Benefits of a Knowledge Management (KM) Powered Project Management Office (PMO)

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1 RTM Cnsulting Benefits f a Knwledge Management (KM) Pwered Prject Management Office (PMO) Randy Mysliviec President & CEO

2 RTM Cnsulting All rights reserved. Benefits f a Knwledge Management (KM) Pwered Prject Management Office (PMO) Intrductin Nt nly are prjects becming increasingly cmplex, but rganizatins are facing an even greater challenge f delivering mre prject value while ensuring demanding custmers are satisfied with the slutin. Prject Management is a knwledge intensive dmain which needs skilled prfessinals t manage and deliver prjects. T address these grwing challenges, rganizatins are fcusing n creating Prject Management Offices (PMOs) and buying new tls/technlgy. A survey cnducted by the Technlgy Services Industry Assciatin fund 40% f prjects miss margin targets, 31% f prjects verrun billable hur targets and 43% f prjects run behind schedule. But many rganizatins ften frget the mst imprtant cmpnent f prjects i.e. Peple. Peple hld knwledge and effective use f knwledge leads t prject success. Having a cmprehensive Knwledge Management practice will enhance the rganizatins success rate f prjects. Knwledge is created at every phase f a prject and it needs t flw seamlessly thrugh the nine prject management knwledge areas. A gd Knwledge Management practice helps rganizatins in identifying: What is cnsidered as knwledge in the rganizatin? What knwledge d peple have in the rganizatin? What are the surces f the knwledge in the rganizatin? Hw peple are accessing the knwledge surces? Where is knwledge stred and retrieved in the rganizatin? Hw and where is knwledge captured in the rganizatin? And mst imprtantly, hw then t use/re-use knwledge fr the benefit f custmers and the enterprise. A survey dne by Reuters in 2001, finds that 90 percent f cmpanies that deply a Knwledge Management slutin benefit frm better decisin making and 81 percent say that they nticed increased prductivity.

3 RTM Cnsulting 3 What is a PMO and what are the challenges it is facing? As per the Prject Management Bdy f Knwledge 1, a prject management ffice (PMO) is a management structure that standardizes the prject-related gvernance prcesses and facilitates the sharing f resurces, methdlgies, tls and techniques. Every rganizatin is unique depending n its crprate culture and the prducts r services it delivers. S ne size fits all is nt applicable fr a PMO. A PMO is built with very high expectatins that the rganizatin and its clients will benefit by prjects being delivered n-schedule, n-budget and meeting custmers expectatins and requirements. These high expectatins ften lead t failed PMOs. Here are sme f the critical challenges that a PMO is facing in the current cmpetitive envirnment: 1. Managing stakehlders expectatins: PMOs must make tugh decisins abut the prjects and priritize them based n the rganizatinal business needs. In rder t perfrm this task, PMOs must manage the expectatins f all stakehlders in the rganizatin and keep them aligned fr the benefit f bth the custmer and enterprise. 2. Prcesses and Methdlgy: Having prcesses and a standard methdlgy driving thse prcesses is great but at the same time PMOs shuld als make sure that the prcesses are nt verkill fr the prject teams. It is always gd fr PMOs t think big but start small when implementing prcesses and methdlgy. PMOs shuld fcus initially in the areas which are causing majr prblems, gradually mving thse areas t higher maturity levels. 3. Gvernance and Metrics: PMOs shuld have a gvernance plan which maps measures and metrics t the rganizatinal business envirnment. Identify and Priritize Prjects Evaluate and Learn PMO (Prjects, Prgrams, Prtflis) Define Prcesses and Methdlgy Mnitr and Cntrl Fund Prjects / Initiatives 1 PMBOK Guide, 5 th Editin, PMBOK is a registered trademark f the Prject Management Institute, Inc.

4 RTM Cnsulting 4 The challenges faced by PMOs can cntribute t pr perfrmance n prjects resulting in lst custmers, delayed prjects, increased prject expenses and pr quality f deliverables. Organizatins can vercme these challenges if they can unlck the ptential f peple within the rganizatin by effectively and efficiently tapping in t the rganizatinal knwledge gained by the peple wrking n prjects every day. The Standish Grup research shws a staggering 31.1% f prjects will be canceled befre they ever get cmpleted. Further results indicate 52.7% f prjects will cst 189% f their riginal estimates. On the success side, the average is nly 16.2% fr sftware prjects that are cmpleted n-time and n-budget. A cmprehensive Knwledge Management practice/slutin will help rganizatins streamline their intellectual prperty (IP), enable knwledge sharing, leverage rganizatinal learnings t reduce prject risks, eliminate duplicatin f effrts, standardize prject management prcesses and prvide rganizatins with a cmpetitive advantage in the market place. Knwledge Management and the PMO Knwledge Management is a cncept and a practice t identify, capture, share, reuse and innvate by effectively utilizing rganizatinal experiences and insights. Knwledge Management and the PMO are very clsely related in many aspects. Fr example, peple are a key cmpnent f Knwledge Management as well as the PMO. The main aspect f Knwledge Management is abut hw t capture, share and reuse knwledge held by peple. Similarly, the key aspect f a PMO is abut hw t deliver prjects n-time, within budget and meeting custmer expectatins. Knwledge Management can prvide a great platfrm fr the PMO t leverage the rganizatinal knwledge in delivering prjects and meeting its ultimate gal f ptimizing the prject delivery prcess. Knwledge Management can prvide much needed supprt t the PMO during every phase f a prject - planning, initiating, executing, mnitring & cntrlling and clsing (Prject Management prcess grups frm the PMBOK guide) - by prviding the right knwledge t peple in a timely fashin. A PMO can leverage Knwledge Management in varius areas f prject/prgram management. Here are a few typical areas where mst rganizatins benefit frm Knwledge Management: 1. Prject repsitries (past and current prjects artifacts accessible t everyne in the rganizatin) 2. Best practices and lessns learned repsitries 3. Prvide fr a Subject Matter Expertise (SMEs) lcatr 4. Enable the cncept f Cmmunities f Practice (CPs)

5 RTM Cnsulting 5 Knwledge Management practices shuld becme part f PMO prcesses. Once this is dne, rganizatins will start t see Nnaka s Knwledge Cnversin Mdel (famusly knwn as the SECI 2 mdel) cming t life, leading the rganizatin twards a learning rganizatin. Benefits f Knwledge Management fr the PMO Knwledge Management ffers bth quantitative and qualitative benefits fr the PMO rganizatin. Here are sme key benefits frm bth categries: Quantitative Benefits: 1. Reduced rewrk and prblem reslutin time as emplyees will have access t rganizatinal knwledge, which helps them reuse knwledge artifacts (dcument, cde snippet, etc.) 2. Reduced n-barding csts and time. A PMO can create a knwledge package (a cllectin f artifacts and guidelines alng with details n whm t reach (SMEs), where they can find infrmatin, etc.) fr new emplyees wh can gain insights quickly and ramp up faster t cntribute t the prject s success. 3. Reduced attritin csts. This is an indirect benefit frm ne f the qualitative advantages f imprved emplyee mrale. 2 Scializatin, Externalizatin, Cmbinatin, Internalizatin

6 RTM Cnsulting 6 4. Faster turn-arund. As the PMO rganizatin is cntinuusly learning frm its prjects, it gains insights, which in turn will lead t faster cmpletin f prjects by effectively leveraging the rganizatinal knwledge resurces. Qualitative Benefits: 1. Imprved custmer service/satisfactin. Delivering prjects n-time and within budget helps PMOs gain custmer cnfidence, which in turn leads t better custmer satisfactin ratings. 2. Imprved cmpetitiveness in the market. As prjects are dne faster, the KM enabled rganizatin nw has the advantage f tapping int new markets r handling mre prjects, which ultimately helps the rganizatin meet its revenue gals. 3. Imprved emplyee mrale. This is a very imprtant benefit as peple are the key cmpnent f a successful rganizatin. Emplyees feeling satisfied and happy will have lng term benefits t the rganizatin and will help in cming up with innvative prducts/services. 4. Imprved quality f deliverables. With increased cnsistency acrss all prjects, because f reuse f knwledge, tls, etc., there will be an imprvement in the quality f deliverables, which again will have an impact n verall custmer satisfactin. Making Knwledge Management Wrk in Yur PMO Knwledge Management as a practice/cncept needs the right envirnment t grw and prvide the kind f benefits discussed in the abve sectin. It s cmmn t say that trees cme frm seeds. But hw culd a tiny seed create a huge tree? Seeds d nt cntain the resurces needed t grw a tree. These must cme frm the envirnment within which the tree grws. But the seed des prvide smething that is crucial: a place where the whle f the tree starts t frm. As resurces such as water and nutrients are drawn in, the seed rganizes the prcess that generates the grwth. Peter Senge, Authr, The Fifth Discipline: The Art and Practice f the Learning Organizatin Many rganizatins in the past have tried t implement Knwledge Management and failed. Over ur many years in the KM envirnment, I have fund that the tp tw reasns why rganizatins failed implementing KM are: Reasn #1 Cmpanies build grand KM strategies, and subsequently try t tackle t much at nce. KM slutins are far frm simple t build and implement, but t many cmpanies make the prcess far t cmplex, while als failing t take an incremental apprach t the prblem. The practicality f the slutin then receives rganizatinal resistance eventually leading t its demise.

7 RTM Cnsulting 7 Reasn #2 They fcus n technlgy vs. a prcess, when in fact ne withut the ther will nt wrk. N questin abut it, KM can be very prcess intensive, but the prcess can/shuld be designed in such a manner that the wrkflws are mre natural fr the rganizatin. A gd KM tl(s) is als necessary t enable a gd prcess. KPMG did a survey and the findings indicate that 43% were at Stage 1 Knwledge Chatic. Only a third (32%) culd be said t be at Stages 2 r 3 Knwledge Aware and Knwledge Fcused. Only 10% were at Stages 4 r 5 Knwledge Managed and Knwledge Centric (nly 1% were at the latter stage) Given such a high failure rate, mst rganizatins are hesitant t try and make Knwledge Management wrk fr them. With the right apprach and supprt frm tp management, Knwledge Management can be implemented successfully. There are sme critical challenges that the rganizatin needs t vercme t have a cmprehensive Knwledge Management slutin that is wrking and delivering benefits fr the PMO. Fllwing are a few key challenges that a KM implementatin may face and sme guidance n hw t vercme thse challenges by asking the right questins and finding answers fr thse questins t reslve the resistance: 1. Culture: a. Are peple willing t share their knwledge practively r nt? b. Are peple willing t take new appraches t slve prblems? c. D emplyees trust each ther, leadership? d. Is failure cnsidered a negative in the rganizatin? e. Is change management in place t address cultural issues? 2. Strategy: a. Is the KM strategy in-line with the verall business/crprate strategy? b. Is the KM strategy understd by everyne in the rganizatin? c. Is the strategy clear t get buy-in frm the peple? 3. Leadership: a. Des tp management understand and supprt the KM initiative? b. Is management aware that KM is a lng term bjective/gal whse results may nt be immediate? c. Is management ready t prvide necessary resurces and financial investments t the initiative? 4. Technlgy: a. Des the tl/technlgy selected meet all the requirements? b. Are peple trained n hw t use and leverage the tl? 5. Cmmunicatin: a. Hw ften d peple hear abut KM?

8 RTM Cnsulting 8 b. What cmmunicatin channels are used t pass n the message? KM Slutin Taxnmy, CM & Tls Prcesses & Wrkflws KM Strategy Figure 1 Mving twards creating a cmprehensive KM slutin that addresses the challenges a PMO faces needs t be dne in an incremental fashin. Figure 1 abve illustrates the building blcks apprach fr designing an enterprise wide Knwledge Management slutin. 1. KM Strategy This is the mst imprtant aspect fr a successful KM slutin as this lays a fundatin and prvides much needed directin fr KM effrts. Mst rganizatins ignre this step and jump right int buying a KM slutin, which ultimately leads t failure. Organizatins shuld take time t think thrugh the business challenges KM will help them reslve and the business value it will bring the users. It is imprtant t have a clear understanding f what yu are trying t achieve and hw yu are ging t get there. 2. Prcesses and Wrkflws Knwledge Management is all abut hw peple access knwledge and hw they use that knwledge in perfrming their day-t-day tasks. KM prcesses and wrkflws shuld blend int prject prcesses and wrkflws seamlessly, prviding emplyees with the right knwledge at the right time. Mst rganizatins which lead by first purchasing a KM autmatin tl end up failing. Prcess and wrkflw definitin must drive a requirements gathering prcess ultimately leading t selectin f supprting autmatin capabilities.

9 RTM Cnsulting 9 3. Taxnmy, Change Management and the Tl The next majr building blck is defining the taxnmy fr yur Knwledge Management slutin. Every rganizatin is unique, s the taxnmy shuld meet yur rganizatin s specific needs. When defining taxnmy, it is imprtant t include the stakehlders (end users) in the prcess. Similarly, Change Management is big cmpnent in this building blck. Mst f the time peple are resistant t change. Getting peple t buy-in is key t realizing the benefits f the KM prgram. Anther imprtant cmpnent is making the right decisin abut the KM tl/technlgy. Mst rganizatins make a buying decisin based n prduct dems r sales presentatins. As discussed earlier, every rganizatin is unique, s having clearly dcumented requirements helps rganizatins make the right chice which ges a lng way in fully leveraging yur rganizatins knwledge. 4. KM Slutin Gvernance is anther key aspect f a successful KM slutin. When the slutin is implemented there shuld be a gvernance plan in place t mnitr and cntrl the verall KM prgram. The gvernance plan is in place t define and measure the perfrmance f yur KM slutin based n identified metrics. Tips frm the Trenches Sme tips fr implementing a successful Knwledge Management initiative acrss the rganizatin fr PMO leadership are: 1. Build a viable KM Strategy 2. Create a prcess t build, manage and maintain quality knwledge capital 3. Implement effective change management t ensure adptin 4. Implement a KM specific cmmunicatins plan 5. Build metrics and gvernance t ensure the right utcmes

10 RTM Cnsulting 10 Cnclusin Nw mre than ever, rganizatins are tasked with managing their knwledge capital. PMOs are being created t deliver these cmplex and dynamic slutins t custmers and at the same time managing ever demanding custmer expectatins. Knwledge Management is the answer t the challenges PMOs face. Knwledge Management prvides a knwledge platfrm fr PMOs t fully leverage their rganizatinal knwledge capital. Knwledge Management creates an envirnment fr the PMO where a culture f sharing and reusing existing knwledge becmes the way prject teams wrk. Abut RTM Cnsulting and the Authr Cincinnati-based RTM Cnsulting prvides strategic and peratinal advice t assist technlgy cmpanies with increasing revenues and margins by leveraging services mre effectively. Specializing in Resurce Management and Services Business Optimizatin, RTM Cnsulting helps teams respnsible fr prfessinal, cnsulting and supprt services achieve the benefits assciated with successful services prtflis. With its unique Just-in-Time Resurcing slutin and Business Acceleratin Services, RTM Cnsulting helps large, medium and small firms mve beynd thery t practical applicatin f industry best practices and achievement f exceptinal results in the shrtest pssible perid f time. Randy Mysliviec leads RTM Cnsulting, prviding high impact advisry services fr technlgy cmpanies service businesses. Acknwledged by industry surces as an expert in Glbal Resurce Management (GRM) and authr f the Just-in-Time Resurcing brand f slutins, Randy advises multinatinal cmpanies with the cmplex challenge f perating services teams serving the glbal market. He is a funding member f the Technlgy Prfessinal Services Assciatin (TPSA nw TSIA - the Technlgy Services Industry Assciatin) and served as a member f the TPSA Advisry Bard. Randy is als a cntributing authr fr PSVillage All rights reserved.

11 RTM Cnsulting The Challenge Technlgy service prviders and ther human capital intensive service rganizatins including hardware, sftware and cnsulting cmpanies, internal shared service rganizatins and utsurcing entities all knw that efficient management f human capital, prject prcesses, and ther service delivery and g-t-market related prcesses are key t market success. Tday s challenging business envirnment makes running a services business highly dependent upn having lean and prven business and peratinal prcesses designed fr peak perfrmance. The Slutin Our unique cmbinatin f decades f services and utsurcing peratinal experience cupled with slutins targeted t the services rganizatin allw us t wrk with large, medium and small firms t mve beynd thery t practical applicatin f industry best practices and achievement f exceptinal results in the shrtest pssible perid f time. Cntact Us: (855.RTMC555) inf@rtmcnsulting.net Wh We Are RTM Cnsulting prvides strategic and peratinal advisry services t technlgy cmpanies and ther industries t assist them in increasing revenues and grwing margins by leveraging cnsulting, prfessinal and supprt services mre effectively. What We D Strategic Planning Services - We use ur extensive leadership experience t help services rganizatins build the right strategy and peratinal mdel t make value creatin a reality. Resurce Management - We help yu fcus n Getting the Right Persn in the Right Place at the Right Time with ur Just-in-Time Resurcing (JITR) slutin. Prject and Prtfli Management Our unique PMO/PM framewrks will help yur rganizatin efficiently run prjects n-time, n-budget, with cnsistently excellent quality. Services Business Optimizatin - Our skilled practitiners help yu identify and implement best practices necessary t transfrm yur services business int the mst efficient and effective peratin pssible. Skills Develpment/Training - We enhance the sft skills f yur cnsulting and prfessinal services persnnel t cmplement yur prduct, business and technical knwledge. We als ffer training in prject management, resurce management and ther services based disciplines. PSA/PPM Cnsulting - We prvide an bjective third party assessment and assistance in chsing the right autmatin slutin fr yur needs and assist yu with implementatin t achieve the benefits f yur investment. Outsurcing Advisry Services - We assist bth prviders and cnsumers f utsurcing services with Strategic Surcing Cnsulting, Resurce Management Strategies, Business Optimizatin, Skills Develpment and Training, and Resurce Management/Prject Management Autmatin. Value Realizatin Services - Our unique Value Realizatin Framewrk enables yu t help yur clients clse the technlgy cnsumptin gap by accelerating adptin f yur prducts full range f features and functins. Hw We D It Cmpany Capabilities Overview Our missin is t help cnsulting, prfessinal and supprt services rganizatins get better at what they d Our highly disciplined management cnsulting and peratinal services include: Rapid Diagnstics t identify pprtunities t imprve business perfrmance. Implementatin Services t make slutin implementatin fast and effective. Business Planning Services t turn yur visin int a realistic perating plan. Business Acceleratin Services t accelerate yur time t value with RTMC slutins. Cpyright All Rights Reserved.