Preliminary findings from our 2008 Project Management Office Research demonstrate that PMOs can provide significant cost savings and other benefits when they align with delivery of the organization’s strategic plan and are well-managed. Those that fail to do so do not survive.
With economic pressures looming over the world, most executives are seriously pondering how to manage the impact of outside forces on their business results. Just as with individual consumers, who are “tightening their belts” right now, it isn’t surprising that many organizations, even those that may be economically healthy, are seriously considering whether or not to cut fixed spending with layoffs. These layoffs will occur in non-revenue generating departments.
Project Management Offices(PMOs) are often seen as non-revenue generating and vulnerable in difficult economic times. Yet they provide important benefits to an organization by ensuring that projects are successfully and efficiently implemented. The Business Improvement Architect’s preliminary research findings indicate that PMOs are missing this opportunity.
Our 2008 Research of PMOs provides some insights to help PMOs survive these economic times. If the PMO is to survive these economics, here is what you need to do:
- Train the management team
- Conduct more Project Health Checks and Audits, following the ISO10006 Guidelines
- Manage the resourcing of all projects
- Ensure only strategically aligned projects are managed – all others should be dropped during the project prioritization period
- Review all management presentations before they are delivered
- Ensure all project changes are documented and approved by the sponsor
1. Train the Management Team
Train the management team, including functional management on Strategic Project Leadership so that they understand why they should support you and why it’s good for them and the organization.
- The main resistance level to the PMO inside an organization was at the functional manager level. (67%)
- 61% of PMOs are responsible for project management training. Training is generally conducted for Project Managers (95%) and to a lesser degree for project team members (69%). Surprisingly, only one-third of PMOs trained project sponsors or Functional Managers (even though functional managers were the major resistors to acceptance of the PMO.)
The management team, including functional managers, provide sponsorship and resources to projects. They need to be “on-board” for projects to succeed. Management often view projects as a tactical function and one that takes their resources away from their day-to-day job responsibilities and puts them onto non-value added work. There is a missed opportunity of not providing them with an understanding of the critical importance of their role in ensuring project success via project management training.
This training should focus on:
- Their role and responsibility to ensure project success
- The impact of project management on the organization’s continued success
- Ensuring all projects are strategically aligned
- Creating a culture that supports a project management environment
- Implementing strategic project management best practices
- Creating a strategic project measurement system
- Getting management to understand how the successful management of projects will benefit them; will help you survive.
Continued training of project managers and team members is important. Training of management is critical.
2. Conduct more Project Health Checks and Audits, following the ISO10006 Guidelines
It is the clear documentation of all quality project processes that enables the PMO to easily and successfully conduct a health check and/or audit of a project.
An important business case for PMOs is to increase customer satisfaction and 71% of respondents in the research to date have told us that their project success measures include meeting customer requirements. However, while most PMOs apply PMBOK as a guideline for establishing PMO processes, our preliminary findings show that there is almost no emphasis on the quality of these processes because nobody is applying ISO 1006 Guidelines for Quality Management.
The ISO 10006:2003, Guidelines for Quality Management in Projects, is creating the next wave in our understanding of the management of projects and is of benefit to consider when planning and auditing projects. Its overall purpose is to create and maintain quality in projects through a systematic process that ensures:
- Stated and implied needs of customers are understood and met.
- Interested stakeholders needs are understood and evaluated.
- The organization’s quality policy is incorporated into the management of projects.
Unlike the PMBOK, the ISO 10006 Guidelines are often used to conduct project health checks and/or project audits in order to ensure compliance to these guidelines. For example, during an audit, the Guidelines provide guidance on how to review all project documentation to ensure that the processes of:
- Managing each project is clear and well documented.
- Creating and maintaining the team is documented.
- Managing change on the project is apparent and documented.
- Managing risk is continuous, is documented and followed.
- Reviewing task completion is documented and followed.
- Reviewing the budget is documented and followed.
- Closing and evaluating the project is documented and followed.
3. Manage the resourcing of all projects
The resourcing of projects continues to be a top priority of management and a significant barrier for PMOs in achieving their mandate. Management are not “on board” because they are uncertain what the resources are doing and why. They often perceive that work on projects is an intrusion to their work requirements. PMOs do not appear to be addressing the opportunity by working with the Human Resource department to create new performance management systems.
The top mandates for PMOs were:
- Monitor projects (90%)
- Portfolio project reporting (53%)
- Train in project management skills (50%)
- Do project prioritization (48%)
Re-evaluate the organization’s performance management system so that it includes work on projects. Employees today are facing a performance-reporting dilemma. They have a dual reporting relationship to both a functional manager and to a project manager or sponsor. Yet their overall job performance, reviewed by their functional manager or supervisor, generally reflects only the work they do according to their job description. It rarely includes other work that is assigned, which is generally the work on a project, as a project manager or project team member.
A more effective system to manage performance is one that reflects the employee’s “total” performance. This includes the job description performance as well as the performance on their assigned projects. Total Performance Management™ is a performance system that evaluates employee performance on the basis of all the time spent at work. This includes the time spent on their functional job as well as special project performance.
4. Ensure only strategically aligned projects are managed – all others should be dropped during the project prioritization period
Most PMOs have found success by focusing on delivery of the organization’s Strategic Plan. Strategically focused projects have been well received and successful, while tactical projects seem to struggle to fulfill reporting requirements.
Best practices include:
- Executive buy-in and sponsorship critical
- PMO has to directly link with the strategic plan
- Strategically focused projects are well received and successful, while tactical projects struggle to fulfill reporting requirements.
- Getting corporate support for prioritization and selection of projects is important
- Centralizing project budgets for prioritization
- Organization structure should support the PMO’s existence and operation with direct line authority and communication with stakeholders.
Complete a full inventory of all projects within the organization. Identify the goal, deliverables and strategic alignment for each. Include all projects in the project prioritization process. This will immediately identify which projects should be eliminated or deferred as they are not added value to the organization’s ability to realize its strategic imperatives. These non-valued added projects are using valuable resources.
Ensure all projects have detailed project plans which include task and resource identification. Use the resource information to map these projects into a large resource grid. Provide the management team with your recommendations regarding any resource over-allocation issues which may affect the ability of a project to be successfully completed.
5. Review all management presentations before they are delivered
When PMOs present to management reporting must be accurate. If not, this can lead to dire consequences.
The top factors that contributed to success of a PMO are:
- Clear process in place for managing projects (82%)
- Executive sponsorship (72%)
- An organizational culture that is supportive of projects (66%)
The top rated project success factors were:
- On-time (91%)
- On-budget (86%)
- Project achieved scope requirements (79%)
- Customer requirement met (71%)
We took these findings and supplemented them with one-on-one interviews. This revealed that:
- On-time and on-budget (traditional project measurements) was a moving target. The original time-line and budget were missed. New timelines and budgets were put into place.
- No sponsor-approved change documentation was in evidence to support the changes.
- Project presentations were high-level project overviews that often hid the facts.
- The PMOs did not conduct Project Audits to validate the information they were getting. This meant that management were not given correct information.
- At the outset, everything looked good on most projects but a deeper analysis indicated many projects were managed by crisis, fire-fighting and a hope and a prayer.
- Review all management presentations before they are delivered.
- Ensure facts are correctly presented.
- Conduct Project Health Checks every 6 months and a detailed Project Audit at the project’s conclusion.
6. Ensure all project changes are documented and approved by the sponsor
Many projects have time and budget continuously shifting yet no project changes have been formally approved. Weekly project team meetings, which give an accurate accounting of the schedule and budget, are often not held or do not have detailed project plans, so although project reporting and monitoring may be happening, the frequency of reporting is insufficient.
- 55% of PMOs provided project teams with methodology training to ensure that documentation is followed.
- Most PMOs ensure that documentation is followed using regular project reporting (76%) and project monitoring (73%)
The most widely used tools and templates are:
- Project Management Process (88%)
- Change Request Template (83%)
- Reporting Template (81%)
- Scope Statement Template (77%)
- Issue Log Template (71%)
- Issue Report (70%)
The PMO must ensure that all projects have detailed project plans. This will ensure that weekly project team meetings are focussed on schedule and budget, based on detailed plans. Any variances should be recorded as issues. If it is apparent that a milestone might be missed the project manager and team must complete a project change request. This should be reviewed by the PMO and approved by the Sponsor before implementing the change.
In a climate of limited resources such as now, PMOs will be expected to generate savings and efficiencies for their organizations. It will be up to those who manage the PMO to demonstrate that they are doing this. Implementing our six recommendations above should guide your path to success with minimal additional investment.
Next Steps for the PMO Research
We are continuing to complete our global PMO research study and welcome your participation. We expect to have the final report and recommendations completed by the summer of 2009. Please contact us if you would like to participate and receive a copy of the summary report, prior to the release of the full report and recommendations.