A PMO Value Model. For Strategic Execution and Value Delivery P M. Robert Frost PMP, PMOC. 4/19/2016 PMO Value Model 2016 Robert Frost 1
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1 A PMO Value Model For Strategic Execution and Value Delivery P M Robert Frost PMP, PMOC O 4/19/2016 PMO Value Model 2016 Robert Frost 1
2 Why we need a PMO Value Model Why Capabilities Needed The Challenges* Projects are Financial Investments Organizations have unlimited opportunities for projects and limited resources It doesn t matter how fast you execute if you re working on the wrong projects Any project worth doing is worth doing fast Organizations need to beable to quantify and consistently deliver promised project value so that executives and sponsors feel the impact Organizations need to be able to optimizeresources to deliver more projects without correspondingly more resources Organizationsneed to be able to prioritize projects for execution and pull projects through based on priorities Organizations need to be able to execute a continuousflow of projects in drastically shorter times *PMI s Pulse of the Profession: The High Cost of Low Performance, 2014 Only 17% of Organizations are able to realize envisioned project value Only 17% of Organizations consider their processes as high maturity Only 42% of projectswere classified as having high alignment with Organizational strategy Only 9% of Organizations consider themselves excellent at executing projects 4/19/2016 PMO Value Model 2016 Robert Frost 2
3 Why we need a PMO Value Model There are two kinds of organizations: those that are getting better and those that are dying W. Edwards Deming All organizational work is project work Tom Peters Organizations that want to stay relevant need to improve at project execution and delivery 4/19/2016 PMO Value Model 2016 Robert Frost 3
4 Interactive Exercise: Barriers to Project Success
5 Interactive Exercise #1 You have 3 projects to complete in this order of priority: 1) Project Whiskey 2) Project Tango 3) Project Foxtrot One partner will complete the project and the other partner will use a stop watch to keep the time. Start with Project Whiskey and copy the numbers all the way down using the black pen. Move to Project Tango and copy the letters all the way down using the blue pen. Finish with Project Foxtrot by copying the shapes all the way down using the red pen. Record the overall time to complete each of the projects in seconds. 4/19/2016 PMO Value Model 2016 Robert Frost 5
6 Project Summary Average times in Seconds
7 Interactive Exercise #2 This time you will need to complete the 3 projects while multi-tasking across all three projects. The same partner will complete the project and the same time keeper will use a stop watch to keep the time. Start with Project Whiskey and copy 5 numbers using the black pen. Then switch to Project Tango and copy 5 letters using the blue pen. Switch again to Project Foxtrot and copy 5 shapes using the red pen. Repeat this process copying 5 at a time and switching pens between projects until they are all complete. Record the overall time to complete each of the projects in seconds. 4/19/2016 PMO Value Model 2016 Robert Frost 7
8 Project Summary Average times in Seconds
9 Barriers to Project Flow 4/19/2016 PMO Value Model 2016 Robert Frost 9
10 Project Flow Density Curve Maximum Flow, Optimal Density Flow Density (Throughput) 4/19/2016 PMO Value Model 2016 Robert Frost 10
11 Pushing the Curve TM Pushing the Curve Pull Projects through based on capacity and project priorities Flow Density 4/19/2016 PMO Value Model 2016 Robert Frost 11
12 Optimize Value Flow Strategic Execution and Value Delivery: Delivering project value as fast as possible based on project priorities and available capacity 4/19/2016 PMO Value Model 2016 Robert Frost 12
13 PMO Value Model Visibility Governance Risk Management Vision Value Prioritization Tools Communication 4/19/2016 PMO Value Model 2016 Robert Frost 13
14 Vision Vision The PMO Value Model starts with a Holistic Vision for the PMO The Vision should be strategic and not tactical, with a focus on the big picture of all strategic projects and how the organization creates value Determine the Type of PMO desired and what is needed to realize the vision Develop a Plan and Roadmap to address the gaps between where you are and where you want to go Manage the PMO implementation like a projectinclude the pieces of this model and what s required to realize the vision Keep your target in your sight: the vision should guide all decisions 4/19/2016 PMO Value Model 2016 Robert Frost 14
15 Governance Governance Strong Governance and Executive Commitment is key to success Governance includes all levels of project and portfolio management: PMO organization design to realize the vision PM Capability Competitive weapon PPM governance and escalation PMO Processes Clear expectations of Roles and Responsibilities-each level of governance needs to understand the process and their roles, and be committed to enforcing compliance Clearly Defined Reporting Processes and Cadence for Governance Meetings Without strong governance it will be hard to get compliance and to deliver business value 4/19/2016 PMO Value Model 2016 Robert Frost 15
16 Governance Leadership (Example) Cadence Responsibilities Capital Committee Quarterly (or Ad Hoc) Investment Planning Approve New Capital Projects and Funding Prioritize Capital Spending Provide Strategic Alignment Portfolio Review Board Monthly Roadmap update reviews Monthly Portfolio Review Project Scoring and Prioritization Project Steering Committee Project Management Office Project Sponsors Project Team Monthly Bi-weekly Weekly Daily Review Project Status with Teams Provide Guidance to Project Teams Provide Escalation and Support as Needed Stage Gate Review and Approval Project Deep Dive Reviews Resource Visibility and Capacity Planning PMLC Process Oversight & Value metrics Review Project Status with Teams Provide Inputs for integration Roadmap updates Help Drive Project Delivery Provide Escalation and Support as Needed Execute the Project for Successful Delivery Monitor and Control the Project Provide Weekly Project Status Reports Manage Issues and Risks *Leadership Commitment is more important than the Structure 4/19/2016 PMO Value Model 2016 Robert Frost 16
17 Governance Processes (Example) Vision 1 to 3 Sentences Strategy 1 to 3 Paragraphs Policies 1 to 3 Pages Standards 2 to 10 Pages Guidelines 4 to 15 Pages Procedures 5 to 50 Pages Processes are a critical piece of the PMO Governance 4/19/2016 PMO Value Model 2016 Robert Frost 17
18 Scalable and Flexible Processes (Example) FAST TRACK Definition Stage Gate Implementation - Project closure Stage Gate - Scaled Agile process based on level of Risk and Complexity Initiation & Planning Execution/G0-Live and Close FULL TRACK PMO Initiation Stage Gate 1 PMO Planning Stage Gate 2 PMO Go-Live Stage Gate 3 PMO Close Stage Gate 4 Initiation Planning Execution Go-live and Close 4/19/2016 PMO Value Model 2016 Robert Frost 18
19 Scalable and Flexible Processes (Example of Scaling by Project Levels) Criteria Grades Weighting Total Possible Points BUSINESS PROCESS IMPACT SYSTEM CRITICALITY How many business processes will be impacted by the project? 0: None, 3: One core process, 7: Multiple core processes What is the classification for disaster recovery response? 1: Business important, 3: Business critical, 7: Mission critical INTEGRATION COMPLEXITY What is the level and complexity of system integrations? 1: Standalone, 3: Non-mission critical integrations, 7: Mission critical integrations 7 49 BUSINESS VALUE LOCATION IMPACT PROJECT INVESTMENT BUSINESS RESOURCE COMPLEXITY What is the business value (synergies, revenues, savings, etc? 1: Minimal <500k, 3: Moderate 0.6-3M, 7: Significant >3M How many locations will be impacted by the project? 1: Site, 3: Regional, 5: Multi Regional, 7: Global What is the total project cost? 1: Small (<$250k), 3: Medium ($250k -$2M), 5: Large (>$2M) What is the level of business resource commitment? 1: Minimal, 3: Single functional need, 5: Multiple functions involved LEVEL OF ORGANIZATIONAL CHANGE What is the amount of organizational change required for the project to be successful? 1: Limited, 3: Moderate, 5: Extensive 3 15 TECHNOLOGY LANDSCAPE VALIDATION / QUALIFICATION REQUIRED? Does the project involve new or existing technologies? 1: Leveraging existing, 3: Modifying existing, 5: Introducing new Does the project require validations? 0: No, 5: Yes BUSINESS RISK What is the level of risk to business operations? /19/2016 1: Minimal, 3: Single functional PMO need, Value 5: Model Multiple functions 2016 involved Robert Frost 19
20 Why we need Governance 4/19/2016 PMO Value Model 2016 Robert Frost 20
21 Prioritization Prioritization If everything s important, then nothing is Without priorities you lose control and project flow is negatively impacted by bad multi-tasking A Standardized Scoring and Ranking method is essential: Strategic Alignment Cost benefit method (NPV, etc.) Revenue, cost savings, cost avoidance Visibility of Priorities is critical for project and resource planning and to provide focus for project teams Pull Projects Through (vs. Push) Governance teams must be committed to the prioritization method and accept the trade-offs 4/19/2016 PMO Value Model 2016 Robert Frost 21
22 Visibility Visibility is Key to PMO Success Visibility Resources (Supply) Project activities Non-project activities Capacity for new projects Active Projects and Initiatives (Demand) PMO Projects Baseline activities Administrative Project pipeline (Upcoming Demand) Priorities Project and Portoflio Risks Project Dependencies Project Status Scoreboard Visibility must be accurate and relevant 4/19/2016 PMO Value Model 2016 Robert Frost 22
23 Value Value The Number One Goal of the PMO is to Create Value Templates, processes and tools don t create value Successfully delivering projects creates value PMO and Project Value Metrics: Project Success Project Value Cycle Time and Efficiency Portfolio Value Tracking- The big picture of how you measure value at the organization and portfolio level Quantifiable Value Sells the PMO and makes compliance a lot easier 4/19/2016 PMO Value Model 2016 Robert Frost 23
24 Value Optimization (Example) Net Present Value (NPV) is a great method for determining project value because it takes into account all aspects of cash flow (the project costs, the project benefits, and the time value of money) Whatever value metric is used, it should also include the resource constraints Which Project is the best investment? Project C looks like the best investment based on the value If you factor in the resource hours, Projects A and B are more effectively utilizing resources to create value If we select both projects A and B, we can deliver 50% more value with the same amount of resources 4/19/2016 PMO Value Model 2016 Robert Frost 24
25 Communication Communication Implementing a PMO Model requires clear, effective and timely communications Over-Communicate the Vision Develop Organization Change Management and communications plan for the PMO (You can t make people like change, but you can make them feel less threatened by it) Develop Training plans for PMO and Processes Create Project and Portfolio Scoreboards that provide Frequent and Clear information on project and portfolio status Communicate successes, project wins, and value created to ensure continuing leadership alignment and executive buy-in Share Lessons Learned and continuously improve 4/19/2016 PMO Value Model 2016 Robert Frost 25
26 Risk Management Risk Management Successful Project and Portfolio Management requires Proactive Risk Management Be Proactive about Risks Walk through the project Canary in a Coal Mine Develop a Risk Management Process to ensure visibility of Issues and Risks and proactive mitigation Identify Analyze Manage Report Escalate 4/19/2016 PMO Value Model 2016 Robert Frost 26
27 Tools Tools Tools should enable the PMO processes through Automation and Simplification The Vision, model and processes should come before the tools Tools shouldn t be draped over the process, tools should add value and save time Project Management Portfolio Management Resource Management Budget and Cost Management Time Reporting Automated Status Reports and Portfolio Dashboards 4/19/2016 PMO Value Model 2016 Robert Frost 27
28 A PMO Value Model For Strategic Execution and Value Delivery P M Robert Frost PMP, PMOC O THANK YOU! 4/19/2016 PMO Value Model 2016 Robert Frost 28
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