Setting up a PMO

Today’s Webinar will feature… PMO Setup Issues and Techniques Mark Perry, Director of PMO Services, gantthead A Practical Approach to PMO Setup Cornelius Fichtner, Host of The Project Management Podcast™ Questions and Answers

PMO Setup Issues and Techniques

PMO Setup Issues and Techniques What we are seeing - Issues Drivers Trends Constraints Actions Observations What we are seeing – Techniques Inwardly focused approach to PMO Setup Constituent focused approach to PMO Setup Recommendations

PMO Setup Issues and Techniques What we are seeing - Drivers Cost savings Return on investment (as a justification mechanism) Desire to first maximize existing software and next consider purchase of new Preference for incremental improvement Resistance to “quantum change – big bang” approaches Willingness and/or preference to start small Minimize risk Accelerate success Rapidly and cost effectively adopt and expand

PMO Setup Issues and Techniques What we are seeing - Trends Collaboration and agility Techniques driven, not necessarily technology driven Focus on capabilities and outcomes Driven by practitioner and team behaviors Common sense CMM/PMM Level 3 and beyond Not management edict or via a formal maturity program

PMO Setup Issues and Techniques What we are seeing - Constraints Staff Number Skill mix Share-ability PMO Budget At risk Business cycle Timing Unique issues Product of the Project Marketability Growth Time Stabilization Rapid Growth Correction Mission Critical Productivity Innovative Product Types

PMO Setup Issues and Techniques What we are seeing - Actions Broader view on project management and PMOs Enterprise, IT, Line of Business, Program Offices Business driven view on the purpose of PPM and the PMO More focus on: Goals, objectives, and needs of the business Using the tools and infrastructure that we already know and have Value and leveraging organizational skill Less focus on: Theoretical approaches and models for the PMO Overly bureaucratic project management approaches Imposing systems and methods on the business

PMO Setup Issues and Techniques What we are seeing - Observations This all leads to a needs of the business driven, constituent-oriented focus, but… it is hard to do. Sometimes, no sooner is the potential for a PMO mentioned than a runaway freight train leaves the station – fully loaded with ideas and opinions for what the PMO ought to be And, lost in the debate is the definition and understanding of the business needs for the PMO, the customers of the PMO, the specific goals that need to be reached, and the problems that the PMO exists to solve

PMO Setup Issues and Techniques What we are seeing - Techniques A Case Example Inwardly Focused Constituent Oriented

PMO Setup Issues and Techniques What we are seeing – Case Example The CEO of an emerging technology company was faced with many of the common problems associated with market success Large companies were keen to engage in pilots for their technology Business partners were lining up to develop technology partnerships Existing customers were adopting the technology enterprise-wide Business as usual was not working There were too many projects underway and in the pipeline With the company doubling in size and projects increasing more than fourfold, the CEO presented to the leadership team the idea of a PMO

PMO Setup Issues and Techniques What we are seeing – Inwardly Focused The CEO hired a PMO Manager Previous experience as PMO Manager at other companies PMP Certified Week 1 CEO and leadership team each met with the new PMO Manager Week 2 PMO Manager presented his strategy

PMO Setup Issues and Techniques What we are seeing – Inwardly Focused Organization - Small PMO team - Methods and standards - Reporting - Consulting and mentoring - Biz units owns projects Tools - Project management - Resource management - Issues management - Executive reporting Project Management - Singular methodology - Aligned to the PMBOK - Accessible from the intranet Training - Project management basics - Tools usage - Methodology Coaching Model PMO

PMO Setup Issues and Techniques What we are seeing – Inwardly Focused End of month 1 5 project managers hired End of month 2 Vendor demonstration arranged for leadership team PMO Manager had experience with tool at other IT PMOs Tool implemented and used by the PMs in the PMO End of month 3 Methodology was developed and made available Months 4 through 6 Project management training sessions were held PMBOK® Knowledge Areas, tool usage, methodology

PMO Setup Issues and Techniques What we are seeing – Inwardly Focused Six month checkpoint… How is the PMO Manager doing..? Is his strategy working..? Is the leadership team is satisfied..? Are the needs of the business are being met..? Is the PMO Manager up for a pay increase or bonus..? Or, is the PMO Manager at risk of being fired..?

PMO Setup Issues and Techniques What we are seeing – Inwardly Focused Six month checkpoint… VP of Sales “Unhappy” Too long to get new projects underway VP of Professional Services “Unhappy” Methodology did not effectively address management of requirements and pricing of billable work VP of Business Development “Unhappy” Non-revenue producing business development projects not supported Manager of Product Development “Unhappy” Development resources still being pulled away for sales support Chief Financial Officer “Unhappy” Data in PPM tool not accurate nor useful for revenue planning

PMO Setup Issues and Techniques What we are seeing – Inwardly Focused Six month checkpoint… As for the CEO, the CEO was appreciate of the efforts of the PMO Manager, but… Too much focus on project management minutia Too much bureaucracy Not enough focus on the needs of the business Not enough focus on the customers of the business

PMO Setup Issues and Techniques What we are seeing – Inwardly Focused The first year anniversary of the PMO The PMO Manager resigned The CEO tried to convince the PMO Manager to stay The CEO still believed in the value of the PMO for the company

PMO Setup Issues and Techniques What we are seeing – Constituent Focused The CEO hired a new PMO Manager No previous experience as PMO Manager at other companies Not PMP Certified Week 1 CEO and leadership team each met with the new PMO Manager Week 2 PMO Manager scheduled a PMO planning work session Prior to the working session the PMO Manager distributed a one page business planning template and asked each member to come prepared with a working draft of their input

PMO Setup Issues and Techniques What we are seeing – Constituent Focused Top three problems to be solved by the PMO _________________________________________________ Vision The vision of the PMO is to __________________________ Mission The mission of the PMO is to _________________________ Goals and objectives The top three goals and objectives of the PMO Goal 1 __________________________________________ Objectives _________________________________ Goal 2 __________________________________________ Goal 3 __________________________________________

PMO Setup Issues and Techniques What we are seeing – Constituent Focused By the end of the working session, the leadership team had arrived at a consensus position for all four components of the business planning template

PMO Setup Issues and Techniques What we are seeing – Constituent Focused Top three problems to be solved by the PMO Poor forecasting and management of project-based revenue Not enough capacity to perform more projects Lack of visibility of all the projects of the company Vision To be an enabling and facilitating organization that is focused on, and accountable for, the project-based success of the company Mission To develop and execute annual plans and strategies that solve the major project-related problems faced by the company Goals and objectives The top three goals and objectives (how much by when) of the PMO Goal 1: Improve project revenue management Objectives: Reduce forecasting margin of error to 5 percent by year end Goal 2: Increase project capacity Objectives: 100% increase by year end Goal 3: Provide holistic view of all projects Objectives: Effective project reporting in place within 90 days

PMO Setup Issues and Techniques What we are seeing – Constituent Focused By the end of the working session, the leadership team also agreed that other areas of need such as business development getting resources for non-revenue producing projects and product development wanting to stop sales from borrowing development resources would be secondary in importance over the next twelve months And, after the working session, members of the leadership team commented to the CEO on how different the approaches of the PMO Managers had been

PMO Setup Issues and Techniques What we are seeing – Constituent Focused The next six months PMO Manager worked closely with the three project managers assigned to the large, complex customer-facing projects PMO Manager helped the PMO Officer streamline and right-size the project management methodology working with head of sales and the top account manager PMO Manager helped and provided oversight to the PMO Officer responsible for all aspects of the PPM system CEO and leadership team very happy with progress With the same team, the new PMO Manager accomplished more in 6 months than the previous PMO Manager accomplished in a year

PMO Setup Issues and Techniques What we are seeing – Constituent Focused What was the difference..? It wasn’t the five project managers in the PMO It wasn’t the project management skill of the new PMO Manager It wasn’t the new PMO Manager’s knowledge in methodology or tools

PMO Setup Issues and Techniques What we are seeing – Constituent Focused The difference was all about focus..! The first PMO Manager was inwardly focused Organization, methodology, tools, training Minimal input from the leadership team on PMO strategy The second PMO Manager was constituent-oriented Problems to be solved by the PMO Vision, mission, goals and objectives PMO strategy a by-product of leadership team input

PMO Setup Issues and Techniques Recommendations Have a constituent-oriented focus Problems to be solved, benefits, value Avoid becoming inwardly focused It is very easy to be consumed in PM minutia Forget about all of the PMO hype Relentlessly focus on needs of the business, value, and benefit realization Have a continuous improvement mindset There are only two kinds of PMOs PMOs that are business driven and PMOs that are not

Now on to… A Practical Approach to PMO Setup Cornelius Fichtner Host of The Project Management Podcast™

Now on to… Questions and Answers

Thank You..! Setting up a PMO