451 Consulting. White Paper. Series: Program Management Office HOW DOES YOUR PMO SUPPORT YOUR CHANGE AGENDA? 451 Consulting

Transcription

1 451 Consulting Trusted Advisors and Capability Partners to business and government since Consulting White Paper Series: Program Management Office HOW DOES YOUR PMO SUPPORT YOUR CHANGE AGENDA?

2 Introduction Many organisations reach the conclusion they need a Portfolio or Program Management Office to coordinate and help executives manage their change agenda. Asking PMO Specialists What is the purpose of a PMO? will result in different responses depending on which school of thought they support. One of the reasons for this diversity is that Portfolio and Program Management is a relatively young discipline. It is important you align yourself to the right approach to meet your needs at this point in time, as the way your PMO function is defined, managed and operated is fundamentally different between approaches. Your selected approach is best determined by asking yourself What Problem are you trying to solve? However, our research suggests too many organisations focus their PMO on addressing symptoms of the problem. For instance, management may attribute regular project budget blowouts, missed deadlines, and failed projects solely to the project manager. This self-diagnosis can be dangerous, costly, and result in high project manager turnover. A systemic solution is required that covers people, process, performance measurement and technology. What we believe At 451 Consulting, we believe the purpose of a PMO is to enhance the selection and delivery of an optimal change agenda that builds capability and realises strategic and operational goals, whilst proactively managing risk. We have worked with numerous private and public sector organisations in the area of portfolio, program and project management offices since Also, our people include lecturers at MBA programmes and regular conference presenters on these topics. Our research shows there are six (6) elements that must work in harmony for a PMO to be successful: 1. Work with (not against) your culture and understand your maturity 2. Assist in selecting an optimal Change Agenda 3. Minimise Risk and Disruption to Business Operations 4. Realise Benefits 5. Governance & Monitoring 6. Build Program/Project Management Capability. Finally, in order to achieve the above, the implementation or re-positioning of your PMO needs to be considered an organisational change management program in itself. The unfortunate reality is a number of PMO remain stuck in compliance activities such as chasing up project managers for timesheets and status reports, and reworking documentation. In these situations, a significant repositioning is required. 451 Consulting Pty Ltd Page 2 of 5

3 Focus Value to Organisation White Paper: Program Management Office Series 1. Work with your culture and understand your maturity A number of consulting organisations who are self proclaimed PMO Specialists emphasise the right way of prioritising and selecting programs and projects, managing programs and realising benefits. However, this ignores an organisation s culture and maturity, as well as their specific needs at different points in time. The following is a useful Maturity Model developed by 451 Consulting in 2004 which shows the typical stages an organisation goes through as it strives to maximise value from a PMO. Note how the focus changes with an increasing emphasis on organisational change management to progress beyond Stage 2. Your approach needs to be different at each stage in the Model and this needs to relate to the specific problem you are trying to address at a point in time. Typical Stages of Project-Program-Portfolio Maturity Where is your organisation? Stage 4 Investment Mgt Centre Stage 1 Ad Hoc Project Mgmt Cost/Benefit Gating Internal PM s Limited Methods Varied Success Stage 2 Project Office Project Measurement External Expertise Improved PM Methods Increased Project Governance Focus on Business Projects Stage 3 Program Mgmt Prioritisation & Selection Blended Expertise PM Mentoring Explicit Link to Strategy Business/ICT Impact Assessment Resource Balancing Planning, Control, Reporting Post Implementation: Benefits Realisation Benefits Accountability Defined Org. Agenda for Change Balanced Investments aligned to Scorecard Whole-of-Business Focus Strategic Alignment, Worth & Risk Realisation of Business Value Project Culture, based on Continued Learning Process Standardisation Delivery to time and budget and quality Organisational Change Management Benefits Planning/Realisation Competency Development Supportive PM Environment Time 451 Consulting Assist in selecting an optimal Change Agenda A PMO provides the process and facilitation skills to assist your executive team to select an optimal change agenda that will collectively deliver your strategy and operational goals, with known (and acceptable) risk, people impact and cost. Sound easy? Well it s not. Most organisations have a tried and proven process for generating ideas which can become potential projects and/or initiatives. This is essentially a bottom-up approach as ideas can (and should) originate from any level or group. However, organisations are often much less skilled at deriving programs, projects and initiatives from Strategy. The result can be a large change agenda that does not bring the organisation materially closer to delivering strategy. 451 Consulting Pty Ltd Page 3 of 5

4 A commonly overlooked dimension in the selection of a change agenda is the need to include performance measurement and ICT projects needed to put in place a performance scorecard and benefit tracking system to demonstrate how you are progressing towards strategic goals. Accordingly, there needs to be a tight coupling between Strategy, Performance Measurement and your Change Agenda (Programme Management) as shown in the following diagram. Vision Mission KRA s for Customers, Shareholders, and Goals for Excellence Board & Executive Reports developed to support KPI s These are cascaded throughout the organisation in increasing detail. Strategy & Targets for KPI s Define and Optimise Projects Programme Management Managing & Project Management & Operating Change Management Current Business & Continuous Short & Long Term Projects Improvement Performance Measurement Actual measures & trends are used to track performance and can be used to update targets where necessary. 451 Consulting Minimise Risk and Disruption to Business Operations A key role is to assist in organisational change management and coordinating the impact across programs/projects on staff and customers to ensure actions are coordinated, operational risk is acceptable, and minimise change fatigue. The PMO needs to provide an organisational nerve centre that assists in forecasting the aggregate impact from your change agenda to each section of your organisation and customers. Proactive organisational change management is recommended to minimise risk and disruption to the business. The PMO can provide information to the business to help avoid several projects impacting the same key business people (or customers) at the same time. Thus, a formal Business and ICT Impact Assessment is needed at the time of executive prioritisation & selection, and this must be managed throughout the change. 4. Realise Benefits The PMO should provide an environment where benefits are defined, owned and realised by the business. The end-to-end definition, measurement and realisation of benefits require an early focus (at business case stage), clear performance measures, and clear accountability of WHO will need to deliver the benefits. This also requires an understanding that Project Managers deliver OUTPUTS and that line managers convert the OUTPUTS into OUTCOMES (benefits). 451 Consulting Pty Ltd Page 4 of 5

5 5. Governance & Monitoring Establish simple and effective governance, with single-point-accountability (where possible) in combination with a highly transparent reporting and tracking system covering scope, time, cost, quality & benefits. In our experience there is NOT a good correlation between organisations who spend much executive time in project steering committees and an improvement in project delivery to scope, time, cost and that realise benefits. One client we assisted implemented a more accountable program and project governance environment AND liberated 20% of senior management time! 6. Build Program/Project Management Capability It is fundamental for the PMO to work with project managers and sponsors to build capability to increase the probability of projects delivering to scope, time, cost and agreed quality. The importance of this point cannot be overestimated. Our research suggests that a strong focus on project tracking to improve transparency, without an equal focus on building capability to support project managers, can actually REDUCE project success (as it can result in non-disclosure of the real picture by project people)! Conclusion A growing number of organisations are acknowledging that no single approach to developing a successful PMO is possible. You need to understand the problem you are trying to solve, your maturity and culture to position your PMO for success. This White Paper helps to frame the challenge and identifies six elements for success. Authored by Gerard O Hara and Edited by: 451 Consulting Management Team If you would like to receive future copies of White Paper please contact Gerard O Hara 451 Consulting on tel or info@451consulting.com.au This White Paper can be copied in part or in whole provided 451 Consulting is formally acknowledged as the source of the information. 451 Consulting Pty Ltd Page 5 of 5