PMO

Effective Project Management Offices
AN A PQ C BE S T P R AC T IC E S S TU D Y
Table of Contents
Page
Project Personnel 3
Copyright 4
Study Participants 5
Acknowledgements 6
Executive Summary 7
Overview of Best Practice Organizations 9
Chapter 1: PMO Strategy 13
Chapter 2: PMO Practices 25
Chapter 3: Technology and Automation 42
Chapter 4: Measures and Reporting 50
Conclusion 54
Case Study: Dell Services 59
Case Study: DTE Energy Co. 94
Case Study: IBM 121
Case Study: The United Illuminating Company 139
Case Study: Organization A 161
Appendix A: Methodology 179
©2013 APQC. ALL RIGHTS RESERVED.

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Project Personnel
PROJECT TEAM
Rachele Williams, senior project manager, APQC
Sarah Hewson, project team member, APQC
Janis Mecklenberg, senior adviser, APQC
SUBJECT MATTER EXPERTISE

Jeff Varney, PMP, senior adviser, process improvement practice lead, APQC
CONTRIBUTING AUTHORS
Sarah Hewson
Janis Mecklenberg
Rachele Williams
EDITOR
Paige Leavitt
SUBJECT MATTER EXPER TISE

Jeff Varney, PMP, senior adviser, process improvement practice lead, APQC
Jeff Varney is a senior adviser within APQC‘s Advisory Services group. In this role
he is responsible for the implementation of process management and process
improvement, knowledge management, custom benchmarking, performance
measurement, and performance improvement activities.
As the process improvement practice lead within APQC, Varney coordinates

applied research projects for process management and process improvement (e.g.,
Lean and Six Sigma) spanning all industries and disciplines. Varney is also an
instructor for many of APQC‘s training courses including Process Management,
Building and Sustaining Communities of Practice, Strategies and Tactics for
Knowledge Management, and Applying Benchmarking Skills in Your Organization.
Varney has extensive experience with enterprise projects across multiple industries
including software development, banking, insurance, military, and space. In each
instance, he has been a catalyst for process improvement and innovation by leading
Project Management Institute (PMI) certification efforts; driving SEI CMM and
ISO 9001 adoption; driving Six Sigma initiatives; establishing balanced scorecard
reporting; and nurturing strong, effective teams. This has been achieved through a
blending of process, technology, and training.

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As a project management professional and member of the Project Management

Institute, Varney regularly contributes to his local chapter, most recently leading a
panel discussion on project management office (PMO) best practices. He
consistently advocates knowledge sharing, mentoring, and process improvement
with his peers.
Prior to joining APQC, Varney worked with CSC as its banking PMO director. He
established a project management office that merged three disparate cultures (due to
acquisitions) into a single, cohesive project management and reporting practice. He
also established and maintained several communities of practice and assisted in
creation of an opportunity management approach, which resulted in a structured
sales process. He was an active member of the CSC project management steering
committee and led its best practices capture team.
Varney has a history of successfully participating on and leading technology projects

with Computer Sciences Corp., Raytheon Co., and McDonnell Douglas. These
included custom call center solutions, military command and control applications,
and the International Space Station. With a degree in aerospace engineering, Varney
has a strong technical background that complements his experience in management,
process improvement, and knowledge management.

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Copyright
MEMBERSHIP
For information about how to become a member of APQC and to receive
publications and other benefits, call 800-776-9676 or +1-713-681-4020 or visit our
website at http://www.apqc.org.
COPYRIGHT
©2012 APQC, 123 North Post Oak Lane, Third Floor, Houston, Texas 77024-7797
USA. This report cannot be reproduced or transmitted in any form or by any means
electronic or mechanical, including photocopying, faxing, recording, or information
storage and retrieval.
Additional copies of the report may be purchased from APQC by calling 800-776-
9676 (U.S.) or +1-713-681-4020 or online at www.apqc.org. Quantity discounts are
available.
ISBN-13: 978-1-60197-183-8 • ISBN-10: 1-60197-183-4
STATEMENT OF PURPOSE
The purpose of publishing this report is to provide insight into the processes and
practices associated with certain issues. It should be used as an educational learning
tool and is not a ―recipe‖ or step-by-step procedure to be copied or duplicated in
any way. This report may not represent current organizational processes, policies, or
practice because changes may have occurred since the completion of this study.

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Study Participants
SPONSOR O RGANIZATIONS
 Amgen Inc.
 Becton, Dickinson and Co.
 Commonwealth Edison Co.
 Dow Chemical Co.
 Honeywell International Inc.
 Johnson & Johnson Inc.
 U.S. Navy Carrier Team One
 Newfield Exploration Co.
 Praxair Inc.
 Public Service Enterprise Group Inc.
 Suncor Energy Inc.
 U.S. Army ARDEC
BEST-PRACTICE ORGANIZATIO NS
 Dell Services
 DTE Energy Co.
 IBM
 The United Illuminating Co.
 Organization A
DATA-ONLY PARTNERS
 Ameren Corp.
 Nationwide Mutual Insurance Co.
 The Doe Run Co.

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Acknowledgments
APQC would like to thank all of the participants in this collaborative benchmarking
study. The sponsor representatives provided valuable input throughout the study by
helping to design the site visit discussion guide and detailed questionnaire,
participating in the site visits, and providing feedback to develop the knowledge
transfer session.
A special thank-you is extended to the representatives from the five best-practice

organizations who took time out of their busy schedules to participate in this study.
The representatives received no compensation or reimbursement for their time or
travel. Each member of the best-practice organizations went out of his or her way to
guarantee the success of this study.

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Executive Summary
BEST-PRACTICE FINDINGS
Effective Project Management Offices was designed to uncover trends among a
select group of best-practice project management offices (PMO). The APQC
research team found several patterns, insights, and findings from the best-practice
organizations including strategies, practices, technologies, and metrics. This provides
insights into how these organizations manage projects for maximum value. These
findings differentiate best-practice organizations from other organizations in the
study, and they may provide solutions to the challenges other organizations face.
Thirteen best practices emerged in this study and are summarized in this section.
PMO Strategy
 Best-practice PMOs go beyond alignment with strategic initiatives; they are
involved in creating and implementing organizational strategy.
 Best-practice PMOs focus on projects of high strategic importance and provide
other projects with a standard framework and methodology. At these
organizations, there are well-defined criteria and rules that determine which
level of project management is needed on particular projects.
 At best-practice organizations, there is a well-defined, clear governance
structure and established roles between the PMO and the leadership team.
PMO Practices
 Best-practice PMOs‘ project management methodologies balance structure and
flexibility to meet the outcomes demanded by different types and sizes of
projects.
 Best-practice PMOs establish a formal approach to review the budget, risks, and
resourcing of projects to preemptively identify and mitigate risk.
 Best-practice PMOs value continuous process improvement; they work to
continually mature and evolve their project management capabilities.
 Best-practice PMOs take a strategic approach to resource loading.
 Best-practice PMOs encourage employees to earn both internal and external
project management certifications.
 At best-practice organizations, project managers are trained in blending
technical, soft, customer, and product skills. Project managers are often paired
with mentors and/or coaches to ensure the skills needed to do the job.

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 At best-practice organizations, both project managers and non-project managers

receive project management training, which is available virtually for ease-of-use
and convenience.
Technology and Automation

 Best-practice PMOs provide central portals and toolkits for project managers to
access everything they need (tools, templates, communities, lessons learned
databases, etc.).
 Best-practice PMOs integrate various technologies to consolidate information
from disparate sources to bring relevant information together. This provides
project managers with the visibility needed to effectively manage projects.
Measures and reporting

 Best-practice PMOs create dynamic dashboards of key performance indicators
that can be drilled down and queried.
Success Factors
In summary, this benchmarking study found that successful PMOs have the
following attributes:
 they are active in organizational strategy setting and implementation;

 they have a well-defined role within the organization;
 they focus on high-value, high-risk projects;
 they leverage a flexible project management methodology;
 they have clear interactions with organizational owners and leaders;
 they take a comprehensive approach to developing their project managers;
 they provide easy access to project management guides, tools, and support;
 there is high visibility into project drivers via technology integration; and
 they aggressively use measures to achieve high-performing projects.

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Overview of Best-Practice
Organizations
Five best-practice organizations participated in this study. Each was identified in
secondary research conducted by APQC and were selected by the sponsor
organizations from a larger candidate pool. The best-practice organizations
completed a detailed questionnaire and hosted half-day site visits, either virtually and
in-person, which were attended by the sponsors, other best-practice organizations,
and members of the APQC study team. More details on each organization and its
project management office can be found in the detailed case studies at the end of
this report. Organization overviews are provided below.
BEST-PRACTICE ORGANIZATIONS
Dell Services
Texas-based Dell Inc. is the world‘s third largest supplier of desktop and notebook
PCs. Its technology products—including network servers, printers, data storage
systems, and projectors—reach a global customer base. It also offers third-party
software and hardware, as well as IT services. With more than 100,000 employees,
Dell reported $62 billion in revenue for 2012.
A key business unit, Dell Services has 42,000 employees offering:
 application services,
 managed services,
 cloud services,
 IT support services,
 configuration services,
 deployment services,
 OEM services,
 information security services,
 end-user computing,
 training services,
 enterprise consulting for data centers and for workloads, and
 business process outsourcing.
Created largely through the acquisition of Perot Systems in 2009, Dell Services
supports 95 percent of global Fortune 500 companies, 10 million small businesses,
400,000 classrooms, every G20 government, 200,000 physicians, 75,000 channel
partners, and 60,000 retail locations.

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The charter for the project management office at Dell Services is to ―establish a
minimum standard for project management practices to increase project
management expertise, efficiency, and effectiveness across Dell Services, ultimately
increasing the success of global project delivery.‖ Tin 2011, this charter guided the
development of its PM3 framework (Dell Services‘ project management
framework), as well as its continued evolution and implementation. The PM3 is a
comprehensive compilation and collaboration, based on more than 20 years of
experience by the various delivery teams and PM/PMO subject matter experts
across Dell Services. The PM3 is a global project delivery framework with standard,
repeatable processes, as well as tools and templates for project, program, and
portfolio management.
DTE Energy Co.

DTE Energy Co. is a diversified energy organization that operates energy-related
businesses and services nationwide. It is involved in both utility (electric and gas)
and non-utility businesses. In terms of electric and gas utilities, its largest operating
facilities are Detroit Edison (2.2 million customers and the nation‘s eleventh largest
electric utility) and MichCon (1.2 million customers and the nation‘s fifth largest gas
distributor). These businesses have each been in operation for more than a century.
Together, these regulated utilities provide electric and/or gas services to 3 million
residential, business, and industrial customers throughout Michigan. In addition,
DTE Energy has a number of non-utility subsidiaries (gas midstream, power and
industrial projects, unconventional gas production, and energy trading), which
provide energy-related services to business and industry nationwide. In total, DTE
Energy operates in about one-half of the United States.
The report examples and case study focus on DTE Energy‘s project management
office for major enterprise projects. Major enterprise projects primarily supports
Detroit Edison, the largest subsidiary of DTE Energy, although it is starting to
engage in projects for the other DTE Energy companies. Senior leadership at DTE
Energy chartered major enterprise projects in 2006 as part of DTE Energy‘s
continuous improvement efforts to transform the organization into one of the best-
operated energy companies in the United States.
Major enterprise projects primarily handles large capital facilities projects related to:
 renewable energy (wind farms, solar projects, etc.),

 smart grid and advanced metering infrastructure (the migration of customers
from analog meters to digital radiofrequency meters),
 nuclear development (new nuclear licensing),
 large environmental retrofits on fossil fuel plants (selective catalytic reduction
units and desulfurization scrubbers for sulfur, clean air initiatives, etc.),

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 plant demolitions (such as the demolition of old coal facilities),

 environmental projects, and major upgrades to the Ludington pump storage
site.
Major enterprise projects also supplements project teams of other business units, as
needed, as well as mentors and coaches project managers on the methodology.
Currently, the major enterprise projects office manages about 110 projects,
representing about $800 million USD, although it does not manage ongoing capital
maintenance projects.
IBM
New York–based IBM is the global market share leader for computer products and
services. With 430,000 employees worldwide and $100 billion in revenue from
continuing operations in 2011, IBM produces computer hardware, software, and
semiconductors, as well as offers technology, outsourcing, and business services.
Work at IBM is divided into discrete projects (i.e., temporary endeavors to produce
unique products or services), programs (i.e., comprised of multiple, related projects),
and portfolios of projects and programs (i.e., projects and programs within the
business units to help deliver strategy). The IBM project management center of
excellence (PM/COE) supports IBM‘s road map to 2015 and drives the ongoing
transformation to a project-based enterprise.
The IBM PM/COE was established in 1997 by charter of the CEO Lou Gerstner
with a mandate to transform IBM into a project-based organization. The PM/COE
is an enterprise project management office that supports all business units across
IBM and approximately 27,000 project managers worldwide. Its mission is to
provide global oversight of project management skills, processes, and community,
while developing and supporting a standard, effective, and consistent project
management approach across the enterprise. Today, the PM/COE provides
guidance across all IBM business units and all regions in which IBM operates. The
PM/COE delivers a variety of projects and programs at IBM that develops and
supports project and program managers involved in product and software
development, as well as service delivery. The PM/COE is also available to work
directly with both internal and external clients when project or program
management expertise is needed (e.g., to help establish a project management office
for a large account).

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United Illuminating Company

UIL Holdings Corp. is the parent company of the electric utility United Illuminating
Co., as well as three gas utilities: Southern Connecticut Gas, Connecticut Natural
Gas, and Berkshire Gas Co. UIL acquired the three gas utilities in 2010, which more
than doubled its customer count from 325,000 to 700,000 customers. The four
utilities serve customers in Connecticut and Massachusetts. UIL has 1,800
employees and combined assets of $4 billion.
UIL formed its first project management office in 2002 to manage a large SAP
implementation. In 2003 UIL began using and developing dedicated project
managers. By 2008 UIL had three project management offices acting independently
of one another (i.e., a transmission and distribution project management office, a
corporate project management function, and an IT project management office). In
2010 UIL created a portfolio management office called the center of project
excellence to ensure a single methodology, standard tools and templates, and overall
portfolio management. As of 2012 the center is comprised of 52 project managers
and support staff who run 300 capital projects annually.
Organization A
Organization A is an east-coast beverage manufacturer and a recognized leader in
this industry. The organization has more than 5,000 employees and reported net
sales in excess of $2.5 billion for fiscal 2011.
Organization A created it program management office in 2009 with the backing of

its president and CEO, who had experience opening similar offices. His belief was
that a program management office would help the organization both manage its
growth and sustain its corporate culture. The program management office is a
permanent fixture meant to improve the organization over time. The office directly
manages some of the major, cross-functional, strategic projects within the
organization, as well as provides a project management framework, process, system,
and guidance for smaller projects.
DATA-ONLY PARTNERS
In addition to the five organizations selected as best-practice organizations, three
other organizations, initially screened as potential best-practice organizations,
participated in the detailed questionnaire: Ameren, Nationwide, and the Doe Run
Co.

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Chapter 1: PMO Strategy

In conjunction with the APQC research team, the sponsors developed the study
scope and key areas this exploration. The study findings, or key themes, are called
out throughout this report and are complemented by examples from the best-
practice organizations‘ site visits and analysis of the detailed questionnaire data.
In any study of an organization‘s best practices, it is helpful to understand the

strategy of the organizations involved in the research. In the strategy scope area of
this research, the study explored the following issues:
 the nature of strategic alignment between the organization‘s strategic goals and
objectives and the function of the PMO,
 the PMO‘s role in project prioritization and selection, and
 the reporting structure/governance and funding of the PMO.
SENIOR LEADERSHIP SU PPORT

A key enabler to the strategy of almost any endeavor or initiative is senior leadership
support. A common theme across the best-practice organizations was that they all
received tremendous support from their senior leadership teams. In fact, most of
the best-practice organizations‘ PMOs were established by and report directly to the
C-level management or one level removed from the C-level (Figure 1).

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Where does your PMO directly report?
Figure 1
Senior leadership at DTE Energy chartered major enterprise projects in 2006 as part
of its continuous improvement efforts to transform itself into one of the best-
operated energy companies in the United States. The IBM PM/COE was
established in 1997 by charter of the CEO Lou Gerstner with a mandate to
transform IBM into a project-based organization. The executive steering team at
IBM has helped eliminate obstacles and communicate the message of transforming
IBM into a project-based enterprise.

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All best-practice organizations leverage senior leadership evangelism to

communicate the mission and vision of their PMO to the rest of the organization
(Figure 2).
How does the PMO communicate its mission and vision?
Figure 2

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STRATEGIC ALIGNMENT
Key finding: Best-practice PMOs go beyond alignment with

strategic initiatives; they are involved in creating and
implementing organizational strategy.
Most best-practice organizations had either a formal or informal business case to

establish or transform their PMO (Figure 3). One of the top reasons for establishing
a PMO was to help support the execution of organizational strategy (Figure 4).
Was a business case developed prior to forming or transforming your PMO?
Figure 3

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If yes to the business case, did you include any of the following information in the
business case?
Figure 4
Although all best-practice PMOs clearly align with overarching organizational and
strategy, some best-practice PMOs play a much more active role in the selection and
prioritization of projects. For example, at Organization A, the program management
office works with the executive leadership team to develop strategic initiatives and
objectives for the organization. When the program management office was first
formed, each business unit aligned some projects and programs with its own goals
and objectives. However, this strategic alignment was not institutionalized across the
enterprise. The program management office stepped in to help the executive
leadership team align the enterprise-wide strategic goals to ensure the organization
was investing in the right programs and projects. The program management office
ensures that business units align their programs and projects with the both
enterprise-level and business unit/function strategy and initiatives. Half of the nine

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project managers on the project management team are embedded in the business
units. With a view of all the projects underway throughout Organization A and a
clear understanding of the strategy, the program management office can determine
the optimal allocation of projects and project work.
DTE Energy‘s PMO, called major enterprise projects, goes beyond strategic
alignment; its leadership team helped design some of the corporate strategic
planning processes. Major enterprise projects‘ vision and long-term goals and
objectives integrate with DTE Energy‘s corporate and strategy and ultimately
cascade from the top corporate priorities. As part of the strategic planning process,
major enterprise projects leadership reviews the long-term goals annually and
periodically adjusts them to better meet the needs and objectives of the
organization. Major enterprise projects‘ leadership works with internal client
business unit leadership, corporate strategists, and finance functions to define and
fund a plan that meets the organization‘s objectives. It is fully engaged in strategic
initiatives and projects across the enterprise, as well as in select projects outside the
enterprise.
At UIL, the center of project excellence is heavily involved in the creation of an

integrated, 10-year capital plan for the UIL enterprise and each of its business units.
To create the plan, the center asks each business unit to plan for the next 10 years as
if it has unlimited funds. With this plan drafted, the center helps the business unit
scale back as needed. The center then combines each plan into the UIL capital plan.
The oversight that the center has over the plan allows it to ensure that projects are
not duplicated, are integrated across business units wherever possible, and occur in a
timely manner (i.e., a project isn‘t conducted after the need has passed).
Key finding: Best-practice PMOs focus on projects of high strategic

importance and provide the remaining projects in the
organization with a standard framework and methodology. At
these organizations, there are well-defined criteria and rules that
determine what level of project management is needed on
particular projects.
The study team found that the best-practice organizations focus on projects that are
strategic in nature, as well as help bring at-risk projects back on track. They ensure
highly qualified project managers run the most strategically important projects. Each
best-practice organization adheres to clearly established criteria and rules to
determine which projects the PMO will address.

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At DTE Energy, major enterprise projects manages projects, programs, and

initiatives of strategic importance to the enterprise that meet the following criteria:
 require significant investment (more than $5 million USD);

 extend beyond one year from planning, to execution, to close out and turnover;
 expand the asset base of the organization (usually with new assets with no
associated retirement);
 implement new capacity, capability, or technology; and
 match major enterprise projects‘ owner/client mindset and are separate from
day-to-day, routine operations.
It is the mission of major enterprise projects to deliver strategic projects and

initiatives to the enterprise on time, with high quality, and for the best possible cost.
At Organization A, there are numerous requests for the program management

office‘s time. As such, a project must meet one or more of the following criteria:
 an executive leadership team member or senior executive requests program

manager;
 it is tier 1 or 2 (tiers refer to a determination of project importance based on a
number of factors);
 it has a large scope/impact that aligns with strategic goals of the organization;
 it is enterprise-wide or has multiple-unit, cross-functional impact;
 it is a major, strategic, or high-risk initiative; or
 it is a first responder to turn a crisis/major issue into a recovery/turnaround
program.
The 52 employees in the UIL center of project excellence provide support to the
entire organization. The center does not manage every project in the portfolio, but it
is involved with as many projects as possible. It assigns a dedicated project manager
to the large-dollar, strategic projects. Each business unit can set up its own projects;
however, the center must approve a project charter and any subsequent change
requests. The project charter establishes the project approval and authorizes the
project‘s budget.

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PROJECT PRIORITIZATI ON AND SELECTION

Best-practice PMOs also play an active role in the project proposal cycle and project
prioritization (Figure 5).
What role does the PMO play in selection of projects?
Figure 5
In order to ensure the right people are staffed on projects at Dell Services, the Dell
Services Business Unit PMO is involved early in the sales cycle to understand each
customer‘s requirements. This enables the statement of work to include project
management services that are scoped and staffed appropriately.
REPORTING STRUCTURE/ GOVERNANCE
Key finding: At best-practice organizations, there is a well-defined

and clear governance structure and roles between the PMO and
the leadership team.

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Best-practice PMOs have clearly defined governance structures, with a clear

delineation of roles and responsibilities (Figure 6).
Do policies/processes exist that that define the authority/responsibility of the

PMO?
Figure 6

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Most best-practice organizations and study sponsors have established a formal

charter for the PMO (Figure 7).
Do you have a formal charter for the PMO?
Figure 7
At IBM, executive steering team members champion project management in their

respective organizations. The team is comprised of senior executives in the business
units who provide guidance to the PM/COE. The PM/COE meets with the team
quarterly to provide status and program updates, as well as to obtain input,
guidance, and feedback. In between the quarterly meetings, the director and
program director for the PM/COE have ad hoc discussions with each executive
regarding targeted initiatives, new requirements, and/or challenges.
The Organization A PMO sits at the enterprise level in order to take on major
strategic programs. Each business unit may also have a project management office.
These offices have a dotted line reporting relationship to the program management
office, and there is a significant amount of collaboration between them. Each
business unit‘s senior leadership team meets on a regular basis to review portfolio
performance. The project management team includes nine program managers who
report to the office‘s senior director, who in turn reports to the CIO and meets with
the executive leadership team on a monthly basis. Each member of the program
management office supports a member of the executive leadership team. This gives
team members a name and face they know and can interact with on a regular basis.
The UIL center of project excellence is strategically aligned, both through its
organizational structure and through the budget it manages, to consistently deploy

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best-practice standards across UIL. The center reports to the center of project
excellence governance review board, which is comprised of the CEO, CIO, CFO,
COO and several vice presidents. The board provides leadership backing, adds
credibility to the center, and works with the center to make key portfolio
management decisions. The board receives regular updates from the center and
tracks program and project progress.
PMO FUNDING
In terms of PMO funding, a higher percentage of best-practice organizations‘ PMO
budgets are funded out of a centralized budget than that of the sponsor
organizations (Figure 8). This likely reflects the nature and types of PMOs prevalent
in each data set (enterprise vs. line of business PMOs, etc.).
How is the operating budget for your PMO funded?
Figure 8
At Organization A the program management office is a central, enterprise-level

function, so its cost is not directly charged back to programs/projects. It is
considered corporate overhead, similar to finance or HR.

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When a project manager from UIL‘s center of project excellence directly supports a
project, his/her time is billed directly to the project. Indirect costs such as portfolio
management, financial management, project controls, standards and methodologies,
and unproductive time (vacation and sick time) are distributed to the portfolio of
projects. The center‘s cost to UIL‘s total capital budget is approximately 4 percent.
The cost of education and training that the center conducts is part of its operating
budget.
CONCLUSION
Best-practice organizations not only align projects with their organization‘s strategic
initiatives but also help create and implement organizational strategy. This gives the
PMOs a unique view of their organizations‘ strategies and project portfolios, which
allows them to successfully manage and prioritize the portfolio. Project
prioritization is closely tied to strategic planning and is often the first step in making
a strategic plan operational.
Best-practice organizations also use project prioritization to address increasing

requests and demands for their time. The PMOs focus on projects of high strategic
importance and provide the remaining projects with a standard framework and
methodology. The best-practice organizations adhere to well-defined criteria to
determine whether to get involved in a given project.
Integral to the best-practice PMO‘s involvement in organizational strategy, as well as

their influence and authority across the organization, is a well-defined relationship
between the PMO and leadership team. They reported that they had formal standing
meetings with leadership. Additionally, many best-practice organizations credit their
successful management of the project portfolio to leadership backing and
involvement.

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Chapter 2: PMO Practices

The APQC study team also investigated the methodology used for project
management, how organizations staff the PMO and projects, and project
management careers and skills at participant organizations.
PROJECT MANAGEMENT M ETHODOLOGY
Key finding: Best-practice PMO’s project management

methodologies provide a balance of structure and flexibility in
order to meet the outcomes demanded by different types and sizes
of projects.
The methodology at best-practice organizations provides a standard for project

management in the organization but is also flexible enough and scalable to adapt to
their needs. More than half of the best-practice PMOs indicated that they use a
hybrid approach, which means they have tailored the external project management
body of knowledge methodology to meet the needs of their specific organization
(Figure 9).

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What is the foundation for your project management methodology?
Figure 9

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Best-practice PMOs balance providing standard project management tools and

templates to the organization with being adaptable and flexible to their needs; they
may review and update their methodologies more frequently than sponsors (Figure
10) to ensure that the latest industry standards are included and adapted to changing
needs (such as increased globalization).
How often do you review and update your project management methodology?
Figure 10

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Best-practice PMOs have also created scalable project management methodologies

to allow for projects of different scope and complexity (Figure 11).
Have you defined tailoring guidelines to your methodology to accommodate

projects of different complexity?
Figure 11
As part of the first gate (initiation) of DTE‘s project management methodology, a

project scalability matrix is approved. A scalability matrix specifies the requirements,
level of rigor, and governance for smaller projects (less than or equal to $5 million
USD) and larger projects requiring greater governance. The directors of the three
COEs and the appropriate platform (or their delegates) sign off on the scalability
document, so there is full buy-in concerning how to move the project going
forward. The methodology includes a rigorous change review board, with sign-off
thresholds indicated in the scalability matrix.
IBM uses a project management methodology created by its PM/COE called the
worldwide project management method. It ties not only to the industry standard
(i.e., the project management body of knowledge) but also to the organizational and
technical methods that the business units leverage to accomplish their work. A key
success factor is to ensure that the methodology provides a standard for the
organization but is flexible enough to also address the diverse needs of the
organization. Business units can tailor it to incorporate their organizational and
technical methods.

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Across the business units at Organization A, a four-phased project implementation

framework ensures that there is common language, culture, process, training, and
results for every project. Yet the framework is also flexible and able to adapt to
unique business unit needs. At the core of the project implementation framework is
a gated process. All projects proceed through a stage gate at the end of each phase.
The level of approval required at each stage gate is dependent upon the project tier;
tier 1 projects require executive leadership approval to pass through each stage gate,
while tier 4 projects require either manager or self-approval. The stage gates provide
Organization A with a common language and set of tools to execute projects. Using
the stage-gate process, it is able to:
 better prioritize projects and deploy/plan resources accordingly;

 increase the success rate, speed, and quality of projects;
 increase the rate of knowledge growth in managing projects;
 decrease the time and costs of training resources on strong project management
practices; and
 leverage lessons learned and process improvements across the entire
organization.
At Dell Services, its standard project management framework, called PM3, was
introduced in 2011. It provides common processes, tools, and templates for project,
program, and portfolio management. The PM3 not only addresses best practices but
also the best practices for Dell‘s customer account–level project management
offices. The PM3 is flexible, scalable, and applicable to any type of project and/or
PMO engagement. Scaling guidelines are built-in to streamline or enhance the
project management rigor as appropriate, or right-size the PMO organization.
Dell Services categorizes individual projects into four complexity levels that are
rated from zero to three. Descriptors and criteria guide the assignment of a project
to a specific category based on size, complexity, and risk factors, which can increase
with project management rigor. The PMO assesses these factors in an integrated
and consistent manner, using a weighted scoring technique that is applicable to any
project type.
Key finding: Best-practice PMOs have established a formal

approach to review the budget, risk, and resourcing of projects in
order to preemptively identify and mitigate risk.
The benchmarking study found that best-practice organizations take a rigorous,

systematic, and proactive approach when it comes to project management. Most of

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them described a detailed, gated methodology that they follow for project
management. They have created a culture at their organizations that encourages
project managers to seek help in advance of a project getting into trouble.
For example, DTE Energy follows a formal, gated methodology for project
management. Risk management is one of the nine bodies of knowledge on which
DTE measures its maturity, and the creation of a specific risk register is part of its
gate 2 (conceptual). Furthermore, full-time equivalent employee (FTE) thresholds
are pre-loaded into its scheduling system. If the thresholds are exceeded, then action
items are automatically uploaded into its portfolio activity tracking system to alert
project managers that one or more resources are over-utilized, either presently or
forecasted.
Organization A uses its tiered project system to measure and report on projects and
programs. Generally speaking, the higher tiers equate to higher costs, higher risks,
and higher strategic impact and organizational value. As such, the executive
leadership team reviews tier 1 projects every month. All projects, regardless of tier,
are assigned a color value to represent their overall status. Employees are
encouraged to truthfully report project status and the PMO emphasizes that it is
acceptable for status not to be reported as green. It is more important to set the
status accurately (e.g., to yellow if there are issues and to red if there are issues and
the project objectives are at risk), so management can provide help, resources, and
changes as soon as possible to ensure project success. PMO leadership believes that
its project portfolio is aggressive and there is always some risk; therefore, there
should be projects reporting as yellow or red.
At UIL, risk planning is built into the project management methodology. Once the
project charter is approved, project managers must complete a risk management
plan, which asks four questions:
1. What can go wrong?
2. How can it go wrong?
3. What is the potential harm?
4. What can be done about it?
Project managers complete a risk register template, which is a Microsoft Excel

document listing:
 the category of the risk (i.e., scope, schedule, and budget),

 a description of the risk,
 its probability,

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 its significance,
 a risk score,
 a response strategy,
 response actions, and
 the planned date when the threat of the risk has passed.
The risk register is due within 60 days of charter approval. The project manager,
project team members, project sponsor, and project stakeholders all contribute to
the risk management plan.
There are situations at UIL where a project is at risk, and it then gets assigned to a
troubled project recovery team. This group of project managers and leadership assist
with projects that are under-performing. The center frequently reinforces that the
troubled project recovery team is not a punishment and that project managers
should use the resource if needed.
Key finding: Best-practice PMOs value continuous process

improvement; they work to continually mature and evolve their
project management capabilities.
Best-practice organizations clearly value a robust project management methodology,

and of equal importance, they recognize that opportunities to improve their
methodologies, best practices, tools, and training are equally essential for ongoing
project success. Several best-practice organizations described their PMO
methodologies as grounded in a philosophy of continuous improvement to
minimize redundancies and maximize efficiencies. Best-practice organizations
referenced Six Sigma and Lean in their site visit presentations. In fact, many of their
project management employees hold these certifications, in addition to Project
Management Institute (PMI) certifications.
For example, DTE Energy‘s major enterprise projects implemented a capability-

based approach for designing work and processes originally developed by author
Stephen J. Spear. Spear‘s research found that many companies‘ continuous
improvement programs fail. There are four failure modes of companies, and four
countermeasures or capabilities (C1, work design, through C4, developing engaged
employees through teaching, coaching, and mentoring). DTE Energy operates
according to these four capabilities and uses a continuous improvement
measurement process (from the project management maturity model). It assesses 45
attributes within four capabilities on a five-point scale (1 equals initial stage, 5 equals
benchmark caliber). Ultimately, the process assesses major enterprise projects‘

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capability to improve the four capabilities of operationally outstanding companies

(C1 through C4). The assessment is performed on an annual basis. Every-other year
it is formally assessed by an external team. The organization builds annual action
plans based on the assessment results, while performance is tracked quarterly.
The program management office at Organization A requires all projects to link to an

attribute of the APQC Process Classification Framework (PCF). The PCF outlines
all of the processes practiced by most organizations, categorizes them, and aligns
them according to a hierarchical numbering system. The program management
office plans to use the PCF to benchmark its project portfolio against industry
peers. For example, the organization is interested in learning how its mix of projects
and programs is different or similar to the mix for other similar organizations. The
office also views the PCF project data by project tier.
At UIL, the center of project excellence aims to continuously evaluate its project
management method based on changes within UIL and internal studies. A recent
internal study revealed pain points in the project change request processes. In
response, the center created a change request board that meets bi-weekly.
PMO STAFFING
Key finding: Best-practice PMOs take a strategic approach to

resource loading.
Best-practice PMOs aim to have the right resources on the right projects at the right
time. In order to do this, they take a strategic and integrated approach to resource
forecasting. Many of these organizations work with HR to ensure that they match
project manager‘s skills with project needs. Additionally, a number of the best-
practice organizations have—or are in the processes of—integrating their project
management IT tools with HR systems to track and manage staff skills and
availability.
At DTE Energy, in order to comply with the requirements of project management

maturity model level 4, major enterprise projects documented its process for
integrated resource planning. It begins with a strategic phase, where the controller‘s
organization in major enterprise projects formally meets with project platform
directors, platform managers, and the scheduling supervisor each quarter. These
meetings capture the platforms‘ current and anticipated resource needs and any
needed project adjustments for the scheduling tool. The attendees review and adjust
the platforms‘ strategic, integrated resource plans to align with the one- and five-
year plans.

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HR also has roles dedicated to major enterprise projects at DTE Energy. It creates a
standard for the number and types of projects that a senior staff member can handle
compared to a more junior staff member. In addition, major enterprise projects‘
management works with HR to build up its skills database (matched against all
project management deliverables) in order to comply with project management
maturity model level 4. HR is involved with the integrated resource planning process
to ensure a pipeline of resources for current and future projects (including
leveraging contractors). Major enterprise projects‘ goal is to never have to turn a
current project down due to a lack of resources.
UIL is a matrixed organization, meaning that project staff (e.g., engineers) report to
project managers on a project basis in addition to functional managers for regular
staffing matters such as development and performance reviews. A single project
manager works on five to seven projects at a time, all at different stages. To staff
projects, the center matches key project attributes with project manager
competencies. If, for example, a project has high political or customer exposure,
then UIL might select a project manager with strong soft skills and experience.
Ideally, resources are balanced across each of the divisions within the center. If
needed, project managers can move between business units because their skills are
interchangeable.
The center at UIL determines baseline resource estimates during its annual budget-
setting process. The preliminary annual budget sets the baseline and cost for
projects to be executed in the following year, including project resource
requirements. The center also uses Oracle‘s Primavera P6 to model project
resources.
PROJECT MANAGER CARE ERS/SKILLS
Key finding: Best-practice PMOs encourage their employees to

earn both external and internal project management
certifications.

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All best-practice organizations include project management certifications in their

PMO budgets (Figure 12).
What does your PMO budget include resources for?
Figure 12
In addition, best-practice PMOs have formal career paths for their project managers
(Figure 13), and a greater percentage of best practice organizations than sponsors
motivate project managers to achieve certification through rewards and recognition
(Figure 14).

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Is there a formal career path for project managers at your organization?
Figure 13
Are there any rewards/recognitions tied to achieving PMO certification?
Figure 14

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At IBM, several tiers of qualification (starting with the PMI certification and moving
toward internal certification) provide a career path for project management
professionals. The IBM certification and validation process ensures common
education and experience requirements for project and program managers on a
global basis; there is also opportunity for specialization. As project managers
progress up the career path, they are asked to confirm their retained learning and
technical expertise and professional project management experience. They must also
demonstrate a commitment to the project management profession, and their skills
and experience are periodically re-evaluated. From an internal certification
standpoint, there are no material differences in education and experience
requirements between an internal IBM project manager supporting internal
initiatives and an external, customer-facing project manager; both are held to the
same standards of validation and competency. The expectation is that everyone has
a basic understanding of project management, as well as a solid understanding of
their specialty areas. In practical terms, within some business units at IBM,
programs are used to match resources with projects and programs. For all projects
above a certain dollar value or FTE size, project managers are assessed to ensure
they are qualified to handle that work. This metric is tracked, analyzed, and reported
by the PM/COE on a quarterly basis.
At DTE Energy, major enterprise projects mapped the career path pipeline for
technical staff and project managers from associate engineers to technical experts to
management. Individuals can take a number of different paths over their careers
from an analyst level to management.
Dell Services offers project managers flexible, cost-effective, and industry-aligned

training. Clearly defined career paths extend from a PM3 project manager
certification program to a standardized project and program management job family
and associated position profiles. As the size, complexity, and risk of a project
increases, experiential and training requirements expand, thus increasing the
requirements and seniority level.
Most sponsor and best-practice organizations pay for project managers to be

certified (Figure 15) as a project management professional.

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Does your organization pay for PMO training and certification costs?
Figure 15
Key finding: At best-practice organizations, project managers

receive training in a blend of skills including technical, soft,
customer, and product skills. Project managers are often paired
with mentors and/or coaches to ensure they have the skills to
perform the job.
There was a great deal of interest from study participants on whether and how
project managers are trained in soft skills (i.e., teamwork, leadership,
communication, and other interpersonal skills) in addition to more technical skills
related to project management. The best-practice PMOs incorporated soft skills
training modules into their comprehensive training offerings. In many cases, formal
training was complemented by coaching and one-to-one mentoring from senior
project managers.
At DTE Energy, major enterprise projects conducts 47 weekly one-to-one kata

sessions between managers and their mentees to improve capabilities and
performance. It offers training on: SAP and other integrated systems; industrial
safety compliance; and location-specific, HR, organization-specific, and role-specific

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issues. Training for its tracking system is a common denominator across most
project management roles. All project managers are also trained on soft skills. Safety
training is a component of the major enterprise projects‘ workplace; participation in
industrial safety compliance training is monitored closely, and safety metrics are
examined monthly. Most training is web-based and is developed by in-house and
external resources. Some training courses occur once, while others are required
annually. Project managers are assessed on a combination of soft and technical skills
during the performance appraisal process.
The IBM PM/COE focuses on the practitioner in terms of providing project and
program managers with a consistent baseline of skills and education. To that end,
the PM/COE has developed a global project management curriculum, which is a
frequent recipient of PMI professional awards. Project management curricula were
developed through a practitioner skills analysis. It is offered to practitioners at three
levels:
 project management fundamentals,

 organizational-specific needs, and
 advanced project and program management skills, such as leadership skills and
teaming in virtual environments.
The IBM PM/COE has developed a set of milestones to map the careers of project
and program managers. The path of a project or program manager begins at the
entry level (level 1) and progresses to a thought leader designation (level 5). Along
with each designation are skills (project management, leadership, and technical),
experiences, and qualifications. This career path and associated levels are
incorporated into the IBM career framework. All employees regardless of job role—
not just project and program managers—fit within these levels. Project and program
managers, however, additional criteria of accreditation and/or certification to
validate the skills and experience they need. The qualification aspect of the various
milestones allows the organization to assess the employee population and pipeline.
In addition, senior IBM project managers have the opportunity to mentor others as
part of the virtual project management community of practice. In fact, project
managers are required to participate in and give back to the community (e.g.,
documenting lessons learned, mentoring others, or facilitating study groups), as a
requirement of the internal certification process.
Training at Organization A covers a range of topics including knowledge and

application of project management techniques, behavioral competencies, and
program and project management system training. The organization relies on senior
project managers to share their knowledge and experience with the project
management community. The PMO is building a project management community
of practice. Senior project managers will share knowledge and mentor junior

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employees. When staffing projects, there is an informal practice of pairing an

experienced project manager with a less experienced project manager.
Employees in the center of project excellence at UIL are encouraged to participate

in:
 leadership development programs,

 soft skills development programs,
 mentoring, and
 project management professional training programs.
The center encourages employees to leave their comfort zones by managing larger,
more difficult, and different types of projects. There are a number of opportunities
for junior staff to have top-level management exposure. Employees‘ personal
development plans include continuous training, and the larger UIL scorecard
incorporates training metrics.
Dell Services‘ project management competency model lists the required technical,
functional, and leadership skills/knowledge. Technical and functional competencies
represent the science of project management by focusing on the physical processes
and tangible results of projects. Leadership competencies correlate to the art of
project management. These soft skills tend to be more subjective and qualitative
aspects of the training.
Key finding: At best-practice organizations, both project

managers and non-project receive project management training.
Training is available virtually to allow project managers ease of
use and convenience.

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In addition to providing project management competency throughout the

organization, best-practice PMOs serve as mentors and role models in the
organization (Figure 16).
Describe the functions of your PMO.
Figure 16
Best-practice PMOs communicate the mission and vision of the PMO through
training and education. Each discipline within major enterprise projects at DTE
Energy, including project management, has an associated training process work
flow. All new project managers receive four hours of project management training
as part of their new-hire orientation. They receive a manual that documents each
step in the process, as well as examples from successful projects.
The IBM project management curricula have courses for inexperienced project
management professionals (basic fundamentals), experienced project managers, and
program managers staffed on complex programs. Individuals who are in functional
areas and are not project managers per se (such as operations or HR) have access to
project management training. The curricula are available electronically through

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IBM‘s project management university, an online learning portal for project

management practitioners and business unit managers. Both formal (online classes)
and informal project management educational offerings (announcements of brown
bags or lunch-and-learns) are housed in the portal. The portal also houses job-
specific or focused educational offerings such as training on the Agile methodology
and on elements of the road map (e.g., cloud computing and business analytics). In
addition, the portal helps project management practitioners and managers create a
learning plan for their own career growth, as well as for their employees.
Continuous learning is part of the culture at Organization A, and project and

program management training is available for all employees regardless of experience
level. Each employee receives 30 hours of training per year. It uses a program that
measures an employee‘s project management competency and recommends specific
areas and coursework for employees. A project management assessment is generally
part of an employee‘s three-year career path planning with his/her manager.
The center of project excellence at UIL conducts internal core project management
skills training courses for UIL employees at-large. These courses occur in-house and
are typically only two hours long.
CONCLUSION
The findings outlined in this chapter illustrate practices used by the best-practice
organizations to create and sustain excellent project results. Although it is important
to achieve consistency in projects (in terms of methodology, training, and
processes), the best-practice organizations emphasize scalability and flexibility of
their project management methodologies, which allows them to be adopted across
their organizations for projects of all sizes. They emphasize that project
management processes are continuously evaluated and refined.
Best-practice organizations realize the value of creating a formalized process around

project resourcing to ensure the right employees are staffed on the right projects.
Their resource loading processes are at various levels of maturity; many work with
HR to track employee‘s skill sets and certifications, while others use strategic
planning and annual budget-setting to forecast resources.
Best-practice organizations value project management as a core competency and as

such provide project management training to project managers and non-project
managers alike. They also emphasize soft-skills training. Highly capable project
managers within the PMO engage in high-order tasks such as portfolio management
and resource loading. Additionally, an emphasis on project management training
provides flexibility in how and where project managers are staffed.

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Chapter 3: Technology and

Automation
Best-practice organization use different types of technology to accomplish their
work within the PMO, as well as knowledge management techniques.
TECHNOLOGIES LEV ERAG ED

Most of the best-practice organizations PMOs leverage automated project planning,
tracking, and reporting tools (Figure 17). Primavera and Planview, in particular, are
two tools that are predominantly purchased externally. Automated tools for risk
management and knowledge repository are also used by more than half of the best-
practice organizations, and these tend to be internally developed.

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Do you have the following applications/tools to support project management?
Figure 17

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IBM‘s PM/COE leverages a web-based lessons learned and intellectual capital

database called IBM rational asset manager, which serves as a vehicle for capturing
and sharing tacit project management knowledge. The database allows project
managers to search for and reuse existing solutions often applicable to new projects
and initiatives. It is available to all IBM employees globally and, since 2000, has
ranked in the top three (of more than 100 IBM intellectual capital repositories) in
terms of usage by the enterprise employee base. From its inception, the PM/COE
has put a great deal of effort into capturing and using the lessons from projects and
programs.
Most sponsors also leveraged automated tools for project planning, tracking,
reporting, budget management, and resource management (Figure 18). These tools
tend to be purchased externally.

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Do you have the following applications/tools to support project management?
Figure 18

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Key finding: Best-practice PMOs provide central portals and

toolkits for project managers to access everything that they need
to do their work (tools, templates, communities, lessons learned
databases, etc.).
The benchmarking study found that an important enabler for project management
success was to provide managers with one spot for easy access to all of the tools,
templates, and project information. Several of the study best-practice organizations
were great exemplars of this practice.
IBM‘s PM/COE portal serves as a central resource where project and program
managers can access information related to their work. It includes links to the
project management university; the online community; tools, templates, and the
project management methodology; an expert discussion forum; updates in methods
like the Agile method; and relevant external content such as to PMI information and
Harvard Business Review. The expert discussion forum is administered by the
PM/COE and allows practitioners to receive on-demand answers to their questions.
The portal includes a link to a practitioner support network staffed by thought
leaders and subject matter expert volunteers who make themselves available to
employees around the globe. The portal serves as a one-stop shop for practitioners
to find what they need, whether it is a reference, a tool, or other type of content.
Project management tools and automation are considered part of the organizational
competency strategic initiative. IBM has developed an IBM program work center as
its platform of choice for project and program management. The center provides
the following functionality for IBM project and program managers:
 requirements management,
 proposal management,
 portfolio management,
 resource management,
 project management,
 work management,
 progress time and expense reporting,
 exception management,
 service request management, and
 defect tracking.

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Organization A leverages Planview to align projects with enterprise-wide strategic

planning initiatives and manage its portfolio within its project pipeline. Project
managers upload project-related documents into Planview (everything from a
project charter to engineering CAD documents). The system uses automated work
flows so that multiple users can work on the same project at a time. For financial
tracking purposes the system uses a blended rate, with one for employees and one
for contractors. An organization chart is built into the tool. Within the Planview
system, the enterprise PMO uses a range of functionalities including rolling projects
into portfolio views, drilling down into projects from various project dashboards,
flagging at-risk projects, managing documents, and managing work flows.
Dell Services‘ project management information system is a comprehensive toolkit

for automation and standardization. The tools that project management offices,
project managers, and project teams use in the course of projects are known
collectively as the PMI toolkit. Tools range from process-aligned templates to
systems integration capability. They include homegrown applications, commercially
available systems, and Microsoft Office templates.
Key finding: Best-practice PMOs integrate various technologies to

consolidate information from disparate sources in order to bring
all relevant information together and provide project managers
with the visibility they need to effectively manage projects.
The integration of data from disparate systems is a characteristic of most best-

practice PMOs, which allows them to conduct analytics and forecasting and support
effective decision making.
Major enterprise projects at DTE Energy leverages the following systems, all of
which feed into ePAT, its tracking system:
 Primavera enterprise project portfolio management software─the scheduling

system for integrated resource planning,
 Maximo asset management software─the corrective action request system,
 SAP business management software─the financial and project systems modules,
 Timberline construction accounting software─the estimating system, and
 Documentum enterprise content management software─the document storage
system.

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EPAT is DTE Energy‘s implementation of Skire Unifier software that takes data
feeds from different systems (listed above) and acts as an enterprise portfolio
activity tracking system. It includes work flows such as automated change requests
and gate reviews.
KNOWLEDGE MANAGEMENT
Best-practice organizations cited project management portals, tools, templates, and
lessons learned databases as a way to capture and transfer explicit/written
knowledge. Further, they use project management communities of practice and
mentoring/coaching to transfer tacit knowledge (i.e., the knowledge that is in
people‘s heads). APQC defines a community of practice as designated networks of
people who share information and knowledge. Both best-practice and sponsor
organizations cite a high use of project management communities of practice
(Figure 19).
Do you have a project management community of practice?
Figure 19
One way in which project managers share tacit knowledge and lessons learned at
IBM is through a virtual, vibrant community of practice. It provides an online
forum for best practices and knowledge sharing, mentoring, and global study groups
for the project management certification PMI exams. (Study groups are offered in
multiple languages.) As part of the certification process, project managers must
participate in and give back to the community. The PM/COE offers a program
called eShareNets whereby it records educational sessions provided by and to the
project management community. These sessions are accessible in a knowledge
database.

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At Dell Services, the PM3 framework and all associated knowledge assets are
available online in a centralized SharePoint repository where team members can
easily access processes, templates, and a supporting toolkit. Knowledge assets can be
searched by title, topic, process classification, knowledge area, and phase. The site is
fully linkable and interactive. Asset lists are grouped by knowledge area or lifecycle
phase and have shortcuts to frequently used assets. Dell Services also has a
SharePoint project site template for project teams. It features space for team
announcements, contact lists, discussion boards, and links to PM3 tools. Business
units also have a project management community of practice with access to a PMO
book club, current information, and a chat room.
CONCLUSION
Study participants, both best-practice and sponsor organizations, leverage
automated technology solutions for project planning, tracking, reporting, budget
management, and resource management. These large project management tools are
mainly purchased from external vendors, notably Planview and PrimaveraPro
systems. Best-practice organizations report using home-grown knowledge
management tools to capture and share tacit project management knowledge.
An important enabler for project management success is a central project

management portal or toolkit. One-stop shop portals provide project managers with
easy access to tools, templates, and project information that they need.
Further enabling a one-stop shop resource is the integration of disparate systems

brings together relevant information and provides project managers with the
visibility they need to effectively manage their projects. Though best-practice
organizations had reached varying degrees of maturity in system integration, they
reported integration with—or plans to integrate—external systems such as the
organizations financial and HR systems.

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Chapter 4: Measures and

Reporting
Best-practice organizations distinguish themselves in measuring and reporting
project results and project status, while establishing accountability for project
managers and teams.
PROJECT MANAGEMENT M ETRICS

Figures 20 and 21 depict the different project management and PMO measures that
study organizations track.
Which of the following measures does your organization use to monitor project
performance?
Figure 20

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Which of the following measures does your organization use to monitor PMO
performance?
Figure 21
Measures of project constraints (i.e., costs, quality, and schedules) are standard.
Some interesting areas of difference among the best-practice PMOs are the
emphasis on project manager development to measure PMO performance and on
the risk to measure project performance by the best-practice PMOs, both of which
were discussed earlier in this report.
Project Reporting
Figure 22 depicts the frequency that best-practice PMOs review project
performance. Most review project performance formally on a monthly and annual
basis, supplemented by review at critical gates and also as needed.

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How often does your organization review project performance?
Figure 22
Key finding: Best-practice PMOs create dynamic dashboards of

key performance indicators that can be drilled down and queried.
Truly leading PMOs have developed two critical capabilities when it comes to
project reporting: 1) dashboards of key performance indicators that visibly depict
project performance on a balanced set of critical indicators, and 2) drill-down and
query capabilities of project and personnel data enabled by integrated systems. The
study found more examples of the former rather than the latter.
Organization A selects a set of balanced metrics to ensure that one metric doesn‘t
change because staff is focusing on a different one. The program management
office has created a number of dashboards to display the key metrics it collects.

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When reviewing the dashboard, a user can hover over a specific item for more
information.
UIL believes that you get what you measure, and, as such, it strives to find the right
metrics. To emphasize accountability in project management, scorecards and
metrics are a large part of the culture. Scorecards track progress against strategic
goals for each business unit and are displayed on the headquarter walls at all times.
UIL manages its large amount of metrics by organizing and presenting them on
scorecards. Business units, divisions within each business unit, and large projects
and programs have their own scorecards. They state a business unit‘s mission and
strategic objectives, which are broken into four quadrants: financial, customer,
operations, and capabilities. The scorecards contain the metrics for threshold, target,
and maximum performance.
To take the next step in leveraging its in-house analytics capabilities, IBM PM/COE
has created a dynamic project management metrics dashboard for the executive
steering team and project management deployment leaders. They receive key
performance information such as the number of certified/uncertified project
managers and the number of project managers in different business units/regions.
The dashboard reports on the capabilities of all project managers and non-project
managers doing project management work (in terms of levels 1 through 5 from the
career framework) around the world. The executive steering team and the project
management deployment leaders can access the dashboard and view charts,
information, and analytics (updated quarterly) that can be customized based on
business unit and location, including areas for improvement.

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Conclusion
Best-practice organizations observe the adage ―you get what you measure.‖ As such,
they focus on collecting measures that allow for proactive management. Most
measure and report on project status monthly and use straightforward and dynamic
dashboards to display project performance. Many best-practice organizations
reported that their measurement and reporting capabilities were enhanced through
integration with other systems. They found a clear benefit in focusing on: project
status and risk measures, the vehicle in which they display these measures to
leadership and key stakeholders, and the accountability implied by the measures.
Best-practice organizations recognize the value of their PMO to their organizations

(Figure 23). The top three perceived benefits of PMOs are to assist with flexible
staffing of projects, improve project schedule performance, and improve project
completion success rates. In fact, the benefits report by study organizations went far
beyond these three examples. They reported that they were involved in strategic
planning and alignment, provided project management training, and directly
managed key strategic projects in addition to their role as portfolio managers. A key
intangible benefit articulated across the best-practice organizations is that, as a result
of their successes, the PMOS have increased requests for their services from across
their organizations.

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Using the experience of your PMO, please rate each statement about the value of
having a PMO. (5 is “strongly agree”; average is shown)
Figure 23
Find out how your organizations fares against the best-practice organizations
highlighted in this study using the following project management assessment tool
(Figure 24):

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Comparing Your Organization’s Performance to Best Practices in Project

Management
Directions: Rate your organization against best practices in project management. For each item in the
left column, rate your organization in the right column using the following scale:
5 = This organization manages it well most of the time.
4 = This organization manages it well some of the time.
3 = This organization manages it adequately much of the time.
2 = This organization manages it adequately some of the time.
1 = This organization does not manage it adequately.
0 = This item is not appropriate for this organization.
When you finish rating the 21 items, please add up your score at the bottom of the right column.
Criteria Ratings
Your organization’s PMO: 0 1 2 3 4 5
1 Goes beyond alignment with strategic initiatives; it 0 1 2 3 4 5

is involved in creating and implementing
organizational strategy.
2 Focuses on projects of high strategic importance 0 1 2 3 4 5

and provides the remaining projects in the
organization with a standard framework and
methodology. The “best of the best” project
managers are involved in strategic projects.
3 Has established, well-defined criteria and rules that 0 1 2 3 4 5

determine what level of project management is
needed on particular projects.
4 Has a well-defined and clear governance structure 0 1 2 3 4 5

and roles between the PMO and the leadership
team.
5 Project management methodologies provide a 0 1 2 3 4 5

balance of structure and flexibility in order to meet
the outcomes demanded by different types and
sizes of projects.
6 Uses a formalized approach to reviewing budget, 0 1 2 3 4 5

risk, and resourcing of projects to preemptively
identify and mitigate risk.

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7 Values continuous process improvement; the PMO 0 1 2 3 4 5

works to continually mature and evolve its project
management capabilities.
8 Takes a strategic approach to resource loading. 0 1 2 3 4 5
9 Encourages employees to earn both internal and 0 1 2 3 4 5

external project management certifications.
10 Project managers are training on a blend of skills 0 1 2 3 4 5

including technical, soft, customer, and product
skills.
11 Project managers are often paired with mentors 0 1 2 3 4 5

and/or coaches to make sure they have the needed
skills to do the job.
12 Project management training is available to project 0 1 2 3 4 5

managers and non-project managers alike.
13 Project management training is offered virtually for 0 1 2 3 4 5

ease of use and convenience.
14 Has a central portal and/or toolkit allowing for easy 0 1 2 3 4 5

access to tools, templates, communities, lessons
learned databases, and more.
15 Has integrated various technologies to consolidate 0 1 2 3 4 5

information from disparate sources in order to bring
all relevant information together and provide
project managers with the visibility they need to
effectively manage their projects.
16 Has created dynamic dashboards of key 0 1 2 3 4 5

performance indicators that can be drilled down
and queried.
Add up your scores, and place them in the box at right

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Score Description (Examine individual elements to see which practices may need
improvement.)
80-64 Outstanding. Your organization is well-aligned with best practices.
63-47 Good. Your organization needs to improve only in select areas.
46-30 Fair. Your organization needs to improve in more than just a few
areas.
29-13 Not so good. Your organization needs to improve in most areas.
12-0 Not good at all. Take immediate action.
Figure 24

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Case Study: Dell Services

BACKGROUND
Texas-based Dell Inc. is the world‘s third largest supplier of desktop and notebook
PCs. Its technology products—including network servers, printers, data storage
systems, and projectors—reach a global customer base. It offers third-party
software and hardware, as well as IT services. With more than 100,000 employees,
Dell reported $62 billion in revenue for 2012.
A key business unit, Dell Services has 42,000 employees offering:
 application services,
 managed services,
 cloud services,
 IT support services,
 configuration services,
 deployment services,
 OEM services,
 information security services,
 end-user computing,
 training services,
 enterprise consulting for data centers and for workloads, and
 business process outsourcing.
Created largely through the acquisition of Perot Systems in 2009, Dell Services
supports 95 percent of global Fortune 500 companies, 10 million small businesses,
400,000 classrooms, every G20 government, 200,000 physicians, 75,000 channel
partners, and 60,000 retail locations.
Project Management Office Origins

The Dell acquisition of Perot Systems in 2009 combined two iconic IT brands. The
expanded Dell became better positioned for immediate and long-term growth and
efficiency driven by:
 providing a broader range of IT services and solutions and optimizing how

they‘re delivered;
 extending the reach of Perot Systems‘ capabilities, including in the most
dynamic customer segments, around the world; and
 supplying Dell computer systems to more Perot Systems customers.

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Dell and Perot Systems shared several key characteristics, and their products,
services, and structures were overwhelmingly complementary. They both had
strong, relationship-based cultures that were recognized for helping customers
thrive by using IT for greater effectiveness and productivity. The acquisition
provided opportunities for improved efficiency, which would ultimately benefit
Dell‘s customers.
To drive efficiency and improve customer experiences in offering integrated, end-

to-end, and multiservice solutions for Dell‘s customers, it was critical for the project
teams to demonstrate unified and seamless delivery. Thus, Dell launched the
enterprise project management standardization (EPMS) program in 2011. It
established one standard project management framework called PM3, which is a
comprehensive compilation and collaboration, based on more than 20 years of
experience by the various delivery teams and PM/PMO subject matter experts
across Dell Services globally. The PM3 is a global project delivery framework with
standard, repeatable processes, as well as tools and templates for project, program,
and portfolio management. The PM3 not only addresses project and program
management best practices, but also best practices for Dell‘s customer account–level
project management offices (PMOs). The framework is flexible, scalable, and
applicable to any type of project and/or PMO engagement. Scaling guidelines
streamline or enhance the project management rigor as appropriate, or right-size the
PMO organization, based on the size, complexity, and risk of the engagement.
Figure 25 shows how the project management capabilities of Perot Systems and
Dell were combined to create the platform for the PM3.

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Dell Services PM3 Framework Evolution and Integration
Figure 25
As the framework development process concluded in 2011, the business unit–level

PMO began embedding it throughout Dell Services. The target completion date for
this process is February 2013.
The Dell Services Business Unit PMO Charter

The charter for the business unit–level PMO is to ―establish a minimum standard
for project management practices to increase project management expertise,
efficiency, and effectiveness across Dell Services, ultimately increasing the success of
global project delivery.‖ It guides the development of the framework and its
continued evolution and implementation.
To execute this charter, the PMO focuses on doing the right projects in the right
way with the right people, said Michele Caputo, services BU PMO leader and EPMS
program director. The business unit–level PMO provides support, monitoring, and
compliance reporting to ensure projects use the PM3 framework to consistently
manage project scope, schedules, risks, and budgets, as well as provides:
 process and procedure guides;

 standardized quantitative, early-warning performance metrics; standardized
reporting platforms;

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 standards for quality management; and

 project management tools/systems.
To ensure the right people are staffed on projects, the PMO is involved early in the
sales cycle to understand each customer‘s requirements. This enables the statement
of work to include project management services that are scoped and staffed
appropriately.
PM3 Framework Implementation

The PM3 framework addresses the six standard functions of the PMO by providing
the standard processes, tools, and templates for project, portfolio, and program
management. The PM3 is made up of two complete frameworks: the first focused
on project and program management and the second focused on standards for
PMO operations. Each is discussed below.
1. The PM3 project and program management framework addresses all nine
Project Management Institute PMBOK knowledge areas (project integration
management, project scope management, project time management, project
cost management, project quality management, project HR management,
project communications management, project risk [RAID] management, and
project procurement management).
2. The PM3 PMO operations framework includes: project portfolio management

and portfolio governance; portfolio resource management; portfolio quality
management; PMO support for project and program management; and PMO
organizational planning, design, and management. The PM3 PMO framework
also details how the Dell Services business unit–level project management
office, as well as the customer account–level project management offices,
support projects and programs through organizational planning, design, and
management.

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Figure 26 shows the progression of how Dell Services is building the PM3
capability. Implementation began in 2010 and has a targeted completion date of
2013.
Framework Implementation Timeline
Figure 26
The business unit–level PMO, which uses the PM3 framework, provides deeper
organizational insight into all aspects of project execution, both at the tactical and
strategic levels. It allows each customer account–level PMO to allocate resources
efficiently among the ongoing customer initiatives. With this framework, Dell
Services governs projects from a strategic viewpoint by looking at similar projects
across all accounts. This framework helps Dell Services‘ project managers deliver
projects according to contractual terms by providing a proven, repeatable, and
predictable experience. The framework enables early warning on underperforming
projects, thus allowing corrections to be made before impacts occur. Finally, the
PM3 framework details the strategic support the business unit–level PMO provides
at the portfolio level to enable scalability and optimum utilization of resources.

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PROJECT MANAGEMENT O FFICE ORGANIZATIONAL

STRUCTURE
Dell Services has different degrees of PMO implementations—there are PMOs for
customer-facing accounts and for Dell Services‘ in-house organizations.
The PMO Framework within the Dell Services PM3 is a compilation of best
practices and lessons learned that developed and matured over years of managing
project delivery for customer outsource accounts, as well as industry-recognized
portfolio management standards from the Project Management Institute (PMI®).
The PMO framework is intended to plan, design, and operate a PMO for customers
and internal project portfolios, and it includes the Dell Services internal project
delivery governance processes.
The primary focus of the framework is for outsourced customer account PMOs
responsible for external project delivery. Secondarily, it is valuable to internal project
delivery to formalize the roles, responsibilities, functions, processes, and tools used
in designing and operating project management offices. The PMO framework
consists of the people, process, and tool-related deliverables to support the
planning, design, and operation of an IT outsource customer account PMO.
A Dell Services PMO, whether at the business unit-level or on an individual

account, handles quality management, governance, resources and skills management,
tools and reporting, and methodology and standards. A PMO provides a consistent
level of support across the lines of business within the organizational structure
which includes PM3 adoption and training, a Compuware ChangePoint software
release aligned with the framework, project manager certification oversight,
reporting standardization, and governance. Figure 27 demonstrates the range of
responsibilities in the PMO.

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Dell Services’ Project Management Office Responsibilities
Responsibilities Description
Project delivery governance Monitor, control, and report project performance; monitor
and report compliance to PM3 standards; escalate issues,
notify leadership; report exceptions intervene/remediate risk
Project portfolio management Manage project inventory and new project requests;
prioritize projects; manage change within project/portfolio
Portfolio resource management Develop and maintain resource capacity, plan, and forecast
Portfolio quality management Maintain project: categorizations, manager certifications,

plan certifications, and health assessments
PMO planning and design Acquire staff; assign project managers; develop the
organization; and manage it
PMO support for project and Manage project integration, scope, time, cost, quality, HR,
communications, and procurement
program management
Figure 27

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Customer Account–Level PMOs

As an IT outsourcer, Dell Services is often contracted to manage a customer‘s
portfolio of projects or to work as a part of the customer‘s project management
office. This is in addition to the standard IT service offerings Dell Services delivers.
Customer-facing centralized project portfolio management and direct governance
are generally directed locally by a customer account–level PMO.
The responsibilities executed by a customer account PMO vary based on the size
and complexity of the projects in the portfolio, as well as by other unique customer
requirements. Based on the information about the customer‘s portfolio, an
organizational model for the PMO is derived. Figure 28 lists the scaling criteria and
factors that determine which type of PMO is needed. (Dell Services uses these levels
to scale and right-size PMOs, not projects; thus, it is not to be confused with the
project complexity categorization for individual projects.)
Levels for Customer Account PMOs
P1MO P2MO P3MO

Increasing Size, Complexity, and Risk
 Volume of projects is  Assist customer with  Partner with customer

low with few larger than ranking and prioritization to implement IT
level 1 of programs and portfolios strategic plan as
 No formal PMO  Moderate volume of portfolios of programs
 PMO leader role can be: projects of all complexity and projects
 dedicated to the levels (from 0 to 3)  Volume of projects is
account,  Mid-tier accounts with great and all levels of
 part-time for formal PMO or subset of projects (0 to 3)
another account’s the customer’s PMO  Major strategic
leadership resource,  Moderate number of account with formal
or delivery resources PMO
 part-time leveraged  Large number of
resource from the delivery resources
business unit PMO
Figure 28

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Business Unit–Level PMOs

There are also internal delivery team PMOs across the lines of business, with one
centralized, overarching PMO to oversee compliance and performance called the
Dell Services business unit PMO. It drives consistency and standardization in
project, program, and portfolio management. Although the delivery leadership is
ultimately accountable for project delivery performance, the Dell Services business
unit PMO supports the leadership team monitoring, controlling, and contributing to
project delivery quality and standards compliance, and it primarily oversees and
engages in the portfolio quality management, organization design, planning, and
management for internally funded portfolio of projects.
This business unit–level PMO drives the portfolio management and portfolio
governance process for its IT investments that align with the strategy. The IT road
map planning is on a six-quarter rolling cycle. Requests from across the business
unit are centrally prioritized by a governance board consisting of executives from
each division. The projects are rigorously vetted, and if approved, they are evaluated
to determine the impact and dependencies across the portfolio. Approved projects
are prioritized and funded. Status is monitored, reviewed, and reported on a routine
basis.
The processes in Figure 29 represent the services-wide scope of the business unit–
level PMO.

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Responsibilities of the Dell Services Business Unit PMO
Governance Focus Area

Component
Project portfolio quality  Critical project assessments and certifications for complex
management projects (i.e., a rating of 3 out of 3)
 Support from sales cycle through planning and executing phase
Project delivery  PM3 compliance monitoring and control of complex projects

governance  Critical project intervention and remediation support for
complex projects
 Portfolio managers align by industry segments, lines of
business, regions
PMO resource and skills  Project management certification program administration

management  Project management training, governance, metrics, reporting
 Leveraged program management office support
Project management  Weekly services-wide project performance and compliance

tools and reporting reporting (early warning through standardized, quantitative
earned value metrics1)
 Project management reporting standardization
 Dell Services’ project management tools, governance, support
PM3 framework and  Enterprise project management standardization program

standards  PM3 framework maintenance and continuous improvement
through a collaborative services-wide governance committee
 PM3 framework and project management office sales support
 Project management training strategy
 Project management community of practice, communications,
PMO relationship management
Figure 29
1
Earned value is derived from numbers for schedule/cost details based on hard data for standard metrics, not
subjective analysis.

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STRATEGY
The business unit–level PMO and PM3 framework support the Dell Services
strategy by focusing on its investment priorities and customer requirements. Its six
investment priorities are:
 cloud solutions,
 mobility and social media,
 lifecycle services,
 support capabilities,
 global expansion, and
 security solutions.
The office‘s customer requirements involve providing unified, seamless delivery

using the PM3 framework across integrated, end-to-end, multiservice solutions. This
alignment with strategy is helpful in selecting high-value projects.
Additionally, the goal being a trusted solutions provider guides the PMO in
providing continuous project performance monitoring, inspection, and reporting, as
well as using quantitative early-warning metrics to identify project status. With this
information, the office identifies and minimizes potential negative outcomes and
increases customer loyalty. These proven, repeatable best practices enable Dell
Services‘ projects to be delivered on-time and within budget, as well as to produce
quality project results for the customer, said Caputo.
The PM3 framework guides project managers through flexible, cost-effective

training aligned with the project management industry. The PMO provides clearly
defined career paths and highlights new project management opportunities.
At the individual account level, Dell Services PMOs align their portfolios with their
own strategies and those of customers. This involves translating the customer‘s
strategic goals and objectives into specific drivers by which to evaluate projects. The
drivers are ideally organization-focused rather than IT-focused. Figure 30 details
Dell Services‘ strategic driver process. The output is developed from aligning the
PMO with the strategies and then shaping its outputs using guides and enablement
tools. The resulting outputs are weighted strategic drivers that ensure portfolio
success.

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Strategic Driver Process
Figure 30
PROJECT COMPLEXITY C ATEGORIES

Dell Services categorizes individual projects into four complexity levels, rated from
zero to three. Descriptors and criteria guide the assignment of a project to a specific
category based on size, complexity, and risk factors. Project management rigor
increases as the size, complexity, and risk increases. A PMO assesses these factors in
an integrated and consistent manner, using a weighted scoring technique that is
applicable to any project type.
Since project managers in Dell Services are also measured and rated based on their
ability to manage projects of certain size and complexity, standard project ratings
ensure project managers receive appropriately sized project assignments and leaders
can focus on the most critical projects.
Figure 31 provides an overview of the categories.

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Project Complexity Categories (PCC)
Complexity Category Criteria

PCC 3  High-risk factors and project complexity
 Typically more than 10 FTEs per month
 Typical duration is greater than 6 months
 Typical labor budget is greater than $750,000
 Highest degree of project management rigor and oversight
PCC 2  Medium risk factors and project complexity

 Typically between two to 10 FTEs per month
 Duration is typically between 2 and 6 months
 Typical labor budget may range from $100,000 to $750,000
 Medium level of project management rigor and oversight
PCC 1  Lower risk factors and project complexity

 Typically two FTEs or less per month
 Duration is typically less than 2 months
 Typical labor budget is less than $100,000
 Minimal project management rigor and oversight
PCC 0  Minimal risk factors and minimal project complexity

 Project work typically less than 320 hours
 Labor budget is typically less than $100,000
 Requires approval for work and weekly status reporting
Figure 31

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GOVERNANCE
Dell Services believes good IT governance transcends formal organizational
structures to enable strategic objectives and accelerate the pace of change. The PM3
framework details IT governance structures for all projects, as well as portfolio
governance and program and project governance where applicable. The business
unit–level PMO specifies the decision rights and provides an accountability
framework through PM3 (Figure 32).
PMO Governance
Figure 32
IT governance provides the overall framework since the types of projects delivered
are IT-focused. Specific IT governance capabilities include:
 applying a framework, strategic planning process, and IT enterprise architecture

process;
 governing the IT organization/resource management, investment/project
portfolio management, risks, and regulatory compliance; and
 communicating about governance.

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Project Portfolio Governance

The business unit–level PMO conducts several governance activities for Dell
Services‘ project portfolio (Figure 33) including governance board meetings,
managing project portfolio reporting, and providing information that the boards use
in decision making. Administratively, the office manages project requests and
executes portfolio management prioritization tools on behalf of the governance
boards and manages a data repository of project information in order to track
delivery reports, contract compliance, and service-level agreements.
Governance Activities
Figure 33

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Program and Project Governance

At the program and project levels, governance is focused on meeting
customer/sponsor requirements. Four governance teams meet regularly at Dell
Services.
1. The organizational partner advisory group meets monthly.
2. The steering committee meets semimonthly.
3. The PMO or program management team meets weekly.
4. Project teams meet weekly.
PROJECT SELECTION AN D PRIORITIZATION
“A convenient way to understand portfolio management is to

recognize that while project management focuses on doing the
work right, portfolio management focuses on doing the right
work.”
─Michele Caputo
Services BU PMO leader & EPMS program director
Dell Services used PMI‘s standards for portfolio management as the basis for its
approach to prioritize and select projects. Like PMI, each PMO at Dell Services
defines metrics and evaluates strategic alignment criteria. It normalizes and weights
the organization and IT strategies and then establishes key performance indicators
for its portfolio. At the account level, this is done working directly with customer
leadership. At the business unit level, the PMO monitors the plan to ensure it is
achieving customer goals, as well as its own objectives. Dell Services uses this
strategic planning information to align the project inventory of the portfolio with
new project requests. Figure 34 shows the Dell Services portfolio management
process.

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Portfolio Management Process
Figure 34

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The three stages for moving a project request into the portfolio are demand
management, investment selection, and monitoring and control. Figure 35 lists
activities for each stage.
Stages to Accept a Project
Demand Management Investment Selection Monitoring and

Control
 Initiate new project and  Prioritize new projects and  Report on key
change requests changes performance indicators
 Evaluate strategic  Optimize portfolios  Measure portfolio,
alignment for projects  Allocate/Reallocate program, and project
and changes resources health
 Develop business case  Govern the investment  Periodically verify
for projects and selection process strategic alignment
changes
 Rank projects and
changes
Figure 35
PRACTICES
The PM3 framework includes processes and supporting tools and templates to
mitigate risk and deliver predictable and repeatable results. These processes and
tools are what Dell Services refers to as the science of project management. The art
of project management is the judicious and cost-effective application of the science
to a problem or environment, said Herm Barringhaus, the tools and reporting lead
for Dell Services‘ project management office.
A project manager must demonstrate project management knowledge, personal

effectiveness, application-specific technical skills, an understanding of enterprise
environmental factors, general management proficiencies, and strong performance.
An experienced and qualified project manager uses these skill areas to deliver critical
project outcomes.
Project Management Method

The Dell Services PM3 framework for global project delivery aligns with best
practices for managing projects and portfolios. The PM3 consists of the PMOs,
project and program management, and project delivery governance. Unique support

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tools and resources are available online via a customized, interactive SharePoint
repository with user-friendly views and links.
The customer-facing goals of Dell Services for the framework are to be able to
support more engagements, larger and more complex deals, and multiservice line
deals, as well as increase its ability to up-sell within accounts. These goals are only
possible with projects managed through standardized and consistent practices.
Project Management Office

The business unit–level PMO focuses on the portfolio view of the PM3. It provides
best-practice standards, processes, tools, and templates to increase project delivery
quality and effectiveness across Dell Services. Some of the office‘s accomplishments
include an organizational design process, standard roles profiles, an IT governance
maturity model assessment, and procedural guides to execute standard functions.
Project and Program Management

The framework provides a standards-based method applicable to all types of
projects in Dell Services. As noted, this flexible and scalable method defines the
project management processes, tools, templates, techniques, and scaling
recommendations necessary to meet the defined minimum standards. It also raises
the maturity level of project execution and the rate of on-time/within budget
project completion. As a comprehensive method, its project lifecycle aligns with
PMI‘s industry best practices and includes a standard project complexity
categorization, metrics, job families, training, and continuous improvement process.
Figure 36 shows the steps dictated by the PM3 framework for the project lifecycle.

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PM3 Project and Program Lifecycle
Figure 36
Project Delivery Governance

The focus of the project delivery governance part of the PM3 framework is to
minimize the negative impacts to the account financials and customer satisfaction
with Dell Services engagements. The framework defines the responsibilities of the
account, segment, and business unit PMO, as well as the operations management in
the governance of project delivery. On a weekly basis, project managers enter
project status into a centralized tool, including narrative information and standard
project metrics defined by the PM3. This data is pulled into a dashboard for
leadership review and for action on projects that are trending negatively.
Staffing Model
There are no typical PMOs because each one is tailored to fit the need of the
organization or customer engagement. During the sales process, an evaluation
determine the optimal staffing approach—PMOs are reviewed relative to the
portfolio of projects to ensure sizing changes are reflected in staffing of the account.
A standard staffing model is shown in Figure 37.

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PMO Staffing Model
Figure 37
PROJECT MANAGEMENT C AREERS AND SKILLS

Dell Services offers project managers flexible, cost-effective, and industry-aligned
training. Clearly defined career paths include a project manager certification
program, a standardized project and program management job family, and
associated position profiles. As the size, complexity, and risk of a project increases,
experiential and training requirements expand, thus, increasing the expectations and
seniority level.
Project Management Competency Model

For a large, complex project, strong leadership and general skills become even more
critical for success, said Allison Bass, Dell Services business unit PMO program
manager. Therefore, Dell Services‘ project management competency model and
associated project management certification articulates the required technical,
functional, and leadership skills and knowledge. The technical and functional
competencies represent the science of project management by focusing on the
physical processes and tangible results of projects. Leadership competencies
correlate to the art of project management. These skills, often referred to as soft
skills, tend to be the more subjective, qualitative aspects of the training and
certification.

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The PM3 training and certification programs align with Dell‘s core leadership
competencies. Figure 38 lists the content areas for these competencies.
Project Management Competency Model
Technical/Functional Leadership Competencies

Competencies The Art
The Science
 Project scope management  Tickets to entry  Drive for results

 Project schedule (time)  Intellectual capacity
management  Integrity and ethics
 Project cost management  Adaptable
 Project resource management
 Project integration management  Ability to  Decide
 Project risk (issues or RAID) execute  Simplify
management  Inclusive
 Project quality management
 Ability to excel  Drive strategy
 Project communications
 Innovate
management
 Project procurement management
 Ability to  Customer first
 General financial management
engage  Personal
processes
effectiveness
 Organizational change management
 Engage others
 Project management information
system technical skills  Project  Matrix management
 Reporting processes and tools management–
specific
Figure 38

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Dell Services Project Management Training

The business unit–level PMO drives training goals specific to project management
in alignment with PM3 adoption and compliance. It also addresses PM3 project
management certification program goals. Routine reporting monitors compliance
and progress to team-level training plans.
The learning department provides courseware that aligns with the PM3 and includes
PMI–aligned curriculum. The courseware is categorized by project management role
and skill level, and the majority of content is available online for 24/7 delivery. The
training home page provides access to training to gain technical knowledge, manage
a career, and receive framework training. The site highlights newly released courses
and related sites for team-specific training and project manager certification.
Employees can access the courseware directly from the project management training
home page (Figure 39).
Project Management Training Home Page
Figure 39

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PM3 Project Management Certification

The internal PM3 project management certification process is a risk mitigation and
quality assurance practice. The primary driver behind the certification program is to
increase the expertise, efficiency, and effectiveness of project/program managers
and project coordinators for all teams within Dell Services. This ultimately drives
consistency and synergy in project management practices. Ensuring that the most
critical projects are led by prequalified project managers—with an emphasis on past
successes with like-sized, complexity projects—reduces the risk of project delivery
challenges and increases the probability of success.
Dell Services‘ multitier project management certification program provides a clear

professional development path. It includes a standard and objective assessment of
qualifications for project coordination and project management roles. The
certification defines qualification criteria for project management learning, practical
project management experience, and mentoring. Certifications included as part of
the certification program are:
 project coordination level 1 and level 2,

 project management certification level 1,
 project management certification level 2, and
 project management certification level 3.
This addresses project management assignments as team members progress along

the project management career path.
Certifications are awarded only after meeting a comprehensive set of qualifications

and training requirements, as well as passing a detailed review of artifacts to ensure
they meet the standards espoused by the PM3 framework. For the higher level
certifications, it includes passing a panel interview made up of senior project
managers and PMO leaders.
Skills and prior experience are consistently quantified to match people to project
roles. This information establishes annual development goals and creates individual
development plans. By having consistent standards across Dell Services, employees
have career mobility, and it improves the effectiveness of the leveraged resource
pools split across the Dell Services lines of business.
Each organization and individual project management team member sets annual
developmental goals, which includes PM3 project management certification targets.
The Dell Services business unit PMO monitors and reports on progress to targets
on a monthly and quarterly basis.

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TECHNOLOGY AND AUTOM ATION

Dell Services‘ project management information system is a comprehensive toolkit
for automation and standardization. The tools that PMOs, project managers, and
project teams use during the course of projects are known collectively as the PMIS
toolkit. Tools range from process-aligned templates to systems integration capability
and include homegrown applications, commercially available systems, and Microsoft
Office templates.
Homegrown Applications
The status reporting tool for Dell Services is called project reporter, a homegrown
web application used by project managers to track weekly project status. This
application gives leadership access to projects and information on project
performance in order to govern, manage, monitor, and control projects. Aligned
with industry best practices and standards, the tool reports standard performance
measures across all projects and ensures consistency in status reporting. Customers
and vendor project managers can access the tool online.
The PM3 project workbook is a macro-driven MS Excel workbook tool designed to

guide teams through project management quality checkpoints. It provides the initial
question set that defines the project complexity criteria and then provides areas of
focus for the project manager through the life of the project including:
 general project information,

 scope,
 time,
 cost models,
 risk,
 scoring,
 sales cycle results,
 startup checklist,
 question summary,
 document control,
 frequently asked questions, and
 a reviewer checklist.
There are additional standardized Microsoft Project schedule tools, including

templates and scoring calculators to automate quality checks (Figure 40). The view
highlights reported earned value metrics of a project.

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Standardized MS Project Schedule Tools
Figure 40

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The PMO organization calculator is used to scale a PMO based on size, scope,
complexity, and risk factors (Figure 41). As mentioned earlier in this report, the
PMO resource model is defined based on the size and scope of the portfolio of
projects on the customer account. This Excel tool provides various calculators to
define the portfolio size and the complexity of the customer account. It results in a
suggested resource model needed to meet the needs of the organization.
PMO Organization Calculator
Figure 41
Knowledge Management
The PM3 framework and associated knowledge assets are available online in a
centralized SharePoint repository where team members can easily access processes,
templates, and a supporting toolkit. Knowledge assets can be searched by title,
topic, process classification, knowledge area, and phase. The site is fully linkable and
interactive. Asset lists are grouped by knowledge area or lifecycle phase and have
shortcuts to frequently used tools. Dell Services also has a SharePoint project site
template for project teams to use. It features locations for team announcements,
contact lists, discussion boards, and links to PM3 tools. The business unit also has a
project management community of practice with access to a PMO book club,
current information, and a chat room.

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MEASURES AND REPORTI NG

Metrics at Dell Services are based on earned value as the foundational element.
Quality is integrated across all three elements of the PM3 frameworks (project and
program management, the PMO, and project delivery governance). PM3 quality
standards, supporting tools, and templates are woven throughout the processes and
procedure guides. These integrated processes form the cohesive PM3 quality
standards and are accessed in the PM3 repository.
Project and Portfolio Management Metrics

The PM3 framework provides standard checkpoints at the end of each phase of a
project as it moves from feasibility though initiating, planning, executing, and
closing. Each stage gate has quantitative reporting measures based on earned value
metrics. Dell Services measures in-progress performance to identify concerns before
key milestones are in jeopardy or missed. This reporting reflects true costs and
provides an integrated view of the progress made in terms of scope, schedule,
resources, and costs.
The quality process for project and portfolio management consists of:
 project complexity categorization, comprised of four standard categories so

appropriate attention can be focused on the most critical project;
 staff skill certifications, identified through quantified assessment of project
manager skills and experience;
 project management certifications, ensure that project plans follow best
practices; and
 project management quality assessments, also called health checks, examine
project management compliance, identify project management gaps to success,
and provide an external review of a project‘s health status.
Standardized project metrics are used across the enterprise to determine a project‘s
status. Performance metrics include cost and schedule earned value measurements,
as well as product quality and customer quality measures. Compliance metrics
measure adherence to the PM3 framework based on project complexity. Figure 42
lists examples.

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Standardized Project Metrics
Performance Metric Examples Compliance Metric Examples
 Costs  Subjective vs. calculated

 Cost performance index  Weekly status reporting
 Variance at completion  Accuracy of status
 Schedule  Project artifact completion
 Schedule performance index  Project certification
 Variance of significant milestones  Project management certification
 Quality  Project reviews
 Product quality metrics  Action plans
 Customer satisfaction results
 Customer-/Team-specific metrics
Figure 42
Reporting
Several reporting applications provide operational oversight into project
performance, staff utilization, and compliance to standards and policy. There are
three levels of reporting: strategic, managerial, and operational. At the strategic level,
a high-level project summary is reported when triggered by a variance threshold
such as changes to benefits, costs, or delivery. Managerial reports cover changes to
scope, schedule, and resources with statements regarding adaptive actions and any
open issues. At the operational level, reports consist of detailed task information, all
variances, and contingent and preventive plans. Figure 43 lists the types of
monitoring and reporting for both performance and compliance.

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Project Delivery Governance Monitoring and Reporting (Weekly)
Performance Monitoring and Compliance Monitoring and

Reporting Reporting
 Project/Program status reporting  Standard metrics compliance

 Summary reporting across accounts  General verification of accuracy of
 Red/Amber project action plan reviews project status information
and issue escalation  Discrepancies between project
 Project/Program metrics’ variance analysis management—reported
 Performance trend and root-cause red/amber/green—status and
analysis calculated status using the quantitative
 Project/Program health assessments metrics
 Intervention and remediation for  Weekly reporting frequency
underperforming projects/programs  Project categorization
 Project management quality standards,
project quality assessments, and project
audits
 Project management quality standards
for sales cycle plan certifications
 Project management training metrics,
reporting, and analysis
 Project manager certification gap
analysis
 Project manager certification target
setting and management
Figure 43

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Dell Services has designed a variety of visual report formats. For example, a project
status report format for customers can be customized with its logo (Figure 44).
Project Status Reporting to Customers
Figure 44

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Portfolio-level reporting uses color-coded visuals of projects‘ status and a view of

status by project types (Figure 45).
Project Status Reporting to Customers
Figure 45
LESSONS LEARNED AND CHALLENGES
“The main challenge for the enterprise-wide standardization

efforts is maintaining momentum through change while ensuring
long-term adoption and compliance consistently across the
business unit. Organizational change management techniques and
establishing and maintaining credibility of the PMO team are key
factors for its continued success.”
─Michele Caputo
Services BU PMO leader & EPMS program director

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The Dell Services business unit PMO noted lessons learned and keys to success
within six areas of competency.
1. Organizational change management
2. Sponsorship and stakeholder engagement
3. Comprehensive, integrated solutions
4. Guiding principles and success factors for sustainability
5. Measure effectiveness and incorporate lessons learned for continuous

improvement
6. Maintain credibility for the PMO and lead by example
Lessons that have helped the Dell Services project management office develop its
best practices include the items listed below.
 Obtain leadership involvement.

 Establish a leadership steering committee for the program, with
organization-wide representation of leaders who have the authority to
enforce standards, remove obstacles, and escalate/resolve issues. Typically
this would be one level below the top leader of a division.
 Maintain committed executive sponsors.
 Maintain relevance to strategy.

 Ensure PMO methodology and improvement plans demonstrate value to
the organization.
 Early in the implementation, maintain interest, momentum, and visibility
through quick wins. Select opportunities aligned with the hottest pain
points.
 Listen. Continue to seek to understand the organization and be sensitive to
customer priorities.
 Manage the human side of change.

 Leverage organizational change management techniques.
 Leverage a change readiness assessment.
 Ensure involvement from all affected stakeholder groups and teams.

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 Provide convenient, cost-effective training for highly constrained, billable staff

in various regions across the globe.
 Develop training with a more scalable, cost-effective global delivery model
by using Web-based, self-service, self-paced, and interactive training.
 Conduct course evaluations and use feedback mechanisms to ensure
learning objectives are met and feedback is incorporated for continuous
improvement.
 Balance the art and science of project management by incorporating a
balanced focus on leadership competencies and skills with technical and
functional skills.
 Provide comprehensive learning paths that integrate online vendor training
and in-house developed, customized PM3 training.
 Continuously evolve project management methods and standards.

 Avoid the rote and/or rigid application of the method. Strive to provide a
more flexible, scalable framework by emphasizing the intent and purpose of
the standards, as well as the critical outcomes.
 Use the PM3 framework as a means to an end. Focus on the successful
outcomes of project management and project delivery.
 Get involved with outside organizations.

 Align with industry-recognized best practices such as the Project
Management Institute, and communicate the alignment.
 Take advantage of opportunities to showcase your best practices in order to
solicit outside validation.
 Capture lessons learned on the effectiveness of the PMO standards and

methodology.
 Analyze project performance and compliance information weekly through
regular, standardized project status reports and metrics.
 Conduct reviews throughout the project lifecycle by collecting and
analyzing trends and the root causes of variances to quality standards.
 Establish and maintain credibility of the PMO team across the business unit.
 Lead by example and demonstrate value through practical application.
 Be supportive and flexible while balancing risk with rigor. Scale and
streamline where appropriate without sacrificing quality.
 Communicate in order to sustain visibility and momentum.

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NEXT STEPS: METHODOL OGY AND STANDARDIZAT ION

Dell Services‘ roll-out schedule for the PM3 adoption program has a target
completion date of February 2013. The business unit–level PMO is planning to
sustain the PM3 adoption efforts and continue to integrate additional acquisitions
into the framework.
The relationship with PMI has been invaluable, said Caputo. Dell Services plans to
continue that relationship and, specifically, participate with its global executive
council for thought leadership in order to stay abreast of industry advancements in
project, program, and portfolio management. Continuously maturing tools and
techniques will be a priority. It also plans to retain its status as a Registered
Education Provider (R.E.P.) with PMI.
Automation
In an effort to reduce redundancy and improve efficiencies for project managers,
Dell Services‘ PMO plans to continue to refine its system integration and
automation capabilities. Additionally, the continued advancement of automation and
integration of corporate systems with the Microsoft Project schedules will help
improve reporting.
Governance and Benefit Realization

High customer satisfaction is key to the success of a services organization, said
Caputo. Dell Services focuses on customer feedback in multiple ways. One way is
through routine project management checkpoints involving both informal
conversations and formal documentation throughout the project lifecycle that
correspond with milestones, key deliverables, and project signoffs. Another way is
through standardized project satisfaction surveys. To ensure follow-up and
resolution to any areas flagged for improvement, the PMO will monitor compliance
to the customer surveys conducted at project close-down and ensure lessons learned
are incorporated into the PMOs repository. It will monitor actions needed by the
account to close the loop with the customer and incorporate process improvements.
Project Management Competencies and Skills Management

Dell Services staffs its engagements with the highest quality talent by driving project
manager certification targets across the business unit. Additionally, it plans to
continue to develop and implement advanced PM3 customized training, coaching,
and mentoring in topics emphasizing scope, schedule, cost, and quality
management. This may include the development of new offerings for project
management coordinators and entry-level positions. Because competency is the
result of collaboration with others in the PMO community, Dell Services aims to
expand the project management community of practice and other two-way
communication channels across the global business unit delivery teams in order to
mature the project management framework and project manager proficiency across
Dell Services.

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Case Study: DTE Energy Co.

BACKGROUND INFO RMATI ON
DTE Energy Co. is a diversified energy organization that operates energy-related
businesses and services nationwide. It is involved in both utility (electric and gas)
and non-utility organizations. In terms of electric and gas utilities, its largest
operating facilities are Detroit Edison (2.2 million customers and the nation‘s
eleventh largest electric utility) and MichCon (1.2 million customers and the nation‘s
fifth largest gas distributor). These organizations have each been in operation for
more than a century. Together, these regulated utilities provide electric and/or gas
services to 3 million residential, business, and industrial customers throughout
Michigan. In addition, DTE Energy has a number of non-utility subsidiaries (gas
midstream, power and industrial projects, unconventional gas production, and
energy trading), which provide energy-related services to business and industry
nationwide. In total, DTE Energy operates in about one-half of the United States.
The top corporate priorities at DTE Energy include having:
 highly engaged employees,

 top-decile customer satisfaction,
 a distinctive continuous improvement capability,
 a strong political and regulatory context,
 a clear growth and value creation strategy,
 and superior and sustainable financial performance.
In the view of DTE Energy leadership, if the organization is successful at these

priorities, then financial success will follow. Ron May, senior vice president of major
enterprise projects, said it all starts with an emphasis on employees: ―We think that
employees are the best chance that we have at succeeding in everything that we do.
So we spend a lot of time developing people along with processes.‖
“We think about everything that we do in this framework, and

these core priorities are consistent over time.”
─Ron May
Senior vice president, major enterprise projects, DTE Energy

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Along with its top corporate priorities, the organization focuses on strong
environmental stewardship, community involvement, and local economic
development. Dave Harwood, director of the program office for major enterprise
projects, said: ―We are trying to be a catalyst in the downtown area [of Detroit]. We
are putting a lot of effort into creating a better environment and a better
neighborhood feel in our city.‖
This case study focuses on DTE Energy‘s project management office (PMO) for
major enterprise projects. It primarily supports Detroit Edison, the largest subsidiary
of DTE Energy, although it is starting to engage in projects for the other DTE
Energy organizations. Major enterprise projects is viewed by senior leadership as
critical to overall organizational success, said May.
EVOLUTION OF MAJOR E NTERPRISE PROJECTS

Senior leadership at DTE Energy chartered major enterprise projects in 2006. The
utility industry is a cyclical industry. At the time of major enterprise projects‘
establishment, there was a wave of investments and capital influx toward renewing
the energy infrastructure in the United States, and in Michigan in particular.
However, the common perception of Michigan at the time was that the state‘s work
force was not efficient and that labor costs in Michigan were at a premium
compared to other geographies.
Leadership at DTE Energy refused to accept this premise. It focused on

understanding this overall perception while benchmarking and improving its own
performance. It migrated to one ERP system (SAP), and, in the process, removed
inefficient processes and redundancies. The leadership began to evaluate itself
against a project management maturity model, with level 1 being the least mature
and level 5 being the most. It concluded that DTE Energy was in the 1 to 2 range
and set a goal to achieve level 4. Gerry Anderson, chair, president, and CEO, said,
―We began to invest to make that happen.‖
At the same time, leadership sought to engage the work force in being more
efficient and productive through continuous improvement efforts. Anderson said:
―There was tremendous goodwill in our work force to try to help their home state
and make it better. We went out to our work force and said, ‗Do you want to fix
your state? Start by renewing this organization and making it better. Use all of your
knowledge, skills, and energy to undertake continuous improvement here.‘‖
As of 2012, major enterprise projects is operating at level 4 in terms of internal

project management maturity, said Anderson; externally, the organization is now the
largest capital contributor in Michigan.

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“Our best way to contribute to the renewal of this state was to

renew ourselves.”
─Gerry Anderson
Chairman, president, and CEO, DTE Energy
Major enterprise projects was formed as part of DTE Energy‘s continuous

improvement effort to transform it into one of the best-operated energy companies
in the United States. Part of this transformation involved consolidating and
streamlining IT systems, as well as analyzing processes at the organization. Senior
leadership believes that DTE Energy operates in an important industry (utility) that
provides a fundamental service (power) to its customers, and it is to continually
improve operations. Anderson said: ―We often say that if people are looking to find
something meaningful in their work, they don‘t have to look very far. We are
providing something fundamental and doing it better helps a lot of people.‖
The history of major enterprise projects is summarized in Figure 46.

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History of Major Enterprise Projects
Year Activity
2005–2006 SAP implementation at Detroit Energy
2006 By consensus of senior leadership, a small project management

office forms on the heels of the SAP implementation to eliminate
redundancies and make it more competitive, thus helping the
community combat Michigan’s reputation of operating at a “price
premium.”
2007–2008 The project management office grows and becomes major

enterprise projects, an enterprise project management office
initially serving Detroit Edison.
2009 Additional employees and projects from around DTE Energy begin
to work directly for the major enterprise project office.
2010 Major enterprise projects achieves project management maturity

model level 3.
2011 Fermi 2 projects join2 the scope of major enterprise projects’ work.
2012 Major enterprise projects achieves project management maturity

model level 4.
Figure 46
Major enterprise projects‘ leadership‘s goal is to expand its services throughout

DTE Energy by leading by example. May said: ―We have started small. By
demonstrating that we can do things better, other DTE Energy organizations are
starting to come to us. Instead of being pushed onto other organizations, we are
trying to be diligent in performing our current work well. Then others will ask us to
help with their projects.‖
2
Fermi 2 is a nuclear power plant located 30-40, miles south of Detroit.

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OVERVIEW AND STRUCTU RE

The types of projects that major enterprise projects handles are primarily:
 large capital facilities projects related to renewable energy (wind farms, solar
projects, etc.),
 smart grid and advanced metering infrastructure (the migration of customers
from analog meters to digital radio frequency meters),
 nuclear development (new nuclear licensing),
 large environmental retrofits on fossil fuel plants (selective catalytic reduction
units and desulfurization scrubbers clean air initiatives, etc.),
 plant demolitions (old coal facilities),
 other environmental projects, and
 major upgrades to the Ludington pumped-storage site.
Major enterprise projects manages projects, programs, and initiatives of strategic

importance to the enterprise that meet the following criteria:
 require significant investment (more than $5 million USD);

 extend beyond one year from planning, to execution, to close out and turn over;
 expand the asset base of the organization (usually with new assets with no
associated retirement);
 implement new capacity, capability, or technology; and
 match major enterprise projects‘ owner/client mindset and are separate from
day-to-day, routine operations.
Major enterprise projects also supplements project teams of other business units, as
needed, as well as mentors and coaches project managers in other areas on the
major enterprise projects methodology. Currently, it manages about 110 projects,
representing about $800 million USD, but it does not manage ongoing capital
maintenance projects.
Major enterprise projects is a dynamic, balanced-matrixed organization that is

structured into three centers of excellence (COEs) and four project platforms
(Figure 47). This structure allows for flexibility in project staffing, facilitates
employee development, promotes shared resources, and leverages a strong process
orientation. Major enterprise projects‘ COEs provide the resources to support the
activities of the platforms. Process excellence employed through the three COEs
enables DTE Energy to build and refine skills and to cost-effectively deploy
resources where needed.

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Major Enterprise Projects Organization Structure
Figure 47
There are approximately 200 employees currently in the major enterprise projects
organization (supplemented with additional contractors when needed); most
administratively report into one of the three COEs listed in Figure 47. The main
functions of the COEs are explained below.
1. Program office COE─headed by a director-level executive, this COE is

comprised of all of the supporting project staff, including a controller
organization, financial analysts, contract administrators, estimators, schedulers,
administrative staff, and key organizational subject matter experts.

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2. Project management construction and engineering COE─headed by a director-

level executive, this COE is primarily comprised of project managers, project
engineers, discipline engineers, construction managers, and safety engineers.
3. Quality management COE─headed by a director-level executive, this COE is

comprised of employees (supplemented by contractors when needed) who are
focused on quality. The quality management staff conducts audits and
surveillances related to maintaining adherence to procedures, processes, and
process improvements. May said, ―The quality management organization helps
to proactively identify if we are not doing something right and to keep us on the
straight and narrow.‖
Major enterprise projects will deliver strategic projects and

initiatives to the enterprise on time, with high quality, and for the
best possible cost.
─Major enterprise projects’ mission
Each of the four project platforms listed in Figure 47 is headed by a director, who is
potentially joined by the manager of a particular program. Project platforms manage
like-type projects, each of which is typically run by one project manager. As projects
are initiated in the platforms, project teams are formed from various COE staff that
report in a matrix fashion to the platforms. When the projects are complete, COE
employees are re-deployed on new projects. The structure enables consistent
training and application of project management process while project platforms
manage the successful implementation of strategic projects and initiatives.
The organization chart for major enterprise projects is depicted in Figure 48. The
directors of the three COEs and the four platforms are considered to be at similar
organizational hierarchical levels, and all report up to the senior vice president of the
major enterprise projects organization.

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Major Enterprise Projects Organization Chart
Figure 48
STRATEGY
To be the best manager of strategic initiatives and projects in

Michigan and the utility industry in an ever-improving
environment
─Major enterprise projects’ vision
DTE Energy follows an annual planning cycle (Figure 49) modeled after General
Electric and Toyota. It includes a refreshed long-term financial plan that supports
strategy and growth targets.

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DTE Energy Annual Planning Cycle
Figure 49
As depicted in Figure 49, the annual planning process is comprised of two macro
levels: S1 (for longer-term, strategic planning) and S2 (for shorter-term, more
tactical discussions and budgeting). These are followed by the development of
scorecards that measure achievements against strategy. The strategic planning
process cascades from the long term (five to ten years out) to short-term (for the
next year) to individual plans (performance goals and objectives for each employee).
Figure 49 also shows the continuous improvement cycle, modeled after Deming‘s
plan, do, check, act cycle. Quarterly business unit updates (QBUs) are performed
throughout the year.
Major enterprise projects‘ vision and long-term goals and objectives (the two- to
five-year challenge and ―True North‖ aspirations in Figure 50) integrate with DTE
Energy's corporate and strategy and ultimately cascade from the top corporate
priorities (also in Figure 50). In fact, major enterprise projects‘ leadership helped
design some of the corporate strategic planning processes including a review the
True North aspirations, which are annually and periodically adjusted to better meet
the needs and objectives of the organization.

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MEP True North and Vision
Figure 50
As shown in Figure 50, major enterprise projects‘ vision is not constrained to the
DTE Energy organizational boundaries, it wants to be the best project management
organization in the state and in the industry (across the nation) as it offers its
services to other organizations.
Strategic Alignment and Funding

Major enterprise projects‘ leadership works closely with internal client business unit
leadership, corporate strategists, and finance to define and fund a plan that meets
objectives. It classifies projects, programs, and initiatives it selects for
implementation as safety related (e.g., provides for a safe work environment for
employees), mandatory (required by a public service commission order, industry
regulations, or law), and/or strategic. In addition, it provides expertise and support
to other business units as needed. PMO costs bill directly to the projects, programs,
and initiatives they support.
Project Prioritization and Selection

Major enterprise projects is fully engaged in strategic initiatives/projects across the
enterprise, as well as in select projects outside of the organization. Much of the
project portfolio and selection process is guided by the Toyota Kata approach,
whereby PMO leadership strategizes ways to meet a desired end or target condition.
A key target condition of major enterprise projects is to broaden its portfolio,

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formalize the division of responsibility with other business unit partners, and
increase awareness of its services throughout the organization and the community.
The broadening portfolio includes community projects such as assisting with the
Detroit business district revitalization, local street lights, business development, and
future Detroit light rail projects. The leadership has created a 10-year plan that
depicts its anticipated portfolio mix of projects.
PRACTICES
DTE Energy and major enterprise projects have implemented a capability-based
approach for designing work and processes originally developed by author Stephen
J. Spear whose research found that many companies‘ continuous improvement
programs fail. His book summarizes four failure modes of companies, along with
four countermeasures or capabilities (C1 through C4) to ensure that an organization
doesn‘t fall victim to the failure modes. The capabilities include:
 C1—design work to see problems as they occur;

 C2—address problems rapidly at the point of activity;
 C3—share new local knowledge across the enterprise; and
 C4—develop engaged employees through teaching, coaching, and mentoring.
Capability 1: A Process Focus Designed to See Problems

Major enterprise projects approached C1, process work design, for project
management by leveraging a project management maturity model. This book builds
off of Project Management Institute‘s (PMI) project management body of
knowledge, and major enterprise projects has added construction, engineering, and
safety processes as well. It has documented approximately 117 work processes
within its PMO (not all of which are project related), including guides, procedures,
and desktop references for each by using Spears‘ C1 process design.
Using a project management maturity model, DTE Energy measures maturity across
nine bodies of knowledge: 1) integration management, 2) scope management, 3)
time management, 4) cost management, 5) quality management, 6) HR management,
7) communications management, 8) risk management, and 9) procurement
management. There are also five maturity levels: 1) initial, 2) structured, 3)
standardized, 4) managed, and 5) optimized. The major enterprise projects
organization measures the maturity of 43 of its 117 processes against this maturity
model.
Capability 2: Practice, Repetition, and Training Through Team Huddles

In Spear‘s capability-based framework, C2 represents problem solving at the point
of activity. As described by Jason Schulist, director of the engineering and project
management COE, C2 at major enterprise projects includes ―huddling, going-and-
seeing, and applying the scientific method problem-solving approach.‖

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This approach has work teams, both in-person and virtual, conduct short daily or
weekly meetings, or huddles, to review together a variety of process maps and
performance indicators on a board. The huddles typically begin with a short
discussion on safety, followed by a discussion of what went well over the past week,
what didn‘t go well (and what can others learn), what opportunity or problem to
focus on in the coming week, and, finally, a discussion on whether the team has the
tools and equipment needed to do its job. The huddles identify performance issues,
and it uses a scientific method and/or countermeasure worksheets to solve
problems and improve processes.
Capability 3: Knowledge Sharing

C3 involves sharing new local knowledge across the enterprise. Major enterprise
projects primarily shares knowledge through communities of practice (CoP),
knowledge-sharing meetings, a lessons learned database, and after-action reviews.
The project management community involves project managers across DTE

Energy. The community‘s executive sponsor is the senior vice president of major
enterprise projects. This community meets face-to-face two to three times per year,
each time at a different DTE Energy location. The community allows project
managers a venue to share their best practices with one another. For example, major
enterprise projects shared their project management maturity model and its gated
methodology with the larger community at a CoP meeting. Rick Carrithers, a
manager of major enterprise projects, said the community meetings have strong
buy-in from the rest of the organization, partially by getting people off-site at
different locations with an expectation of sharing best practices. Typically, each
meeting lasts about five hours, beginning with a morning meeting and then followed
by a networking lunch.
C3 knowledge-sharing meetings are one-hour monthly meetings for the major

enterprise projects organization. Primarily, these meetings are intended to share
projects and processes that have been positively impacted by continuous
improvement and can cover topics such as corrective actions, major deployments,
scheduling, and contracting strategies.
Major enterprise projects has recently created a lessons learned database. Lessons
from across the project platforms are housed in DTE Energy‘s implementation of a
commercial capital project and portfolio management system. It customized an
implementation in a project management information system (PMIS) called ePAT
(enterprise portfolio activity tracking). Anyone within the organization can enter a
lesson into the system, which triggers an approval process. (Unclear, inadequate, or
incorrect lessons return to the author to modify for approval.) Once leadership
approves the lesson, it is routed to the appropriate knowledge area leader (there is
one leader for each of the nine knowledge areas), who either returns or approves it.

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The project and portfolio management system then captures critical data about the
lesson so that it can be categorized, filtered, and searched for by the user. The
system is integrated with the risk database. Schulist said, ―We can associate a lesson
with a risk; so people searching for a specific project type can see relevant past risks
and lessons.‖
Finally, major enterprise projects conducts after-action reviews to discuss the

lessons from projects or initiatives. Actions and results are captured in the lessons
learned database.
Capability 4: Leaders Teach and Coach

C4 involves major enterprise projects leaders engaging employees through coaching.
From this standpoint, major enterprise projects conducts 47 weekly one-to-one kata
sessions between managers and their mentees to improve capabilities and
performance. A coach will ask an employee the questions in Figure 51 as part of the
weekly session.
Five Questions for Target Condition Coaching

What is your target condition?
What is your current condition?
What obstacles are preventing you from reaching your target condition?
a) Which obstacle are you addressing now?
b) In your last step, what did you expect to happen?
c) What did happen?
d) And what did you learn from the last step?
What is your next step? (This is the start of the next Plan, Do, Check, Act cycle.) If the next step is
analysis: What do you expect to learn? If the next step is a countermeasure: What do you expect
to happen?
When can we see what you have learned from taking that step?
Figure 51

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Integrated Resource Planning
“Our dream was to have all resources loaded in the schedules. This
would allow us to know what our project management office
organizational resource needs would be throughout our strategy
into the future. We would be able to predict those resource needs,
know how we are effectively using our resources, and how to gain
efficiencies in our resource utilization.”
─Rachel Benore
Scheduling supervisor, major enterprise projects
Major enterprise projects provides all of the project labor for project teams that it
leverages for big construction and engineering projects, with the exception of
contractors who have access to the scheduling tool to build their schedules. Often,
DTE Energy outsources its engineering design and construction, and then major
enterprise projects provides engineering and construction oversight. Major
enterprise projects wholly owns the project management resources so it can dictate
how projects are staffed.
Major enterprise projects uses Primavera software as its scheduling tool (migrated
from Microsoft Excel databases) and to track project milestones. It has created a set
of scheduling templates for small, mid-size, and large projects. All of major
enterprise projects‘ large projects and many of the mid-size project schedules are
built and resource-loaded into Primavera, which allows project managers to
understand the resource needs and support a project throughout its lifecycle (from
initiation to design/implementation to start-up and testing and to close-out).
Once all of the resource-loaded schedules of current projects are in Primavera,

major enterprise projects loads future projects‘ resource requirements and schedules,
all aligned back to the corporate long-term plans (five years out). Primavera allows it
to model its project resource needs at various states of the project funding cycle.
Rachel Benore, a scheduling supervisor, said, ―We are able to make effective
management decisions, see where people are coming off of projects, plan for where
they might go in the future, and understand where professional development
opportunities exist.‖
In order to comply with the requirements of project management maturity model

level 4, major enterprise projects documented its process for integrated resource
planning. It begins with a strategic phase, where the controller‘s organization in

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major enterprise projects formally meets with the project platform directors,
platform managers, and scheduling supervisor each quarter. These meetings capture
the current and anticipated resource needs and any adjustments to the scheduling
tool. The attendees review and adjust the platforms‘ strategic, integrated resource
plans to align them with the one- and five-year plans. A big part of the discussion is
anticipating resources required from the various COEs. These formal meetings are
supplemented by informal, update meetings as needed. The integrated resource
planning process involves a series of embedded tests, or gates. Eventually, a
scheduler from one of the platforms is assigned to the project (taken over from the
supervising scheduler, who sets the initial strategy for the integrated resource
planning).
Next, projects are authorized by senior management, which is determined by the

size of the project. The manager of budget and forecasting in the program COE
secures initial funding, the project manager kicks off the project and drafts a project
charter, which is signed by the MEP platform director and the business unit
customer (scope is part of the project charter). The project manager authors a
staffing plan, which signals to the COEs that there is a staffing requirement for a
project. During this phase, the project manager submits the authorization, and the
COEs and the project platform resources determine the initial resources needed to
support the project (depending on the size of the project).
Once a project is authorized, data feeds the schedule and control processes. The
project and portfolio management system generates weekly, integrated resource
planning updates for project and platform managers to update. Then the platform
directors and the COE directors meet monthly to discuss the resource strategy.
Benore said, ―We focus on our specific key resources when we go into these
meetings so that we know what is going to be required resource-wise to kick off a
project efficiently.‖
The integrated resource planning process is enabled by its tracking system (ePAT),
in addition to its scheduling tool. The tracking system lists action items (color-coded
for priority based on due date) regarding the integrated resource planning. Leaders
can track how well the organization is filling resource gaps and adhering to its
resourcing strategy. Action items remain open in the tracking system until the
project managers complete the actions and update them in Primavera.
In addition to its reporting functionality, Primavera can produce profiles of current

projects‘ resources and future resourcing needs. The profiles show current or
anticipated resource gaps that need to be filled. Benore said, ―Our True North goal
in integrated resource planning is to ensure that when a project is kicked off,
resources are ready to go.‖
The system shows full-time equivalent (FTE) allocations on currently funded and
future projects, which indicates whether they are over- or under-allocated (driven by

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thresholds built into the system). This information—current and projected

utilization—drives how project managers respond to action items in the tracking
system. Ultimately, the system‘s action items drive effective decision making by
project and platform managers, said Benore.
Developing Project Manager Skills

Like the controller‘s office, HR also has roles dedicated to major enterprise projects.
The management work with HR creates a standard for the number and types of
projects that a senior staff member can handle compared to a more junior staff
member.
In addition, major enterprise projects‘ management works with HR to build its skills
database (matched against project management deliverables) to comply with project
management maturity model level 4. Figure 52 is a snapshot of the process
deliverables skills assessment.
HR ensures a pipeline of resources for current and future projects including

leveraging contractors. Major enterprise projects has a goal of never turning down a
current project because of a lack of resources. Benore said, ―One of the goals of the
integration between resource planning and HR is to develop skill sets so that there
are always project managers available with a base amount of project management
skills.‖

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Major Enterprise Projects Process Deliverables Skills Assessment Snapshot
Figure 52
Each discipline within major enterprise projects, including project management, has
an associated training process work flow. All new project managers receive four
hours of project management training as part of their new-hire orientation. They
receive a manual that documents each step in the project management process, as
well as examples from successful projects. Major enterprise projects also offers
training on:
 SAP and other integrated systems (e.g., its tracking system and corrective action
requests),
 industrial safety compliance (with 22 safety and environmental training courses),
 location-specific issues,
 HR issues (such as ethics, diversity, and sexual harassment),
 organization-specific issues, and
 role-specific issues (for facilities project managers, safety and health engineers,
construction manager general contractors, etc.).
Training for its tracking system is a common denominator across most project
management roles. All project managers are also trained on soft skills such as
leadership and team participation. Safety training is also a component, so
participation in the industrial safety compliance training is monitored closely, and

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safety metrics are examined monthly. Most training is web-based and is developed
by a combination of in-house and external resources. Some training courses occur
once while others are required annually.
There is a mentoring program within major enterprise projects whereby more

experienced project managers mentor new ones to help them accelerate their time-
to-competency.
It is the desire of major enterprise projects‘ leadership that all of its project
managers become project management professional-certified through PMI.
Currently, 71 percent of major enterprise projects‘ project managers are certified.
Carrithers said: ―If everyone is speaking the same project management body of
knowledge (PMBOK) language, then it makes it much easier to communicate as an
organization.‖
Major enterprise projects mapped the career path pipeline for technical staff and
project managers from associate engineers to technical experts and to management.
Individuals can take a number of different paths over their careers from an analyst
level all the way to management. Major enterprise projects created a new associate
project manager position for new hires, many of whom have interned at the
organization, and allow them to rotate through different positions to gain
experience and determine where they would like to work.
In addition, major enterprise projects leverages a project management skills

assessment tool from PM Solutions that allows management to assess project
managers on a one (novice) to five (expert) scale as part of the semiannual
performance assessment process. General categories for the skills assessment
include leadership, communication, teamwork, analytical, and project management
skills. A sample skills assessment form for leadership skills is depicted in Figure 53.

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Project Management Skills Assessment—Leadership Skills
Figure 53
The goal is for all project managers to be assessed at levels 4 or 5 (and then to
extend this assessment to the rest of major enterprise projects‘ staff). These
performance management assessments are combined with 360-degree feedback
assessments to provide project managers and management with a holistic
assessment of their performance.

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Project Management Method: The Major Enterprise Projects Gated Process
“Benchmarking has shown that having a gated process is the best

practice for ensuring sustainability and compliance to your
specified processes, which is the key to project excellence.”
─Rick Carrithers
Manager, major enterprise projects
Major enterprise projects has developed a formal, gated process to guide all projects.
A gate approval committee is comprised of the directors from the program office
COE, project management COE, the quality management COE, and the
appropriate project platform. The process specifies required deliverables, approval
requirements, and roles. All supporting project documentation must be attached to
the appropriate deliverables checklist. Each form within the required project
documentation is owned by one of the nine knowledge area leads who review the
relevant information in advance of each gate review to ensure that it meets the
project management maturity model level of intent.
There are seven steps in the gated process. Below each step is the list of activities
that should occur in that step.
 Preliminary gate 0 (authorization):

 Project submission from the strategic planning process
 Establishment of a project owner
 Approval of partial appropriation
 Notification of the project by the financial analyst to the scheduling
supervisor
 Clarification of major enterprise projects‘ roles and responsibilities
 Identification of key stakeholders
 Acceptance of the project by the directors of the project management office
and adding the project to the one- and five-year plans
 Review of gate 0 actions by the major enterprise projects sponsor
 Announcement of the new project to the major enterprise projects
organization by the gate administrator
 Gate 1 (initiation): All projects within major enterprise projects launch with a
project initiation meeting. Mandatory attendees include the applicable platform

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director or manager, the client representative, the major enterprise projects

manager, the program office manager, the quality assurance COE manager, and
the project manager. (Other attendees might include the construction manager,
engineers, budgeting staff, and procurement manager)
 Assignment of a project manager
 Approval of the project charter by the customer and major enterprise
projects‘ leadership
 Creation and approval of the project scalability matrix, which specifies
requirements, level of rigor, and governance for smaller projects (less than
or equal to $5 million USD) and larger projects requiring greater
governance; directors of the COEs and the appropriate platform (or their
delegates) sign off on the scalability document, so there is full buy-in
concerning how to move the project going forward; the methodology
includes a rigorous change review board, with sign-off thresholds indicated
in the scalability matrix
 Completion of the initiation meeting, and issuance of meeting notes
 Generation of a preliminary integrated resource plan, and review of the
template
 Development of a strategy for project documentation
 Completion of the initiation checklist
 Gate 2 (conceptual):
 Approval of the work scope document
 Kickoff of the project
 Issuance of kickoff meeting notes and minutes
 Completion of an initial baseline schedule and budget
 Completion of the project staffing plan
 Completion of a project definition rating index (PDRI), if required by the
scalability matrix document; the PDRI is a weighted scoring checklist to
assess project construction readiness
 Completion of the conceptual phase checklist, initial master document list,
and environmental change checklist
 Creation of initial project management plans (project management, quality,
scope, procurement, stakeholder engagement and communication, risk
register and management, and document and file management) to support
the design phase

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 Gate 3 (design):
 Completion of the deliverables and design verification checklist and project
work scope checklists
 Design of project deliverables according to project scope, schedule,
construction, and testing criteria
 Completion of the baseline schedule and budget
 Granting of full appropriation
 Development of an initial project summary report as required by the
scalability document
 Finalization and approval of project management plans for the rest of the
project
 Gate 4 (construction/implementation):
 Notification of substantial complete by the contractor, as required by the
contract
 Granting of commission readiness approval by the contractor and
acceptance by the start-up team, as required by the contract
 Development of an initial punch list of open items, according to the
contract; the punch list contains outstanding items that must be done
before the customer completely accepts the project as complete
 Updating the project summary report, according to the scalability contract
 Updating the project management plans, if required
 Gate 5 (commissioning and startup):

 Completion of a notice of equipment in service form
 Completion of the project closeout checklist
 Acceptance of the training, warranty, and punch list by the client
 Updating the project summary report, per the scalability document
 Updating project management plans, if required
 Gate 6 (closeout):
 Completion of the project closeout phase process checklist
 Finalization of the project summary report, per the scalability document
 Completion of an after-action review meeting
Projects don‘t necessarily go through these phases sequentially; it is possible that a

project may be involved in multiple phases at the same time. Gate review meetings

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focus more on internal compliance. Clients are informed regularly about the status
of a project and rarely have a prominent role in gate review meetings.

Major enterprise projects leverages the following systems, all of which feed into
ePAT:
 Primavera enterprise project portfolio management software—the scheduling

system for integrated resource planning;
 Maximo asset management software—the corrective action request system;
 SAP business management software—the financial and project systems
modules;
 Timberline construction accounting software—the estimating system; and
 Documentum enterprise content management software—the document storage
system.
EPAT is DTE Energy‘s implementation of Skire Unifier software that takes data
from all of the systems listed above and acts as an enterprise portfolio activity
tracking system. It includes work flows such as automated change requests and
automated gate reviews. Major enterprise projects‘ management anticipates
launching phase 2 of ePAT in 2013.

DTE Energy and major enterprise projects, in particular, are process-centric
organizations. Major enterprise projects has documented many of its major
processes as part of its aspiration to reach level 5 maturity.
The Road to Level 4 Maturity

Crawford‘s project management maturity model (PMMM) and Spears‘ process
design help DTE Energy measure its maturity across nine bodies of knowledge and
43 processes. The lowest-rated score on any of the bodies of knowledge or
processes becomes the overall score for the organization. Vic Allen, a manager of
major enterprise projects, said, ―All of the project management processes are so
tightly integrated, you need to move them all forward together in order to change
the maturity level of the entire organization.‖
Major enterprise projects assesses itself against the PMMM twice per year: once
formally (with external assessors) and once informally (with internal assessors). It
uses spider charts to display the maturity ratings of each of the nine knowledge
areas. It began assessing itself against the project management maturity model in
2008 and, at that time, was rated a level 1 (ad hoc) organization. Findings from the
2008 assessment included:

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 many project management processes needed to be created and then

documented;
 some processes were not being followed consistently, and project managers and
team members needed training on these processes;
 the assessors were not always the experts needed; and
 the assessment team was not prepared and needed training on the project
management maturity model for future assessments.
In 2009, major enterprise projects used an external assessment team and again was
assessed a level 1. That is, although seven areas had improved to a level 2, quality
management and integration management remained at level 1. Findings from the
2009 assessment include:
 most project management processes existed, but a few still needed to be

developed;
 many processes were new and were still not followed consistently across
projects, indicating a need to educate project managers;
 the assessment process caused a high level of apprehension among project
managers, and they found the assessment intimidating, which indicated a need
to coach project managers about the assessment and help them through it the
first time; and
 the external assessors were experts in project management but not yet
assessment.
In 2010, major enterprise projects engaged a professional assessment team and were
assessed a level 3 (standardized) organization. Allen said assessors helped to close
the experience gap and get a more accurate read on maturity. Also, the group broke
down the attributes into specific base components to ensure that they were
following the intent of each rigorously. The apprehension level of project managers
was lower because they had been coached in the process. However, some of the
processes were still new, and project managers needed time to practice.
In 2011 an internal assessment team assessed major enterprise projects back at level
2. The key finding was that as new projects enter the portfolio, it is possible to take
a step backward. The organization took on some challenging projects that were in
the implementation phase, and they helped bring the overall maturity rating for the
organization down. In addition, new project managers were not trained as
effectively as possible, document management/information control could be
improved, additional computer automation was needed (level 4 requires integrated
systems), and a gating process was needed.

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In late 2012, major enterprise projects reached level 4 maturity, which requires
integrated processes and systems. In order to achieve this rank, the organization
identified associated gaps in process and performance, and focused on closing them
in 9 knowledge areas, 43 sub areas, and 300 attributes. When major enterprise
projects achieved a level 4, this meant that it had achieved a level 4 on all 300
attributes. The organization also built capability ePAT that focused on its
continuous improvement program, including identifying any process abnormalities,
training the organization in effective problem solving, and providing problem-
solving tools and support.
Although major enterprise projects‘ leadership cannot quantify the value of reaching
level 4 maturity, Allen said that out of hundreds of projects, very few have been off
the mark in terms of anticipated funding requirements. In fact, a number of projects
returned millions of dollars back to the organization as a result of more efficient and
effective performance. Allen said: ―As a result of all of our work in this area, we
really know the status of all projects at all times. For projects requiring course
corrections, we are now able to course correct them faster. So we now have the
ability to surface issues earlier and mitigate them.‖
“Your ability to attain a certain benefit for a cost over time, a ROI,
is greatly affected by operational excellence.”
─Vic Allen
Manager, major enterprise projects
Continuous Improvement Maturity Model

In addition to measuring maturity through a breakdown of processes, DTE Energy
and major enterprise projects use a continuous improvement measurement process
(modeled on the project management maturity model). It assesses 45 attributes
within four capabilities on a five-point scale (1 equals initial, and 5 equals
benchmark caliber). Figure 54 shows the process.

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Continuous Improvement Measurement Process
Figure 54
Ultimately, the process assesses major enterprise projects‘ capability to improve the
four capabilities of operationally outstanding companies, C1-C4. It conducts this
assessment on an annual basis; and every-other year it is formally assessed by an
external team. The organization builds annual action plans based on the results of
the assessments. Performance against these plans is tracked quarterly. In 2010 (the
first formal assessment year) major enterprise projects scored a 1.75; in 2012 it had
improved to 2.82. Its goal is to reach a level 3 by 2013. According to Allen, this will
involve:
 focusing on process management,

 measuring process effectiveness (rather than just output),
 determining the specific True North statements and actions for each process,
 focusing on rapid experimentation in problem solving, and
 building the organization‘s problem-solving capabilities (through After-Action
Reviews, the kata routines, and corrective action systems, as well as by
providing clearer guidelines on when to use which tool).

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Project Reporting
Project reporting at major enterprise projects includes several techniques: daily
huddles of project teams; weekly practice, repetition, and training huddles; and
weekly katas. In addition, it reports monthly to stakeholders on key project metrics
(quality, cost, and schedule). Finally, at the end of projects, major enterprise projects
conducts a post-project review with the board of directors.

DTE Energy has adapted prominent project management models and standards to
refine its focus and standardize its projects through gates. Its systematic
assessments, using its platform and capacity constructs, have provided both lessons
and challenges for the major enterprise projects organization.
Incremental change has helped the organization grow in an effective way. Harwood
said: ―It‘s not like waiting to finish all your processes, getting them all perfect, and
not moving forward until you‘ve got everything ready to go. The analogy we‘ve been
using at least for a year now is we‘re flying a plane while we‘re building it. It‘s
difficult, but getting a few early successes is the key and that‘s what gets people
engaged.‖
As a result of major enterprise projects‘ early successes, the organization has been
asked to take on other corporate project management initiatives such as a new
branding initiative. Now other project management offices within DTE Energy
model major enterprise projects and consider it the standard to follow for project
management.

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Case Study: IBM

IBM Values:
Dedication to every client’s success
Innovation that matters ─ for our organization and for the world
Trust and personal responsibility in all relationships
New York–based IBM is the global market share leader for computer products and
services, with more than 430,000 employees worldwide and $100 billion in revenue
in 2011. IBM produces computer hardware, software, and semiconductors, as well
as offers technology, outsourcing, and services. IBM has a set of global, corporate-
wide values that provide guidance for all IBM interactions internally and with
customers.
Project Management Center of Excellence

Work at IBM is divided into discrete projects (i.e., temporary endeavors to produce
unique products or services), programs (i.e., comprised of multiple, related projects),
and portfolios of projects and programs (i.e., projects and programs within the
business units to help deliver strategy). This case study describes how the IBM
project management center of excellence (PM/COE) supports IBM‘s roadmap to
2015 and drives the ongoing transformation to a project-based enterprise. The
PM/COE is an enterprise project management office (PMO) that supports all
business units across IBM and approximately 27,000 project managers worldwide.
The PM/COE delivers a variety of projects and programs at IBM that develop and
support project and program managers involved in product development, software
development, and service delivery. The PM/COE is also available to work directly
with both internal and external clients when project or program management
expertise is needed (e.g., to help establish a PMO for a large account).

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Enterprise Project Management Initiatives
“We provide the infrastructure, and then we encourage

integration of the infrastructure with the methods, tools, and
management system so that we are driving project management
through all levels of capabilities, from base practitioners up to the
executives who own each business unit.”
─Steven DelGrosso
Director, IBM PM/COE
Leadership of the IBM PM/COE speaks about its initiatives throughout the
enterprise in terms of infrastructure and integration (Figure 55).
From an infrastructure standpoint, the PM/COE establishes standards and

requirements for IBM projects and programs. For example, the PM/COE has
developed and is responsible for one common, global project management
methodology that all project and program managers use, along with a set of
standard project management tools. At its core, the PM/COE offers a global base
of project management educational offerings and certification options in support of
its own validation requirements needed to attain the advanced levels of career and
capability advancement.
From an integration standpoint, although each business unit has its own unique
responsibilities and objectives, all are expected to integrate the core project
management methods, tools, and processes. For example, the global business
services consulting business unit leverages the standard project management
methodology and integrates it into technical methods that are used by project and
program managers on both client and internal IBM projects. The IBM PM/COE
ensures that the general tenets of project and program management are understood
by IBM management (i.e., the way in which executives and managers assign and
evaluate project performance).

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Enterprise PMO Initiative Breakdown
Figure 55
History of IBM’s Project-based Transformation

The IBM PM/COE was established in 1997 by charter of the CEO, Lou Gerstner,
with a mandate to transform IBM into a project-based organization. At the time,
project management was recognized as key to reliably deliver on commitments. The
mission of the PM/COE is to provide global oversight of project management
skills, processes, and community while developing and supporting a standard,
effective, and consistent project management approach across the enterprise. Today,
the PM/COE provides guidance across all IBM business units and all regions in
which IBM does business. The PM/COE has received several awards over its
tenure, including:
 the Project Management Institute Continuing Education Provider of the year

(2012),
 the Brandon Hall Excellence in Learning gold award for the IBM certification
program (2012),
 the Brandon Hall Excellence in Learning bronze award for continuing
education (2011),

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 the Project Management Institute (PMI) Continuing Professional Education

product of the year award for IBM‘s Agile learning suite (October 2011), and
 PMO of the year award from the PMI project management office community
of practice and PM Solutions (October 2010).
In addition to a common methodology and processes, the PM/COE established

standard measurements of the transformation‘s progress and uses project/program
performance for all business units as input to needed projects and programs. Project
managers, managers, and executives are held accountable within this performance
management framework.
The journey of the PM/COE is summarized in Figure 56, starting with a focus on
the practitioner in 1997, then migrating to the organizational method work in the
early 2000s, and then focusing on stakeholders in 2003 through 2006. Throughout
this process, IBM leveraged deployment leads to help build the PM/COE.
The transformation began with a focus on the project management professionals

and building their skills, including establishing project management educational
offerings, requiring project manager qualifications, and sharing knowledge in a
community of project managers. DelGrosso said: ―It [the project management
initiative beginning in 1997] truly was a new initiative that was going to transform
not only the way we work, but also the way that practitioners looked at their careers.
So there was a lot of work done upfront to define the job descriptions for the
profession. As we gave people a clearer vision of project management from a
professional standpoint, the numbers of formal project managers began to grow,
not only because of the business unit needs but also because the practitioners saw
career opportunities.‖
Next, the transformation focused on putting key enablers in place by establishing a

standard project management methodology, tool set, guidelines, and maturity
assessments that practitioners could leverage across projects, programs, and
portfolios. The final focus of the transformation was on making project
management systemic through communication, measurement, executive
involvement, and integration with management systems.

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The IBM PM/COE Transformation Journey
Desired A community of qualified Project management Management

project managers that lead methods and tool systems,
Outcomes
teams and manage on- set, scalable and infrastructure, and
time, delivery within scope adaptable to process that provide
and cost, and reduced risk customer program visibility to project/
through the use of project- and project needs, program information
based disciplines provide the right needed to manage
level of control to the organization
match risk and effectively
ensure delivery
Focus Build skills of professionals Put key enablers in Make project

place management
systemic to the
organization
Initiatives  Skills  PM method  Executive

 PM education  PMO tools involvement
 PM qualification  Guides  Measurements
 PM knowledge  Maturity  Management
sharing assessments systems
integration
 Communication
Competence Practitioner Organizational Stakeholder
Figure 56

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STRATEGY
Strategic Alignment
The PM/COE aligns initiatives with IBM‘s strategic road map through 2015. They
are divided into three primary areas of focus derived from the road map.
 Organizational competency is the project management methods and tools that

are provided to the organization as a whole, as well as tracking project and
portfolio management maturity.
 Practitioner/project manager competency is professional development, goals,
and objectives for building skills, capabilities, and competencies of project
management practitioners.
 Stakeholder engagement is developing a project management community,
leveraging social networking tools, and communication.
The objective is to establish IBM in the marketplace as a primary provider of project

and program management services and as an organization that people look to as a
mature example of excellence for project and program management. Specific goals
for the PM/COE for 2012 and 2013 are to strengthen project management value by
addressing:
 increased project and program complexity;

 global and growth market project management skills;
 skill sets related to the IBM 2015 road map (e.g., business analytics and cloud
computing); and
 soft skills/skills of project managers such as effective leadership, client
relationships, organizational change, and global/cultural awareness.

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PMO Governance
Figure 57 demonstrates the governance and funding structure for the IBM
PM/COE.
Project Management Governance
Figure 57
The executive steering team champions project management in their respective

organizations. The team is comprised of senior executives in the business units who
provide guidance to the PM/COE. They meet quarterly to provide status and
program updates as well as to obtain input, guidance, and feedback. In between the
quarterly meetings, the director and program director for the PM/COE have ad hoc
discussions with each executive regarding any targeted initiatives, new requirements,
and/or challenges. DelGrosso said, ―The executive steering team is valuable in
knocking down any obstacles and acting as cheerleaders in the business units to
communicate the message of transforming IBM into a project-based enterprise.‖
A small PM/COE core team, depicted at the center of Figure 57, develops and
maintains programs, tools, the project management methodology, and policies to
foster the systemic use of project management disciplines across the organization.
The PM/COE team is assisted in its work by volunteers and profession leaders.
Volunteers carry out much of the PM/COE work, while profession leaders have
geographic assignments assisting the global worldwide profession leader, who
reports to the program director of the PM/COE. The global worldwide profession
leader holds meetings every-other week with the profession leaders for each
business unit and region; during these meetings, feedback is gleaned directly from
practitioners and management teams.

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The periphery of Figure 57 depicts the interactions that the PM/COE has with
other groups both inside and outside the core team. The PM/COE also works
closely with business unit management and conducts meetings to discuss initiatives
and how the PM/COE can support those initiatives for the next 12 to 18 months.
The core team is supported by internal (extended teams in the functions and the
more than 27,000 project managers) and external relationships (industry influencers,
client teams, and clients). DelGrosso said this extended support is a critical success
factor: ―We have extended teams, business unit support, a vibrant community of
practice, and client teams that bring those new client requirements related to project
and program management. Strong external relationships with several industry
organizations help us to leverage our combined areas of expertise.‖
Practices
Project Management Methodology
IBM uses a project management methodology created by the PM/COE called the
worldwide project management method. It ties not only to the industry standard
(i.e., the Project Management Body of Knowledge, or PMBOK) but also to the
organizational and technical methods that the business units leverage to accomplish
their work. A key success factor for the creation of the project management
methodology was to ensure that it provides a standard for the organization but is
flexible enough to also address its diverse needs. Debi Dell, program director for the
IBM PM/COE, said, ―We did not want to be prescriptive to the point where a
business unit couldn‘t tailor WWPMM [the methodology] to incorporate their
organizational and technical methods. Flexibility was a key requirement.‖
Since 2009, the PM/COE core team has focused on more clearly defining a project
versus a program, and it has added a program management component to the
methodology. The methodology is part of the larger body of IBM corporate
practices and provides guidance on how to deliver projects and programs. Although
there is neither corporate mandate to use the project management methodology nor
any ongoing tracking or auditing of compliance by the PM/COE, DelGrosso said,
―IBM employees view it as a standard way to conduct projects and programs inside
IBM.‖
Initially, the PM/COE tracked the roll out to and use of the methodology and tools
by the business units in addition to the growth and development of IBM‘s project
management profession. However, since these measures were consistently high, the
PM/COE discontinued tracking these metrics on a centralized basis; the individual
business units now track and report use of these enablers.

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PM/COE Staffing Model

The IBM PM/COE is staffed by small group of certified professionals who make
up the core team. Staffing has decreased significantly over time as the organizational
maturity with project management has increased. The staffing model for the project
management PM/COE is depicted in Figure 58.
PMO Staffing Model
Figure 58
The work of the PM/COE core team is divided into macro initiatives (i.e.,
organizational competency, practitioner/project manager competency, and
stakeholder engagement). The core team ensures that PM/COE initiatives integrate
with the needs of the organization for project and program management capabilities
and skills. Different subject matter experts work on these initiatives, including
professional development, project management process, and metrics and risk
management subject matter experts.
The PM/COE employees maintain and improve the project and program
management tool set and methodology as part of the organizational competency
initiative and a new area of focus for PM/COE staff is business analytics. The
PM/COE leverages IBM technology in order to analyze available data, share metrics
and measurements with its project managers, and provide analytics (number of

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project managers, location of project managers, areas of expertise, etc.) externally to

the executive team to enable a better understanding of project management at IBM.
The PM/COE team supports the entire enterprise with all of these major initiatives,
with a particular consideration of what might need to be done differently in the
growth markets.
Project Management Careers and Skills
“Building common skills globally is required in today’s

increasingly complex world.”
─Debi Dell
Program director, IBM PM/COE
The IBM PM/COE focuses on the practitioner in terms of providing project and
program managers with a consistent baseline of skills and education. To that end,
the PM/COE has developed a global project management curriculum, which is a
frequent recipient of PMI professional awards.
Project management curricula were developed through a skills analysis of

practitioners (Figure 59) and are offered at three levels: project management
fundamentals, organization-specific needs, and a focus on advanced project and
program management skills, such as leadership skills and teaming in virtual
environments.

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IBM Global Project and Program Management Curricula
Figure 59
Further, the IBM project management curricula is available to individuals who are in
functional areas and are not project managers per se, such as operations or HR.
They have access to project management training. PM/COE leadership conducts
calls twice a year with the managers of project managers to ensure they are aware of
the depth of training and support available for their teams.
Finally, the curricula include job-specific training to meet the specific skills needs of
each business unit. To this end, the IBM PM/COE works with organizational and
regional leaders to develop and offer job-specific project and program management
training. In this manner, the global project management curricula support the
PM/COE‘s charter to make IBM a project-based enterprise.
The curricula are available electronically to project and program managers through
the project management university, an online learning portal for project

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management practitioners and business unit managers. Both formal (online classes)
and informal project management educational offerings (brown bags or lunch-and-
learns) are housed in the portal. Dell said the virtual classroom is advantageous to
practitioners because ―it allows them to take courses 24/7 as they can fit them into
their schedules, especially if they are on-site at client engagements but want to stay
current with their certifications.‖
The portal also houses job-specific or focused educational offerings, such as training
on the Agile methodology and on elements of the road map (e.g., cloud computing
and business analytics). The portal helps project management practitioners,
employees, and managers create a learning plan for their career growth.
The level of interactivity in virtual classes depends on the course and its objectives.
IBM is moving toward more interactivity in its virtual classes as it explores gaming
and simulations.
Education is fundamental to building IBM‘s project management competency. The

PM/COE ensures that individual project and program managers have the
experience and knowledge necessary to meet project and program needs through an
external and internal validation and certification process. Dell said, ―The internal
certification program is based on what we believe IBM practitioners need to be
successful at IBM.‖
Several tiers of qualification (starting with the PMI certification and moving toward
internal certification) provide a career path for project management professionals.
The IBM certification and validation process ensures that there are common
education and experience requirements for project and program managers on a
global basis with the opportunity for specialization. As project managers progress up
the career path, they are asked to confirm their learning and technical expertise and
professional project management experience. Those moving up the career path
must demonstrate a commitment to the project management profession, and their
skills and experience are periodically re-evaluated. From an internal certification
standpoint, there are no material differences in education and experience
requirements for an internal IBM project manager supporting internal initiatives
versus an external, customer-facing project manager. Both are held to the same
standards and competency. The expectation is that all project managers have a basic
understanding of project management, as well as a solid understanding of their areas
of specialty.
In practical terms, within some business units, programs are used to match
resources with projects and programs. Where applicable, project managers of record
for projects above a certain dollar value or FTE size are assessed to ensure that they
are qualified to handle that project or program. This metric is tracked, analyzed, and
reported by the PM/COE on a quarterly basis.

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“Validation across levels provides the milestones that ensure

practitioners are acquiring the knowledge, skills, capability, and
experience that is required to provide client value at each level.”
─Debi Dell
Program director, IBM PM/COE
Initially, the entire global project management curriculum was internally developed.
IBM externally supplements the curriculum as needed, particularly at the advanced
level.
In 2011 IBM developed a formal career framework that is an enterprise-wide career

model that guides all employees‘ careers and develops their capabilities that matter
most to IBM clients. Employees of all types, not just project managers, can assess
themselves within the career framework against the managing projects and programs
capabilities. It provides clarity and guidance on the skills, abilities, and experience
that employees need to succeed in their current role. Dell said the advantage of the
career framework is ―when we look at our numbers, we can determine that we are
deploying employees on projects and programs that can deliver. The career
framework helps us to do that consistently across not only project management but
also other capabilities needed to deliver along IBM‘s road map to 2015.‖

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The IBM PM/COE has developed a set of project management career milestones
for project and program managers (Figure 60).
IBM Project Management Career Milestones
Figure 60
As depicted in Figure 60, the career path of a project or program manager begins
with entry level (level 1) and can progress to a thought leader (level 5). Along with
each designation are associated skills (project management, leadership, and
technical), experiences, and qualifications. This career path and associated levels are
incorporated in the IBM career framework. All employees regardless of job role—
not just project and program managers—fit within these levels. Project and program
managers, however, have added criteria of accreditation and/or certification that
validates that they are equipped with the required skills and experience. The
qualification aspect of the various milestones allows the organization to assess the
employee population and pipeline. Dell said: ―We can now look at our pipeline and
know the capabilities of all employees through this process. It gives us an important
advantage in supporting our clients and projects.‖
Each business unit assesses its pipeline of projects and programs. It tracks the
number of project managers at the different levels and assess those against the
ongoing and expected project work. It determines any gap in the skills that they
need, and then decides either to develop skills internally or to hire externally.

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Project management tools and automation are considered part of the organizational
competency strategic initiative. The organization has developed an IBM program
work center (IPWC) as its platform for project and program management. The
center provides the following functionality for IBM project and program managers:
 requirements management,
 proposal management,
 portfolio management,
 resource management,
 project management,
 work management,
 progress time and expense reporting,
 exception management,
 service request management, and
 defect tracking.
According to Dell, IPWC serves as ―the right tool at the enterprise-level that can be
flexible according to different needs, yet it addresses the need for consistency across
all of the different projects that we have.‖ Whereas Microsoft Project is supported
on client engagements (when required) and as needed, IBM project and program
managers are encouraged to rely on the center as the enterprise tool for project and
program management. The program management work center is also available
externally.
Knowledge Management
One way in which project managers share tacit knowledge and lessons learned is
through a virtual, vibrant community of practice which provides an online forum
for best practices and knowledge sharing, mentoring, and global study groups for
the PMI exam. (Study groups are offered in multiple languages.) As part of the
certification process, project managers must participate in and give back to the
community. ―By making this community visible and by letting our volunteers know
that they can present lessons learned and have the opportunity to mentor others or
facilitate study groups, we get that give-and-take necessary to focus the global
project and program managers on building IBM into a project-based enterprise,‖
said Dell.
The PM/COE offers a program called eShareNets. It records educational sessions

provided by and to the project management community, and they are accessible in
the knowledge database.

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The PM/COE leverages a web-based lessons learned and intellectual capital

database called IBM rational asset manager as a vehicle for capturing and sharing
tacit project management knowledge. It assists project managers in the search for
and reuse of existing solutions often applicable to new projects and initiatives. The
database is available to all IBM employees globally and, since 2000, has ranked in
the top three for employee usage of more than 100 IBM intellectual capital
repositories. Dell said: ―We put a great deal of effort from day one into capturing
the lessons learned intellectual capital that results from our projects and programs. It
is very important that our practitioners don‘t need to go out and recreate the
wheel.‖
Contributing to the lessons learned and intellectual capital database or acting as a

subject matter expert reviewer of content is another way project managers can give
back to the project management community. The relevancy of content in the
database is reviewed by volunteer project management subject matter experts who
ensure that the content reflects what project managers need to meet objectives.
The PM/COE has one FTE dedicated to the e-Sharenet program, the IC database,
and managing the volunteer network of subject matter experts. This individual
works with the experts to keep the approximately 3,000 intellectual capital assets
current. Any IBM employee can submit an asset to the database for review, and
experts review that content prior to its inclusion.
Another important element of knowledge management as it relates to project

management at IBM is the corporate project management programs available
online, such as the PM/COE portal. It serves as a central resource where project
and program managers can access the information needed to manage their projects
and programs. This includes links to the project management university; the online
community; tools, templates, and the project management methodology; an expert
discussion forum; updates in methods like the Agile method; and relevant external
content such as to PMI information and Harvard Business Review. The expert
discussion forum is manned by the PM/COE and allows practitioners to receive on-
demand answers to their questions. The portal also includes a link to a practitioner
support network staffed by thought leaders and subject matter expert volunteers
who make themselves available to employees around the globe. ―We want our
practitioners to go to one place and find what they need, whether it is a reference to
a method, a tool, or some other type of related content,‖ said Dell.

The IBM PM/COE has created a dynamic project management metrics dashboard
for use by the executive steering team and project management deployment leaders.
Members receive key performance information such as the number of
certified/uncertified project managers and the number of project managers in
different business units/regions. The dashboard reports on the capabilities of all

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project and non-project managers performing project management work (in terms
of levels 1 through 5 from the career framework). The executive steering team and
the project management deployment leaders can view a series of charts, information,
and analytics (updated quarterly) that can be customized based on business unit and
location, including areas for improvement. Theresa Schnider, metrics and risk
management subject matter expert, said, ―The dashboard provides us with a sense
from a level perspective of the depth of the project management capability that we
have in the regions and organizations and also experientially for the skills of the
project managers.‖ From its inception, the IBM PM/COE established targets for
the population to be certified based on business unit objectives. These goals were
aggressive in the early years of the PM/COE, according to Schnider.
Measuring the Value of the PM/COE

The PM/COE is not an operational project management office and is not
responsible for tracking the profit/loss statements of any business unit. It is
considered a competency provider across the business units, and its value is
measured qualitatively by the programs it provides and quantitatively by the number
of practitioners that it supports and advances through the career framework.
DelGrosso said: ―You can look at internal measures such as increased levels of
utilization, increased performance on the quality of project and program delivery,
and successful project delivery. The PM/COE also receives direct feedback from its
clients through post-project delivery surveys. Per DelGrosso, ―The data consistently
points to clients being extremely happy if not thrilled with our performance. In
addition, we have achieved a strong reputation, both inside IBM and in the external
marketplace, for our project management capabilities.‖

Despite establishing IBM as a project- and program-based organization and
supporting the IBM road map to 2015, the IBM PM/COE still faces some
challenges. DelGrosso said that one of the biggest ones has been addressing the
cultural, language, and time differences; communication norms; and differences in
technology platforms across teams and clients in IBM‘s global environment. In
addition, the PM/COE continues to address the challenge of how to best leverage
the skills available in IBM and with partners no matter where they are located in the
world. The PM/COE team regularly interacts with colleagues across the globe and
must manage the intricacies of communication, team building, and virtual
management. The PM/COE works to address these challenges through ongoing
education, building skills in growth markets, and offering dynamic tools such as the
project management metrics dashboard.
Over time, other regions have established project management offices of their own.
The PM/COE conducts monthly interlock meetings with those colleagues that
discuss initiatives to improve communication from the enterprise PM/COE to the
regional offices. The PM/COE is sensitive to the cultural diversity of its internal

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clients and practitioners; to that end, subject matter experts can review assets in the
intellectual capital database in their native language, and practitioners may submit
intellectual capital in theirs.
Future Directions
In terms of future areas of focus, the IBM PM/COE continues to focus on growth
markets to ensure that it builds a project and program capability similar to the
mature markets that it serves. In addition, the PM/COE has a robust and active tool
and method strategy to keep the project management method up-to-date with the
different versions of the PMBOK, as well as to support the latest requirements from
each business unit. The PM/COE continues to focus on its program management
capabilities and the career framework, along with continuing its work with the
business analytics group to increase its understanding of the project and program
manager population and capability.
In terms of stakeholder engagement, the PM/COE continues to expand its e-

Sharenet program and to invite external industry speakers to share their expertise
with the project manager community. Finally, the PM/COE continues to focus on
how it can realize value, including IBM client teams who support industries and
sectors around the globe and the internal management teams that depend on the
project management metrics dashboard and associated business analytics.
Throughout its journey, the PM/COE is supported by an executive steering team

comprised of senior-level executives across the organization. DelGrosso, said: ―The
support that they have given us over the years has been invaluable. The end result of
this transformation is a project-based enterprise. We are not at the end of the
journey, but we are well along the way of maturity.‖

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Case Study: The United

Illuminating Co.
UIL Holdings Corp. is the parent company of the electric utility United Illuminating
Co. (UIL), as well as three gas utilities: Southern Connecticut Gas, Connecticut
Natural Gas, and Berkshire Gas Co. UIL acquired the three gas utilities in 2010,
which doubled its customer base from 325,000 to 700,000. UIL has 1,800
employees and combined assets of $4 billion and serves customers in Connecticut
and Massachusetts.
Beginnings of the Portfolio Management Office

According to Richard Reed, vice president of engineering and project excellence,
prior to the creation of a project management office (PMO), UIL leadership felt that
projects were operating in silos, which affected the efficiency of execution. UIL
formed its first project management office in 2002 to manage a large SAP
implementation. In 2003, UIL began using and developing dedicated project
managers. By 2008 UIL had three project management offices acting independently
(i.e., a transmission and distribution project management office, a corporate project
management function, and an IT project management office). In 2010, UIL created
a portfolio management office called the center of project excellence (hereinafter
referred to as ―the center‖) to ensure a single methodology, standard tools and
templates, and overall portfolio management. Currently, the center is comprised of
52 project managers and support staff who run 300 capital projects annually. The
majority of the offices‘ project work (i.e., 85 percent) is transmission and
distribution construction projects. The remainder of the work is 3 percent
maintenance projects, 2 percent process improvement, and IT runs the remaining
10 percent using the center‘s tools, methodology, and reporting.
Vision and Mission of the Portfolio Management Office

UIL‘s corporate mission, to be a premiere provider of utility and related services,
and its vision, to be recognized by stakeholders as an industry leader, flows through
each of the business units and the center. To augment the enterprise mission and
vision, each business unit and the center create their own.
The center instills project management best practices into all of it projects. It is
responsible for managing projects within the capital plan. According to Reed,
consistency and predictability are important to UIL because it operates in a highly
regulated industry; prior to 2008, it struggled to meet its estimates of capital
expenditures. In UIL‘s line of business, it earns a return on its assets, and the
financial community expects to see UIL using its entire capital expenditure budget

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to invest in the organization. The center credits UIL‘s increase in predictability in

spending its annual capital expenditure budget to its ability to execute on this
mission. Concurrently annual expenditures have increased from $50 million to $300
million in three years.
Organizational Structure
The center is strategically aligned, both through its organizational structure and
through the budget it manages, to consistently deploy best-practice standards across
UIL. The organization operates through five units:
1. United Illuminating,
2. Southern Connecticut Gas (purchased in 2010),
3. Connecticut Natural Gas (purchased in 2010),
4. Berkshire Gas Co. (purchased in 2010), and
5. Shared Services (includes UIL-owned assets, mainly IT).
The center currently resides within operations in the United Illuminating business
unit, and it reports to the center of project excellence governance board. This
reporting relationship is valuable, according to Mary Lou Palmieri, director of
portfolio services, because the governance review board provides leadership backing
and adds credibility to the center. It works with all five business units and there are
six directors and each runs a project management office. The center is led by
Richard Reed, vice president of engineering and project excellence who also leads
the engineering and construction business units within United Illuminating. UIL
links engineering, construction, and project management together under Reed
because they are core parts of its purpose. Figure 61 shows the organizational
structure of the project management office.
The transmission and substation project management office manages mainly large
capital construction transmission and substation projects. These projects are
typically not scalable given their size and level of priority. The distribution programs
office typically manages capital construction programs with large customer and
maintenance projects. Projects within this office are usually scalable. The corporate
projects office manages large corporate initiatives. Their most recent success
includes the design, construction, and occupancy of the new enterprise headquarters
in 2012.
A project management office for gas projects is in development. Currently, these

types of projects are managed by part-time project managers. They are internal
employees to the gas department whose sole responsibility lies outside of project
management (e.g., a business system analyst, a programmer, or an engineer working

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within that department). The gas team project managers meet regularly with the
center.
The portfolio services group is responsible for UIL‘s portfolio of projects. Within
the portfolio services group, the project management process and standards
function is responsible for methodologies and standards, the Primavera program
management technology, and portfolio schedule management. The business
management function, with four financial analysts, is responsible for the financial
oversight of the portfolio. In the future, a project management competency role will
oversee the creation of a project management competency career path to help train
employees, as well as help with staffing and resource leveling. Finally, the principal
financial policies and procedures function audits the center‘s adherence to financial
procedures and policies.
The IT projects office handles hardware and software implementation projects, and
along with the gas projects office, has a dotted-line reporting relationship to the
center; that is, it does not directly report to Reed but manages projects in
accordance with the center‘s standards and processes. The IT project management
office is staffed by part-time project managers (e.g., a business system analyst, a
programmer, or an engineer working within that department). The IT projects office
also uses capability maturity model integration in addition to the center project
management methodologies.

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Center of Project Excellence Structure
Figure 61
STRATEGY
The center‘s strategic objectives adhere to uniform project management standards
and promote consistent communication and reporting. The center strives to achieve
these objectives in the management of the capital expenditures budget. It is heavily
involved in the creation of UIL‘s integrated, 10-year capital plan for the enterprise
and each of its business units. The center ensures that all projects align with the
capital plan by moving funds and resources as needed. A governance review board,
comprised of UIL senior leadership, works with the center to make key portfolio
management decisions.
Strategic Alignment
The 52 employees in the center provide support to the entire organization. It does
not manage every project in the portfolio, but it is involved with as many as possible
and assigns a dedicated project manager to the large-dollar, strategic projects. Each
business unit can set up its own projects; however, the center must approve a

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project charter and any subsequent change requests. Project charters establish the
approvals and authorize its budget. Overtime, the center established increasing
levels of rigor for project status reporting, including regular updates on expenditures
and cash flows. By maintaining visibility over all projects within the enterprise, the
center can better manage the cost, schedule, and resource management performance
of the portfolio.
Project Prioritization
The center prioritizes projects based on several factors, the most important being
potential safety concerns. It also prioritizes compliance with industry standards,
regulatory, legislative, or municipal regulations, as well as UIL‘s ability to meet
customer demand and payroll. Other prioritization classifications include
infrastructure replacement, reliability, capacity, marketing/new business, systems
operations, and process improvements. Compulsory projects typically address a
large safety concern or are in progress so that it does not make good financial sense
to stop. The center encourages the business units to consider the scalability of
projects and programs as it is a major tool used in managing the portfolio. Figure 62
shows a selection of UIL‘s project prioritization classifications.
Prioritization Classification
Classification Priority Description Examples of Projects

Safety 1 Near-term safety impact to Ground-level inspections
employees or the public
Compliance 2 Required to comply with Restoration advancement,

industry standards, regulatory, Grand Avenue sub rebuild,
legislative, or municipal pole management
regulations replacement
Customer 3 Provide direct electric or gas Yale, meters and regulators,

service to external customers commercial and residential,
state
Fixed 4 Payroll or other fixed costs not Payroll base projects

subject to reduction at this allocation
time
Figure 62

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Funding and Governance

When a project manager from the center directly supports a project, his/her time is
billed directly to the project. Less direct costs such as portfolio management,
financial management, project controls, standards and methodologies, and
unproductive time (vacation and sick time) are distributed to the portfolio of
projects. The center‘s cost to UIL‘s total capital budget is approximately 4 percent.
Education and training costs that the center conducts is part of its operational
budget.
The center‘s governance review board, comprised of the CEO, CIO, CFO, COO
and a group of vice presidents, is responsible for key portfolio management
decisions. The center relies on the governance review board for support and
authority. The board receives regular updates from the center and closely tracks
program and project progress. A typical agenda for a governance review board
meeting includes:
 current year financial performance,

 proposed adjustments to the current year forecast,
 balanced scorecard performance,
 center of project excellence initiatives,
 external matters, and
 issues and concerns.
Staffing resources and funding can be moved among the six units within the center
at the governance review board‘s discretion. The center ensures that actual dollars
meet fiscal year target spending. Project managers notify the center if they need
contingency funds or, alternatively, if they will give back their funds. If a project
timeline gets pushed past the current fiscal year, then another project may be moved
up to ensure funds are spent efficiently. Many of the programs and projects are
scalable; so if financial resources change during the fiscal year, certain programs can
be scaled up or down depending on need.
Capital Plan
To create the integrated, 10-year capital plan, the center asks each business unit for
its 10-year plan which is developed as if it has unlimited funds. Then the center
helps the business unit scale back as needed. Plans are combined into the UIL
capital plan by removing any duplication and adjusting timelines as needed. The
center‘s oversight allows it to ensure that projects are not duplicated, are integrated
across business units wherever possible, and occur in a timely manner (i.e., a project
isn‘t conducted after the need has passed). The plan‘s financial forecast is updated
and presented every year; the formal written document is updated and presented
every two years.

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Figure 63 shows UIL‘s 2012–2021 capital plan. More recent have higher dollar
values due to the certainty of projects.
Integrated, 10-Year Capital Plan
Figure 63
PRACTICES
The center translates UIL strategic goals into a defined portfolio road map. To this
aim, the center‘s core responsibilities include:
 portfolio cost performance,

 portfolio schedule performance,
 portfolio resource management,
 portfolio strategic management, and
 integrated, 10-year capital plan development.

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The center developed the following project management method, as well as staffing
and knowledge management efforts, to best carry out these core responsibilities.
Project Management Method

The center bases its project management method on the project management body
of knowledge (PMBOK) guide and standards. The method was drafted by UIL
project managers in the form of a project management reference manual. The
manual, which includes:
 roles and responsibilities,

 business case,
 cost estimate,
 project charter,
 project schedule and tasks,
 project budget,
 project status updates,
 project change requests, and
 project closeout.
The project management reference manual aligns with UIL‘s financial policies. In
addition to detailing the required project management tasks and examples of
relevant documents, the reference manual covers soft topics such as
communication, team building, and meetings. Project managers are encouraged to
scale the method to the size of their projects.
Charters are a key element of the center‘s method. To gain formal authorization for
the expenditure of UIL funds for a project, project charters must be approved by
the center. Project managers may spend a limited amount of money on the
preparation of the charter (i.e., preliminary engineering or solution studies). Figure
64 shows the roles and responsibilities in the project charter development process.

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Developing the Project Charter
Participant Responsibilities
Project manager Develops charter and obtains required approvals
Champions project, explains need and desired outcome, and

Project sponsor
approves charter
Manager of project Reviews and approves the charter with the project manager
manager before it’s submitted to the project sponsor for approval
Assists project manager in developing project objectives, high-

Project team/subject
level requirements and risks, summary milestone schedule, and
matter experts
budget estimate
Figure 64
A chart similar to Figure 64 is in the project management reference manual for each
project management task. Once the project charter is approved, project managers
must complete a risk management plan, which asks four questions:
1. What can go wrong?
2. How can it go wrong?
3. What is the potential harm?
4. What can be done about it?
Project managers complete a risk register template, which is a Microsoft Excel

document listing:
 the category of the risk (i.e., scope, schedule, and budget),

 a description of the risk,
 the probability,
 the significance,
 a risk score,
 a response strategy,
 the response actions, and
 the planned date when the threat of the risk has passed.

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The project manager, project team members, project sponsor, and project
stakeholders all contribute to the risk management plan.
The project manager completes a communication plan that outlines the purpose,
methods, and appropriate frequency of communication for the project. For
example, the plan may require weekly exchanges between specific points of contact,
weekly team conference calls, a monthly written status report, and periodic
communication between UIL and the external customer.
A project change request requires project managers to align all changes with project
deliverables, organizational processes, project documents, and the project
management plan. They must obtain approval from their managers and project
sponsors when a change exceeds schedule or budget tolerances or causes a change
in scope. If the change also exceeds the amount the project sponsor is authorized to
approve, then the project manager must obtain approval from the center. Figure 65
displays the schedule and tolerance limits requiring a project change request.
Project Change Request Schedule and Budget Tolerance Limits
Condition Impact on Schedule

Resource restrictions or conflicts Delay any activities more than 23 works days and push the
(people, material, or equipment) project end date
Causes movement of more than $250,000 of a multiyear

Schedule reaction budget from the fourth fiscal quarter of one year to the first
fiscal quarter of the next year
Move work beyond the following quarter AND push the

Schedule delays
project end date
Budget Estimate Tolerance Limit
Up to $100,000 +/- 25%
$100,001 to $250,000 +/- $25,000
$250,001 to $2,500,000 +/- 10%
$2,500,001 to $5,000,000 +/- $250,000
Figure 65

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The center aims to continuously evaluate the project management method based on
changes within UIL and internal studies on the voice of the organization. A recent
internal study revealed pain points in the project change request processes. In
response, the center created a change request board, which meets biweekly. The
board processes project changes in a more timely and efficient manner. Participants
in the change review board meetings include project sponsors, the center portfolio
services group, and the vice president of the center. Ideally, the project manager
proposing the change presents it to the board before the meeting. The internal audit
team reviews a selection of projects to ensure project managers follow the project
management method.
Project Staffing
Ronald Rossetti, director of the distribution program management office, said the
center has developed best practices for staffing projects across the enterprise. UIL is
a matrixed organization, meaning that project staff (e.g., engineers) report to their
project managers in addition to their functional managers. A single project manager
works on five to seven projects at a time, all at different stages. To staff projects, the
center matches key project attributes with project manager competencies.
Figure 66 shows a selection of the project attributes and project manager

competencies that UIL uses to evaluate staffing. This information is combined with
resource availability within each division and the project criteria. If, for example, a
project has high political or customer exposure, then UIL might select a project
manager with strong soft skills and experience. Ideally, resources are well-balanced
across each of the divisions within the center. If needed, project managers can move
between business units in the center because their skills are interchangeable.

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Project Attributes and Project Manager Competencies
Project Attributes Project Manager Competencies
Effort Experience
Duration Tenure
Level of difficulty Past projects
Dollar value Technical capabilities
Complexities Soft skills
Political/customer exposure Working relationships
Figure 66
Staffing Demands
The center determines baseline resource estimates during its annual budget-setting
process. The preliminary budget sets the baseline for the cost of projects to be
executed in the following year, including project resource requirements. The
biannual refresh of the capital plan allows for high-level resource forecasting. The
center uses Oracle‘s Primavera P6 to model project resources. If additional
resources are needed, then it can use the information from Primavera to create a
business case.
If there is a large change to the capital budget that was not anticipated during the
budget-setting process, then the center and governance review board looks at the
portfolio of projects to determine if it can make adjustments. Typically, it can scale
down or up distribution projects and shuffle resources as needed.
Project Manager Competency

Within the center, project managers have both functional and project management
expertise. Some have utility experience with engineering or accounting backgrounds,
while others have project management professional certifications. Rossetti said that
the diverse backgrounds of the project management professionals allows for
flexibility in staffing and brings new ideas to projects.

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Career Path
Typically there are two paths to a project management career: a technical path (i.e.,
engineers and IT professionals) and a project control path (project
analyst/scheduler to PM). There are three levels within the project management
function at UIL. Further, there are three pay grades for project managers based on
their knowledge, types of projects they have managed, and certification levels. Once
an employee becomes a project manager, he/she can move into a variety of roles
throughout UIL with opportunities for promotion. UIL has project management
professionals working as managers, directors, and in senior management as vice
presidents.
Training and Professional Development Opportunities

Center employees have a number of internal and external training options.
Employees have the opportunity to participate in leadership development programs,
a soft skills development program, mentoring, and project management professional
training. The center encourages employees to manage larger, more difficult, and
different types of projects. There are a number of opportunities for junior staff to
have top-level management exposure. Employees‘ personal development plans
include continuous training, and the larger UIL scorecard incorporates training
metrics.
UIL‘s ongoing supervisory development program trains potential and current

supervisors, as well as new managers nominated from various business units. The
supervisory development program consists of 21 modules on management and
leadership. The program is a multi-year commitment on the part of the participant
and their manager, and attendance is monitored.
UIL has a strong engineering competency model that Rossetti wants to replicate for
project managers. For example, when a recent university graduate starts at UIL with
a degree in electrical engineering, there are several competencies he/she will need to
develop before becoming a distribution engineer, a protection and control engineer,
or a substation engineer. New engineers participate in a rotational program allowing
them exposure to each discipline. Then the engineers choose, based on availability
and at the discretion of their managers, where to specialize. UIL provides highly
technical training to build the necessary engineering competencies. The center plans
to take the strengths of the engineering competency model and apply it to the
project management role.
UIL encourages project management professional certifications for all employees

who want to move into a project manager role. The Project Management Institute‘s
(PMI) project management professional certification is required for all senior project
managers and master schedulers. As of 2012, UIL has 27 employees with the
certification and one certified schedule professional. (UIL pays for the
certifications.) The center also conducts internal core project management skills

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training courses for UIL employees, and they occur in-house and are typically only
two hours long.
Communication and Knowledge Management

The center sponsors a monthly project management forum featuring external and
internal speakers. As a learning community, it serves as a venue to discuss lessons
learned and topics of interest. In addition, a Primavera users group meets to feature
example cases and a question-and-answer period. Center staff meetings are held
quarterly; the agenda typically includes a review of recent best practices and a
question-and-answer forum. Monthly and quarterly newsletters feature projects,
biographies of project managers, safety tips, and best practices. Special events
promote team building including international project managers day, engineer‘s
week, ―PI day‖ (with home baked pies), and Friday afternoon popcorn. The center
hosts an intranet site with the management reference manual, as well as other
relevant announcements and documents. The center is implementing an enterprise
content management site to improve: knowledge capture, the use of lessons learned,
and retrieval of details/designs for every project.

The center uses Primavera for scheduling and resource management. According to
Norman Prevost, manager of project management processes and standards, the
program can seem cumbersome for first-time users, but it is an enterprise-wide
solution that provides a great deal of functionality and information. The center uses
four tools for financial management:
1. WimBeams—a homegrown budgeting tool,
2. PeopleSoft—a cost repository,
3. PowerPlan—for plan accounting (capital expenditures), and
4. Microsoft Excel spreadsheets—to automate reporting.
Prevost said that the center would like to minimize its use of Microsoft Excel
spreadsheets, but they are currently needed because the financial systems and
Primavera operate independently of one another. In the future, the organization
would like all of its systems to align with one SAP system that could produce
automated reports.
As of 2012, project managers across UIL use network shared drives to save all
project documentation. To improve its knowledge management process, the center
is migrating to LiveLink by OpenText, which will house project management
documents and include automatic work flows, a lessons learned database, and a
standardized file structure. The current plan is that when LiveLink goes live, shared

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drives will be locked; employees will not be able to save documents anywhere but
this enterprise content management site.

UIL believes that you get what you measure and as such Rich Reed said that UIL
strives to find the right metrics. To emphasize accountability in project
management, scorecards and metrics are a large part of the culture at UIL.
Scorecards track progress against strategic goals for each business unit and are
displayed on the headquarter walls. Philip Surato, manager of project controls,
believes that an organization is never perfect, but the act of measuring against a set
of metrics inherently makes the organization better.
Metrics and Scorecards

The center has worked to change the perspective of UIL‘s project managers. Reed
said that prior to the institutionalization of project management methodologies at
UIL, project managers felt that if they got the project done, it was a success; if they
got the project done on time, they were really successful; and if they got the project
done on time and within budget, they were a hero. The center emphasizes metrics
that getting the project done on time and in budget is the expectation and the norm,
and it uses metrics and projects scorecards to make that point.
UIL uses o many metrics that Surato says even he can‘t name them all. Project,
program, and portfolio metrics include scheduling, financials, compliance,
certification, and quality. A metric design process is in place for creating a new
metrics. An employee must present a case, like a mini-charter, to their team. Figure
67 shows the template that employees must complete to gain approval on a new
metric.

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Metrics Design Template
Figure 67
Example metrics tracked by the center include:
 project update percentage,

 on-time project delivery,
 project management reference manual adherence,
 schedule quality (based on a 14-point quality assessment),
 earned value,
 project control analyst support as a percentage of capital,
 project management reference manual hits,
 project management payroll as a percentage of capital expenditure,
 quarterly spending accuracy, and
 project change orders by department.

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The center works with project managers to ensure that key metrics are on track to
avoid budget surprises. The center gathers key metrics from project managers
monthly and compiles them for senior leadership review. Figure 68 shows an
example of a project metric. This particular metric shows forecasted and actual
project spending for August. (The metric has been sanitized for the purposes of this
report.) The metric allows the center to support specific projects as needed. In some
cases, projects with large variances will undergo a financial and schedule review and
then a subsequent reforecast.
Forecasted vs. Actual Spending Metric
Figure 68

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Figure 69 is an example of financial performance as reported monthly to the

governance review board and the individual business units; the figure shows
monthly spending versus target spending.
Center of Project Excellence Monthly Progress Review
Figure 69
Although the organization tracks a large amount of metrics, Surato said that it does
not receive a lot of pushback from UIL employees. Each employee compiles one to
three metrics per month, so the work is manageable. Different parts of the
organization focus on different metrics, and employees are not overwhelmed by the
amount of metrics they need to review.
UIL manages its metrics by organizing and presenting them on scorecards. Each
business unit, division, and large projects and programs have their own scorecards.
The scorecard states the business units‘ mission and lists its strategic objectives. The
strategic objectives are broken into four quadrants: financial, customer, operations,
and capabilities. An example a balanced scorecard is shown in Figure 70. Metrics
that the center is directly accountable for are highlighted. An actual scorecard also
contains the metrics for threshold, target, and maximum performance.

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Balanced Scorecard
Figure 70
Figure 71 shows a scorecard metric of the percentage of projects on time. The

metric is collected using an average of all the project schedules for projects greater
than $250,000. It is captured using Primavera.
Percentage of Projects on Time
Figure 71

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The center also measures adherence to its methodology as documented in its

reference manual. The metric is based on five process measures, which are applied
to projects greater than $250,000. The five process measures follow.
1. Charter approval—charter is approved before $25,000 is spent on a project.

Approval follows the format specified in the project management reference
manual.
2. Schedule in Primavera—each project has a baseline schedule in Primavera

within 30 days of charter approval.
3. Scope document—each project has a detailed scope document within 30 days

of charter approval.
4. Risk register—each project has an active risk register within 60 days of charter
approval.
5. Communication plan—each project has a communication plan within 60 days

of charter approval.
UIL has tracked almost 100 percent compliance to the methodology each month.
There are occasions when a project is identified as being at-risk. They are moved to
a troubled project recovery team, which is a group of project managers and leaders
who assist with under-performing projects. The project recovery team is not a
punishment; it is to be a resource if needed. Many times during the planning stage of
a project that will be under heavy public scrutiny, the project manager requests that
this team review the project plan and provide suggestions for improvement prior to
its launch.

The center has learned a great deal since its inception, according to Rossetti. He said
its primary lesson is hiring enthusiastic, passionate employees that want to be
successful and learn. In addition, the center emphasizes recognizing and rewarding
staff, employee development, and work/life balance.
According to Rossetti, the center pursues a balanced approach between executing

projects and developing capabilities. UIL‘S reward program provides opportunities
for acknowledging employees‘ special contributions towards achieving the mission
and goals. UIL‘s rewards program includes informal recognition as well as formal
rewards. Employees can recognize any other employee with a recognition eCard for
their special performance or achievements. Leaders can recognize employees with
cash or time-off. The formal rewards program is based on a tiered approach which

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consists of recognizing and rewarding staff at all levels of the organization. There
are five levels of recognition:
1. Star Award,
2. Connection Award,
3. EmPowered Award,
4. Energy+ Award, and
5. CEO Award.
The CEO Award recognizes, at the highest level of the corporation, the outstanding
accomplishments of employees and may be given mid-year or year-end, if there is an
effort (typically a project) of significant merit. Each division has budgeted for
monetary recognition and time-off awards.
The center has benefitted from executive and senior management involvement from
its inception, and the continued involvement has contributed to the center‘s
legitimacy and successful implementation of its project management method. The
change review board and troubled project recovery team also proved to be
successes.
The center has a clearly defined role in executing strategy through portfolio
management and capability development. They have imbedded project management
into the corporate balanced scorecards and measures cascade down to lower level
scorecards. It has found that project scalability allows it to respond to changes or
organizational needs.
The center has had its challenges along the way as well. Some in the organization
feel that project managers take away their authority. So the center leverages senior
management commitment, demonstrates successful projects, and simply makes
employees jobs easier. It has developed metrics to demonstrate the center‘s value,
but it continues to search for better metrics that demonstrate value.
Each year the center establishes a major set of goals for the next year. These
initiatives are designed to improve portfolio management, how projects are run, and
how project performance is reported. The center of project excellence 2013
initiatives include:
 further developing soft skills of project management staff,

 expanding services to all projects,
 expanding an engineering competency model for project managers,

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 refining portfolio performance metrics,

 working toward project management consistency across units, and
 capitalizing on Primavera functionality including automation.

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Case Study: Organization A

BACKGROUND INFO RMATION
Organization A is a recognized leader in beverage manufacturing. It has
approximately 5,000 employees across North America and reported net sales of
more than $2.5 billion for fiscal year 2011. According to the NPD Group,
Organization A is one of the best-selling beverage manufacturers in fiscal year 2011.
Organization A operates from several business units and has established

manufacturing and distribution agreements for its main products. Its product is used
in some third-party brands as well.
Beginnings of the Program Management Office

Organization A established its program management office (PMO) in 2009 with the
backing of its president and CEO, who implemented similar offices at other
organizations. He believes that a PMO would help Organization A manage growth
while sustaining its corporate culture. The office is a permanent fixture meant to
improve the organization over time. It directly manages some of the major, cross-
functional, and strategic projects within the organization, as well as provides a
project management framework, process, system, and guidance for smaller projects,
although it does not directly manage them all.
The Program Management Office Charter

Organization A‘s PMO began with a vision to create project and portfolio
management leadership. Its mission is to ensure that the right projects are done, and
done right. Supporting this mission is the desire to increase the speed, quality, and
net impact of projects. At the foundation of the charter, and critical to its success, is
the objective to establish standard processes, tools, training, and effective
organization and project controls. If done correctly, these objectives will help
improve the speed, quality, and impact of projects but not add another bureaucratic
layer. Organization A believes that strong portfolio, program, and project
management will accelerate the work that needs to be done and improve the
likelihood for successful outcomes.
Snapshot of the Current Program Management Office

In addition to the charter, the program management team had a key directive from
the CEO who wanted a dashboard to review the status of major programs and
projects at his monthly executive leadership team meetings. These meeting include
the CFO, CIO, chief HR officer, and the presidents of each of business unit. They
established a set of goals for the PMO:
 establish program portfolio management and governance,

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 implement an enterprise project and portfolio management system called

Planview,
 standardize project and portfolio management processes and methodology,
 create a project and portfolio management training and development-tiered
curriculum, and
 provide strategic program management support.
According to the PMO senior director, in 2012 the program management office
made great strides towards these goals. To establish program and portfolio
management and governance, the project management team began monthly
program reviews, which provided portfolio analysis to the executive leadership
team. Initially, the team tracked and managed program status and portfolio
management in Microsoft Excel and Microsoft Project, but they eventually selected
a project and portfolio management system. The PMO senior director said that an
organization should not wait to deliver key program and project information to
leadership.
After a search process lasting approximately three months, the team selected and
implemented Planview as its enterprise project and portfolio management system.
Thus far the program management office has trained over 500 employees in the
system by delivering 1,200 hours of instructor-led training. As of the third quarter in
2012, 1,500 projects reside in Planview, and it includes more than 10,000 tasks and
over 4,000 resources.
In the Planview implementation, and most other project management initiatives, the
team takes an evolutionary and collaborative approach (rather than revolutionary
approach) to change, said the PMO senior director. Time reporting is a function of
the Planview system and approximately 200 employees use the time reporting
feature. Although the project management team understands the benefit of time
reporting and ideally would like every employee at Organization A to use this
function, it is not mandating staff participation. The PMO believes that it will
eventually get all staff on board with time reporting as word spreads of its benefits,
but this is not a priority and is not necessary for success.
Prior to the inception of the PMO, Organization A used a variety of project forms
and charters, all serving similar purposes. The office has subsequently created
standardized processes through a common methodology and framework, which is
now built into the Planview project lifecycle.
Additionally, 29 new project management templates have been developed and

released. They ensure that a junior project manager new to the organization does
not have to start from scratch when planning a project. Task sequence, duration

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expectations, roles, and other important details are specified in the standard
templates for project managers to use as a baseline.
Since 2008 the project management team has developed training for project
managers. The tiered curriculum for project managers includes an introduction,
fundamentals, and a project management professional certification. Organization A
designed its training program based on the latest research in adult education. For
example, in conjunction with Paradigm Learning, it developed an interactive game
that teaches employees about the program management office and program/project
management. It is not only informative but also fun for employees and shortens the
time required to learn.
Each of the PMO goals contributes to the organization‘s ability to provide strategic
program management support. The office supports major strategic initiatives
including, for example, partnerships.
Looking forward to fiscal year 2013, the office will, among other initiatives,
continue to expand Planview, enhance the framework, and continue to develop its
project management training and development program. The PMO senior director
said the program management office continues to improve and evaluate the level
and quality of the organization‘s program/project management and continues to
strive for a balanced approach with adequate organization and project controls
supporting fast execution.
ORGANIZATIONAL STRUC TURE

The project management team includes nine program managers who report to the
office‘s senior director, who reports to the CIO and meets with the executive
leadership team on a monthly basis. Each member of the PMO supports a member
of the executive leadership team. This gives the executive leadership team member a
point-of-contact to interact with on a regular basis.
All new requested projects, regardless of project tier, are validated by a program
manager. The team evaluates projects to determine if they‘re in the right place
within the organization, aligned with the correct tier, are similar to projects in the
portfolio that can be leveraged, and have filled out a standard set of attributes.
Project managers and team members for most projects usually come from within
the business units and functions.
STRATEGY
The Organization A mission, vision, corporate purpose, and principles lay the
foundation for the strategy. The PMO works with the executive leadership team to
develop strategic initiatives and objectives based on the strategy. The program
management office ensures the business units align their programs and projects with
the enterprise-level, business unit, and/or function strategy and initiatives. With a

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view of all the projects underway throughout Organization A and a strong

understanding of the strategy, the PMO can determine the optimal allocation of
projects and project work.
Strategic Alignment
Approximately half of the nine project managers on the project management team
are both embedded within the business units, and support the office. This structure
gives an opportunity to understand the organizational areas, improve to best serve
the business units, and align the goals of the business units with the enterprise-level
strategic goals. The program management office has found this structure to be very
effective.
When the PMO was first formed, each business unit aligned some projects and
programs with its goals and objectives. However, this strategic alignment was not
institutionalized across the enterprise. The office stepped in to help the executive
leadership team align the enterprise strategic goals to ensure that it is investing in the
right programs and projects. When the PMO first began reviewing the portfolio,
some projects didn‘t align with the business unit or enterprise-level strategic
initiatives. The team examined why resources and funds went to these projects.
Defining a Project, Program, and Portfolio

The investment in Planview and the implementation framework is integral to
ensuring strategic alignment. To best use these tools, the PMO found it necessary to
define what constitutes a project. For the business units to enter their projects into
Planview and use the tool throughout the course of their projects, they must
understand the characteristics of a project and what should not be entered into the
tool. The program uses the global standard from Project Management Institute
(PMI) as a foundation that defines a project as a temporary endeavor undertaken to
create a unique product, service, or result. In addition, a project must meet all of the
following criteria concerning schedule, cost, and scope:
 schedule—more than 4 weeks and more than 60 person hours,

 costs—more than $10,000 and more than two people required, and
 scope—more than 20 individual tasks/activities.
If a project does not meet these criteria, then the work is likely part of ongoing
operations and should not be managed as a project. The PMO emphasizes
determining whether a given task is a project outside of normal job activities or an
operational activity that is part of employees‘ day jobs. Projects are fundamentally
different because they cease when its specified objectives have been attained,
whereas non-project undertakings adopt a new set of objectives and continue work.
The team also defines a program using the PMI global standard as the foundation: It
is the execution of an interdependent group of projects that, when implemented

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collectively, will satisfy a set of related objectives and realize distinct, measureable
benefits for an organization. A program contains a minimum of two individual sub-
projects and meets one or more of the following criteria:
 schedule—more than six weeks and more than 160 person hours,
 costs—more than $50,000 and more than five people required, and
 scope—more than 100 individual tasks/activities.
Planview allows for programs to be defined. One of the recent initiatives is the
grouping of similar projects, as there are a number of commonalities among projects
across the business units. By grouping projects into program and portfolios, the
office can streamline resources, timelines, and lessons learned.
At the broadest level, the PMO defines a portfolio as a collection of similar projects
or programs that are grouped together to facilitate effective management of the
work and meet strategic objectives. One of the most powerful aspects of Planview is
its use of portfolio management. The project management team can easily create a
group of projects to make a portfolio and view it from a variety of different
measures including resources, schedule, and financials. A portfolio is created for the
executive leadership team to review each month.
Project Tiers
To ensure the executive leadership team has oversight and knowledge of key
projects, the PMO enabled a project/program management prioritization and
selection process. In order to categorize these efforts, Organization A divides its
programs and projects into four tiers. A number of measures can define a project
tier including cost, time, and scope, as well as project impact and other variables.
The program management office has developed tier definition guidelines; however,
the office believes the most important decision factor is the opinion of the executive
leadership team. As such, the program management office asks the executive
leadership team to select which projects are most important to them.
The tier definition guidelines outline criteria for each tier against various dimensions
that include:
 management,
 scope/impact,
 monitoring,
 project manager role/skill,
 cost,
 people, and
 time.

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For example, tier 4 projects:
 are small in size,

 have narrow in scope,
 are monitored at the department level,
 are low cost, and
 require less than one year to complete.
Conversely, tier 1 projects:
 involve the program management office,

 are managed by a program manager selected by the executive leadership team
member sponsor,
 have a large scope,
 are enterprise-wide,
 require a large amount of funding and resources, and
 take longer than a year to complete.
Guiding Principles of Project Management

The PMO has drafted 14 guiding principles for project management (Figure 72).
The intent is that all project managers keep this list posted at their desks and live by
these principles. According to the PMO senior director, these principles are ―the
rules you live by when no one is looking.‖

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14 Key Principles of Project Management
1. Project plans accurately reflect work being done, and projects are managed with plans.
2. Projects are managed in one enterprise project and portfolio management system with
an approved methodology.
3. There is a formal project approval process with an identified business case and
anticipated ROI.
4. Projects have a work breakdown structure, key milestones, and an identified critical
path.
5. All project/program plans have a saved baseline.
6. Projects are generally planned to last no more than one year. Programs can be longer.
7. Actual data results (costs/hours worked) should be updated weekly and are required
monthly.
8. Project plans are scheduled at least once each week.
9. All activities/tasks have at least one specifically assigned resource or role.
10. All supporting documentation (charter, ROI, etc.) is linked to or in the project plan.
11. Formal phase exit reviews are conducted at all significant project transitions.
12. Corporate policies are followed with all required project information, codes, and
financials.
13. Lessons learned are compiled on all projects, and results are built back into
methodology.
14. An appropriate level of project management discipline, process, and quality is applied to
each project based on its scope, cost, and impact.
Figure 72
Program Management Office Governance

The PMO sits at the enterprise level, and focuses on major strategic programs. Each
business unit (BU PMO in Figure 73) may have a project management office, and
they have a dotted line reporting relationship to the enterprise-wide program
management office (EPMO in Figure 73). There is a significant amount of
collaboration among them. Each business unit‘s senior leadership team meets
regularly to review portfolio performance. Figure 73 illustrates this governance
structure.

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PMO Governance
Figure 73
There are many requests for the program management office‘s time on projects
within the business units. As such, it has developed a series of criteria for when it
will get involved in a project; it must meet one or more of the following criteria:
 executive leadership team member or senior executive requests a program

manager;
 program is tier 1 or 2;
 program has a large business scope/impact that aligns with strategic goals of the
organization;
 program is enterprise-wide or has multiple-unit, cross-functional impact;
 is a major, strategic, or high-risk initiative; and/or
 first responder to turn a crisis/major issue into a recovery/turnaround program.
The program management office is a central enterprise-level function, so its cost is

not directly charged back to programs/projects. It is considered corporate overhead,
similar to finance or HR. The PMO senior director said that the central program
management office is intentionally kept small and agile to avoid becoming a
bottleneck in providing project manager resources for every project. It is important
to avoid managing all projects throughout the organization.

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PRACTICES
When the program management office was first founded, it grew quickly. It needed
to set up the right balance to execute projects predictably while not stifling the
organization‘s growth. The office surveyed existing organizational processes and
found that various parts of the organization had different levels of project
management maturity. Additionally, it wanted to base its program and project
methodology on industry standards such as the PMI‘s international standards. The
program management office worked with the business units for six months to create
a project implementation framework.
Project Implementation Framework

Across the business units, the project implementation framework ensures that there
is common language, culture, process, training, and results in every project. Yet, the
framework is also flexible and adaptable to unique business unit needs. The four
phases of the framework are shown in Figure 74.
Project Implementation Framework
Figure 74
At the core of the project implementation framework is a gated process. All projects
proceed through a stage gate at the end of each phase. Tier 1 projects require
executive leadership approval to pass through each stage gate, and tier 4 projects
require only manager or self-approval. The stages provide a common language and
set of tools to execute projects. Using this process, Organization A is able to:
 better prioritize projects and deploy/plan resources accordingly;

 increase the success rate, speed, and quality of projects;
 increase the rate of knowledge growth in the art and science of managing
projects;
 decrease the time and cost of training resources on strong project management
practices; and
 leverage lessons learned and process improvements across the entire
organization.

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There are several customizable and scalable steps within each phase of the
framework; however, every project across the organization, regardless of topic, uses
these four phases. Projects can be demanding and stressful, but the project
implementation framework reduces stress during the project management process.
Figure 75 displays the tasks for each of the four phases of the project
implementation framework. Organization A has embedded change management
techniques throughout the framework, which is completely built into and automated
in Planview. With Planview a project team is never starting from scratch; old
templates can be used and customized to meet new needs.
Corporate Standard Project Management Methodology
Figure 75
Phase 1 begins with the request to define a project, a project charter, and
benefit/risk trade-offs. Phase 2 includes drafting the scope, a schedule, a team, a
detailed return on investment, and an assessment of risks. The project is set up for
success during this phase. Phase 3 is where the most time is spent in order to ensure
the project delivers its goals. Finally, during Phase 4, the project output goes live and

page 170
is not part of ongoing operations. Feedback and appreciative inquiry (i.e., examining
what really works) is a large part of the culture.
Project Management Careers and Skills

Employees are introduced to the foundations of project management during their
new-hire orientation through a discovery map developed in conjunction with
Paradigm Learning. The map introduces the framework and tools that help
Organization A move forward in its growth.
Continuous learning is part of the culture, and project and program management
training is available for all employees regardless of experience level. Each employee
receives 30 hours of training per year, and it covers a range of topics including
knowledge and application of project management techniques, behavioral
competencies, and program and project management system training. A one-day
program introduces new project team members to common tools, terminology, and
processes through a game-like simulation. Organization A also uses a program that
measures an employee‘s project management competency and defines which areas
of focus and coursework. A project management assessment is generally part of an
employee‘s three-year career path planning with his/her manager.
Organization A emphasizes project management as a career path. Figure 76 shows

the path towards skill development in project management methodology.

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Project Management Methodology
Figure 76
Following this same format, coursework in behavioral growth and technical skills
growth is defined for each level of project manager.
Organization A relies on its senior project managers to share knowledge and

experience with the project management community. The PMO is in the process of
building a project management community of practice that will let senior project
managers share knowledge and mentor junior employees. When staffing projects,
the organization has an informal practice of matching an experienced project
manager with a less experienced one.
Moving forward, the PMO plans to expand training and focus on influence without
authority and supporting behavioral competencies. An expanded Planview training
is scheduled to deliver modules for ideation, strategy, and product management.

Organization A uses Planview to align projects with enterprise-wide strategic
planning initiatives and to conduct portfolio management within its project pipeline.
This allows the PMO to ensure it is doing the right projects at the right time with
the right resources. The office asks employees to use the tool as a way to
communicate with senior leadership and to request more resources. Within
Planview, the PMO uses a range of functionality including rolling projects into

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portfolio views, drilling down into projects from various project dashboards,
flagging at-risk projects, managing documents, and managing work flow.
The program management office is careful to take an evolutionary, rather than

revolutionary, approach. It has intentionally left work flows simple and held off on
rolling out the time tracking function until projects ask for increased functionality.
Figure 77 shows different functions available with the system.
Program and Project Management System Functions
Figure 77
Currently, Planview is a web-based system and was initially loaded with projects and
resources from other systems. Eventually the PMO would like to integrate the
interface with their HR and finance systems. Currently, the system uses automated
work flows, and multiple users can work on the same project at a time. For financial
tracking purposes, the system uses a blended rate, one for employees and one for
contractors. An organization chart is also built into the tool.
Program and Project Management System Training

Employee training is integral to the rollout of Planview. Every employee who needs
an account must take training, including the CEO. After training, employees receive
a framed certificate signed by the PMO senior director and the CIO. Another key
part of training is a video of the organizations executives speaking to the value of
Planview and strong project management.

page 173
The PMO conducts biweekly Planview user forums, maintains an e-mail account for
Planview-specific questions, and answers system questions by phone. All project
managers receive a book of Planview screenshots of the reports that senior
executives view on a regular basis. Organization A is migrating existing Microsoft
Project or Excel project and program plans to Planview. Once the project managers
have the opportunity to use the system, and the more experienced they are, they are
usually easy converts. According to the PMO senior director, the office tactic is to
―provide all the help, support, and kindness they need to be successful.‖
Program and Project Management System Value

Although all aspects of the system are not currently in use, the benefits of such a
system are clear. Its functionality goes beyond that of Microsoft Project and Excel.
The product module allows the PMO to tie projects to a specific product line and
view its funding/resources. Figure 78 shows the value this system. A key benefit of
implementing a true enterprise project and portfolio management system is having
all of an organization‘s projects visible in one database. This enables collaboration
on projects across business units/functions, and provides management visibility to
make effective decisions. The system provides a standard way to manage projects
and store and reuse the lessons learned from previous projects, including tasks,
duration estimates, roles needed, etc.
The Value of an Enterprise PPM System
Figure 78

page 174

Organization A uses its tiered project system to measure and report on projects and
programs. Generally speaking, the higher tiers equate to higher: costs, risks, strategic
impact, and value. As such, tier 1 projects are reviewed with the executive leadership
team every month. At any given time there are approximately 100 projects in tier 1.
Organization A uses seven project status colors to represent their overall status, and
they are embedded in Planview. Employees are encouraged to truthfully report
project status. The PMO emphasizes that it is acceptable for status not to always be
reported as green, as an accurate status is more important Projects are encouraged
to move to yellow if there are concerns and moved to red if there are issues and
project objectives are at risk. The philosophy is that management must be aware as
soon as possible to provide the help, resources, and changes to ensure project
success. Organization A believes its portfolio is aggressive and there is always some
risk; therefore, projects should be yellow or red. It is the project manager‘s duty to
accurately reflect the status, tackle the issue, or request assistance and turn the
project around.
Organization A selects a set of metrics to ensure that one measure doesn‘t change
because staff is focusing on a different one. It collects metrics on its current project
management implementation that is designed to focus on desired behaviors
concerning adoption of project management processes and compliance to
methodologies. These metrics include participation in web-based training and
PMO–led classes, the number of users in Planview, the total number of projects,
and the total number of tasks. Once the program management office feels that the
program management implementation process is achieved, it will adjust these
metrics to focus on performance.
Other metrics include project budget, which is collected and viewed in a number of
different ways including by project tier, project type, and business unit. This allows
the PMO to view projects costs by business unit and see relative costs by project
type.
The PMO requires that all projects link to an attribute in the APQC Process
Classification Framework (PCF). The PCF outlines all of the processes practiced by
most organizations, categorizes them, and aligns them according to a hierarchical
numbering system. Figure 79 shows an example of the project portfolio by PCF
classification.

page 175
Project s by APQC Process Classification Framework
Figure 79
The program management office plans to use the PCF to benchmark its project
portfolio against industry peers. For example, Organization A is interested in
learning how its mix of projects and programs is different from other similar
organizations. The office also views the PCF project data by project tier.
LESSONS LEARNED
The PMO has compiled lessons learned and tips based on its experiences since
2009. It has established its program management office in 2009 with the backing of
the president and CEO, who values a program management office. This executive
support never wavered and the program management office continues to leverage
leadership support from the entire executive leadership team. Upon their inception,
the project management team began monthly program reviews, which provide
portfolio analysis to the executive leadership team. By delivering operational data it
established their role within the organization and gained buy-in from employees.
The PMO senior director believes that a small core project management team is
empowered to make decisions and take action. The structure of the team lends itself
to engagement, alignment, and partnership with users. For example, each member
of the executive leadership team aligns with an enterprise project manager. This

page 176
gives the executive leadership team members a point-of-contact to interact with on a

regular basis.
The office has a clear mission, goals, processes, procedures, and policies. Many of
the procedures and policies are embedded directly into Planview. All employees are
required to take Planview training and the executive leadership team supports it
through a sponsoring video shown at every training class, as well as by taking the
training themselves. The PMO conducts biweekly Planview user forums, maintains
an e-mail account for Planview-specific questions, and answers system questions by
phone.
A key benefit of establishing the PMO has been to recruit senior, experienced,
professional program managers to lead strategic programs. They have helped
demonstrate the value of program and project management and of the department.
It has also been important and a challenge to recognize the varying levels of project,
program, and portfolio management maturity, and to adapt the implementation
process across the enterprise to fit the current state of maturity in the different
business units and functions.
Forward-Looking Statements
Certain statements contained herein are not based on historical fact and are
―forward-looking statements‖ within the meaning of the applicable securities laws
and regulations. Generally, these statements can be identified by the use of words
such as ―anticipate,‖ ―believe,‖ ―could,‖ ―estimate,‖ ―expect,‖ ―feel,‖ ―forecast,‖
―intend,‖ ―may,‖ ―plan,‖ ―potential,‖ ―project,‖ ―should,‖ ―would,‖ and similar
expressions intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. Owing to the
uncertainties inherent in forward-looking statements, actual results could differ
materially from those stated here. Factors that could cause actual results to differ
materially from those in the forward-looking statements include, but are not limited
to, the difficulty in forecasting sales and production levels, the degree to which there
are changes in consumer sentiment in this difficult economic environment, the
success in efficiently expanding operations and capacity to meet growth, the success
in efficiently and effectively integrating acquisitions, the ability to maximize or
successfully assert our intellectual property rights, the success in introducing and
producing new product offerings, the dependence on external capital, including the
credit facility, competition and other conditions in industry, fluctuations in
availability and cost of materials, any other increases in costs including fuel, the
ability to continue to grow and build profits in the At Home and Away from Home
businesses, the ability to attract and retain senior management, the continued
availability of a consistent supply of parts, and the employees themselves, the
experiencing product liability, product recall and higher than anticipated rates of
warranty expense or sales returns associated with a product quality or safety issue,
the extent to which the data security of the organization‘s websites may be

page 177
compromised, the impact of the loss of major customers or reduction in the volume
of purchases by major customers, delays in the timing of adding new locations with
existing customers, the level of success in continuing to attract new customers, sales
mix variances, weather and special or unusual events, the impact of the inquiry
initiated by the SEC and any related litigation or additional governmental
investigative or enforcement proceedings, as well as other risks described more fully
in the Annual Report on Form 10-K for fiscal year 2011 and other filings with the
SEC. Forward-looking statements reflect management‘s analysis as of the date of
this release. The organization does not undertake to revise these statements to
reflect subsequent developments, other than in its regular, quarterly earnings
releases.
GAAP to Non-GAAP Reconciliation

In addition to reporting financial results in accordance with generally accepted
accounting principles (GAAP), the organization provides non-GAAP operating
results that exclude certain charges or credits such as transaction expenses related to
the its acquisitions including the foreign exchange impact of hedging the risk
associated with the currency exchange purchase price of an acquisition; any gain
from sale of a services organization; legal and accounting expenses related to the
SEC inquiry and pending litigation; non-cash related items such as amortization of
identifiable intangibles and losses incurred on the extinguishment of debt; and the
effect of net operating and capital loss carryforwards, each of which include
adjustments to show the tax impact of excluding these items. These amounts are not
in accordance with, or an alternative to, GAAP. The management believes that these
measures provide investors with transparency by helping illustrate the underlying
financial and organizational trends relating to the results of operations and financial
condition and comparability between current and prior periods. Management uses
the measures to establish and monitor budgets and operational goals and to evaluate
the performance of the organization. Please see the ―GAAP to Non-GAAP
Reconciliation of Unaudited Consolidated Statements of Operations‖ tables that
accompany this document for a full reconciliation of GAAP to non-GAAP results.

page 178
Appendix A: Study Methodology

Developed in 1993, APQC‘s consortium benchmarking study methodology (Figure
80) serves as one of the world‘s premier methods for successful benchmarking. It
was recognized by the European Center for Total Quality Management in 1995 as
first among 10 leading benchmarking organizations‘ models. It is a powerful tool to
identify best and innovative practices and facilitate the transfer of these practices.
APQC’S FO UR -PHASE METHODOLOGY
APQC’s Four-Phase Methodology
Plan
Adapt Collect
Analyze
Figure 80
Phase 1: Plan
The planning phase of the study began in mid-2012. During this phase, APQC
conducted secondary research to help identify successful organizations that might
participate as best-practice organizations. The APQC project team conducted
telephone screening interviews with a subset of these organizations to uncover best
practices. Five organizations were selected for their successful PMO practices.
A study kickoff meeting was held in August 2012, during which the sponsors
refined the study scope, gave input on the site visit discussion guide and detailed
questionnaire, and reviewed information about the selected best-practice
organizations. Five organizations were selected by the APQC project team and

page 179
sponsors for continued study: Dell, DTE Energy, IBM, United Illuminating, and
Organization A.
Finalizing the site visit discussion guide and detailed questionnaire concluded the
planning phase of the study.
Phase 2: Collect
The best-practice organizations selected for continued participation in the study
hosted site visits (a mixture of virtual and face-to-face meetings) in October 2012,
which were attended by study participants and members of the APQC project team.
The study team prepared a written report (case study) of each site visit and
submitted it to the best-practice organization for approval or clarification.
Additionally, four of the five best-practice organizations and all 13 of the sponsor
organizations completed the detailed questionnaire), the quantitative survey for this
study. (One sponsor submitted two different submissions for two different PMOs.)
In addition to the study participants, three other, non-participating organizations
completed the questionnaire.
Phase 3: Analyze
Working with the subject matter expert, APQC analyzed the qualitative and
quantitative information obtained through the site visits and detailed questionnaire.
The analysis concentrated on examining the critical success factors and challenges
that organizations face in the study scope areas.
Phase 4: Adapt
Adaptation and improvement, stemming from identified best practices, occur after
the sponsors apply key findings to their own operations. APQC staff members are
available to help sponsors create action plans appropriate for their organizations.

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Effective Project Management Offices

©2013 APQC. ALL RIGHTS RESERVED.

SUBJECT MATTER EXPERTISE

SUBJECT MATTER EXPER TISE

As the process improvement practice lead within APQC, Varney coordinates

©2013 APQC. ALL RIGHTS RESERVED.

As a project management professional and member of the Project Management

Varney has a history of successfully participating on and leading technology projects

©2013 APQC. ALL RIGHTS RESERVED.

ISBN-13: 978-1-60197-183-8 • ISBN-10: 1-60197-183-4

©2013 APQC. ALL RIGHTS RESERVED.

©2013 APQC. ALL RIGHTS RESERVED.

A special thank-you is extended to the representatives from the five best-practice

©2013 APQC. ALL RIGHTS RESERVED.

©2013 APQC. ALL RIGHTS RESERVED.

 At best-practice organizations, both project managers and non-project managers

Technology and Automation

Measures and reporting

 they are active in organizational strategy setting and implementation;

©2013 APQC. ALL RIGHTS RESERVED.

A key business unit, Dell Services has 42,000 employees offering:

©2013 APQC. ALL RIGHTS RESERVED.

DTE Energy Co.

 renewable energy (wind farms, solar projects, etc.),

©2013 APQC. ALL RIGHTS RESERVED.

 plant demolitions (such as the demolition of old coal facilities),

©2013 APQC. ALL RIGHTS RESERVED.

United Illuminating Company

Organization A created it program management office in 2009 with the backing of

©2013 APQC. ALL RIGHTS RESERVED.

Chapter 1: PMO Strategy

In any study of an organization‘s best practices, it is helpful to understand the

SENIOR LEADERSHIP SU PPORT

©2013 APQC. ALL RIGHTS RESERVED.

Where does your PMO directly report?

©2013 APQC. ALL RIGHTS RESERVED.

All best-practice organizations leverage senior leadership evangelism to

How does the PMO communicate its mission and vision?

©2013 APQC. ALL RIGHTS RESERVED.

Key finding: Best-practice PMOs go beyond alignment with

Most best-practice organizations had either a formal or informal business case to

Was a business case developed prior to forming or transforming your PMO?

©2013 APQC. ALL RIGHTS RESERVED.

©2013 APQC. ALL RIGHTS RESERVED.

At UIL, the center of project excellence is heavily involved in the creation of an

Key finding: Best-practice PMOs focus on projects of high strategic

©2013 APQC. ALL RIGHTS RESERVED.

At DTE Energy, major enterprise projects manages projects, programs, and

 require significant investment (more than $5 million USD);

It is the mission of major enterprise projects to deliver strategic projects and

At Organization A, there are numerous requests for the program management

 an executive leadership team member or senior executive requests program

©2013 APQC. ALL RIGHTS RESERVED.

PROJECT PRIORITIZATI ON AND SELECTION

What role does the PMO play in selection of projects?

REPORTING STRUCTURE/ GOVERNANCE

Key finding: At best-practice organizations, there is a well-defined

©2013 APQC. ALL RIGHTS RESERVED.

Best-practice PMOs have clearly defined governance structures, with a clear