 366 Flight Preparation: Reasons for Implementing Project Portfolio Management 367 Takeoff: Initiating a PPM-implementation Project 370 Flight Level: Defined Project Portfolio Processes 373 Flight Check: Selection of Project Portfolio Management Criteria 377

13 xiv Contents Volplane: Current Situation of Project Portfolio Management 379 Landing; Summary 381 Author Biography 381 Chapter 19 The PMO Maturity Cube: A Project Management Office Maturity Model 383 Introduction 383 The Operating Philosophy of a PMO 385 Types and Functions of PMOs 386 The Maturity of the PMO 390 The PMO Maturity Cube 394 Conclusion 395 Author Biographies 401 References 402 Epilogue The Role of the PMO as a Portfolio Management Office 403 Index 421

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