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IT Project Management Office

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Presentation on theme: "IT Project Management Office"— Presentation transcript:

1 IT Project Management Office
Paul R. Astiz, MBA, PMP, CDP ( )

2 Presentation Objectives
Provide an overview and general understanding of PMO models, functions, success factors, and implementation Introduce the CobiT PM CMM as a framework for establish and evolving the PMO Project Management functions

3 Outline IT PMO Trends PMO Models PMO Key Considerations
Charter Culture Change Implementation Strategies Staffing/Skills Performance Metrics Critical Success Factor Introduction - CobiT® CMM

4 IT PMO Trends 67% of IT organizations in 2003 have PMOs (Forrester Survey) More than half established since 2000 (Forrester Survey) Government is moving to standardize IT Project Management Nov, 2003, Federal CIO Council recommends setting up Federal PMO to standardize PM practices Jun, 2004, SC requires management of major and inter-agency IT projects to use standard practices and be managed by PMP Jan, 2001, NY sets up PMO to standardize management of technology projects Jun 2002, CA CIO established objectives for statewide project management standards IT PMOs are becoming strategic IT PMOs are gaining more influence

5 What’s Driving IT PMO Proliferation?
Late and over budget IT projects Lack of coordination of activities Poor project management practices Lack of standardization of PM methodology Need for consolidated project reporting to drive prioritization/decisions More focus on IT project ROI More focus on alignment of IT projects with business strategy Strategic value and dependency on IT applications/technologies Increase in IT Project workload Proliferation of IT project proposals Delays in getting projects approved More complex IT environment and solutions Enterprise solutions/cross-functional projects Distributed development organizations Outsourcing and contracting out of IT projects The PMO is a solution to a problem or business need. What is the problem or business need?

6 PMO Benefits Companies that implemented successful PMOs achieved:
80% ROI 20% reduction in project time 30-35% successful project delivery Companies without a PMO experience 74% project failure rate Source: Forrester Research

7 PMO Models One size does not fit all Tactical vs. strategic
PMO drivers/business needs PM maturity Vision and goals of sponsor Business/organization mission Organization size Number of projects Political and cultural environment Tactical vs. strategic Internal vs. external focus Departmental vs. enterprise (IT vs. LOB) Single vs. multiple Staff vs. line organization

8 PMO Support/Control Model
Project administrative support PM standards, methodology, processes Project Consulting and mentoring PM coaching/training/certification Integrated Project Reporting Issue Tracking/Reporting Master Project Schedule Project Document Repository PM tools and tools support Project Audits Cost and Schedule Control Business Case Project Approval Project Prioritization Project Management Resource Management IT Asset Management Project Portfolio Management

9 Key Considerations PMO charter Culture change Implementation strategy
Staffing Metrics/Performance Success factors Maturity of Project Management Practices

10 PMO Charter Charter Scope Charter Document Business Needs Sponsor
Public vs. Commercial PM Maturity Charter Document Mission/Vision Goals/Objectives Service Offering PMO Governance Key Performance Metrics Funding model Charter provide clear focus of PMO and what is being implemented (similar to project charter) Facilitate business case and project planning Mission/Vision What you do, what you want to become Business needs, drivers, why is it being created Get sponsor and key stakeholders involved in defining mission/vision Not easy all the time, because key stakeholders may not exist yet (e.g., PMs) Goals/Objectives (goals –refinement of vision/accomplishments, objectives specific activities Ideally no more than 3-5 Expand in the future as success is proven and part of evolutionary strategy Offering/Scope – Business needs and urgency of what is required What it will or will not do. What functions it will perform Who is the customer Performance Metric Provides sense of value in particular if value metrics are defined Helps to think and define baseline upfront May want to consider SLAs Governance – How will the PMO be organized Who reports to whom (Line of business vs. IT organization) What skill required Who will it report to (board, steering committee, CIO, CEO, other) How will it interact with operational and development functions What is the reporting process for communicating status and progress Funding – Self funded/charge back Overhead

11 PMO - Culture Change Natural resistance to change Political landscape
Winners/Losers Management Support Degree of cultural change PM maturity PMO charter Existing skill level Key driver implementation strategy Change Management Assess impact of change Inform Educate Involve Level of resistance may be high or low. Management support Driven by pain and urgency to change Assess Impact of change Processes Who is being impacted (staff as well as management) Training

12 PMO Implementation Strategies
Strategy drivers PMO charter PM maturity Sponsor and management support PMO drivers Perception of value Political environment Culture/Value System Evolutionary/Incremental Lower implementation risks Lower start up costs Will take longer to demonstrate ROI More suitable if high resistance to change and low management support Revolutionary/Wholesale Higher implementation risks Higher startup costs May be able to demonstrate ROI quicker More suitable if crisis or recognition at high level that change is imperative Hard to generalize about effectiveness or benefits of strategy. Too many variables. Costs will be impacted primarily by scope and PM maturity Risks will be affected by scope, PM maturity, culture, PMO leadership, sponsor The more the strategy drivers favor a PMO the most likely a revolutionary approach is best strategy. Most organizations seems to take the evolutionary approach. Primary reason is that PM maturity is low.

13 PMO Staffing/Skills Staffing Approaches Skills In-house resources
Hybrid (In-house/contractors) Ad hoc contractors augmentation Skills PMO Director/Manager Project Manager Project Portfolio Manager PM Process/Methodology Trainer Relationship/Account Manager Tools Support/Administration Administrative Support Librarian/Document Control Staffing model based on many factors (budgets, labor policies/strategies, in-house skills, etc.) Charter will drive skills needed These skills do not necessary have to reside in PMO, but need to be considered as part of the planning/budgeting

14 PMO Performance Metrics
PMO vs. Project metrics Less that 15% of PMOs employ formal metrics program (Source: Forrester Research) Metrics are essential for growth and support – demonstrate progress, value, and productivity Performance metrics are driven by charter – no such thing as typical metrics Business value metrics Executive focus - Measure and demonstrate value to business Help justify existence during downsizing Expressed primarily in dollars savings/revenue or ROI Tend to be few and harder to derive Functional performance metrics Internal focus - Measure and demonstrate performance or quality of PMO functions Help justify PMO budget Help improve PMO performance May require baseline or benchmark to demonstrate performance Expressed primarily in percent or counts Tend to be many depending on functions performed Must be selectively chosen so as not to overwhelm Service level metrics Customer focus - Measure and demonstrate service level or quality of service to customer Help improve and maintain customer satisfaction SLA/SLO Expressed in a variety of ways Select on key and most important value to customer community Value Metrics Examples: ROI achieved from early delivery, cost savings, or revenue increase Functional Metrics Examples: Project management, budget, resource management, process improvement metrics, etc. Number/percent projects completed on or ahead of schedule Number/percent projects completed on or below budget Number projects managed – increase over year, target vs. actual Number of training classes delivered (target vs. actual) Service Level Metrics: Turn around time on business cases Turn around time on responding to stakeholder request for support Customer satisfaction based on survey results Turn around time on resolution of issues Categories (Project management, budget, resource management, quality, portfolio, PMO process, PMO governance, reporting

15 Success Factors Clear Charter Top-Down Support Bottoms up Buy-in
Creates clear expectations Defines boundaries for implementation Top-Down Support Bottoms up Buy-in Sponsor - Reporting to senior executive Strong LOB representation Communication/PR Promotion of services Education of value Performance metrics that demonstrate business and customer value Strong LOB - Distributes project management practices, culture, and values more efficiently as well as providing insight into each respective organization delivery issues

16 PM Capability Maturity Models
Valuable tool for establishing PMO and help define objectives, charter, and processes Assess current status Compare against best practices Develop strategy and road map for PMO Help communicate vision and get buy in Different models (CobiT, OPM3, ISO 15504, CMM/CMMI)

17 CobiT ® Capability Maturity Model
CobiT® CMM is valuable and comprehensive framework for assessing maturity of IT organization CobiT® CMM International Open Standard for IT Governance IT Governance Institute (ITGI®) Information Systems Audit and Control Association (ISACA®) ITIG ® not associated with Software Engineering Institute (SEI), Carnegie Mellon CobiT® CMM uses same conceptual framework as SEI’s CMM Defines maturity of IT organizations in four domains Planning and Organization Acquisition and Implementation Delivery and Support Monitoring PM CMM part of CobiT® Planning and Organization domain CobiT – Control Objectives for Information and related Technology developed and promoted by IT Governance institute Information Systems Audit and Control Foundation sponsors of CISA certification - Certified Information Systems Auditor Certified Information Security Manager (CISM) Cobit Mission – research, develop, publicize, and promote an authoritative international set of generally accepted information technology control objectives for day-to-day use by business managers and auditors. Work carried out by team in Free University of Amsterdam, the US (California Polytechnic University) and Australia (University of New South Wales 34 IT processes in 4 domains Planning & Organization – 11 Processes Acquisition and Implementation – 16 processes Delivery and Support – 13 processes Monitoring – 4 processes Why COBIT vs OPM3 IT oriented, fits within other IT COBIT standards, more prescriptive, simpler model, offers specific metrics, structure for balanced scorecard. Sources: and

18 CobiT® Maturity Levels
0 Non-Existent – Not applied 1 Initial – Ad hoc and disorganized 2 Repeatable – Follow regular pattern 3 Defined – Documented/communicated 4 Managed – Monitored and measured 5 Optimized – Best practices followed/ automated Source: CobiT 3rd Edition, Management Guidelines

19 CobiT® Model Components
Defines processes within each domain Defines high-level control statement for each process Defines maturity levels Defines success factors for each process Defines key goals for each process Defines key performance indicators Source: CobiT 3rd Edition, Management Guidelines

20 CobiT® Project Management Process Control Statement
Control of project management process with the business goal of setting priorities and delivering on time and within budget Is enabled by the organization identifying and prioritizing projects in line with the operational plan and the adoption and application of sound project management techniques for each project undertaken Source: CobiT 3rd Edition, Management Guidelines

21 Level 0 – Non Existence PM techniques not used
Organization does not consider business impact of poor project performance Source: CobiT 3rd Edition, Management Guidelines

22 Level 1 – Initial/Ad Hoc Aware of need for project structure and risks of poorly managed projects Use of PM techniques left to the individual Projects are generally poorly defined and do not incorporate business or technical objectives of the organization or stakeholders Lack of management commitment and project ownership Critical project decisions are made without user management or customer input Little or no customer and user involvement in defining IT projects No clear organization within IT projects and roles/responsibilities are not defined Project schedules and milestones are poorly defined Project staff time and expenses are not tracked and compared to budgets Source: CobiT 3rd Edition, Management Guidelines

23 Level 2 – Repeatable but Intuitive
Sr. Management has gained and communicated an awareness of the need for IT Project Management Organization is in the process of learning and repeating certain techniques and methods from project-to-project Projects have informally defined business and technical objectives Limited stakeholders involvement in PM Some PM guidelines developed, but left to discretion of project managers Source: CobiT 3rd Edition, Management Guidelines

24 Level 3 – Defined Process
PM process and methodology formally established and communicated IT projects defined with appropriate business and technical objectives Stakeholders are involved in the management of IT projects Defined project structure with roles and responsibilities Defined and updated project milestones, schedules, budget and performance measurements IT Projects have formal post systems implementation procedures Informal project management training provided No established policies for using combination of internal and external resources Quality assurance procedures are defined Source: CobiT 3rd Edition, Management Guidelines

25 Level 4 – Managed and Measurable
Formal and standardized project metrics PM measure and evaluated throughout organization not just IT PM process enhancement formalized and communicated, and project team members are trained on all enhancements Risk management performed as part of PM Stakeholders actively participate in projects or lead them Project milestones and criteria for evaluating success at each milestones are established Value and risk are measured and managed prior to, during, and after project completion Management has established a program management function within IT Projects are defined, staffed, and managed to address organizational goals, rather than only IT specific ones. Source: CobiT 3rd Edition, Management Guidelines

26 Level 5 - Optimized Proven full life-cycle project methodology is implemented and enforced, and integrated into organizational culture On-going program to institutionalize best practices has been implemented Strong and active project support from Sr. Management sponsors and stakeholders Implemented project organization structure with documented roles, responsibilities, and staff performance criteria Long term IT resources strategy is defined to support development and operational outsource decisions Integrated Program Management Office is responsible for projects from inception to post implementation Program Management Office is under the management of the business units and requisitions and directs IT resources to complete projects Organization-wide planning of projects ensures that users and IT resources are best utilized to support strategic initiatives Source: CobiT 3rd Edition, Management Guidelines

27 CobiT® PM Success Factors
Experienced and skilled project managers are available Accepted and standard project management process in place Sr. Manager sponsorship of projects, and stakeholders and IT staff share in the definition, implementation, and management of projects There is an understanding of the abilities and limitations of the organization and the IT functions in managing large, complex projects Organization-wide project risk assessment methodology is defined and enforced All projects have a plan with clear traceable work breakdown structures, reasonably accurate estimates, skill requirements, issues to track, quality plan, and transparent change process (my note – effective PM methodology enforced) Transition from implementation team to operational team is a well-managed process System development life cycle methodology has been defined and is used by the organization Source: CobiT 3rd Edition, Management Guidelines

28 CobiT® PM Key Goal Indicators
Increased number of projects completed on time and on budget Availability of accurate project schedule and budget information Decrease in systematic and common project problems Improved timeliness of project risk identification Increased organization satisfaction with project delivery services Improved timeliness of project management decisions

29 CobiT® Project Management Key Performance Indicators
Increased number of projects delivered in accordance with defined methodology Percent stakeholders participation in projects (involvement index) Number of project management training days per project team member Number of project milestones and budget reviews Percent of projects with post-project reviews Average number of years of experience of project managers

30 Conclusion IT PMOs can improve IT project delivery performance
One size does not fit all PMO Support/Control model most useful Clear charter, top down support, & bottom ups buy is key to PMO success PMO performance metrics should focus on value to key stakeholders CMM valuable framework for establishing and evolving PMO

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