Exploring the Potentials of the Global Virtual Project Management Office

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1 C. Gibbings: Exploring the Potentials of the Global Virtual Project Management Office 4 ISSN The Journal of the Association of Professional Engineers of Trinidad and Tobago Vol.43, No.1, April/May 2015, pp.4-9 Exploring the Potentials of the Global Virtual Project Management Office Celia Gibbings Caribbean, Arcos Technologies Incorporated, Trinidad and Tobago, West Indies celia@ce71a.com (Received 24 January 2015; Revised 11 March 2015; Accepted 19 May 2015) Abstract: The objective of this paper is to define the Global Virtual Project Management Office (PMO) and establish the critical success factors and limitations in the operation of a Global Virtual PMO. This is based on contemporary practical experience in managing an IT Global Virtual PMO out of the Caribbean for the Latin American (LATAM) region. The analysis is based on the PMO frameworks and domains of work identified by the Project Management Institute. Scenarios based on the realities of operating a Global Virtual PMO from the Caribbean are examined. Obvious challenges include cultural, language and time zone differences and geographically distributed project team members. The paper ends by identifying the advantages of the English speaking Caribbean for a Global Virtual PMO. Keywords: IT Project Management, PMO, Global PM, LATAM IT, International PM 1. Introduction In 2012, the Project Management Institute (PMI) accepted by most practitioners to be the leading global authority on project management, conducted exploratory research, to understand the issues encountered with building, managing and operating a Project Management Office (PMO) (PMI, 2013a). One of the overarching discoveries from this exploratory work was that many are challenged with some of the most basic notions about a PMO. What do the letters actually stand for? What kinds of PMOs exist? What are the functions of the various types? The research was based on the collective experience and expertise of PMO subject matter experts, SMEs who have spent much of their professional careers managing, operating and building different kinds of PMOs in different settings and contexts. 2. Defining the Global Virtual PMO The PMI (2013b) identified and defined five (5) PMO Frameworks, described in Table 1 and listed the nine key domains of work of the PMO, shown in Table 2. The Virtual PMO (VPMO) is a seemingly ethereal entity, existing essentially as an operating framework for the delivery of PMO services for an organisation, based on the work listed in Table 2 without the establishment of a physically located and designated PMO. As such, remote deployment or support of projects from an organisation s established PMO to its branch offices, located elsewhere, is not considered to be an example of a VPMO. A VPMO could therefore be resourced from within an organisation in which the PMO role is recognised but not yet established. The function is distributed across business units and possibly, geographical locations as shown in Figure 1. Another VPMO option is in the use of outsourced PMO services or Project Management as a Service (PMaaS) by a host organisation as in Figure 2. And, the third is the hybrid VPMO, with a variety of options that includes outsourced PMO services shared by more than one organisation or a VPMO made up of resources from both the host organisation(s) and an external VPMO service provider. Figures 3 and 4 illustrate these options. PMO Frameworks 1. Organisational Unit / Business Unit / Divisional / Departmental PMO 2. Project-Specific PMO/ Project Office/ Program Office 3. Project Support / Services / Controls Office or PMO 4. Enterprise/Organisation-wide /Strategic / Corporate / Portfolio / Global PMO 5. Center of Excellence / Center of Competency Source: PMI (2013b) Table 1. Five PMO Frameworks Descriptions Provides project-related services to support a business unit or division within an organisation. Provides project-related services as a temporary entity established to support a specific project or program. Provides enabling processes to continuously support management of project, program or portfolio work throughout the organisation. The highest-level PMO in organisations having one, this PMO is often responsible for alignment of project and program work to corporate strategy. Supports project work by equipping the organisation with methodologies, standards and tools to enable project managers to better deliver projects.

2 C. Gibbings: Exploring the Potentials of the Global Virtual Project Management Office 5 Table 2. Domains of Work at PMO Domains of Work Descriptions 1. Standards, Methodologies and Processes Methodology definition; metrics definition; process development and improvement 2. Project/Program Delivery Management Define the business goals; resource management; schedule/cost/scope management; business realisation management; risk management; stakeholder management; communications; project integration 3. Portfolio Management Prioritisation; strategic alignment; portfolio reporting; resource management allocation; opportunities and investment analysis; risk management; benefits realisation tracking/reporting 4. Talent Management Training, career paths, career development, capability/skills development and certifications/qualifications/ credentials 5. Governance and Performance Management Performance reporting; issue escalation; information distribution; metrics/kpis; compliance; financial management; PMO performance management 6. Organisational Change Management Customer/stakeholder satisfaction; managing resistance; readiness assessment; stakeholder management; communications 7. Administration and Support Tools (provisioning/implementation/support); consulting; IT/IS support 8. Knowledge Management Defining knowledge management policies, managing intellectual collateral/property, lessons learned, content management and collaboration 9. Strategic Planning Confirming strategic priorities; defining business goals and aligning to initiatives; environmental scanning; opportunity analysis Source: PMI (2013a, b) Figure 1. VPMO part of Host Organisation Figure 2. Oustsourced VPMO (V)PMO Figure 3 Hybrid Outsourced VPMO (No Host Organisation PMO) Figure 4 Hybrid Oustsourced VPMO (With Host Organisation PMO or VPMO) 3. Value of the Global Virtual PMO A Global Virtual PMO is one whose operation spans multiple geographic locations with project team resources human and/or equipment, located in different countries and quite often, not in the same country/countries in which the project is being deployed. Figure 5 shows an actual Global Virtual PMO scenario. The Global VPMO is lean and mean. It exists with no physical infrastructure and therefore, the obvious benefits are minimal overhead costs communication, travel and equipment.

3 C. Gibbings: Exploring the Potentials of the Global Virtual Project Management Office 6 Puerto Rico Regional VPMO Figure 5. Mapping an Actual Global Virtual PMO Scenario The Global VPMO must hit the ground running, so it is manned with experienced project management and subject matter specialists (SME s) without the establishment costs that would have otherwise been incurred for their expertise. The virtual framework brings fluidity in team membership and with global reach. This means that a variety of high cost SME s can be added to the team from a global pool as needed, for short term engagements. With team members distributed across several time zones, the Global VPMO is able to provide services over a longer work day than a team in a single location. A byproduct of the Geo-diverse VPMO is that it provides almost 24/7 support for project managers. Any project manager or those who have questions for the project managers, can ask a question and expect a fairly quick response. People contribute based on their experiences and abilities (Wilhelm, 2008). The VPMO and even more so, the Global VPMO is performance and deliverables driven. If it operates within an organisation, the Global VPMO is considered an elite unit, strategic to the organisation. Its acceptance and continuance is contingent on success and failure, would see it disbanded and the PMO service outsourced. For the outsourced Global VPMO, success is critical to securing existing and future contracts and the basis of its professional reputation. The common language and shared culture of the Global VPMO is therefore, Project Management. For success, like any other project team, the Global VPMO requires Scope, Time, Risk, Quality, Integration, Communication, Procurement, Resource and Cost Management. Specific to the Global VPMO is its own established Body of Knowledge. Central to this is project quality via an agreed project management methodology. Given the diversity of team members, this is the binding agent for their operation. Key to efficiency of the Global VPMO is cost effective and efficient communication between its disparately located team members and all other stakeholders. Reliance on the internet for project meetings and access to the project document repository is critical for efficient collaboration. The diversities of language and culture as well as time zone differences, while adding value to the Global VPMO in many ways, are also project risks that must be identified and managed. 4. Critical Success Factors and Limitations of the Global VPMO Of the five PMI s (2013b) PMO frameworks (see Table 1), three are better suited to the Global VPMO scenario. These are: 1) The Organisational Unit PMO/Business Unit PMO/Divisional PMO/Departmental PMO that provides project-related services to support a business unit or division within an organisation; 2) The Project-Specific PMO/Project Office/Program Office that provides projectrelated services as a temporary entity established to support a specific project or program and 3) The Project Support/Services/Controls Office or PMO that provides enabling processes to continuously support management of project, program or portfolio work throughout the organisation. As explained above, the VPMO and even more so, the Global VPMO is performance and deliverables driven. Of the other two PMO frameworks, the primary function of the Enterprise/Organisation-wide/Strategic/Corporate/ Portfolio/Global PMO is alignment of project and program work to corporate strategy. This function would be better provided by a centralised, strategic organisational PMO than a distributed Global Virtual VPMO. The Center of Excellence or Center of Competency PMO framework has a primary function of equipping the organisation with methodologies, standards and tools to enable project managers to better deliver projects. This again would be better provided by a centralised organisational PMO. This function could be

4 C. Gibbings: Exploring the Potentials of the Global Virtual Project Management Office 7 outsourced to a VPMO however, there may be competing interests involved, as the VPMO in transferring this knowledge, could render itself redundant. For each of the three PMO frameworks, for which the Global VPMO is most appropriate therefore, of the nine PMO functions identified in Table 2, there are three primary functions (PMI, 2013a). Actual project scenarios will be used to illustrate the critical success factors (CSF) and limitations of each of these. 4.1 Organisational Unit PMO/Business Unit PMO/ Divisional PMO/Departmental PMO This category of PMO provides project-related services to support a business unit or division within an organisation. As in Figure 5, the present Global VPMO scenario shows that the outsourced PMO supports the Latin American and Caribbean Regional Business unit, located in Miami, USA for a global enterprise, headquartered in Switzerland. The Business Process Consultant on the project team operates from Spain. Software development will be done in India. The Project Manager operates from Trinidad and Tobago. The Global VPMO Project Sponsor is located in Toronto, Canada with a Regional VPMO out of Puerto Rico. The project involves the deployment of ERP and Point of Sale systems in 80 Latin American and Caribbean retail stores including a 9-ship cruise line. The main issue for this PMO framework is the role of the parent organisation in the relationship between the Global Virtual PMO and the business unit. There are overlaps in project related services provided by the parent organisation to the Business Unit and project management methodologies are prescribed by the parent organisation to which the Global Virtual PMO must adhere. There is also competition for project resources between the Global Virtual PMO and the parent organisation. Project financing is provided by the parent organisation. Therefore, their key stakeholders must be included in key project decisions and regular communication on project status. In this case, the Global Virtual PMO is engaged because geographical proximity and shared language with the Business Unit, makes this relationship more efficient for project success than management of the project from a remotely located head office. The primary functions of this PMO framework are 1) Project/Program Delivery Management; 2) Standards, Methodologies and Processes; and 3) Portfolio Management Project/Program Delivery Management function require the Global VPMO to define the business goals; resource management; schedule/cost/scope management; business realisation management; risk management; stakeholder management; communications and project integration (PMI 2013a). Critical success factors (CSF) for this are that the Global VPMO Project Manager is on-site for the project initiation phase or involved as early as possible in the project planning phase and secondly; the inclusion of key stakeholders from the parent organisation in the project team and in regularly scheduled project status meetings and correspondence. Hence, the main limitations are that there may be overriding parent organisation strategic objectives that influence project requirements; competition for project resources and competing projects that the Global VPMO, may not be aware of Standards, Methodologies and Processes function require that the Global VPMO determine methodology definition; metrics definition; process development and improvement (PMI 2013a). The first CSF for this for the Global VPMO is the recognition that this is the shared language of the project. All standards, methodologies and processes must be clearly defined, documented and agreed to and signed off by all team members at the start of the project. Secondly, consistent reviews during the project are required to ensure project quality to avoid rework and resulting project delays. Whereas the main limitation is that the Global VPMO may need to comply with the host organisation s prescribed standards, methodologies & processes. This may be difficult in situations where based on the Global VPMO team s expertise, it could have recommended efficient or more appropriate standards, methodologies and processes Portfolio Management function require that the Global VPMO determines project prioritisation; strategic alignment; portfolio reporting; resource management allocation; opportunities and investment analysis; risk management; benefits realisation tracking/reporting (PMI 2013a). The CSF for these activities for the Global VPMO, is close collaboration with the key organisational stakeholders and their SME s. Every effort should be made to ensure that they are included on the project team. The main limitation is the reality that this may often be beyond the influence of the VPMO. 4.2 Project-Specific PMO/Project Office/Program Office This category of PMO provides project-related services as a temporary entity established to support a specific project or program. With regards to a successful Global VPMO Scenario, a Disaster Recovery site was set up in Trinidad for a Tortola based organisation with head office in San Francisco, California, USA. This project type was ideally suited to the Global VPMO. The engagement was directly with the parent organisation so there were no conflicting or competing interests involved as is the case when a business unit engages the Global VPMO. The

5 C. Gibbings: Exploring the Potentials of the Global Virtual Project Management Office 8 requirements were specific and the engagement ended on project delivery Project/Program Delivery Management function require the Global VPMO to define the business goals; resource management; schedule/cost/scope management; business realisation management; risk management; stakeholder management; communications and project integration (PMI 2013a). As in the case of the Organisational Unit PMO, the critical success factors for this are that Global VPMO Project Manager is on-site for project initiation phase or involved early in the project planning phase. Because of the direct relationship with the parent organisation, conflict with their strategic objectives should be minimal Standards, Methodologies and Processes function require that the Global VPMO determine methodology definition; metrics definition; process development and improvement (PMI 2013a) and the critical success factors and limitations for the Global VPMO are the same as for the Organisational Unit PMO Governance and Performance Management function require that the Global VPMO establish procedures for performance reporting; issue escalation; information distribution; metrics/kpis; compliance; financial management; PMO performance management (PMI 2013a). The critical success factor for the Global VPMO is that these procedures should be identified and agreed on in the project planning phase. Once this is done, no significant limitation or risk is expected. 4.3 Project Support/Services/Controls Office or PMO This category of PMO provides enabling processes to continuously support management of project, program or portfolio work throughout the organisation. According to the Global VPMO scenario, this involved the initial training, setup and support for the adaptation of a Project Management culture at the Trinidad head office of a Caribbean manufacturing company with 11 Caribbean subsidiaries Project/Program Delivery Management function require the Global VPMO to define the business goals; resource management; schedule/cost/scope management; business realisation management; risk management; stakeholder management; communications and project integration (PMI 2013a). The CSFs are executive management mandate and sponsorship of the initiatives of the Global VPMO and their insistence that all organisational projects are included in VPMO management. The main limitations would be the rate of adoption of project management culture in the organisation Standards, Methodologies and Processes function require that the Global VPMO determine methodology definition; metrics definition; process development and improvement (PMI 2013a, b). The first CSF for the Global VPMO is the provision of, training in and easy access to tools, templates and project operating procedures developed. The second is the insistence from executive management for compliance with the use of these for the organisation s projects. On the other hand, the main limitation for the Global VPMO would be the rate of adoption and the perceived success by use of these prescribed standards, methodologies and processes. There may be difficulty in the initial stages of introduction of the methodology, but it will improve with training and use Portfolio Management function require that the Global VPMO determine project prioritisation; strategic alignment; portfolio reporting; resource management allocation; opportunities and investment analysis; risk management; benefits realisation tracking/reporting (PMI 2013a). The CSF for the Global VPMO would be to include key stakeholders and SME s on the Global VPMO team for endorsement. A limitation would be the need to adopt and customise the project management methodology to the organisational environment for ease of fit. 5. Discussion and Conclusion In the global business space, given its small size and geographic location, the Caribbean is included with and often considered part of Latin America (LATAM). As a result of this pairing and significantly, because Global Business Speaks English (Neeley, 2012), unlike most LATAM countries, the English speaking Caribbean is in a unique and enviable position to provide specialised, outsourced global business services as required by a Global VPMO. Access to reliable and efficient internet service, the backbone of Global VPMO team collaboration, enhances the attractiveness of those countries in which this is available, such as Trinidad and Tobago. These critical requirements are further enhanced with access to certification and training in project management, accredited to global standards. Being in comfortable time zone proximity to the three continents from which most of the world s businesses are headquartered, is yet another significant advantage of team membership or leading a Global VPMO. Of current consequence, particularly for IT projects, is the beginning of a shift of outsourcing of software development from North America s far shore i.e. South

6 C. Gibbings: Exploring the Potentials of the Global Virtual Project Management Office 9 East Asia, mainly India. Many organisations are turning to near shore options, despite the somewhat higher price, to take advantage of other factors. After a decade of dominating the offshore outsourcing business, India has seen some decline in its market share. Companies have begun to realise the limitations inherent in far shore outsourcing to India. To begin, there is the distance. Depending on where you are, it can be 12 time zones away. (Radding, 2010). With this global shift, to LATAM, described as North America s near shore, Caribbean based project managers and SME s are perfectly poised for inclusion in this latest Global VPMO configuration. References: Neeley, Tsedal (2012), Global business speaks English, Harvard Business Review, [cited 30 October 2014] PMI (2013a), PMI s Pulse of the Profession In-Depth Report: The Impact of PMOs on Strategy Implementation, Project Management Institute, Newtown Square, Pennsylvania, United States PMI (2013b), PMI s Pulse of the Profession: PMO Frameworks, Project Management Institute, Newtown Square, Pennsylvania, United States, pp Radding, Alan, (2010), Near Shore, Far Shore, or Both, Business Finance Magazine, [cited 30 October 2014] Wilhelm, Wendy (2008) Building a virtual SW project management office: What you can do when there is no support for a centralised PMO, Proceedings of the 2008 PMI Global Congress, Denver, CO United States, October, [cited 30 October 2014] Author s Biographical Notes: Celia Gibbings is currently the Regional Practice Lead Caribbean for Arcos Technologies Incorporated. As a Virtual PMO Manager, based in Trinidad and Tobago, she delivers IT-based business improvement projects for numerous customer-driven organisations, both across the Caribbean region and in the global market space. Her career began more than 20 years ago in business applications development at BWIA International (now Caribbean Airlines), followed by 7 years as Group IT Manager at Century Eslon, a Caribbean manufacturer with subsidiaries in 11 countries. She is a graduate of the UWI M.Sc. Project Management Programme (2011) and a PMI certified PMP (2004).