Project Management Center of

Excellence: The Cornerstone of

Business Transformation
Kathleen (Kitty) B. Hass
Management Concepts

Session ADV10

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©2008 Permission is granted to PMI for Congress attendee use only
 Agenda
• Center of Excellence Trends
• Lessons Learned about PMOs
• PMO Implementation
– Visioning and Concept Definition
– Readiness Assessment
– Implementation Planning
– PMO Launch
• Challenges
• Pitfalls

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 Center of Excellence Trends
• Primary vehicle for
– Maturing business practices
– Managing complex change initiatives
• Comprised of a team of business/technology experts
collaboratively determining solutions to complex business
issues
– Business analysis
– Data integration
– Enterprise architecture
– Business and IT optimization
– Enterprise-wide access to information
– IT Service Management
– Project, program, and portfolio management

Source: Geiger, Jonathan G. Intelligent Solutions: Establishing a Center of Excellence

BIReview: March 20, 2007
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 Strategic Benefits
• Provides organizational focus for repeatable
practices
• Professionalizes roles, develops project leadership,
and high-performing teams
• Provides central management of critical projects,
contractors, resource pools, locations
• Improves project selection, prioritization, and
resource allocation
• Implements quantitative performance measures
• Increases competitiveness and project value

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©2008 Permission is granted to PMI for Congress attendee use only
 IBM PMO
• Has experienced such success that they are
creating six new CoEs focusing on improving
business performance
– Business analysis and discovery
– Master data management
– Business process innovation
– Risk and compliance
– Workforce productivity
– Business performance and process management
• Goal: help organizations transform information
from utility for running the business to a
competitive asset
Source: Andrews, Chris. IBM Initiative to Capture New Growth Opportunities in
Information Management. 16 Feb 2006 press release. Retrieved from the Internet 29
March 2007. http://www-03.ibm.com/press/us/en/pressrelease/19249.wss
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 Hewlett-Packard CoEs
• Used when implementing large-scale
organizational change for clients
• Benefits of the HP CoEs include many of the same
benefits we seek from PMOs:
– Establish enterprise standards, procedures, governance
– Standardize infrastructure, development methods,
operations
– Increases business agility, i.e., the ability to adapt
quickly
– Reduces risk, redundancy, complexity
– Aligns business and IT
– Enables re-use and faster time-to-market
– Presents one face to the customer
Source: Davis, Mark Frederick. SOA: Providing Flexibility for the Health and
Science Industry. July 2006. Retrieved from the Internet 29 March 2007.
http://h20247.www2.hp.com/publicsector/downloads/Technology_Davis_VB.pdf
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©2008 Permission is granted to PMI for Congress attendee use only
 Benefits of PMOs
• Strategic projects are delivered more effectively
– Accuracy of cost estimates improved by 25%
– Accuracy of schedule estimates improved by 31%
– Project stakeholder satisfaction improved by 9%
• Boosted productivity ensured that priority projects
get the most attention:
– More projects are completed on time and on budget
with fewer resources
– Highest priority projects are allocate majority of
resources
– Reduction in the number of small projects from 233 to
13 saved more than $3 million
– Return was delivered in three to six months
Source: Santosus, Megan. “Office Discipline: Why You Need a
Project Management Office.” CIO Magazine, Jul. 1, 2003
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Often Increase in Value Over Time
The Longer You Have Them,
The Better They Work

Source: “PMOs: The Longer You Have Them, The Better They Work,” CIO
Magazine, Jul. 1, 2003. <http://www.cio.com/archive/070103/office_sidebar_2.html>
(30 November 2004). CIO/PMI survey
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
©2008 Permission is granted to PMI for Congress attendee use only
 Lessons Learned About PMOs
• 50% are seen as relevant and adding value
• Most operate autonomously from other PMOs
• Closure and restructuring happens frequently
• Short time to demonstrate value before being
closed or restructured
• Trouble finding the right fit for PMOs
• Implementation time takes six months to two
years

Source: Hobbs, Brian 2007. The Multi-Project PMO: A

Global Analysis of the Current State of Practice. PMI
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PMO Implementation

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©2008 Permission is granted to PMI for Congress attendee use only
Visioning and Concept Definition

Explore the business need

1. Determine current state
of project performance
2. Document business need
3. Identify PMO sponsor(s)
4. Secure approval
5. Build the case

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1. Current State of Project Performance
• Collect industry data on project
performance
• Conduct a quick assessment of
organizational project performance
• Identify the business need for improvement
• Conduct a gap and cause analysis between
current and desired performance
• Identify the gaps in capabilities that are the
causes of poor project performance

“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
©2008 Permission is granted to PMI for Congress attendee use only
 2. Business Need
• Define the business problem or need the
PMO will satisfy
• Determine if the organization is ready for:
– Strategic level PMO or
– Tactical approach
• Prepare draft:
– Vision and mission
– Objectives and scope
– Measures of success in business terms

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©2008 Permission is granted to PMI for Congress attendee use only
 3. Sponsor(s)
• Identify one or more sponsors
• Interview the sponsors regarding the current
state of projects in your:
– Industry
– Organization
• Discuss the role of the PMO in closing the
gaps
• Identify executive success criteria

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 4. Approval to Proceed
• Staff a small PMO planning team
• Finalize the PMO detailing:
– Vision and mission
– Objectives and scope
– Strategic alignment
• Establish measures to demonstrate PMO
value
• Develop the business case

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©2008 Permission is granted to PMI for Congress attendee use only
 5. PMO Business Case
• Most likely PMO approach based on
– Appropriate PMO model
– Scope considerations
– Organizational alignment, positioning, and maturity
– Implementation approach
• Cost and benefit information
– Equate project performance data to a dollar figure
– Calculate ROI for expected change in performance

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 PMO Models

Major program
support office

Resource
center PMO Department

Strategic
enterprise

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 PMO Functions
PMO Functions

Professional Full Cycle

Standards Services
Development Governance

• Practices and • Skill assessments • Competitive analysis • Business

methodologies • Education and • Business architecture program
• Tools training • Feasibility studies analysis
• Performance • Mentoring and OTJ • Business case • Strategic program
metrics training • Project investment resources
• Knowledge • Team building decision package • Portfolio
management • Career path: • Staff augmentation: management
• Performance – Position process, support
reporting – BAs and PMs
description and facilitation
– Requirement analysis
• Continuous – Grades
– V&V specialists • Benefits
improvement – Competencies
– Workshop facilitators management
– Skill requirements

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 Organizational Alignment
• Business, mission focused
• Relationship to other CoEs through integrated or
stand alone disciplines:
– Project management
– Software engineering
– Quality assurance
– Business analysis
• Golden rule of change management
– Combine change efforts that affect a process
– Eliminate duplication of efforts
– Identify and manage complexity and interdependencies
Source: Bolles, Dennis PMP. Building Project Management Centers of
Excellence. New York, NY: American Management Association. 2002
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 PMO Placement
Business Support Functions Business Area Functions

These business units support business areas of the organization to deliver the These are business units of the organization that are
strategic vision and enterprise objectives. responsible for incoming revenue to the organization.

Business Business Business

Business Business Business
Support Support Support Business Business Business Business
Support Support Support
Function Function Function Function Function Function Function
Function Function Function
(Risk and (Center of (Human
(Sales / Marketing) (Accounting) (Technology)
Compliance) Execellenc) Resources)

Business Project Business Business Business Business Business Business Business Business
Activity Management Activity Activity Activity Activity Activity Activity Activity Activity

Business Business Business Business Business Business Business Business Business Business
Activity Analysis Activity Activity Activity Activity Activity Activity Activity Activity

Business Quality Business Business Business Business Business Business Business

Business
Activity Assurance Activity Activity Activity Activity Activity Activity Activity
Activity

The Center of
Excellence support
function defines
best practices,
integrates into the
organization and
monitors for
compliance and
process
improvement.

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 Implementation Approach
Program Department Strategic

PMO Strategic
Launch PMO

Phase 1 Phase 2 Phase 3

Functional Project-Driven
Organization Organization
Time
Increases Responsibility

Gains Credibility, Acquires Expertise, Builds Trust, Expands Influence

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 Measures of Success
• Project performance improvements
• Time to market improvements
• Project time and cost savings
• Business needs met
• Project benefits managed, measured, and
achieved
• Project portfolio estimated ROI achieved

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 Business Case
• Business case elements:
– Business need for the PMO
articulating strategic
importance
– Initial vision and concept
– Vision, mission, objectives,
scope, measures of success
– High-level estimate of
costs, benefits, and value
– List of suggested members
of the PMO guidance team
– Implementation approach
• Present to sponsor(s) for
approval to:
– Conduct readiness
assessments
– Prepare implementation
plans
– Establish a guidance team
– Devise a communication
plan and political
management strategy
– Conduct a kick-off meeting
and launch the PMO
“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
©2008 Permission is granted to PMI for Congress attendee use only
Readiness Assessments

• Conduct
organizational
readiness assessment
• Conduct individual
competency
assessment
• Compile assessment
findings

“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
©2008 Permission is granted to PMI for Congress attendee use only
1. Organizational Readiness Assessment
• Purpose
– Determine organizational expectations
– Gauge the cultural readiness
– Gather information about best practices in the
organization to use as a springboard for replication
– Uncover challenges, gaps, and issues
– Increase the organization’s readiness to improve
• Method
– Interviews
– Small focus group discussions

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 Organizational Maturity
Continuous Improvement

Optimizing
(5)
Strategic Asset
• BA/PM Maturity
Strategic
Assessments
Enterprise Focus (4) • Product
Assessments
Integrated • Strategic Alignment • BA/PM Skill
• Benefits Mgt. Assessments
Project Centric (3) • BA/PM Practices
• PMO
• Feasibility Studies Improvement
Documented Projects
Ad Hoc • Business Architecture • Business Cases
(2) • Business Risk Mgt. • Portfolio Mgt.
• Quality Assurance • Resource Mgt.
Initial • Requirements • Executive Oversight
(1) • Integrated Teams Allocation &
• Time, Cost, Scope Mgt. Traceability
• Requirements • Stakeholder Mgt.
• Informal, Inconsistent Elicitation, Analysis, • Requirements Mgt.
Processes Specification, V&V Tools & Repository
• Unstable Environment • Supplier Mgt. • Performance Mgt.
• Overruns

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2. Individual Competency Assessment
• Determines the skill level of existing project
managers
• Uses a survey to assess level of
competencies
• Delivers results to help determine:
– Training requirements
– Professional development activities
– Specific mentoring and coaching needs

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 3. Assessment Findings Report
• Compile assessment results in a formal
document
• Use assessment findings to:
– Inform the business plan for the new PMO
– Assess risks and challenges
• Report
– Strengths
– Prioritized list of opportunities for improvements
– Readiness to accept and support the PMO
– Challenges identified in implementing the PMO

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©2008 Permission is granted to PMI for Congress attendee use only
Implementation Planning
Summarize decisions about the
PMO in a Charter to be used as
a Business Plan:
1. Select the appropriate PMO
organization structure and
governance structure
2. Establish PMO guidelines
3. Manage cultural change
4. Prepare to demonstrate value
5. Manage the path to maturity
6. Develop a political management
strategy and communication plan
7. Present the Business Case and
Charter to Guidance Team for
approval

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©2008 Permission is granted to PMI for Congress attendee use only
 1. PMO Organization
and Governance Structure
Executive Sponsor Guidance Team

Director

Consulting Services Professional Life Cycle Administrative

Standards Development Services Manager Governance Support
Manager Manager Manager

Business/technology Administrative support to manage:

Methods and tool Senior PMs to manage: - Budget analysis
Training and consultants to manage:
specialists to - Project initiation and - Communications
development specialists - Strategic program
manage: planning - Contracts
to manage: analysis
- Methods, tools, - Project executing, - Performance reporting
- Skill assessments - Portfolio management
knowledge monitoring and
- Education and raining process and facilitation
management controlling
- Mentoring and OTJ - Project investment
- Performance - Project closeout and
training benefits management
metrics lessons learned
- Team building
- Process Senior BAs to manage:
- Career path
improvement - Competitive analysis
- Skills data base
- Business architecture
- Feasibility study
- Business case
- Project investment
decision package
Senior BAs to augment
project staffing:
- Requirements
analysts
- V&V specialists
- Workshop facilitators

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2. PMO Guidelines

20% -
improving
PM
practices 40% -
4 1
supporting
0
strategic 2
projects 3
40% -
supporting
the strategy
execution
framework

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©2008 Permission is granted to PMI for Congress attendee use only
3. Change Management
• Expect that only a limited
amount of concurrent
change may be absorbed
• Anticipate considerable
amount of resistance
• Secure buy-in and support
• Lead, communicate, and
manage the change
• Use PMO Guidance Team
to communicate a
compelling vision

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 4. Value
• Wrap your mission around your impact on
business
• Establish business measures:
– Gain efficiencies
– Achieve cost savings
– Increase customer satisfaction
– Reduce time-to-market
– Increase revenue and profit
– Increase competitive advantage
• Value is not templates, tools, methodology,
processes, and training
Source: http://www.chiefprojectofficer.com/article/146
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©2008 Permission is granted to PMI for Congress attendee use only
 5. Path to Maturity
• Stabilize performance by supporting basic project
management practices before taking on
sophisticated practices
• Transition to more sophisticated practices as
momentum builds
Limited Influence Strategic Influence

Phase 1 Phase 2 Phase 3

Project Department Strategic

Centric Focus Asset

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6. Communication and Political Management
Communication Plan
• Identify stakeholders
• Conduct an audience analysis
• Document information needs,
messages, media, and frequency
• Use Guidance Team to
constantly communicate
– Vision and mission
– Objectives
– Business drivers
– Value
Political Management Strategy
• Determine which stakeholders:
– Can influence the PMO
– Feel positively or negatively
about it
• Identify stakeholders’ goals
• Assess the political
environment
• Define problems, solutions, and
action plans to:
– Leverage positive influences
– Neutralize negative ones
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©2008 Permission is granted to PMI for Congress attendee use only
 7. Approval of Guidance Team
• Organize, structure, and facilitate the first
Guidance Team meeting
• Ensure that any issues, conflicts, and
inconsistencies have been resolved
• Summarize the contents of the business case
and PMO charter
• Seek approval to proceed with formal
launch of the PMO

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Launch the PMO

1. Conduct PMO Kickoff

2. Build a great team
3. Build a PMO to last

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 1. PMO Kickoff
• Capstone event officially launching the PMO
– All key stakeholders are in attendance
• Purpose
– Finalize the charter and gain consensus on an
implementation approach
• Prior to the kickoff
– Areas of resistance have been resolved
– Charter and business case approved
– Buy-in of influential stakeholders secured

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 2. PMO Team
• Establish a small core dedicated leadership
team
• Avoid overstaffing the PMO
• Augment with SMEs and sub-teams
• Select team members based on their passion
• Develop your team-leadership skills

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 3. A PMO to Last
Executive Love:
• Drive 50% more projects to
completion
– Without increasing resources
• Complete 25% more projects
– In drastically shorter times
• PMO impact is clearly felt
throughout the organization
• Management sees benefits of PMO
Source: Gerald I. Kendall and Steven C. Rollins, Advanced Project Portfolio
Teams Trust:
• Viewed as indispensable
• Gains credibility one project at a
time
• Provides valuable services
– Resource allocation
– Project kick-off workshops
– Risk management workshops
– Coaching and mentoring
– Methods scaled to meet project
needs
– Training and education
– Communities of practice
– Stage gate review preparation
– Business case updates
Management and the PMO, J. Ross Publishing, 2003
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 Expect Challenges
• PMs applaud their increased control
– But loathe the accountability
• Managers enjoy the visibility of
project progress
– But scoff at the added level of
communication needed to get things
done
• Executives like the deliberate
assignment of responsibilities
– But balk at the investment necessary to
support a central resource

Source: Donn DiNunno CCP, CDP, Program Management Office

(PMO) Basics, Engineering, Management, and Integration, Inc. 20
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 Avoid Pitfalls
• Lack of focus and too many
responsibilities
• Placed too low in the organization
• Relegation to clerical role
• Excessive time developing
process and tools
• Perception of not adding value
• Viewed as:
– Worthless resource
– “Project police”

“PMI” is a registered trade and service mark of the Project Management Institute, Inc.
©2008 Permission is granted to PMI for Congress attendee use only
 Contact Information
Name: Kathleen (Kitty) B. Hass, PMP
Senior Practice Consultant
IIBA Director at Large

Email: KHass@managementconcepts.com

Session #: ADV10

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©2008 Permission is granted to PMI for Congress attendee use only