Identifying Forces Driving PMO Changes Summary Report

Transcription

1 Identifying Forces Driving PMO Changes Summary Report Monique Aubry a Brian Hobbs a Ralf Müller b Tomas Blomquist b a University of Quebec in Montreal, Montreal, Canada b Umeå School of Business, Umeå University, Umeå, Sweden, Umeå, Sweden May 2009 [Tapez le résumé du document ici. Il s'agit généralement d'une courte synthèse du document. Tapez le résumé du document ici. Il s'agit généralement d'une courte synthèse du document.]

2 EXECUTIVE SUMMARY This Summary Report presents the results from the web survey that was undertaken to better understand the forces driving changes in Project Management Offices (PMO). The research team is pleased to sincerely thank those who took a few precious minutes from a tight agenda to answer our questionnaire. Understanding the phenomenon of change in PMOs would have been impossible without your participation. Many thanks. The report contains some interesting results from descriptive statistics. The research team will work from this point on to pursue more sophisticated analyses. Please refer to future publications for more results from this survey. This survey is part of a research program on PMOs undertaken in 2004 at the University of Quebec in Montreal. Research collaboration started in 2007 with Umeå School of Business, Umeå University, Sweden. This survey has been undertaken in partnership with both universities. The goal of the research program is to provide understanding of PMOs based upon scientific foundations. This specific research bears on PMO s change. The methodology is based on web survey. This report aims at presenting a brief look at the descriptive statistics from the survey. Major elements that can be pinpointed are: Changes in PMOs are important in their amplitude Their implementation is quite difficult Reasons for change seem to be multiple and interweaved. No one single factor or issue seems to be solely at the origin of change. Impacts of change seem to be always positive for the functions within the mandate of a PMO and for its characteristics ACKNOWLEDMENTS The research team wishes to thank the PMI 1 and the Per & Eivor Wikströmska Foundation, Sweden, for their financial support for the collaboration between the University of Quebec at Montreal, Canada and Umeå School of Business, Umeå University, Sweden. 1 PMI is a registered trademark of the Project Management Institute, Inc. May 2009 Page 2

3 TABLE OF CONTENTS 1 INTRODUCTION GENERAL INFORMATION AND DEMOGRAPHICS Organisation type In which country does the PMO operate primarily? The economic sector of organisations Types of deliverables produced by the projects within the mandate of the PMOs What is your present position? Total number of employees in the organisation Level of project management maturity of organisations Customers of the projects in which the PMO is involved Number of people actively involved in a typical project in the PMO? DESCRIPTION OF THE CHANGE AND ITS IMPLEMENTATION How long ago was the change initiated? The amplitude of the change Implementation IMPORTANCE OF FACTORS AS DRIVERS OF CHANGE IN THE PMO The importance of external factors as drivers of change in the PMO The importance of internal factors Issues CHANGES TO PMO ROLES AND FUNCTIONS The functions a PMO fulfills Change in supportiveness or control of the PMO May 2009 Page 3

4 6 CHANGES TO PMO STRUCTURAL CHARACTERISTICS The PMO s location within the organisation Interdependence with other PMOs Hierarchical level to which the PMO reports The PMO s access to top management Percentage of projects and project managers The PMO s decision-making authority Funding of the PMO Organisational culture The PMO s accountability for project performance CONCLUSIONS LIST OF TABLES Table 1: Change in supportiveness and control 21 Table 2: List of factors and issues having great importance 28 LIST OF FIGURES Figure 1: Types of deliverables 7 Figure 2: Positions of the respondents 8 Figure 3: Total number of employees 9 Figure 4: Level of maturity in project management 9 Figure 5: One or multiple customers 10 Figure 6: Internal or external customers 10 Figure 7: Number of people involved on a typical project 11 Figure 8: How long ago was the change initiated? 11 Figure 9: Amplitude of the change 12 Figure 10: Change management in PMO implementation 12 Figure 11: Difficulty of the implementation 13 Figure 12: Time for PMO change implementation 13 Figure 13: Importance of external factors as drivers of PMO change 14 Figure 14: Importance of internal factors as drivers of PMO change 15 Figure 15: Issues related to organisational context 16 Figure 16: Issues related to project management processes 17 Figure 18: Issues related to human resources 19 Figure 19: Change in the roles or functions of PMOs 21 Figure 20: PMO's location within the organisation 22 Figure 21: Interdependence with other PMOs 23 Figure 22: Change in hierarchical level to which the PMO reports 23 May 2009 Page 4

5 Figure 23: The PMO's access to the top management 24 Figure 24: Percentage of projects and percentage of project managers within the PMO 24 Figure 25: The PMO's decision-making authority 25 Figure 26: Funding of the PMO 25 Figure 27: Organisational culture support 26 Figure 28: Accountability for project management performance 26 Figure 29: Accountability for business performance 27 May 2009 Page 5

6 1 INTRODUCTION This Summary Report presents the results from the web survey that was undertaken to better understand the forces driving changes in Project Management Offices (PMO). The research team is pleased to sincerely thank those who took a few precious minutes from a tight agenda to answer our questionnaire. Understanding the phenomenon of change in PMOs would have been impossible without your participation. Many thanks. The report contains some interesting results from descriptive statistics. The research team will work from this point on to pursue more sophisticated analyses. Please refer to future publications for more results from this survey. This survey is part of a research program on PMOs undertaken in 2004 at the University of Quebec in Montreal. Research collaboration started in 2007 with Umeå School of Business, Umeå University, Sweden. This survey has been undertaken in partnership with both universities. The goal of the research program is to provide understanding of PMOs based upon scientific foundations. This summary report is organized in four sections as follows. The first section presents general information on the survey and on demographics giving a portrait of the respondents and their organisation. The second section describes de change itself and the particular challenges from its implementation. The third section bears on PMO change and the reasons why it changes. After characterizing PMO change, it presents the importance of external factors, internals factors and issues regarding PMO change. Finally, the fourth section focuses on what has been changed looking at the roles and functions of a PMO and its structural characteristics. 2 GENERAL INFORMATION AND DEMOGRAPHICS The survey was ongoing from the end of September 2008 up until March 18 th 2009 both in English and in French. The number of valid responses to the survey is 184. Twenty-two percent of them are in French and 78% in English. The number of respondents is fairly lower in this current survey than in the previous one from 2005 for which more than 500 valid responses were available. However, a total number of 184 valid responses represent a great potential for global analysis but it also has the consequence of diminishing the opportunity for a more refined analysis. 2.1 Organisation type The sample can be divided into three groups: private (57%), public (41%) and non-governmental (2%). May 2009 Page 6

7 2.2 In which country does the PMO operate primarily? Respondents come from 32 different countries and the most important numbers are from Canada (41%), USA (23%) and Sweden (8%). It is worth mentioning that in the comment field, 33 respondents indicate that the PMO they are describing operates in more than one country. Interestingly, most of them indicate that PMOs operate in several countries worldwide. 2.3 The economic sector of organisations Respondents come from 23 different economic sectors. The top five are: Finance, Insurance and Real Estate (20%), Communications (11%) Manufacturing (10%), Public Administration (10%), and Business Services (9%). 2.4 Types of deliverables produced by the projects within the mandate of the PMOs Looking at types of deliverables produced by the projects within the PMOs mandates, we divided them into five groups: engineering or construction (17%), new product and service development (19%), consulting services (7%), Information System (IS) or Information Technology (IT) (48%), and finally business processes (9%). As we can see in Figure 1, PMOs from this survey are mostly involved in IS or IT deliverables. Figure 1: Types of deliverables May 2009 Page 7

8 2.5 What is your present position? PMOs IN TRANSITION SURVEY Figure 2 presents the diversity of positions held by the respondents. There are two major groups: PMO managers (24%) and project managers (22%). The distribution shows greater diversity than the 2005 survey, where PMO managers and Project managers formed 61% of all respondents compared to 46% in the current survey. Figure 2: Positions of the respondents May 2009 Page 8

9 2.6 Total number of employees in the organisation As shown in Figure 3, PMOs that are described in this survey exist mostly in large organisations with 69% of them having more than 1000 employees. These results are quite similar to those obtained in the 2005 survey. Figure 3: Total number of employees 2.7 Level of project management maturity of organisations The well-known five level scale (1: initial level, 5: optimizing level) has been used to have respondents assess the level of project management maturity in their organisation. As presented in Figure 4, half of the population shows a level of maturity of 1 or 2 (52%) while 81% reaches a level of 3 or less. 19% reaches the upper levels of 4 and 5. These results are quite similar to what was obtained in the 2005 survey. The mean for all respondents is a project management maturity level of 2.51 which is in line with other recent studies. Figure 4: Level of maturity in project management May 2009 Page 9

10 2.8 Customers of the projects in which the PMO is involved Most projects within our sample are delivered to several customers (77%). Only 23% are delivered to a single customer. See Figure 5. Figure 5: One or multiple customers Projects in which the PMO is involved are delivered mostly to internal units within the organisation (66%) with only 34% delivered to external organisations. See Figure 6. Figure 6: Internal or external customers The distribution between one or several customers is about the same as the results obtained in However, recent results differ significantly when looking at the distribution between internal and external customers. The 2005 survey showed 45% for external customers versus 55% for internal. May 2009 Page 10

11 2.9 Number of people actively involved in a typical project in the PMO? On average, the number of people working on a typical project in the PMO provides a characteristic of the projects undertaken in the PMO. As shown in Figure 7, sixty-nine percent of respondents report that typical projects within the mandate of their PMO have 25 people or less working on it. At the opposite end, only 5% report having projects with more than 100 people. Figure 7: Number of people involved on a typical project 3 DESCRIPTION OF THE CHANGE AND ITS IMPLEMENTATION This section first presents the description of the change it terms of when the change happens and its amplitude. Then results from the implementation of the change are presented. 3.1 How long ago was the change initiated? Changes in the population happen fairly recently, meaning within the last two years (69%) which is in line with the objective of this survey. The invitation to complete the survey asks about recent PMO changes. See Figure 8. This is consistent with results from the 2005 survey where 54% of the PMOs had changes initiated within the last two years and less. Figure 8: How long ago was the change initiated? May 2009 Page 11

12 3.2 The amplitude of the change As shown in Figure 9Erreur! Source du renvoi introuvable., the amplitude of change follows a normal distribution but with a higher number indicating radical change (10%). It is worth mentioning that 71% of respondents evaluate an amplitude of 5 and more, the mean being of 5.58 on a scale from 1 (minor change) to 9 (radical change). In this population, PMO changes are important and a large proportion of them would be considered major changes. 3.3 Implementation Figure 9: Amplitude of the change 52% of the PMO changes had change management processes, while 38% of respondents reported having no change management processes. See Figure 10. It is interesting to note that PMO implementation is considered an organisational change that merits consideration of change management by more than half of the PMOs within this population. Figure 10: Change management in PMO implementation May 2009 Page 12

13 PMO change implementations are reported to be quite difficult with 60% of implementations being at a level of difficulty of 6 or higher. The mean is See Figure 11. Figure 11: Difficulty of the implementation Implementation of PMO change varies quite a lot, but it is rarely instantaneous (3%). As shown in Figure 12Erreur! Source du renvoi introuvable., twenty-two percent of them take more than a year. May 2009 Page 13

14 Figure 12: Time for PMO change implementation 4 IMPORTANCE OF FACTORS AS DRIVERS OF CHANGE IN THE PMO The following section of the survey examined recent changes to the PMO. It focuses on reasons for these changes and their impacts. This report only presents descriptive results. More sophisticated analysis of them will be undertaken. In the following, each group of factors and issues are presented in figures in a descending order of the importance using the scale from the survey (1: no importance; 9: high importance). For ease of the interpretation the degree of importance is presented in four levels: Strong importance: from 7 to 9 Great importance: 5 and 6 Some importance: 3 and 4 No importance: 1 to The importance of external factors as drivers of change in the PMO This question aims at identifying the importance of external factors as drivers of change in the PMO. Five factors are proposed to capture the role of external environment. The graph in Figure 13 shows the mean of each external factor. Globally, external factors do not seem to play a major role as driver of PMO change even if they are present in the PMO s transformation landscape. The most important factor is Change in the industry or market and has only some importance. May 2009 Page 14

15 Figure 13: Importance of external factors as drivers of PMO change 4.2 The importance of internal factors This question aims at identifying the importance of internal factors as drivers of PMO change using a set of nine factors. The graph in Figure 14 shows the mean of each internal factor. May 2009 Page 15

16 Figure 14: Importance of internal factors as drivers of PMO change Four internal factors have great importance. The most important factor is a new vision or new strategy. It confirms the tight link between strategy and project management. As results show here, it also seems to play a role in PMO change. The second most important factor refers to a broad organisational change within the organisation. It confirms that the PMO is not an isolated island. As organisations go through such restructuration quite often, there is no reason why the PMO will not be part of it. Third most important factor shows the importance of project performance as a driver for changing PMOs. The forth factor, changes in the total workload, might indicate the PMO capacity to adapt to the organisational need, either increasing or decreasing. The five other factors may have some importance in the PMO transformation. Change in the composition of the executive team and the arrival of a new PMO manager have almost the same level of importance. They both refer to a change in the management team and probably to their own philosophy of management. Competition with other parts of the organisation, either for mandate or resources, can play a certain role in the PMO change. Example of that is found in international company with multiple centers in different parts of the world. Centers in developing countries may offer products and services at lower costs, challenging their internal competitors for mandate. When present, this factor can lead to a change to reach better PMOs efficiency. The arrival of a new CEO is of some importance but at a lower degree than a new PMO manager or other executive. The interpretation of this could be that a CEO is far away from May 2009 Page 16

17 the PMO in terms of strategy and business. The least important factor is a change in the ownership of the organisation. However, some observations can be made on the particular distribution for internal factors. These factors are more likely to be unimportant except for a minority for which it is of major importance (up to 25% for the new vision and strategy of the executive team). 4.3 Issues In the following section, results from the survey on the importance of issues are presented in four groups. Besides external or internal factors, some issues may exist in organisations and participate in the dynamics of PMO change. The importance of issues before the change and the impact the PMO change has on these specific issues follows the same pattern of distribution. In order to keep this summary report on a reasonable size, only results from issues will be reported here. The next four Figures show the importance of issues using the mean. Figure 15 shows the importance of issues related to the organisational context. Figure 15: Issues related to organisational context Six issues were proposed for the respondents to assess their importance regarding the PMO change. Four issues related to the organisational context are of great importance. The two most important ones are organisational commitment to project management and accountability for projects. Both of these issues refer to adhesion to project management within the organisation. May 2009 Page 17

18 The issue of customer and stakeholders relations sometimes become an element of dispute and play a role in the PMO change either to give the PMO a closer or larger relationship with customers or stakeholders. Project management and line collaboration issue refer to tensions that are found in matrix structures or more largely at the interfaces between projects and the regular operations within an organisation. PMO change can be undertaken to ease the interplay between project and line management. Two other issues are of some importance regarding the PMO change. The issue of synergy among project managers seems to play a role. This issue can be put in relation with the decision to include or not project managers within the PMO. Results from the survey in 2005 show that there are as many PMOs including project managers as they are excluding them. When they are not included some others mechanisms should be put in place to encourage the synergy among them. The second issue of some importance refers to the tensions or conflicts within the organisation. PMOs are part of the internal political system and as such are part of internal struggles for power. It is in line with what has been observed in the qualitative data of 17 case studies, where tensions and conflicts were part of almost all PMO changes. Figure 16: Issues related to project management processes The importance of issues related to project management processes is presented in Figure 16. Five from the seven issues of this group are of great importance regarding the PMO change. The issue of project alignment with strategy focuses on choosing the right project in relation with May 2009 Page 18

19 the organisational strategy. What this result says is that a lack of alignment between strategy and project may lead to a PMO change. The issue of availability of relevant information for decision-making make the point on the role a PMO could play in decision-making in providing relevant and reliable information about projects. Standardisation of project management methods can play a role in PMO change regarding a lack of such standardisation or too much. Allocation of resources across multiple projects is an issue linked at resolving the equation between limited resources and the wide number of projects or opportunities. The last issue within this group of factors of great importance is project management maturity. Change to the PMO may be related to the expectation of PMO to increase the project maturity. Two other issues are of some importance. The issue of project selection refers to the project portfolio management. This issue can lead to a PMO change in order to get it more or less involved in the selection of the right projects. The issue of fit between project management methods and project characteristics refers to the ability to adapt methods to the degree of complexity, risks, etc of the project. A lack of such granularity may lead to a PMO change. Figure 17 presents the means of the three issues related to performance. Both project performance and business performance are important issues regarding the PMO change. The cost of the PMO is the least important factor of this group. Figure 17: Issues related to performance May 2009 Page 19

20 As shown in Figure 18, the single issue, out of three, that is important among the ones related to human relations is the project management skill level. Other issues, work climate and workfamily equilibrium, do not seem to play a role as drivers of PMO change. Figure 18: Issues related to human resources May 2009 Page 20

21 5 CHANGES TO PMO ROLES AND FUNCTIONS In the third part of the survey, questions aim at capturing change in the PMO regarding the roles and functions this PMO fulfills. Results show that the importance of all functions has improved after the change. This result may not be as positive as it appears at first glance. It may illustrate a positive bias from respondents to over assess results from the PMO change. 5.1 The functions a PMO fulfills The related questions asked in the survey assessed the importance of nine functions before and after the PMO change. These functions were: 1. Monitor and control project performance, including the development of Project Information Systems and the reporting function 2. Develop and implement standards, including methodologies, processes and tools 3. Develop the competency of project personnel, including training and mentoring 4. Multi-project management, including program and portfolio management, coordination and allocation of resources between projects 5. Strategic management, including participation in strategic planning and benefits management 6. Organisational learning, including the management of lessons learned, audits and monitoring of PMO performance 7. Management of customer interfaces 8. Recruitment, selection, evaluation and determination of salaries for project managers 9. Execute specialized tasks for project managers, e.g. preparation of schedules Figure 19 illustrates the importance of each function using the mean of the importance at two different moments: before the change and after the change. The two curves show a positive gap which is stable for each function. Overall, results show that the importance of all functions is greater after the change than it was before. This might be interpreted as a positive attitude towards the PMO changes from respondents answering the survey. May 2009 Page 21

22 Figure 19: Change in the roles or functions of PMOs 5.2 Change in supportiveness or control of the PMO A PMO fulfilling any functions listed above in Figure 19 can be more or less supportive and can play its role with a more or less controlling approach. Table 1: Change in supportiveness and control shows that both supportiveness and control have more importance after a PMO change whatever the change may be. Table 1: Change in supportiveness and control Before After (means) (means) Supportive Controlling May 2009 Page 22

23 6 CHANGES TO PMO STRUCTURAL CHARACTERISTICS The survey captures changes in the PMO using a set of 10 structural characteristics that are listed below: The PMO s location within the organisation Interdependence with other PMOs The hierarchical level to which the PMO reports The PMO s access to top management Percentage of projects within the PMO s mandate Percentage of project managers reporting to the PMO manager Level of the PMO's decision-making authority Funding for the PMO To what extent did the organizational culture support the PMO The PMO s accountability for project performance 6.1 The PMO s location within the organisation The PMO s location within the organisation stays almost the same for Operations, other functional units, Human resources and Finance. In Figure 20, we can see that the percentage of PMO s within IT diminishes after the change while it increases for PMOs within business units, outside these units, as well as for those that report directly to a senior executive. Figure 20: PMO's location within the organisation May 2009 Page 23

24 6.2 Interdependence with other PMOs Respondents reported interdependence of the PMO they were describing with other PMOs. As shown in Figure 21, the percentage of PMOs having interdependencies increased after the change. Figure 21: Interdependence with other PMOs 6.3 Hierarchical level to which the PMO reports Figure 22 presents the results to the question of change on the hierarchical level to which the PMO reports. For almost half of the PMO transition (48%) there was no change. Only 11% indicated a change to a lower level, while 42% indicated a change to a higher level. Figure 22: Change in hierarchical level to which the PMO reports May 2009 Page 24

25 6.4 The PMO s access to top management The PMO s access to top management is a characteristic where change seems to have an impact. In Figure 23, we see a regular curve from very difficult to very easy before the change. The curve for after the change shows a U-shape distribution with a first peak on the difficult side of the scale for 25% of the population, and a second peak on the opposite side for 16% of the population. After the change, 64% of respondents found access difficult compared to 51% before the change. Figure 23: The PMO's access to the top management 6.5 Percentage of projects and project managers Considering the organisational entity in which the PMO is active, the percentage of projects within the PMO s mandate increases significantly after the PMO s change, going from 59% to 72%. Similarly, the percentage of project managers reporting to the PMO manager increases from 37% before the PMO s change to 51% after it. See Figure 24. Figure 24: Percentage of projects and percentage of project managers within the PMO May 2009 Page 25

26 6.6 The PMO s decision-making authority In Figure 25, we see two different distribution levels for the PMO s decision-making authority before and after the PMO s change. Before the change, the distribution is almost regular, but after the change, the distribution shows a phenomenon where fewer PMOs have less decisionmaking authority, while at the other end of the scale, there is a significant increase in PMOs having a more important level of authority. The means suggest an overall increase in the level of decision-making authority with 4.5 before the change and 5.8 after it. 6.7 Funding of the PMO Figure 25: The PMO's decision-making authority As shown in Figure 26, the funding of the PMO is adequate for 42% of the population before the change. 24% of respondents answer that funding was insufficient, while 18% find it generous to various degrees. Surprisingly, almost 2% of respondents find that funding of the PMO is overly generous. The curve after the change is similar to the one before the change. The PMO change seems to not have an impact on the funding of the PMO. Figure 26: Funding of the PMO May 2009 Page 26

27 6.8 Organisational culture Figure 27 shows the extent organisational culture supports the PMO. It increased after the change. It indicates that the respondents perceive the change as positive. The mean value has increased from 4.3 to 5.9 after the change. Figure 27: Organisational culture support 6.9 The PMO s accountability for project performance Two questions were asked about the accountability for project performance: project management (scope, cost & schedule) and business (benefits). Distributions of the population regarding project management performance before and after the PMO s change are quite similar except in the number of PMOs with accountability. Their number increased significantly after the PMO s change. See Figure 28. But overall, the means show an increase for more accountability going from 4.3 before the PMO change to 6.0 after it. May 2009 Page 27

28 Figure 28: Accountability for project management performance When considering accountability for business performance, distributions before and after the PMO s change are not as similar as those for accountability for project management performance. See Figure 29. The number of PMOs without accountability is smaller after the PMO s change but it shows an increase in their number showing business accountability. Means show an increase in the business accountability from 3.0 to 4.6. Figure 29: Accountability for business performance 7 CONCLUSIONS Some insights on PMOs in transition can be concluded from the descriptive statistics presented above. Responses showed that since the previous survey in 2005, demographics on PMOs haven t changed much. Changes in PMOs are important in their amplitude, and their implementation is apparently quite difficult. Multiple factors and issues play a role in the PMO transition. No single factor or issue is at very high level of importance. They all split between May 2009 Page 28

29 having some or great importance. It reinforces the assumption of the interweaving of multiple reasons that lead to a PMO change. Table 2 provides the list of factors and issues having great importance, the ones that have the potential to become drivers of PMO change. If we examine PMO functions and characteristics to describe what has changed, it is notable that the level of their importance after the PMO change is reported to be greater. As stated earlier, there may be a positive bias towards these questions: respondents may have an overall tendency to over assess the benefits from the PMO change. The single characteristic showing a negative change is Access to upper management which seems to be more difficult after a PMO change. This summary report will be followed in the next few months by a full report published by the PMI. An article will be submitted for publication in an academic journal. A paper will be submitted to the 2010 PMI Research Conference. Table 2: List of factors and issues having great importance Groups of factors or issues Internal factors Issues related to the organisational context Issues related to project management processes Issues related to performance Factors and issues having great importance New vision and/or strategy of the executive team Broad organisational restructuring Unsatisfactory project performance or failures Changes in the total project workload Organisational commitment to project management Accountability for projects Customer and stakeholders relations Project management and line collaboration Project alignment with strategy Availability of relevant information to decision makers Standardisation of project management methods Allocation of resources across multiple projects Project management maturity Business performance Project performance May 2009 Page 29

30 Issue related to human resources Project management skill level Thank you very much for your participation. CONTACT INFORMATION For requests and inquiries please contact Monique Aubry at May 2009 Page 30