1. OPM3 - Organizational Project Management Maturity Model Walter A. Viali, CSQA, PMP PMO To Go LLC Professional Development Day PMI Honolulu - May 3, 2006

2. 2 What is OPM3 PMI’s Organizational Project Management Maturity Model Organizational project management is the systematic management of projects, programs and portfolios in alignment with the achievement of strategic goals

3. 3 Walter A. Viali Over 32 years in Information Technology “Retired” from Texaco Inc. in 1999 after 25 years Co-founder and Principal Consultant for PMO To Go LLC Certified Software Quality Analyst (CSQA) Certified Project Management Professional (PMP) Certified Project Management Instructor Member of the faculty of the Project Management Program for the Bauer College Business (University of Houston) JAD Session Leader with over 4,000 hours of planning and project facilitation experience SEI CMM and PMI OPM3 knowledge and assessment experience Implemented several Project Management Office (PMO) organizations Experience in Strategic Business and IT Planning Past President of the Houston Chapter of the Society for Software Quality (SSQ) and of the Texas Application Process User Group Sr. Vice President, External Operations, PMI Houston Chapter Consulting with major companies on Process Improvement, Project Management, PMO implementation, Strategic Planning, JAD facilitation

4. 4 What are Maturity Models? Tools for analyzing business and technical performance of 3 interrelated components –People –Processes –Technology Detailed models that help identify performance characteristics of these components at various stages of growth Frameworks for benchmarking the effectiveness of an organization

5. 5 The Need for Maturity Models Progress and continuous improvement are an integral part of our way of life Organizations need a well construed approach to understand where they are, where they need to be and the resulting gap Current maturity models offer a well organized and linear roadmap for continuous improvement Maturity models offer a quick and often precise snapshot of an organization’s effectiveness and reliability

6. 6 The Standish Group 1994 Chaos Report 17% of projects succeed 31% of projects fail 52% of projects are challenged $78 billion dollars total project waste (against $250 billion in project spending)

7. 7 The Standish Group 2003 Chaos Report 34% of projects succeed (100% improvement over 1994) 15% of projects fail (down from 31% in 1994) 51% of projects are challenged $55 billion dollars total project waste (against $255 billion in project spending) –$38 billion in lost dollars for US projects in 2002 –$17 billion in cost overruns

8. 8 Need for Improved Performance with… Could dismal results be a clue?

9. 9 Where did it all start? The DoD and the problem of software bugs The need to identify reliable contractors The Software Engineering Institute (SEI) is established at Carnegie Mellon University in Pittsburgh, PA Watts Humphrey, former IBM executive, is placed in charge of the SEI The SEI collects “best practices” from large U.S. companies

10. 10 Capability Maturity Model (SM) Software Engineering Institute 1991 Initial - Ad hoc, Informal - Hero Driven Repeatable - Project Mgmnt. Focus Defined - Process Mgmnt. Focus Managed - Focus on QA and QC Measures Optimizing - Continuous Improvement

11. 11 Proliferation of Maturity Models SEI People CMM –Compensation, Participatory Culture, Monitoring and Workforce Innovation SEI Software Acquisition CMM –Requirements, Solicitation, Acquisition, Project Management, Risk, Contract SEI Systems Engineering CMM –Engineering, Project and Organization Domains SEI Integrated Product Development –Product lifecycle, design, product built, tested, supported and retired SEI PSP –Personal Software Process, the SW CMM for the individual SEI CMMI –Integration of SW-CMM, IPD, SE, SA maturity models

12. 12 Proliferation of Maturity Models Data Management Maturity Model Testing Maturity Model Security Maturity Model Internal Controls Maturity Model Project Management Maturity Models PMO Maturity Models Etc.

13. 13 Project Management Maturity Models ESI Framework for Project Management Dr. William Ibbs’ PM Maturity Model (Berkeley) PM Solutions PM and PMO Maturity Models Institute for International Learning PM and PMO Maturity Models Etc.

14. 14 OPM3 PMI’s answer to the plethora of Project Management Maturity Models is OPM3 –Organizational Project Management Maturity Model –Comprised of three general elements Knowledge – content of the standard Assessment – method for comparison with the standard Improvement – setting the stage for organizational changes

15. 15 The OPM3 Standard

16. 16 PMI’s OPM3 Organizational Project Management Maturity Model Standard developed under the stewardship of PMI Provide a way to understand organizational project management Measure a company’s maturity against a comprehensive set of project management Best Practices Improve organizational project management maturity

17. 17 Bridging the Gap Moving to Project Driven Organizational Models…

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19. 19 Links Among the Process Groups in a Project Phase and in OPM3 Initiating Processes Planning Processes Controlling Processes Executing Processes Closing Processes

20. 20 Organizational Project Management Processes – the Domains

21. 21 Organizational Project Management Improving Performance

22. 22 PM Maturity Increases Along a Continuum

23. 23 OPM3 Stages of Maturity

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26. 26 OPM3 Portfolio Management Process Models Portfolio Initiating Processes (1) Portfolio Planning Processes (21) Portfolio Executing Processes (7) Portfolio Controlling Processes (8) Portfolio Closing Processes (2)

27. 27 OPM3 Program Management Process Models Program Initiating Processes (1) Program Planning Processes (21) Program Executing Processes (7) Program Controlling Processes (8) Program Closing Processes (2)

28. 28 What About Project Management?

29. 29 OPM3 Portfolio and Program Management Process Models Inputs Tools & Techniques ControlsOutputs 1.Organizational Objective function description 2.Strategic Plan 3.Historical Information 1.Program and Project Selection Methods 2.Scoring Methods 3.Techniques such as NPV and ROI 4.Expert Judgment 1.Organizational financial expectations or constraints 2.Risk Tolerance 3.Business Goals 4.Investment Decisions 5.Executive Oversight 1.Portfolio Charter 2.Portfolio Leader identified and assigned 3.Portfolio Project Mix 4.Constraints 5.Assumptions Portfolio Scope Initiation

30. 30 Links Among the Process Groups in a Project Phase and in OPM3 Initiating Processes Planning Processes Controlling Processes Executing Processes Closing Processes 21

31. 31 Portfolio Planning Processes Portfolio Plan Development –Use the output of the other planning processes, including strategic planning to create a consistent, coherent document that can be used to guide both Portfolio execution and Portfolio control Portfolio Scope Planning –Progressively determining and defining the scope of the Portfolio Portfolio Scope Definition –Further categorization of the types of Projects and Products that the organization is expected to undertake Portfolio Project Activity Definition –Activities that must be performed to produce the various Portfolio products (Portfolio Program and Project lists) Portfolio Project Dependency Analysis –Identifying and documenting schedule dependencies across Programs and Projects within the Portfolio

32. 32 Portfolio Planning Processes Portfolio Duration Estimating for Programs and Projects –Estimating the number of work periods needed to complete the Programs and Projects in the Portfolio Portfolio Schedule Development –Analyzing Program and Project sequences, duration and resource requirements to create the Portfolio schedule Portfolio Resource Planning –Define resource options and best fit of resources to proposed Programs/Projects and initiatives, with constraints and tolerances to maximize results Portfolio Cost Estimating –Develop an estimate of the costs of the resources needed to complete Portfolio activities Portfolio Cost Budgeting –Establish priorities and make preliminary budget allocations among existing and proposed Programs/Projects

33. 33 Portfolio Planning Processes Portfolio Quality Planning –Identify which standards are relevant to the Portfolio and determine how to satisfy them Portfolio Organizational Planning –Identify, document and assign Portfolio roles, responsibilities and reporting relationships Portfolio Staff Acquisition –Plan for the continued availability of appropriate human resources needed to support the Portfolio Portfolio Communications Planning –Determine the information and communication needs of the Portfolio stakeholders: who needs what information, when they need it and how it will be given to them Portfolio Risk Management Planning –Evaluate and plan risk management activities across the Portfolio

34. 34 Portfolio Planning Processes Portfolio Risk Identification –Determine which risks might affect the Portfolio and document their characteristics Portfolio Qualitative Risk Analysis –Perform a qualitative analysis of risks and conditions to prioritize their effects on Portfolio objectives Portfolio Quantitative Risk Analysis –Measure the probability and consequences of Portfolio risks and estimate their implications for Portfolio objectives

35. 35 Portfolio Planning Processes Portfolio Risk Response Planning –Develop procedures and techniques to enhance opportunities and reduce threats to the Portfolio’s objectives Portfolio Procurement Planning –Determine what to procure and when. Identify economic opportunities across the portfolio Portfolio Solicitation Planning –Document organizational requirements and identify potential sources to meet procurement need

36. 36 The OPM3 Cycle Step One: Prepare for the Assessment Step Two: Perform the Assessment Step Three: Plan for Improvements Step Four: Implement Improvements Step Five: Repeat the Process

37. 37 The OPM3 Cycle

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47. 47 OPM3 Structure Best Practices (586) Capability (two or more) per Best Practice Measurable Outcomes per Capability Key Performance Indicator for each Outcome Paths to each Best Practice Applicable to Portfolio, Program and Project Management, as well as to the Standardization, Measurement, Control and Continuous Improvement “Maturity Phases”

48. 48 OPM3 Structure

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53. 53 Comprehensive Assessment Determine which capabilities exist or are absent for each Best Practice Which outcomes exist and are observable in the organization for each capability? Gain a more in-depth understanding of the organization’s maturity in organizational project management

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55. 55 Dependencies Between Best Practices

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58. 58 OPM3 - What's In It For Me Great project management will be of limited effect in the absence of organizational project management In fact, PMP certification can be viewed only as the first step in improving internal project management practices

59. 59 OPM3 - What's In It For Me Companies wishing to align internal project management practices with PMI’s PMBOK® Guide and future PMI standards, should begin to embrace PMI’s OPM3, especially if ready to embark on a project management improvement journey PMOs need the right tools to improve the organization’s project management practices

60. 60 Maturity Models and the PMO Strategic Business Planning Business Process Reengineering Strategic IT Planning Project Portfolio Management Projects Project Management Office Maturity Models

61. 61 OPM3 - What's In It For Me PMI will continue to enhance this model and allow third-party vendors to develop and market products and services based on OPM3 –OPM3 2008 Update Project under way –DNV (Det Norske Veritas) and the APS program It’s important to embrace organizational project management and make sure we don’t lose the boat the way IT vendors did with the SEI CMM during the past 15 years

62. 62 The Future of Maturity Models CMMI OPM3 ISO Common Standard ? Baldrige DoD

63. 63 In Conclusion Maturity Models are a very important component of the overall organizational effectiveness picture The IT industry has ignored process improvement for too long and is now paying the price This is analogous to the way American industry ignored Deming after WWII, as he was “exiled” to Japan

64. 64 In Conclusion Instead of taking the easy way out, companies need to embrace maturity models as part of organizational project management and start the long journey towards “survival” Fortunately, some of the largest U.S. corporations are embracing organizational project management and not all hope is lost However, if organizational project management continues to be ignored by the majority of companies, tomorrow’s project managers and PMOs will go the same way as the programmers and other “outsourced” professionals of today

65. 65 You think you have problems…. The Great Pyramid at Giza…. –Schedule of 10 years Built starting around 2,550 b.c. 3 years to prepare, 5 years to build, 2 years to ´clean up´ –Resources 13,200 men (peak of 40,000) Artisan village (4,000-5,000 people) 2 million blocks –Labor expended 36.7 million days or 131,200 man-years –Labor costs 111 million jugs of beer 126 million loaves of bread

66. OPM3 - Organizational Project Management Maturity Model Walter A. Viali, CSQA, PMP PMO To Go LLC Professional Development Day PMI Honolulu - May 3, 2006