PMO LEADERSHIP
STRATEGIES FOR ORGANIZATIONAL
DEVELOPMENT AND SUCCESS
Presented by
Ruffin Veal III MSPM, PMP
Project Management Institute
Minnesota Chapter
April 17, 2017
Copyright © 2016 Ruffin Veal and Associates, Inc. All Rights Reserved.
PRESENTATION OVERVIEW
Our Challenges
Our Strategy
How do we as PMPs address these challenges and resulting effects?
Our PMO Evolutionary Goal
Project Portfolio Management or Enterprise Project Management
The PMO Evolutionary Journey
Our role as PMPs
OUR CHALLENGES
 Projects are increasing in size (financially and enterprise-wide).
 Resources (financial and human) are becoming more geographically diverse.
 Continued push for “faster and cheaper”.
 More difficult to stay on time and within budget while producing required
solutions/deliverables.
 Ad hoc and disjointed project selection, initiation and implementation.
Continued 50-60%+ project failure rate.
OUR STRATEGY
HOW DO WE AS PMPS ADDRESS THESE CHALLENGES AND RESULTING EFFECTS?
 The Natural Evolution of Project Management Organizations
Project Management  Program Management Portfolio Management
 This evolution is driven by the challenges we face and the resulting effects
upon our client organizations.
 PMO Organizations must adapt to our ever changing client demands
OUR PMO EVOLUTIONARY GOAL
PROJECT PORTFOLIO MANAGEMENT OR ENTERPRISE PROJECT MANAGEMENT
A Project Portfolio Management Office is an organizational
unit that manages the organization’s project portfolio.
An organization that establishes a PPM office demonstrates commitment to
achieving PPM maturity.
The practical indications of such maturity include the establishment of clearly
defined PPM duties, the consistent application of PPM processes, and
success in each and every aspect of project and portfolio management.
OUR PMO EVOLUTIONARY GOAL
PROJECT PORTFOLIO MANAGEMENT OR ENTERPRISE PROJECT MANAGEMENT
PPM/EPM enforces the proper use of resources, employees, and timeframes to help
management get a healthy queue of work established and deadlines met.
PPM/EPM is infinite for the life of the enterprise.
Provides the strategic methods for analyzing and managing groups of concurrent
projects.
Attention is focused on the strategic viewpoint of the organization’s business and/or
technological goals.
Organizational Goals are primary consideration when addressing project
prioritization/sequencing, risk/resource management, standardization and
communication.
PMO EVOLUTIONARY JOURNEY
OUR ROLE AS PMPS
Remember foundational PMO functionality
- Monitoring
and controlling Project performance (Project governance):
Reporting project status to upper management
Implement and operate a Project Management Information System (PMIS)
Develop and maintain a project score card
- Development
of PM Competencies and Methodologies:
Develop implement and maintain a standard methodology
Promote project management within the organization
Develop competency of PM personnel through training and mentoring
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Remember foundational PMO functionality
- Multi-project
management:
Coordinate between projects, Identify/select and prioritize new projects
Manage one or more portfolios/programs
Allocate resources between projects
- Strategic
management:
Provide advise to upper management
Participate in strategic planning
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Remember foundational PMO functionality
. Organizational
learning:
Monitor and control PMO performance
Manage archives of project documentation
Conduct post project reviews/audits
Implement and manage risk and lessons learned database
- Execute
specialized tasks on behalf of project managers:
Scheduling/Risk/Contract management
Customer liaison/interface management
PMO EVOLUTIONARY JOURNEY
The 4 Styles of PMOs
Source: Gartner (June 2016)
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PMO EVOLUTIONARY JOURNEY
PMO Establishment
Key Business Drivers
Source: Gartner (June 2016)
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Establishing Project Portfolio Management Functionality
The Project Portfolio Management Maturity Model is an effective
tool for organizations to decide quickly what PPM improvements
they should make to enhance their organization's ability to
optimize investments, execute big changes and deliver value.
PMO EVOLUTIONARY JOURNEY
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Project
Portfolio
Management
Maturity
Model
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Five interdependent core dimensions are of critical importance in PPM:
• People: The interdependencies among people in terms of their availability,
their skills, their contribution to the work that needs to be done and their
career aspirations are of critical importance. At higher levels of maturity, the
leadership ability of the individuals involved in supporting PPM activities
becomes essential.
• PPM practices and processes: Disciplines such as portfolio management, as
well as program management and classic project management processes,
such as risk and resource management. One of the most common activities
also included in this dimension is the establishment of a PMO, be it a project
management office, program office or portfolio management office.
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Five interdependent core dimensions are of critical importance in PPM:
• Value and financial management: Systems that might be adequate at Level
1 (when projects are paid for as part of a lump sum) can be totally
inadequate when forced to support a more-detailed look at multiple
projects and programs. This dimension focuses on understanding how to
ensure that projects and programs offer value for the money spent.
• Technology: The requirements for technology support tend to evolve in sync
with the overall maturity of the approach to PPM. This dimension is designed
to help organizations know which technology will yield the greatest return at
a particular maturity level.
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Five interdependent core dimensions are of critical importance in PPM:
• Relationships: PPM fundamentally is focused on teams of people working to
create a specific outcome. This dimension offers appropriate guidance on
the necessary touchpoints, including identifying who needs to be informed,
who needs to be consulted and whose help is mandatory to achieve the
desired outcome.
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Level 1: Reactive:
• The organization is more reactive than proactive when dealing with
projects often with too few resources and very little time.
• Internal processes are centered on managing critical projects, so
priority projects get staffing support.
• Larger projects are contracted out to vendors.
• Projects may have budgetary estimates, but quite often, the project
work is simply funded out of the IT or other departmental budget.
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Level 2: Emerging Discipline
• Level 2 can be a massive swing from a "just get it done" environment
to a process-driven organization.
• Most organizations at this level have invested or will soon invest in a
basic PPM tool.
• The concept of disciplined teams working on a project is developed,
and project collaboration and team workspaces are supported.
• Tools with reliable data for value/financial management are generally
still rudimentary.
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Level 3: Initial Integration:
• At this level, organizations begin to find a balance among the
competing demands of the five dimensions of our model — people,
practices, value, technology and relationships.
• Level 3 organizations practice reasonable resource management.
• Organizations understand the difference between a project and a
program. Therefore, they staff and manage a program when the
scale, risk and complexity of the work justify it. Here, a good portfolio
process ensures that the right projects and programs are approved.
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Level 3: Initial Integration:
• The most useful competency for a PPM function at Level 3 is holistic
thinking — focusing on the whole, not the parts. This entails being able
to understand how a change in one area will affect others, how
changes should be made and in what order to achieve maximum
results.
• In a related development, joint decision making about projects and
programs by the organization as a whole happens at Level 3.
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Level 3: Initial Integration:
• This need for transparent decision making fuels a need for tools to
provide visibility and support analysis. There is also a need for a reliable
delivery mechanism and for some level of financial accountability.
• Level 3 tends to lack sophistication, but there is a conscious focus on
investing in the individual to improve performance so additional
compliance activities aren't required, laying the groundwork for Level 4.
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Level 4: Effective Integration
• The organization begins to focus on being project-capable.
• An expectation that projects/programs contribute business value.
• Fastest, least expensive way to accomplish anything new and
different is through the mechanism of setting up a project or program.
• Work that was started on the portfolio at Level 3 comes up a notch,
and it's now possible to begin to talk about real strategy execution.
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Level 4: Effective Integration
• A network of PPM leaders exists companywide.
• Centers of competency (most of them virtual) help improve workload
management, and capacity planning is in place and operating.
• The portfolio is modeled and appropriately optimized, factoring in risk.
• Value and benefit realization are being tracked.
• Program management skills are being developed internally, most program
managers are now being chosen from internal candidates.
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Level 4: Effective Integration
• Very few companies have successfully reached Level 4, but we
anticipate this number to begin to grow, because digital is changing
everything.
• The new digital economy, where competition can emerge from the
dark corners of possibility, forces organizations to begin to work
together as a matter of course, which supports PPM in attaining the
level of initial integration.
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Level 5: Effective Integration
• Program management exists at Level 5 in the same sense that it does at Level 4.
• An enterprise PMO (EPMO) oversees strategy execution and value delivery.
• Other PMOs exist as necessary throughout the organization.
• Technology supports a robust knowledge management system, and resource
management is enabled for all project resources.
• Team compositions change and adapt to each initiative, and work is structured
and executed in a way that maximizes the odds of getting things done right.
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Recommendations:
• At any level of PPM maturity, focus first on helping the organization make
well-informed investment choices. This will improve the odds of project
success more than any other factor.
• If your organization requires enterprise wide change and capabilities, it is
worth the effort to pursue Level 4, where enterprise PPM practices are built.
• Identify objectives for your enterprise, and use them to identify the most cost
effective improvement opportunities for your enterprise.
• Meticulously manage the change involved in maturing/improving your PPM
capabilities.
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Our Goal: A Project Portfolio Management Office
• A project portfolio management (PPM) office is an organizational unit
whose function is to manage the organization's project portfolio.
• Includes prioritizing projects, allocating resources to projects, and, on
a regular basis, identifying which projects to initiate, reprioritize, or
terminate.
• A key focus is ensuring that the overall collection of projects creates
the greatest possible value by maximally supporting the objectives of
the enterprise.
• The PPM office collects and distributes data for reviewing, assessing,
and managing individual projects to ensure that they are meeting
their expected contributions to the portfolio.
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Portfolio Management links Project Management and Enterprise Management.
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Our Goal: A Project Portfolio Management Office
• Participants, Authorities, and Responsibilities
• The first step for establishing a PPM function is to decide who will participate
as active managers of the project portfolio.
• A project portfolio manager, typically a senior manager, should be
appointed with accountability for the success of the entire project portfolio.
• The successful PPM leader has a rare combination of talents.
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 Important skills/capabilities for the Portfolio Manager
• Good understanding of the organization's vision, mission, and strategy.
• Understanding of project and program management, including ability to
assess project health based on high-level reporting documents.
• Leadership skills, including communication, presentation, and team
building.
• Broad understanding of the business, including markets, customer base,
partners, and applicable regulations.
• Able to interact effectively with senior executives.
• Good analytic skills, with understanding of the basic concepts and
techniques for project valuation and risk assessment.
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Our Goal: A Project Portfolio Management Office
• Adopt a Successful Portfolio Management Process
• The successful PPM process includes four major components. First, a
structured process is used to acquire key information about all projects and
to organize project data into one or more project portfolios.
• Second, consistent and objective methods are employed to analyze
projects and compare their risks and benefits.
• Third, resource demands are compared with capacity so that the subset of
projects that make best use of available resources can be selected.
• The final component consists of tracking portfolio performance for ongoing
assessment and adjustment.
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Our Goal: A Project Portfolio Management Office
• Components of Project Portfolio Management
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Our Goal: A Project Portfolio Management Office
• Adopt a Successful Portfolio Management Process
• On a regular basis tied to the planning and budgeting cycle (i.e. annually,
biannually, or quarterly), the portfolio team reviews all projects that are
seeking funding, including ongoing projects and new project concepts.
• Projects are screened to determine which proposals require formal
evaluation and prioritization.
• Projects exempted from formal evaluation include obvious "non-starters,"
very small projects, and projects that are more appropriately funded from
other budgets.
• Ongoing projects and "mandated" projects may or may not be exempted.
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Our Goal: A Project Portfolio Management Office
• Adopt a Successful Portfolio Management Process
• Typical portfolio management cycle
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Our Goal: A Project Portfolio Management Office
• Adopt a Successful Portfolio Management Process
• Project managers with projects that pass the initial screening are authorized
to use resources to complete additional analysis necessary to provide the
data required for entry into project proposal templates.
• In some instances, the necessary resources can be non-trivial. For example, a
proposed IT project may require some minimal level of business analysis to
determine feasibility, set project scope, provide cost estimates and estimate
project effectiveness at addressing needs.
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Our Goal: A Project Portfolio Management Office
• Adopt a Successful Portfolio Management Process
• Mandated and ongoing projects
• Evaluating ongoing projects for continued funding is useful to ensure that struggling
or obsolete projects do not prevent funds from being available to meet morepressing needs. Where possible, large, long-duration initiatives should be reframed as
a series of smaller projects.
• Not as much effort is required to re-evaluate an ongoing project because template
inputs need only to be updated rather than generated "from scratch“. Estimates
tend to get less uncertain as a project proceeds in its life cycle, and providing up-todate inputs allows portfolio information to be kept current.
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Our Goal: A Project Portfolio Management Office
• Adopt a Successful Portfolio Management Process
• Mandated and ongoing projects - Gate Reviews
• Note that the evaluation of on-going projects for the purposes of project
prioritization is not meant to replace other project progress evaluations.
• A large, multi-stage project may need to be evaluated at specified phases or
"gates" to ensure that it is on track to meeting its milestones and deliverables.
• Project gate reviews involve in-depth evaluations based on real-time information,
but they are typically made in relative isolation to the decisions made on other
projects.
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Our Goal: A Project Portfolio Management Office
• Project gate reviews – Coordinated with Project Portfolio Management
PMO EVOLUTIONARY JOURNEY
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Our Goal: A Project Portfolio Management Office
• Adopt a Successful Portfolio Management Process
• Mandated and ongoing projects - Gate Reviews
• With PPM, gate reviews can be used to trigger project re-prioritizations (prior to the
next portfolio review) or even an immediate project cancellation.
• Gate reviews result in modifications to project tasks. At least at the early stage of
PPM adoption, it is usually best to allow portfolio management activities and gate
reviews to proceed more or less independently.
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Our Goal: A Project Portfolio Management Office
• Adopt a Successful Portfolio Management Process
• Mandated and ongoing projects - Priortizing Projects
• Projects may sometimes have to be evaluated between the major
budgeting cycles.
• Urgent new projects may need to be evaluated between planning
periods.
• Evaluations between major reviews involve comparing such projects
against the most-recently established project priorities.
PMO EVOLUTIONARY JOURNEY
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Our Goal: A Project Portfolio Management Office
• Adopt a Successful Portfolio Management Process
• Mandated and ongoing projects - Multiple Project Versions
• By providing project alternatives, organizations can avoid "all-ornothing" choices for important, but resource-demanding projects.
• Providing alternative project versions for projects can result in a
significant increase in the value generated from the optimized project
portfolio.
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Our Goal: A Project Portfolio Management Office
• Adopt a Successful Portfolio Management Process
• Mandated and ongoing projects - Evaluation and Process Management
• Projects are prioritized and "go," "no-go," "kill," and "hold" recommendations
are made with the goal of creating a value-maximizing project portfolio.
• Project recommendations are reviewed by the executive committee and
project funding for approved and authorized projects.
• Projects are phased based on critical paths to fit people and other
resource constraints, with the most urgent projects starting first.
• Projects designated as "hold" may be resubmitted later.
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Our Goal: A Project Portfolio Management Office
• Adopt a Successful Portfolio Management Process
• Mandated and ongoing projects - Evaluation and Process Management
• The PPM office monitors the status of on-going projects to ensure that
projects stay on track to achieve the anticipated benefits that motivate
their being included in the selected project portfolio.
• Once the project is completed, the products (assets, services, etc.)
delivered or enhanced by the project should be similarly monitored and
evaluated to ensure that the forecasted benefits are realized.
• PPM managers provide the project portfolio manager with feedback on
the extent to which actual benefits are in fact achieve.
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Our Goal: A Project Portfolio Management Office
• Summary of Accountabilities
• Ensure consistent and accurate progress reporting on the costs and other
critical resources consumed by projects.
• Define and develop the detailed, continuous process by which projects are
evaluated, prioritized, selected, and managed.
• Enforce a collaborative effort that enables senior executives (the steering
committee) to reach agreement on portfolio goals and objectives.
• Provide coaching and training to project managers to help them to
understand project evaluation criteria and to enable them to efficiently
generate inputs for the project template.
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Our Goal: A Project Portfolio Management Office
• Summary of Accountabilities
• Communicate to project proponents and other stakeholders which projects
are approved and project priorities.
• Provide stakeholders with timely assessments of portfolio progress, with early
identification and correction of portfolio-level issues that may impact
performance.
• Address and resolve resource conflicts between projects.
• Maintain visibility of key project information across the enterprise.
• Ensure that the project portfolio remains in tune with changing business
objectives and strategy.
• Identify lessons-learned and continually refine the PPM process.
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Conclusion
• Project management organizations are ever changing and naturally evolving entities.
• In order for our PMOs to remain relevant they must adapt to the ever changing
organizational environments which they serve.
• We as PMPs, must approach our PMO management responsibilities with a vision of
enterprise portfolio management as our organization’s goal.
• We as PMPs are obligated and must articulate this evolutionary vision to our client
organizations.
• We must be the proactive facilitators of PMO evolution and not just maintainers of the
status quo.
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References
• Miley W. (Lee) Merkhofer, President Merkhofer Consulting
“Establish a Project Portfolio Management Office”
published on http://www.prioritysystem.com/reasons2c.html
• Gartner Research, analyst(s) Lars Mieritz and Mbula Schoen
“IT Score Overview for Program and Portfolio Management”, 09 Nov 2015.
“Four Types of PMOs That Deliver Value”, 17 June 2016.
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Additional Resources
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Questions & Comments
Email: [email protected]
Web site: http://www.ruffin-veal-and-associates.com