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Copyright 2010 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Evolving your PMO
30
th
September 2010
Michael Cooch
Adam Cowmeadow
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Seminar Structure
The Theory ofEvolution
Introductionto the conceptof maturityand summaryof the Valueof a PMO
The EvolutionaryProcess
Differingviews ofevolution anditerative stepsto improvePMO maturity
EvolutionaryAspiration
Understandthe businessmotivationbehind PMOaspirations
EnvironmentalAssessment
Going beyondthe functionalto build aplatform forPMO success
EvolutionaryPlan
Definingactivities toimprove PMOfunctionalityand mitigateenvironmentalrisks
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The Theory of Evolution
In our previous Value of a PMO presentation
we demonstrated that*:
PMO uptake is increasing (from 47% in
2000 to 77% in 2006) but project
performance is not**
Deploying a PMO does not lead to
performance improvement in itself. It isonly when the PMO increases maturity
that tangible improvement occurs***
AccentureKnowledge
Base
PublishedWorks &Articles
Center for
BusinessPractices (CBP)
LinkedInPMO
Groups
Gartner WhitePapers
Sources Background
*Source:Value of a PMO Keynote at ProjectChallenge Spring Show 2010
**Source:Project Management The State of theIndustry, Centre for Business Practices (CBP) Study
***Source:Value of Project Management Centrefor Business Practices (CBP) Study
****Source:Making the Business Case for a HighlyFocused and Effective PMO Michael Hanford,Gartner 2010
The key to obtaining an approval toform a PMO rests with the
identification of solid benefits, andvalue, to the organization and
their quantification that willaccrue to the organization if a PMO is
enabled and functioning****.
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0
1
2
3
4
5
0: Absent 1: Immature /
Initial
2: Established /
Repeatable
3: Grown-up /
Defined
4: Mature /
Managed
5: Best in Class /
Optimised
What is PMO Maturity?
PMO Maturity levels indicate the effectiveness of project execution support
Level 0:Absent- No identifiable PMO operating. No
influence on project success.
Level 1:Immature/Initial A named entity (identified
as a PMO) is operating but, in general, processes are
inconsistent, project data isnt collected/used and
reporting is broadly qualitative. Has little influence on
project success.
Level 2:Established/Repeatable A recognised PMO is
operating but is in need of improvement. Some
processes have consistency, some project data is
collected but little of it is analysed and reporting is still
primarily commentary based. Plays a limited role in
project success.
Level 3: Grown-up/Defined Standard Processes
A solid PMO which experiences more
successes than failures. Most processes have
consistency, most key project data is collected
but only basic analytics are done and
reporting has introduced some metrics. Playsa role in some project successes (and failures).
Level 4: Mature/Managed A very
successful PMO which has good
sponsorship. All core processes are
consistent, all key project data is
collected, solid analytics are undertaken
and reporting is primarily data-driven.
Plays an important role in the success of
the project environment.
Level 5:Best in Class/Optimised A world-class
PMO which has complete sponsorship. All core
processes are consistent and continuously
improved, all key project data is collected,
analytics are comprehensive and reporting is
completely data-driven. Plays a critical role in
the success of the project environment.
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Organisational Performance Improvement between Levels of PMO Maturity
0% 0% 0% 0% 0% 0% 0% 0%0% 0%
10% 10% 11% 18%
36%
27%
11%
23%
39%
24%
43% 44%
64% 65%
0%
10%
20%
30%
40%
50%
60%
70%
Organisation
financially
successful
Shareholders
satisfied
Projects aligned to
strategy
Project customers
satisfied
Organisation w orks
on the right projects
Strategy executed
to plan
Projects on
schedule & budget
Resources allocated
optimally
Measures of Performance
PerformanceImprovement
How does building PMO maturity help?
A recent global survey demonstrates the performance differentiation (against
schedule, budget and quality) between high and low maturity PMOs.
This includes a 24% improvement in customer satisfaction between Level 1 and Level
3 PMOs (Level 4 and 5 are not included due to lack of statistical data at these points,
however extrapolation clearly trends positively) and a 65% improvement in the
optimal allocation of resources
*Source:The State of the PMO - 2007-2008
A Benchmark of Current Business Practices
Center for Business Practices (CBP) Report
Level 3 (Grown up) PMOs support
project delivery on schedule & tobudget 64%more often that their
Level 1 (Immature) PMO
competitors.
Maturity Level
1 2 3
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Level 1: Immature
25.7%
Level 2: Established, in
need of improvement
34.4%
Level 3: Grown up, more
successes than failures30.4%
Level 4: Mature, verysuccessful
8.7%
Level 5: Best in class
0.7%
How mature are organisational PMOs?
Less than 1 in 10 PMOs are considered high-performers (Level 4 or 5)
Less than 1 in 100 is considered Best in Class (Level 5)
Evidence suggests the cost to implement a Level 3 to 5 PMO is heavily
outweighed by the delivery benefits realised within an organisation.
*Source:The State of the PMO - 2007-2008
A Benchmark of Current Business Practices
Center for Business Practices (CBP) Report
60%of all organisations could
substantially benefit fromimproving the maturity of their
PMO.
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Seminar Structure
The Theory ofEvolution
Introductionto the conceptof maturityand summaryof the Valueof a PMO
The EvolutionaryProcess
Differingviews ofevolution anditerative stepsto improvePMO maturity
EvolutionaryAspiration
Understandthe businessmotivationbehind PMOaspirations
EnvironmentalAssessment
Going beyondthe functionalto build aplatform forPMO success
EvolutionaryPlan
Definingactivities toimprove PMOfunctionalityand mitigateenvironmentalrisks
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The LinkedIn PMO Maturity
Case Study*
Over 150 responses**
Lots of vigorous debate
Highest proportion of responses - it is Impossible
Nearly 7 in 10 said it was Impossible or Very Challenging
How realistic is it to move a
PMO from Level 0 to Level 4in 12 months?
* Responses were categorised according to ourinterpretation i.e. This was not a formal survey
** Multiple responses, from the samecontributor, were unified where possible (but it ispossible that some slipped through the net)
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Impossible Very Challenging Difficult Intermediate Simple
44%
24%
18%
12%
2%
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The Evolutionary Process
DefineAspiration
AssessEnvironment &PMO Maturity
DesignIntegrated Plan
ImplementChange
Track PMOValue
Match the pace of evolution
with the knowledge of theongoing (and possibly
changing) organisational
conditions
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Seminar Structure
The Theory ofEvolution
Introductionto the conceptof maturityand summaryof the Valueof a PMO
The EvolutionaryProcess
Differingviews ofevolution anditerative stepsto improvePMO maturity
EvolutionaryAspiration
Understandthe businessmotivationbehind PMOaspirations
EnvironmentalAssessment
Going beyondthe functionalto build aplatform forPMO success
EvolutionaryPlan
Definingactivities toimprove PMOfunctionalityand mitigateenvironmentalrisks
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Business Driven Aspiration/Motivation of
Project Sponsor
Aspiration/Motivation
Focus on tracking allwork (no off-radaractivity)
Understand high-levelproject risk
Level 1 Controlled progress
through formalcheckpoints
Processstandardisation
Hub of best practice
Improve PMcompetency
Enhance ROI from
Level 1
Level 2 Comprehensive
process standardisation
Data-driven decision-making
Manage projectinterdependencies
Monitor and managescope/change control
Use risk to calculate
project contingency Enhance ROI fromLevel 2
Level 3 PMO provides analytics
& intelligence
Project prioritization (inPortfolio environments)
Integrated resourcemanagement (andcapacity planning inPortfolio environments)
Enhance ROI from
Level 3
Level 4 PMO Organisation is
self-iimproving
Enhance ROI fromLevel 4
Level 5
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Seminar Structure
The Theory ofEvolution
Introductionto the conceptof maturityand summaryof the Valueof a PMO
The EvolutionaryProcess
Differingviews ofevolution anditerative stepsto improvePMO maturity
EvolutionaryAspiration
Understandthe businessmotivationbehind PMOaspirations
EnvironmentalAssessment
Going beyondthe functionalto build aplatform forPMO success
EvolutionaryPlan
Definingactivities toimprove PMOfunctionalityand mitigateenvironmentalrisks
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3. Findings andRecommendations
1. The Interviews2. The Quantitative
Results3. Findings &
Recommendations4. Improvement
Log5. PMO Functional
Plan
The Accenture Model isbased on quantitativeassessment of functionalcapability in 11 key areasover 261 questions:
Assessment of PMOfunctional capability against a5 tier scale for eachFunctional Area
Functional Maturity by areadetermines the main focusareas.
Based on Knowledge-baseand prior, collective, lessons-learned, the assessor willdefine a series of specificimprovements
Improvements are thencrafted into a project plan forimplementation.
PMO Functional Maturity Assessment
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Maturity is a concept to help frame improvement. It is not the panacea to all ills
Whilst this maturity representation is staged there are also models that are continuous which areequally valid and beneficial as frameworks
Project Management Maturity Models can be substituted in lieu of PMO models
The maturity spectrum was established by benchmarking a number of PCS-controlled PMOs
Sample PMO Maturity Assessment (1/2)
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Maturity Model Examples
Portfolio, Programme and ProjectManagement Maturity Model(P3M3) cross referenced to P30
OPM3 Organizational ProjectManagement Maturity Model
Project Management MaturityModel J Kent Crawford
Kerzner Project ManagementMaturity Model (KPMMM)
Harold Kerzner Gartner PPM Maturity Model
Accenture PMO MaturityAssessment
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(The PMO) must drive much
higher ROI than the projects itoversees. In this sense, it becomes
a value machine... (it) must helpexecutives meet their strategic
goals by providing a single point ofknowledge for PM intellectual
property... (it) must helpexecutives execute*
Structural considerations for PMO
* Source:Advanced project portfolio managementand the PMO (paraphrased), Gerald I. Kendall,Steven C. Rollins, J. Ross Publishing, 2003
** Source:Clearly Define Your Goals BeforeCreating a PMO Clearly Define Your Goals BeforeCreating a PMO Daniel B. Stang Gartner 2009
***Source:PMOs: One Size Does Not Fit All DonnaFitzgerald Gartner 2008
PMOs fail, by some estimates,more than 50% on their first
try... We believe that this is thedirect result of not matching
the PMO mission andobjectives to the real needs of
the organization***
When creating a PMO...first clearlyarticulate the main business
problem you are trying to solve,and then define some key goalsfor the PMO in addressing that
problem **
Structural LegacyThe Socio-political factors
affecting a PMOs organisational environment
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It has been shown thatdeploying a PMO does notleadto performance improvement in
itself. It is only when the PMOincreases maturity that tangible
improvement occurs*.
Functional considerations for PMO
*Source: Value of Project Management
Center for Business Practices (CBP) Study
**Source:The State of the PMO - 2007-2008
A Benchmark of Current Business Practices
Center for Business Practices (CBP) Report
*** Source:Closing the Gap - Economist
Intelligence Briefing Unit
To prove that a project was a success, it isnecessary to measuremore than
timeliness and adherence to budget;companies should also measure outcomesagainst project goals, determine whetherthe project delivered bottom-line resultsand assess the satisfaction of clients and
stakeholders with the project. ***
In low-performing organisations
project management performance
(and PMO performance) is not
measured nor is appropriate
accountability for outputs
assigned**
Functional Legacy The operational factors that
influence PMO processes and tools
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Resource considerations for PMO
*Source:The State of the PMO - 2007-2008
A Benchmark of Current Business Practices
Center for Business Practices (CBP) Report
**Source:Software Engineering Economics
Prentice Hall, Englewood Cliffs, NJ, p431
Boehm B (1981)
*** Source:Closing the Gap - Economist
Intelligence Briefing Unit
In low-performing organisations
PMO staff are much less likely to
have formal project management
qualifications, hands-on-experienceand extensive project management
knowledge*
A project staffed with uniformly
very low-rated personnel on all
capability and experience factorswould require 11 times as much
effort to complete the project as
would a project team with the
highest rating in all the above
factors**
Training, mentoring and other
development activities for
project management
professionals should be tied to
specific skills gaps and career
planning.
Resource LegacyThe level of information,
expertise and finance available for PMO activities
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Cultural considerations for PMO
*Source:The State of the PMO - 2007-2008
A Benchmark of Current Business Practices
Center for Business Practices (CBP) Report
** Source: Closing the Gap - Economist
Intelligence Briefing Unit
In low-performing organisations
executive sponsorship is
approximately 60% less likely to
have an appreciation of the
strategic value of a PMO *
In low-performing organisations
PMOs face much greater difficulty in
being accepted as a real value-adding
proposition, at all levels of their
organisation, when compared to high-
performers *
To maintain a competitive
advantage, and maximise value,
leaders must link every PMdecision to the strategic goals of
the organisation. Leaders who
continue to focus on improving PM
strategies and methodologies will
garner the greatest long-term
success. **
Cultural LegacyThe level of organisational
understanding of, and appetite for, PMO activities
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PMO Environmental Assessment Framework
Level of organisational resource competency(e.g. change management/projectmanagement etc)
Level of investment (budget/FTE) availablefor change
Level of PMO team resource competency
Level of PMO leadership experience (todrive change)
Level of understanding of the Value of a PMO
Level of executive buy-in
Level of alignment between goal-setting >results/behaviour > performance assessment
Level of organisational buy-in
Type/magnitude of the cultural/behaviouralchange (e.g. distributed teams)
Required PMO functional blueprint
Level of methodology constraint on PMO Level/value of supporting PM software(and configuration) in place
Breadth of PMO delivery lifecycleresponsibilities (e.g. benefits realisationincluded?)
Level of policy/contractual constraint onPMO
Level of readiness/effectiveness of governance
construct (e.g. unified vs. siloed)Level of project/programme/portfolio complexity
Size of the delivery organisation (headcount)
Level of implicit PMO power
Type of organisational structure(projectized/matrix/functional)
Level of alignment to enterprise strategy
Level of distributed working
Structural
Legacy
Functional
Legacy
Resource
Legacy
Cultural
Legacy
OperationalPMO Maturity
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Seminar Structure
The Theory ofEvolution
Introductionto the conceptof maturityand summaryof the Valueof a PMO
The EvolutionaryProcess
Differingviews ofevolution anditerative stepsto improvePMO maturity
EvolutionaryAspiration
Understandthe businessmotivationbehind PMOaspirations
EnvironmentalAssessment
Going beyondthe functionalto build aplatform forPMO success
EvolutionaryPlan
Definingactivities toimprove PMOfunctionalityand mitigateenvironmentalrisks
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StructuralRiskMitigation
UnderstandPMO Role
Develop PMOCharter
IntegrateDisparate PMO
Functions
Align PMO toEnterpriseStrategy
DevelopFunctional
Relationships
Design Fit-for-
PurposeGovernance
StructuralLegacy
FunctionalLegacy
ResourceLegacy
CulturalLegacy
Position the PMO to enable
Strategy execution through
full involvement in
Programme/Project
Governance
Structural Risk Mitigation
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FunctionalRis
kMitigation
DevelopBusiness Case
Regularly AssessPMO Maturity
Tooling forautomation
Establish andBaseline WBS
DefinePerformance
Metrics
EffectiveKnowledge
Management
Publish Metrics
Tailor / WaiverPMO Scope
Improve PMMethodology
Leverage /Record Lessons
Learnt
StructuralLegacy
FunctionalLegacy
ResourceLegacy
CulturalLegacy
Develop a PMO Business Case
that harnesses Management
Information to evolve
Project/Programme operations
Functional Risk Mitigation
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Re
sourceRisk
Mitigation
Develop PMO
TrainingCurriculum RingfenceSufficient PMO
Budget
Build QualifiedTeam
Build Project
TeamRelationships
Align Roles toPMO Objectives
RecruitExperienced
PMO Manager
Resource Risk Mitigation
StructuralLegacy
FunctionalLegacy
ResourceLegacy
CulturalLegacy
Build and maintain a qualified
and relevant team using all the
resources at the PMOs disposal
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CulturalRisk
Mitigation
Send PMO tothe coal-face
Manage
StakeholderExpectations
Collaborate &Support
(not police)
Design Value -Based Project
Training
Embed Value ofPMO Concept
Develop Systems& Process
Evangelists
Create
CompetitiveSpirit
Embed CulturalFlexibility in
Team
Establish PMOSurvey
Secure andMaintain Buy-In
StructuralLegacy
FunctionalLegacy
ResourceLegacy
CulturalLegacy
Create a PMO value culture on
the Programme/Project and
constantly evaluate stakeholder
expectations and satisfaction
levels
Cultural Risk Mitigation
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Logo
text
text
text
Q6Q5Q4Q3Q2Q1Timeline
PMOMaturity
Level
L5
L4
L3
L2
L1
L0
Accelerating your PMO Evolution*
Baseline Plan Only takes into account the activitiesneeded to address the functional gaps and risks aredealt with on an ad-hoc basis
Accelerated Plan Enhances the functional improvement plan
with a defined environmental risk mitigation activities toaccelerate PMOs improvement
PMO
FunctionalPlan RiskMitigationPlan
* NB: The graphics and statistics on thispage are indicative and used to demonstrateapproximate proportions and trends
EnvironmentalAssessment Results
PMO Functional MaturityAssessment Results
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Summary
Evolving PMO maturity drives real value
Create an integrated plan(process improvement and risk mitigation)
Be clear on the sponsors aspiration
Assess beyond the functional
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C i ht 2010 A t All Ri ht R d 28
Follow-ups, Questions and Answers