A PMO Value Model - PMI-NEIC PMO Value Model © 2016 Robert Frost 1 A PMO Value Model Robert Frost PMP, PMOC For Strategic Execution and Value Delivery. 4/19/2016 PMO Value Model

O

PM

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4/19/2016 PMO Value Model © 2016 Robert Frost 1

A PMO Value Model

Robert Frost

PMP, PMOC

For Strategic Execution and Value Delivery


Why we need a PMO Value Model

Why Capabilities Needed The Challenges*

Projects are Financial

Investments

Organizations need to be able to

quantify and consistently deliver

promised project value so that

executives and sponsors feel the impact

Only 17% of Organizations are

able to realize envisioned

project value

Organizations have

unlimited opportunities

for projects and limited

resources


optimize resources to deliver more

projects without correspondingly more

resources

Only 17% of Organizations

consider their processes as

“high maturity”

It doesn’t matter how

fast you execute if

you’re working on the

wrong projects


prioritize projects for execution and pull

projects through based on priorities

Only 42% of projects were

classified as having “high

alignment” with

Organizational strategy

Any project worth doing

is worth doing fast


execute a continuous flow of projects in

drastically shorter times

Only 9% of Organizations

consider themselves

“excellent” at executing

projects

*PMI’s Pulse of the Profession: The High Cost of Low Performance, 2014


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

Interactive Exercise:Barriers to Project Success


Interactive Exercise #1You 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.

Project Summary

Average times in Seconds


Interactive Exercise #2This 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.

Record the overall time to complete each of the projects in seconds.

Repeat this process copying 5 at a time and switching pens between projects until

they are all complete.

Project Summary

Average times in Seconds


Barriers to Project Flow


Project Flow Density Curve

Density (Throughput)

Flo

w

Maximum Flow,

Optimal Density


Pushing the Curve

Density

Flo

w

Pushing the Curve

“Pull” Projects through

based on capacity and

project priorities

TM


Optimize Value Flow

Strategic Execution and

Value Delivery:

Delivering project value as

fast as possible based on

project priorities and

available capacity


PMO Value Model

ToolsPrioritization

Governance

Vision

Visibility

Value

Risk

Management

Communication


Vision

• 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 project-

include 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

Vision

The PMO Value Model starts with

a Holistic Vision for the PMO


Governance

• 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

Governance

Strong Governance and Executive

Commitment is key to success


Governance Leadership (Example)

Quarterly

(or Ad Hoc)

Monthly

Bi-weekly

Weekly

Daily

• Execute the Project for Successful Delivery

• Monitor and Control the Project

• Provide Weekly Project Status Reports

• Manage Issues and Risks

• Review Project Status with Teams

• Provide Inputs for integration Roadmap updates

• Help Drive Project Delivery

• 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 Guidance to Project Teams

• Provide Escalation and Support as Needed

• Investment Planning

• Approve New Capital Projects and Funding

• Prioritize Capital Spending

• Provide Strategic AlignmentCapital

Committee

Portfolio

Review Board

Project Steering Committee

Project Management Office

Project Sponsors

Project Team

Monthly

• Roadmap update reviews

• Monthly Portfolio Review

• Project Scoring and Prioritization

ResponsibilitiesCadence

*Leadership Commitment is more important than the Structure


Governance Processes (Example)

Vision

Strategy

Policies

Standards

Guidelines

Procedures

• 1 to 3 Sentences

• 1 to 3 Paragraphs

• 1 to 3 Pages

• 2 to 10 Pages

• 4 to 15 Pages

• 5 to 50 Pages

Processes are a critical piece of the PMO Governance


Scalable and Flexible Processes(Example)

Initiation Planning ExecutionGo-live

and Close

PMO Initiation

Stage Gate 1

PMO Planning

Stage Gate 2

PMO Go-Live

Stage Gate 3

PMO Close

Stage Gate 4

Definition Implementation

Stage Gate

- Project closure

Stage Gate -

FAST TRACK

FULL TRACK

Scaled Agile

process based on

level of Risk and

Complexity

Initiation & Planning Execution/G0-Live and Close


Scalable and Flexible Processes(Example of Scaling by Project Levels)

Criteria Grades WeightingTotal Possible

Points

BUSINESS PROCESS IMPACTHow many business processes will be impacted by the project?

0: None, 3: One core process, 7: Multiple core processes7 49

SYSTEM CRITICALITYWhat is the classification for disaster recovery response?

1: Business important, 3: Business critical, 7: Mission critical7 49

INTEGRATION COMPLEXITYWhat is the level and complexity of system integrations?

1: Standalone, 3: Non-mission critical integrations, 7: Mission critical integrations7 49

BUSINESS VALUEWhat is the business value (synergies, revenues, savings, etc?

1: Minimal <500k, 3: Moderate 0.6-3M, 7: Significant >3M5 35

LOCATION IMPACTHow many locations will be impacted by the project?

1: Site, 3: Regional, 5: Multi Regional, 7: Global5 35

PROJECT INVESTMENTWhat is the total project cost?

1: Small (<$250k), 3: Medium ($250k - $2M), 5: Large (>$2M) 5 25

BUSINESS RESOURCE

COMPLEXITY

What is the level of business resource commitment?

1: Minimal, 3: Single functional need, 5: Multiple functions involved3 15

LEVEL OF ORGANIZATIONAL

CHANGE

What is the amount of organizational change required for the project to be successful?

1: Limited, 3: Moderate, 5: Extensive3 15

TECHNOLOGY LANDSCAPEDoes the project involve new or existing technologies?

1: Leveraging existing, 3: Modifying existing, 5: Introducing new 3 15

VALIDATION / QUALIFICATION

REQUIRED?

Does the project require validations?

0: No, 5: Yes1 5

BUSINESS RISKWhat is the level of risk to business operations?

1: Minimal, 3: Single functional need, 5: Multiple functions involved7 49


Why we need Governance


Prioritization

• 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

Prioritization

“If everything’s important,

then nothing is”


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

Visibility

Visibility is Key to PMO Success


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

Value

The Number One Goal of the

PMO is to Create Value


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

• 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

Which Project is the best investment?


Communication

• 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

Communication

Implementing a PMO Model

requires clear, effective and timely

communications


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

Risk

Management

Successful Project and Portfolio

Management requires

Proactive Risk Management


Tools

• 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

Tools

Tools should enable the PMO

processes through Automation

and Simplification

O

PM

™


A PMO Value Model

Robert Frost

PMP, PMOC

For Strategic Execution and Value Delivery

THANK YOU!

Documents

A PMO Value Model - PMI-NEIC PMO Value Model © 2016 Robert Frost 1 A PMO Value Model Robert Frost PMP, PMOC For Strategic Execution and Value Delivery. 4/19/2016 PMO Value Model