SVIM E-JOURNAL OF APPLIED MANAGEMENT VOL-II, ISSUE- I, APRIL 2014, ISSN NO

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1 The Program Management Office. Establishing, Managing and Growing the value of a PMO. Author: Craig J Letavec, PMP. Publisher: J. Ross Publishing, Pages: 388. ISBN Dr. Manasranjan Dashmishra Associate Professor, Shri Vaishnav Institute of Management, Indore, India Mob: Mr. Ritesh Jadwani Associate Manager: Program Control, CSC India Pvt. Ltd., Indore, India, Mob: The Program Management Office. Establishing, Managing and Growing the value of a PMO, by Craig J Letavec, PMP provides practical guidance for implementing a PMO as well as insights for those who already work in a functioning PMO. Many organizations often struggle in establishing and managing a PMO, an inability to create a compelling business case for the PMO, struggling with the issues of designing, structuring and implementing the PMO and an inability to demonstrate the value of PMO. This book addresses these challenges.. A PMO has the potential to provide significant benefits and the PMO journey is well worth undertaking. This book is structured such that first 5 chapters discuss about issues related to the establishment of PMO within an organization and the last 3 chapters discuss the role of the PMO as a consulting, knowledge and standards organization. Craig Letavec is a student of Project Management. He has led information technology projects in a diverse range of companies including P&G, HP and Siemens. He has served as an active speaker and author on a range of topics. Throughout his career, he has studied the role of Project management in organizations and related areas. Mr. Letavec holds a Bachelor of Science from the University of Dayton and a Master of Science in Project Management from George Washington University. He is also a Project Management Professional (PMP ) from the Project Management Institute. The author begins by introducing the concept of projects, programs and PMO. The Project Management Institute s A Guide to the Project Management Body of Knowledge defines a project as a temporary endeavor undertaken to create a unique product, services or result. A program is a grouping of multiple projects that enables consolidated management and reporting. Within a program, multiple projects may exist and be executed simultaneously. Many organizations have identified the need for a central center of organizational project knowledge, with expertise on project management practices, techniques and standards. They may be called Program Management Office, Project Office or another term. These may play several important roles like consulting organization, knowledge organization, and standards organization. In this book, the term PMO is used for an organization responsible for executing many functions. An effective PMO requires long-term commitments of human resources, money and time. There are many possible structures of PMO. In some organizations PMO may be staffed by expert project managers who directly report to a PMO manager. In some organizations PMO may serve the role of a consultancy while in some organizations, PMO may server in an oversight function The author s well constructed analysis of basic structural Models of the PMO provides an insight into PMO structures. A PMO may be either internally facing or externally facing. The internally facing PMO serves one or more divisions, groups or geographies. The externally facing PMO provides a link between the organization and one or more of its customers. An organization may have 71

2 multiple PMOs. A central enterprise PMO may be included to provide overall organizational PMO coordination. Other blended models may exist to meet the unique needs of a particular organization. As a point of general guidance, introducing the PMO concept is best accomplished using phased approach. This approach may involve piloting the PMO concept in one division or group or geography to gather knowledge and then implement the PMO concept more broadly. Author has dwelled deep into defining the benefits of the PMO concept. He explains that PMO serves as a fundamental unifier for project and program activities in the organization. Members of the organization can seek guidance to projected management questions from PMO. PMO may serve as a central oversight organization for providing key project status information to management. Corporate management may also utilize the PMO to manage oversight of project chartering, risk profiling and other governance activities. PMO can also play a key role in standards setting. Organization may also use PMO roles as a way to attract and retain project management talent. Obstacles facing Organizations establishing PMOs are well presented in the book. Management may not understand the roles and benefits of PMO. Many times PMOs may establish new processes that may modify the way Project managers work or create additional work for project managers and team members. The initial success of a PMO is largely dependent upon having sufficient monetary and human resource availability. Having a solid plan and a business case ensures that the management understands the benefits of the PMO. Author provides very practical insights by providing a roadmap for a PMO Start-Up as: Assess Define Sell Implement Operate and Improve Each of the phases has been defined in sufficient details the roadmap begins with assessing the organization s project management needs. After this phase, a definition of and a vision for how the PMO will address some or all of these needs is established. The selling process involves presenting the PMO plan to management. After the selling phase is completed successfully, several foundational activities are undertaken to implement the PMO. Once the foundation is there, the PMO is launched and it enters a phase of operations and continuous improvement. The first critical step in setting up the PMO is setting up the PMO team. It is also important to formally establish management oversight to the PMO function. The purpose of the Assessment Phase is to identify the current state of project management in the context of People (Organization Assessment), Processes (Process Assessment) and Project outcomes (Delivery Assessment). The deliverables from Organizational Assessment include project resource demographics, project organization charts and project management development processes. The deliverables from Process Assessment include Process definition for project selection and approval, Process definitions for project management and Process definition for project closeout and archiving. The deliverables from Delivery Assessment include determining project success within three critical dimensions- cost, time and customer satisfaction. The assessment process serves as a basis for determining areas that could be standardized, enhanced or improved. This data serves as an input regarding the purpose and goals of the PMO. Once the opportunity matrix has been developed, a PMO value statement can be developed. The PMO value statement translates the opportunities matrix into a set of objectives for the PMO. Once the PMO value statement is defined, the next step is creating a mission statement that summarized the intent of the PMO. The sell phase involves creating a base business case and selling the PMO concept to the organization. The base business case will contain four key sections Overview of current project organization, Key challenges in current project organization, PMO 72

3 opportunities, Key actions and accountabilities. Once the documentation portion of the base business case is complete, it is important to plan a management presentation to provide an overview of the base business case. It is important to overcome initial resistance by way of managing expectations, reporting regularly, limited investments and limited risks. Overall, the author very clearly and in details defines the initial steps in the process of establishing a PMO within an organization by undertaking the different phases as mentioned above. In the subsequent chapter, the author provides an insight to several important PMO Models and determining the scope of the PMO. He provides valuable insights into the strengths and drawbacks for each type of PMO models. In the Strong PMO Model the PMO serves as the central project and program management body. Few of the advantages of this model are that it exerts significant influence over the standards and processes. It often performs key benchmarking activities, maintaining project libraries and lessons learned summaries and building knowledge bases of organizational best practices in the project management area. In the strong PMO model, the PMO manager is often a manager at the mid to upper levels of management. Significant management commitment is required to establish a strong PMO. Few drawbacks of a strong PMO are that it can require a significant organizational realignment, long time for implementation. In the Consulting PMO Model the PMO addresses the project management needs of the organization primarily through mentoring and fostering a sense of project management community in the organization. Few advantages of a consulting PMO are that it may serve as a center of expertise but it seldom has direct responsibility for project efforts. It may play a mentoring role by helping troubled projects, providing training or publishing best practices. Few drawbacks of this model is that this PMO may face difficulty in gaining organizational acceptance, it may be viewed as an overhead, and many top project managers may see limited growth in such PMOs. In order to overcome these drawbacks a strong organizational commitment is required. In the Blended PMO Model the PMO draws on the components of strong PMO and consulting PMO models. It creates a structure that supports project management within the organization at the PMO level and within the divisions or geographies. Few advantages of this model are that it is suitable for organizations that cannot afford a full time PMO staff. It provides both active project supports as well as project management. Few drawbacks of this model are that it may face issues related to resource utilization. There may be a tendency to rely on the PMO more heavily as a project management group when large numbers of projects and limited resources exist in the organization. The author then provides general considerations for all models Centralization (Centralized PMO or Decentralized PMO), Resource allocation (PMO manager and full time / part time staff consideration), Environment (Organization Culture, Management commitment etc), Organizational input (Role of existing project organization. It is also important to consider the three essential functions of PMO Consulting, Knowledge and Standards. These three functions are the core for the activities undertaken by the PMO. An understanding of the extent to which the PMO is intended to serve the three functions will be important in development, implementation and operation of the PMO. The author provides a great level of details and meticulously reveals considerations for all three types of PMO. In respect of each of the three functions, the author provides a good perspective with regards to Staff, Additional resources, Support Activities, Engagement, Knowledge Management, Knowledge Repository, Capture and dissemination of knowledge, Knowledge process, Knowledgebase evolution, Training and Professional Development, Portfolio Management Role, Establishing and Maintaining Standards, Standards Development and Implementation, Standard Setting and the Detailed Business Case. Author sums up the discussion by stating that in most cases a good approach is to determine an appropriate mix of focus on the various roles in short terms while still planning for long term development of each of the roles as the PMO matures. 73

4 Author then illustrates the steps in determining the PMO scope. The scope statement has several dimensions like organizational reach, roles and responsibilities and intended outcome. Scope statement serves as the guiding document of the detailed business case. Establishing a clear PMO scope, ensures that there is clarity regarding intended roles and functions of the PMO. The next step involves the process of developing a detailed business case. The author lays stress on clearly articulating the benefits and returns in business case, without which the value of a PMO may not be well understood. Business case sets up a basic set of PMO goals and ensures that the focus remains on it. The author elucidates the objectives that a business case should accomplish like presenting key project management challenges that PMO will address, documenting the PMO objectives, roles, responsibilities and structure, Implementation plan for PMO. Author explains the general sections of the business case as (1) Introduction (2) Summary of Current Challenges and Opportunities (3) PMO Roles, Responsibilities and Organization (4) Initial PMO Goals and Measure (5) Anticipated Costs and Expected Returns (6) PMO Start-Up Roadmap (7) Authorization to Proceed. Against each of the section the author provides valuable guidelines for the form and content. At some places the author also provides the points to be avoided. Few samples are presented by the author that is very useful to the readers in documenting the business case for PMO. The next step is presenting the detailed business case to the Management and securing the approval to move forward. The book provides good pointers and details for this presentation in terms of attendees, the presentation topics. Like all good presentations, the author emphasizes the need for positive discussions. The final step is the authorization to proceed with the assumption that no follow-up steps are required. Moving to the main purpose the author describes the process of implementation planning of PMO in chapter 4. The focus of the author in this section remains on the strategic and tactical aspects rather than administrative aspects of PMO implementation. The essential areas of PMO implementation plan are (1) Assembling the team (2) Developing a detailed implementation plan (3) Developing a management communication plan (4) Introducing and training the team (5) Developing a marketing and communication plan (6) Transforming PMO goals into strategies (7) Executing the plan. Given the nature and purpose of the book, the author provides practical insights into each of the areas as well as provides important pointers for avoiding pitfalls and failures. However the author at some places provides a very simplistic view of aspects such as team assembling, organization chart which in reality may pose severe challenges. Author described the major components of developing a detailed implementation plan. It should be an exercise in further decomposing the major tasks provided in the start-up roadmap, validating the time frame, consideration of potential issues, resource requirement for each major task, consideration of internal process issues etc. Author could have provided a sample or a template for the implementation plan that could serve as the guide for readers of the book. While describing the Management Communication plan, author provides a good sample of communication type, frequency, audience and format. In the next stage of introducing and training the PMO Implementation team, the author provides common pointers to effective meetings and trainings. This section describes in details the main agenda point and important tips and tricks for work sessions as well as additional training requirements for the PMO staff. Author briefly talks about certifications; however a detailed description of different certifications along with eligibility requirements could have served the reader better. While elucidating the PMO Marketing and Communication plan, the author dwells deeper into areas such as identifying audiences, identifying marketing deliverables, developing the plan, executing, measuring and improving the plan. Author briefly describes the steps in executing the plan. 74

5 Overall this chapter provides a good understanding of implementation planning to the readers. A little more focus on practical examples and better structuring of contents is required. Author then shifts the focus on PMO start up and operational aspects. A smooth implementation from implementation to operations is critical for a successful introduction as well as growth of PMO. The author provides few key factors for success of PMO Lead by example, Knowing the mission and Market and Dress to impress. In the context of PMO, the author describes Leading by example in the sense of PMO team itself demonstrating the Project Management best practices. The key to success in leading by example is to proactively identify areas in which potential issue might arise. An understanding of PMO mission by everyone involved in the implementation helps to keep the results aligned with the mission. Dress to impress refers to ensuring that there is appropriate level of professionalism in the presentation of PMO as well as conduct of PMO staff. For PMO start up the areas of focus include Recognition of the implementation team, review of the PMO marketing and communication plan, Introduction of PMO to the organization, Closeout of the implementation phase. Overall the Startup section of the book focused on important implementation areas. Author himself concludes that there may be additional areas of focus for PMO depending on the size, scope and requirements. The focus then shifts to Operation. From an initial operations perspective the relevant areas are Delivering the initial goals, Measuring value, Reporting to management, Seeking feedback from the organization, Planning for what s next. Author provides valuable indicators for each of the areas. Author gives focus on having a proactive risk-management plan, maintaining communication. Measuring values is clearly an important aspect of PMO operations and author does well in describing means of measuring values. This chapter concludes by a description of the planning for next set of activities and laying down a foundation for the PMO road map that helps the PMO staff to ensure that their efforts will be aligned with the long-term areas that PMO will undertake. The last three chapters in the book specific functions of the PMO from the standards, knowledge and consulting perspectives are discussed. Author examines four areas of standardization Project management standards, project management toolsets, project portfolio management and project reporting. Organizations need to decide whether they need to have a far and wide focus or deep and narrow focus in terms of standards. Author also provides an alternative of instead of PMO undertaking standards development; the PMO staff may analyze and purchase a standardized project management methodology from a vendor. The author has discussed in details the project management standards development process that starts with the assessment of the processes in place, Defining and Documenting, Validating, Deploying and improving the processes. As more standards are deployed the PMO may consider bringing together all of the accumulated standards into a single methodology. The PMO may further be involved in managing compliance to standards. Further elaborating the project management toolsets the author provides general guidelines for identifying and implementing useful toolsets such as software packages, models and templates. A brief description of the industry standard tools would have helped the reader gain a better understanding of the toolsets. While describing the concept of the project portfolio the author explains that portfolio represents the collection of all projects along with relevant detail on each project such as resource utilization, cost, schedule, budget information. The role of PMO includes developing and implementing a process for project portfolio management and the related processes for standardization. Author throws interesting light on the concept of single enterprise project portfolio vs integrated enterprise portfolio PMO models. Author has provided a well crafted description of portfolio processes in terms of understanding of management needs, project selection, determining management s expectations, determining project selection criteria, 75

6 developing the Portfolio, and managing the portfolio. The next chapter focuses on the concept of PMO as a Knowledge organization. Interesting problem of excess of knowledge in the current age of computerized organizations is discussed. The goal of building a project management knowledgebase is to create a repository for relevant knowledge assets that is organized, useful and available to the organization for reference. Capturing and maintaining organizational project knowledge making the assets available to the organization facilitates reuse and encourages organizational learning. Developing a knowledge management action plan requires Identifying a Knowledge Leader, Determining Knowledgebase Scope, Collecting Knowledge Assets, Capturing External Knowledge, Cataloging and Distributing Knowledge, Rollout and Critical Success Factors. The chapter ends by a detailed description on Education and Training on Knowledge Management. Author provides too much emphasis on theoretical aspects of training. While it may be a good learning for a basic level of PMO, it would have more value adding to the reader if the author had provided more practical insights into the methodology of training, role of automation in training and references to training organizations in the field of Knowledge Management. The last chapter in the book discusses about the role of PMO as a Consulting Organization. PMO may operate in one or more of the following consulting domains Project and process consulting, Mentoring, Project staff augmentation and active project management. For each of the domains author provides these are discussed in details in the later chapters of the book. A brief overview on core PMO operational areas would have been sufficient in the initial chapters of the book. Author should have provided a few case studies of the organizations that have successfully launched and implemented PMOs. This would have helped the readers gain more real world knowledge. Best practices in the field of PMOs should have been described for each of the phases of PMO implementation. A brief two page PMO starter toolkit with bullet points for each of the implementation phase is required as it would valuable insights from a consulting point of view. Author even provides a brief overview of roles of responsibilities for a few consulting roles like the ad hoc consultant, Formal PMO consultant, Project Proposal Development consultant, Project kick off and team building consultant, Troubled project recovery consultant, Project tracking, Monitoring and Reporting consultant, Project Auditing consultant, Lessons learned and project closeout consultant. Author further lays emphasis on finding the right mix in consulting roles. There is a further discussion about mentoring process in which a PMO member mentors a project manager and the role of PMO in project staff augmentation and active project management. Author does a good academic description of essential PMO concepts, models, roles and PMO roadmap. However the reader would have gained more had there been more focus on practical insights and models for PMO value measurement, trainings and PMO and Project Management certifications. The book does not give much description on best practices being followed in the field of project management. A critical analysis of best practices and the scope of PMO implementation in highly process matured organizations would have been better. Author has described Strong, Consulting and the Blended PMO model. Author has not provided any guidelines for the type and nature of organizations that should implement different types of models. While structuring the overview topics on core operational areas of the PMO Consulting, Knowledge and Standards there is lot of repetitions of concepts related to Knowledge Management and Standards organization as help as a ready reckoner for the reader. While describing the PMO implementation plan, there is too much emphasis on mechanics and administrative activities. A brief to the point description of implementation steps would have been z more value adding read. While author has provided a scholarly description of steps in developing a knowledge management action plan, it would have helped the reader, had there been a greater emphasis on importance of reuse of knowledge and methods of measuring value of knowledge management. While measuring the values of PMO, it is expected that some models and 76

7 dashboards for measuring PMO value be presented as it is one of the most important selling point for a PMO. While discussing the concept of PMO as a standards organization, there should have been some examples or names of specific processes that are in scope of standardization. An important aspect of knowledge management is the ability of organization to ensure compliance to copyright laws. Author has not provided any pointers on this aspect of knowledge management. Overall the author does well in covering the primary missions of the PMO Developing, managing and growing organizational standards, and project consulting and project knowledge base. It s a good read for the managers of the organizations planning to implement a PMO. *************** 77

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