Implementing Program Management Standards at Duke Energy

Background  Duke Energy started the process to acquire Progress Energy in 2010 to form the world’s largest publicly traded utility. At the time of the merger:  Progress Energy had financial and governance standards for programs and full project management standards.  Duke Energy had division specific project management standards and no formal standards of financial approval process for programs.  The merger was approved in 2012 and in 2013:  Corporate standards for project management were created.  Job harmonization created Project Management job families which included project controls.  Standards training was conducted for all primary Project Management functions.  There was apprehension within the leadership team regarding establishing program standards for the combined the company.  There were a record number of programs in existence due to the merger integration work in combination with increased regulatory requirements.

The Process…  Create standards that will work within the company’s existing framework.  Obtain buy in from practitioners and leadership for the completed document.  Publish document as guideline for year 1 and convert to a standard for year 2.

Creating the Standard  The basis for the standard was a combination of PMI’s 3 rd version of the Standard for Program Management and existing company policies & standards.  There were minimum considerations included for smaller programs.

Standard Components  Minimum Considerations Checklist  Achieving Excellence in Program Management  Charter the Program & Determine Program Tier  Assign Organization & Program Manager  Develop Program Management Plan and Governance Structure  Program Monitoring and Control

Minimum Considerations Checklist  All Programs should be defined to a tier and assigned a Program Manager by the parameters contained within the standards document.  All Programs should have a program management plan which includes a benefits realization plan and the other suggested components contained within the standards document.  All Programs should have appropriate governance and oversight in place. At a minimum, all Programs should have a Program Steering Committee and a Program Management Team.  All Projects within the Program must follow project management standards.

Achieving Excellence in Program Management  The documentation outlines the Program Management lifecycle and the Program Management Supporting Processes.

Program Management Supporting Processes Supporting Processes Program DefinitionProgram Benefits DeliveryProgram Closure Program Communications Management Communications planningInformation distribution including Program performance reporting. Program performance reporting should include notification of change requests with response, budgetary information, regulatory findings and response, announcements, and benefit updates. Included in this supporting process is Lessons Learned collection and documentation. N/A Program Financial Management Program cost estimation, Program financial framework establishment and Program financial management plan development Project cost estimation, Program cost budgeting, and Program financial monitoring and control Program financial closure Program Integration Management Program initiation, Program Management Plan development, and Program infrastructure development Program execution delivery and Program performance monitoring and control – explicitly schedule, scope, cost and benefits delivery. Program transition and benefits sustainment as well as Program closure Program Procurement Management Program procurement planningProgram procurement and procurement administration Program procurement closure Program Quality Management Program quality planningProgram quality assurance and Program quality control N/A Program Resource Management Resource planningResource prioritization and resource interdependency management N/A Program Risk Management Program risk management planning including the initial risk assessment Program risk identification, analysis, response planning and Program risk monitoring & control N/A Program Schedule Management Program schedule planningProgram schedule control N/A Program Scope Management Program scope planningProgram scope control N/A

Charter the Program & Determine Program Tier  Draft charter created and vetted within the sponsoring organization.  Scope complexity and risk along with organizational impact determines Program tier.  For our purposes, there were two tiers – strategic and operational.

Assign Organization & Program Manager  Program Manager and Team assignment.  This includes executive and working sponsors as well as a business change agent.  Roles & responsibilities are defined within the document.  Program Alignment within the Organization  Strategic Programs: Enterprise level organizational alignment with indirect reporting relationships to the impacted business groups.  Operational Programs: Program organizational alignment should be within the impacted business. If the line of business has a PMO, alignment should be within that organization.

Develop Program Management Plan and Governance Structure  Create Program Management Plan - Components of a Program Management Plan included within standard  Use Tier Appropriate Governance  Program Management Team  Program Steering Committee  Senior Leadership

Components of a Program Management Plan  Program Roadmap  Program Charter  Benefits Realization Plan  Internal Governance Plan & Program Steering Committee  Strategic Alignment  Change Management  Performance Management  Financial Management Plan  Risk Management Plan  Program Stakeholder Engagement Plan  Communication Management Plan  Procurement Management Plan  Quality Management Plan  Program Resource Management Plan

Key Components & Differentiation of the Plan  Program Charter & Roadmap should be the foundation of the plan.  The benefits realization plan must include both monetized benefits and strategic value to further demonstrate and support strategic alignment.  The internal governance plan must be clearly defined with roles & responsibilities.  Performance management must incorporate stakeholder requirements and change management.  Key questions defined within the guideline should be addressed within the plan for both planning and the monitoring and control areas of the program life cycle.

Establish Program Oversight and Governance  Scope of governance roles are defined  Program Manager  Program Management Team  Sponsorship  Senior Leadership  Decision matrix included  Stage Gate Approvals  Project and Program Review

Decision Matrix Project TeamProgram Management Team Program Steering Committee Project Sponsor Senior Leadership What can project teams decide? Decisions that align with current, approved scope DecideEndorseN/A Decisions that align with corporate processes that do not impact items listed below DecideEndorseN/A What must project teams escalate? Decisions that impact other projects or initiatives within the Program Recommend Endorse or Decide N/A Decisions that impact schedule such as major milestones or critical path (Positive or Negative) Recommend Recommend or Decide Decide Decisions that impact scope other than what is approved Recommend Recommend or Decide Decide Decisions that impact regulatory, safety, or compliance Recommend Recommend or Decide DecideN/A Decisions that impact the business beyond the original Program Management Plan Recommend Recommend or Decide Decide Decisions that impact budget (i.e. Cost savings or excessive cost increase (decision level determined by spending authorization) Recommend Recommend or Decide Decide

Program Oversight and Governance Program Oversight Senior Management Management Review Financial Review Program Steering Committee Project Stage Gate Reviews Major Program Review Program Management Plan Review Program Management Team Project Stage Gate Reviews Monthly Program Review

Role Definition & Clarity Program Management Team  Coordinates and manages Program execution  Develops and revises the Program Management Plan  Allocates resources within the Program  Oversees Projects and initiatives  Conducts Program milestone reviews and provides status to the Steering Committee  Performs gate reviews for component projects  Approves gate reviews within Program Management Plan authorized limits Program Steering Committee  Provide oversight of execution from Program Definition through Closure  Guides allocation of resources within the Program  Guides allocation of funding within the Program  Recommends changes to the Program Management Plan  Assures Program Management Team compliance with corporate policies & procedures  Approves gate reviews within Program Management Plan authorized limits  Is the Program interface with Senior Management

Project & Program Reviews Program Steering Committee Non-Gate Project and Program Reviews and Reporting Review / Report Title ObjectiveTiming Major Program Review Provide a comprehensive review of the Program and component Project and initiative cost, schedule, risk management, safety and environmental performance Quarterly (corresponding with reviews below) Program Management Plan Strategic Proposal Review Gain approval/confirmation of strategic intent, posture and planning elements of the Program, enabling the development of a detailed budget proposal for the following year Annually (typically 2Q) Program Management Plan Budget Proposal Review Confirm consensus on strategic intent, posture and planning elements of the Program and gain consensus of the upcoming requested authorizations and appropriations (budget) Annually (typically 3Q) Program Management Plan Change Request Gain approval to change, adjust, a major element of the Program Management Plan As Required

Reporting Requirements Program Management Team Non-Gate Project Reviews and Reporting Review / Report Title ObjectiveTiming Monthly Program Review Provide a comprehensive review of the Program and component Project and initiative cost, schedule, risk management, safety and environmental performance Monthly Monthly Component Project Report Provide detailed status of current activities and cost, schedule, safety and environmental performance. Track and status major issues and concerns Monthly Monthly Program Report Provide detailed status of current activities and cost, schedule, safety and environmental performance. Track and status benefits realization, Program risks, major issues and concerns. Monthly Project reports should roll up into this aggregated report. Monthly Change Order Request Gain approval to change, adjust, a major element of the Program Management Plan As Required

Program Monitoring & Control  Integrated Change Control  Program Performance Reporting  Resource Control  Issue Management & Control  Scope Control  Schedule Control  Cost Control  Perform Quality Control  Communication Control (Includes Lessons Learned)  Risk Monitoring & Control  Program Contract Administration

Supporting Processes for Program Monitoring & Control

Lessons Learned for a Program

Program Closure  Program closure required that all component Projects and initiatives be completed and closed following the Project Management standards.  For strategic Programs, there is a required stage gate for senior leadership to officially close the Program.

Training  Training documentation for the standard was developed and rolled out to the appropriate personnel within the corporation through a workshop format.  It will be provided as needed going forward.

Questions?

Jennifer Baker, MSPM, PfMP, PgMP, PMP, ITIL, MBB