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Project Management 2012: Findings of the year

Establishing an Effective Project Management
Office




                           CRICOS Provider Code: 03048D



                                             Online PM Conference, 2011


         Professor A Jaafari,
         Graduate School of Business & Project Management

 Asia PacificPacific International College
        Asia International College                         A Leading Australian Higher Education Institution
                                                                              www.apicollege.edu.au
           www.GSBPMollege.edu.au                                          CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year

           Graduate School of Business and Project
           Management
Who is GSBPM and what they                            •     Project Management Graduate Program:
                                                      •     MBA (Project and Program Management)
 offer?                                               •     Master of Business and PM
GSBPM is part of Asia Pacific International           •     Graduate Diploma in PM
  College (GSBPM) an Australian Higher                •     Graduate Certificate in PM
  Education Institution, offering:                    •     Executive Diploma in PM
• Postgraduate Education and Accredited               •     Individual (tailored) programs
  Qualifications in Business, General                 •     Business Management Graduate Program:
  Management and Project Management
                                                      •     Master of Business Management
• Competence-based Management                         •     Graduate Diploma in Business Management
  Education and Training                              •     Graduate Certificate in BM
• Executive Programs                                  •     Executive Diploma in BM and tailored
• Project/Program Health Check                              programs
• Organisational Diagnostics                          •     8 Specialisations
• Corporate Training and Consulting
• See www.apicollege.edu.au

       Graduate School of Business and Project Management       A Leading Australian Higher Education Institution
                                                                CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year



Scope
•   A study of Project Management Office in terms:
     – PMO definition
     – Application range
     – Functions
     – Position in organisation
     – PMO Best practices




    Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                           CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year



What is a PMO?
•   PMO is an organisational unit set up to promote project,
    program & portfolio management in an enterprise
•   Often it reports directly to the senior managers (shielded
    from the line management)
•   In some instances it is a division of an organisation that
    oversees projects
•   The rationale for a PMO is to re-use PM expertise, tools and
    templates and continuously improve the same
•   It can also be a change management unit
•   There is no universal definition or understanding of PMO



    Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                           CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year



What is a PMO?
• A Project Management Office (PMO) is an organizational unit
  to centralize and coordinate the management of projects
  under its domain(PMBOK,2004).
• The PMO strives to standardize and introduce repeatable
  project delivery process and can be a source for
  documentation, guidance, and metrics on the practice of
  project management and execution.




   Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                          CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year



Functions of PMO (source ESI, 2011)




   Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                          CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year

Top 5 Criteria for Assessing Effectiveness of
PMOs (source ESI, 2011)




  Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                         CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year



PMO Success Statements (source: ESI, 2011)

•   92.6% projects on time, in scope, at budget with customer
    satisfaction at 3.25 (4 pt scale)
•   Decreased attrition rate from 47% to 25% due to better
    training
•   Increased ROI by 35%
•   >75% of projects are “healthy”
•   Reduced customer lead times by 30%
•   Reduced change orders by 50%




    Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                           CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year


Benefits of PMO (Nosrati, 2009)




                                        Decrease
                                         Costs


                                               Increase
                                 Increase
                                               Customer
                                  Quality     Satisfaction




  Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                         CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year

PMO functions




  Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                         CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year

PMO Maturity Path (Hill, 2007)




   Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                          CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year


Functional Elements of a PMO (Nosrati, 2009)




  Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                         CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year



Types of PMO
•   Project Management Support Office (PMSO)
•   PM Competence Centre
•   Project/Program Management Office




    Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                           CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year



PM Support Office
•   Typically provides the following services in parallel to several
    active projects:
     – Project administrative and technical support
     – Tools and software support
     – Specific services to project managers as needed, e.g.
       planning, scheduling, estimating, etc.
•   May be known by different names, such as Projects Support
    Office, PM Office, Technical Support Office,…




    Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                           CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year



PM Competence Centre
•   Is not tasked with implementation of strategy or
    projects/programs
•   Has no responsibility for project/program results
•   May provide mentoring and advice
•   Engages in professional assessment & development of PM
    staff
•   Develops methodologies/processes and standards that are
    used widely in the organisation
•   R&D
•   Knowledge System
•   Forum on PM best practices and related areas


    Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                           CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year



Full Project/Program Office
 •   A full PMO acts as enabler of organisational change & capability
     development
 •   In addition to being a PMSO and a PM Competence Centre, it provides:
       –   Project audits and recovery services
       –   Acts as ‘project/program manager’ on all or certain (strategic/large) projects
       –   May provide administration and technical support for all projects
       –   Is responsible for staffing needs of projects, i.e. PM human resources
           development
       –   Provides a service to all projects to support them
       –   Provides preferred methods and tools
       –   R&D
       –   Knowledge System
       –   Forum on areas relevant to project-based management etc.
       –   Generally professionalisation of the organisation




     Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                            CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year



Best practice PMO approach
 •    On multi-unit organsiations establish a central PMO with full
      capabilities
 •    Provide flexibility at individual business units
 •    PM infrastructure (knowledge base, processes, tools and
      methods, templates) all to be widely accessible via the
      organisation’s intranet
 •    Main focus on professionalisation of PM Practices and
      professional development of Project Managers
 •    All staff working with projects need PM assessment, training
      and accreditation as determined by PMO
 •    Investment in PMO can be recouped in a short period through
      savings in project outcomes

     Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                            CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year

Position of a PMO in Project-based Organisation




  Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                         CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year


Centralised PMO




  Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                         CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year

    Functions of a PMO (Nosrati, 2009)
                                 1.Project management methodology
                                  1.Project management methodology
                                 2.Project management tools
                                  2.Project management tools
                                 3.Standards & metrics
                                  3.Standards & metrics
                                 4.Project knowledge management
                                  4.Project knowledge management
17.Project portfolio mngt
 17.Project portfolio mngt
18.Customer relationships
 18.Customer relationships
19.Vendor/contractor
 19.Vendor/contractor                                                     5.Project governance
                                                                           5.Project governance
relationships
 relationships                                                            6.Assessment
                                                                           6.Assessment
20.Business performance
 20.Business performance                                                  7.Organization & structure
                                                                           7.Organization & structure
                                                                          8.Facilities & equipment
                                                                           8.Facilities & equipment
                                                                          support
                                                                           support




       13.Mentoring
        13.Mentoring                                                  9.Resource management
                                                                       9.Resource management
       14.Planning support
        14.Planning support                                           10.Training & education
                                                                       10.Training & education
       15.Project auditing
        15.Project auditing                                           11.Career development
                                                                       11.Career development
       16.Project recovery
        16.Project recovery                                           12.Team development
                                                                       12.Team development

        Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                               CRICOS Provider Number: 03048D
Project Management 2012: Findings of the year


Conclusions

•   The PMO must fit the needs and business practices of the
    organisation
•   Must determine functions and architecture:
     – Whether to have responsibility for project outcomes
     – Or simply a support, capability building role
•   Project managers traditionally resist monitoring and control
•   PMOs must earn their respect; imposition from top will not
    work
•   Avoid a police role for your PMO!
•   A PMO is a vehicle to travel the road to organisational
•   Patience and perseverance are needed

     Graduate School of Business and Project Management     A Leading Australian Higher Education Institution
                                                            CRICOS Provider Number: 03048D

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Управление проектами: Формирование эффективного офиса управления проектами

  • 1. Project Management 2012: Findings of the year Establishing an Effective Project Management Office CRICOS Provider Code: 03048D Online PM Conference, 2011 Professor A Jaafari, Graduate School of Business & Project Management Asia PacificPacific International College Asia International College A Leading Australian Higher Education Institution www.apicollege.edu.au www.GSBPMollege.edu.au CRICOS Provider Number: 03048D
  • 2. Project Management 2012: Findings of the year Graduate School of Business and Project Management Who is GSBPM and what they • Project Management Graduate Program: • MBA (Project and Program Management) offer? • Master of Business and PM GSBPM is part of Asia Pacific International • Graduate Diploma in PM College (GSBPM) an Australian Higher • Graduate Certificate in PM Education Institution, offering: • Executive Diploma in PM • Postgraduate Education and Accredited • Individual (tailored) programs Qualifications in Business, General • Business Management Graduate Program: Management and Project Management • Master of Business Management • Competence-based Management • Graduate Diploma in Business Management Education and Training • Graduate Certificate in BM • Executive Programs • Executive Diploma in BM and tailored • Project/Program Health Check programs • Organisational Diagnostics • 8 Specialisations • Corporate Training and Consulting • See www.apicollege.edu.au Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 3. Project Management 2012: Findings of the year Scope • A study of Project Management Office in terms: – PMO definition – Application range – Functions – Position in organisation – PMO Best practices Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 4. Project Management 2012: Findings of the year What is a PMO? • PMO is an organisational unit set up to promote project, program & portfolio management in an enterprise • Often it reports directly to the senior managers (shielded from the line management) • In some instances it is a division of an organisation that oversees projects • The rationale for a PMO is to re-use PM expertise, tools and templates and continuously improve the same • It can also be a change management unit • There is no universal definition or understanding of PMO Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 5. Project Management 2012: Findings of the year What is a PMO? • A Project Management Office (PMO) is an organizational unit to centralize and coordinate the management of projects under its domain(PMBOK,2004). • The PMO strives to standardize and introduce repeatable project delivery process and can be a source for documentation, guidance, and metrics on the practice of project management and execution. Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 6. Project Management 2012: Findings of the year Functions of PMO (source ESI, 2011) Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 7. Project Management 2012: Findings of the year Top 5 Criteria for Assessing Effectiveness of PMOs (source ESI, 2011) Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 8. Project Management 2012: Findings of the year PMO Success Statements (source: ESI, 2011) • 92.6% projects on time, in scope, at budget with customer satisfaction at 3.25 (4 pt scale) • Decreased attrition rate from 47% to 25% due to better training • Increased ROI by 35% • >75% of projects are “healthy” • Reduced customer lead times by 30% • Reduced change orders by 50% Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 9. Project Management 2012: Findings of the year Benefits of PMO (Nosrati, 2009) Decrease Costs Increase Increase Customer Quality Satisfaction Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 10. Project Management 2012: Findings of the year PMO functions Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 11. Project Management 2012: Findings of the year PMO Maturity Path (Hill, 2007) Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 12. Project Management 2012: Findings of the year Functional Elements of a PMO (Nosrati, 2009) Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 13. Project Management 2012: Findings of the year Types of PMO • Project Management Support Office (PMSO) • PM Competence Centre • Project/Program Management Office Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 14. Project Management 2012: Findings of the year PM Support Office • Typically provides the following services in parallel to several active projects: – Project administrative and technical support – Tools and software support – Specific services to project managers as needed, e.g. planning, scheduling, estimating, etc. • May be known by different names, such as Projects Support Office, PM Office, Technical Support Office,… Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 15. Project Management 2012: Findings of the year PM Competence Centre • Is not tasked with implementation of strategy or projects/programs • Has no responsibility for project/program results • May provide mentoring and advice • Engages in professional assessment & development of PM staff • Develops methodologies/processes and standards that are used widely in the organisation • R&D • Knowledge System • Forum on PM best practices and related areas Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 16. Project Management 2012: Findings of the year Full Project/Program Office • A full PMO acts as enabler of organisational change & capability development • In addition to being a PMSO and a PM Competence Centre, it provides: – Project audits and recovery services – Acts as ‘project/program manager’ on all or certain (strategic/large) projects – May provide administration and technical support for all projects – Is responsible for staffing needs of projects, i.e. PM human resources development – Provides a service to all projects to support them – Provides preferred methods and tools – R&D – Knowledge System – Forum on areas relevant to project-based management etc. – Generally professionalisation of the organisation Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 17. Project Management 2012: Findings of the year Best practice PMO approach • On multi-unit organsiations establish a central PMO with full capabilities • Provide flexibility at individual business units • PM infrastructure (knowledge base, processes, tools and methods, templates) all to be widely accessible via the organisation’s intranet • Main focus on professionalisation of PM Practices and professional development of Project Managers • All staff working with projects need PM assessment, training and accreditation as determined by PMO • Investment in PMO can be recouped in a short period through savings in project outcomes Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 18. Project Management 2012: Findings of the year Position of a PMO in Project-based Organisation Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 19. Project Management 2012: Findings of the year Centralised PMO Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 20. Project Management 2012: Findings of the year Functions of a PMO (Nosrati, 2009) 1.Project management methodology 1.Project management methodology 2.Project management tools 2.Project management tools 3.Standards & metrics 3.Standards & metrics 4.Project knowledge management 4.Project knowledge management 17.Project portfolio mngt 17.Project portfolio mngt 18.Customer relationships 18.Customer relationships 19.Vendor/contractor 19.Vendor/contractor 5.Project governance 5.Project governance relationships relationships 6.Assessment 6.Assessment 20.Business performance 20.Business performance 7.Organization & structure 7.Organization & structure 8.Facilities & equipment 8.Facilities & equipment support support 13.Mentoring 13.Mentoring 9.Resource management 9.Resource management 14.Planning support 14.Planning support 10.Training & education 10.Training & education 15.Project auditing 15.Project auditing 11.Career development 11.Career development 16.Project recovery 16.Project recovery 12.Team development 12.Team development Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D
  • 21. Project Management 2012: Findings of the year Conclusions • The PMO must fit the needs and business practices of the organisation • Must determine functions and architecture: – Whether to have responsibility for project outcomes – Or simply a support, capability building role • Project managers traditionally resist monitoring and control • PMOs must earn their respect; imposition from top will not work • Avoid a police role for your PMO! • A PMO is a vehicle to travel the road to organisational • Patience and perseverance are needed Graduate School of Business and Project Management A Leading Australian Higher Education Institution CRICOS Provider Number: 03048D

Editor's Notes

  1. As noted a PMO can have wide or limited role in an organisation depending on the organisational structure, strategies, policies and actual practices. In this session we review 3 types only but variations in practice are common.
  2. PM support office is generally the first step towards establishment of a full PMO. It starts when a project-based organisation decides that it is more beneficial to support its project managers in various ways such as administration and technical support, or to make tools and templates that can be re-used on multiple projects and or to share project management resources across multiple projects. Many organisations prefer to maintain flexibility and normally stop at this level. This is particularly true of organisations who operate under a switching strategy, i.e. they wish to engage their resources on projects in different fields as market opportunities arise. In such situations, individual project managers need authority and flexibility to be able to use both in-house and outside resources and tools to better meet their individual challenges.
  3. PM Competence Centre (PMCC) typically provides mentoring and advice to active project managers. Its main function is to aid professional assessment and development of project management staff, as well as develop methodologies/processes and standards that suit the organisation’s line of projects. Sometime PMCC engages in R&D (to define/customise a given method) as well as development of organisation specific knowledge bank. A PMCC may also promote adoption of good practice through professional meetings, PM Circles, etc.
  4. A full PMO has wide responsibility not only in terms of project management standards but also in terms of professionalisation of the organisation as whole. A professional organisation (or a performing organisation) has a defined structure and for each position defined performance criteria. Individual appointed to position have the required competencies needed to demonstrate performance. In order for each person to demonstrate performance at their level, they need to possess the blend of competencies (technical and contextual, managerial and socio-cultural) as well as access to tools and knowledge, mentors etc. In addition, they need to work within a well-defined governance/business model and know of the organisation’s practices at various stages of program/project life cycle. A shared vision is essential in the quest to professionalisation of the organisation and individual development.
  5. Multi-national companies, large national companies, government departments and agencies are examples of organisations who operate across multiple business units often operating autonomously. While it is desirable to introduce common language, framework, standards and processes, it is important to retain flexibility as projects are unique, particularly through the environmental influences. Given the extent of complexity, uncertainty and change that surround projects and programs it is important to focus on the development of competent people. In such situations rigid deterministic approaches to planning and bureaucratic management do not work well. Individual and groups have to be empowered to function autonomously and manage the project scope in terms of the prevailing dynamics. Thus, the major task of any PMO in such settings should be development of competent and performing managers. Investment required to train the project management staff and equip the organisation with the appropriate knowledge, tools and system is generally recouped in a short period of time through better project outcomes.