22-Feb-2019

How did a Mid-Size IT company gain from Project Management Office upgrade?

A mid-size, fast growing IT company, specializing in emerging technologies with its operations at three locations in India and five front offices across the globe appreciated the need to improve their competitiveness through enhanced Project Management services. The organization competes with the big five service providers and want to continue being highly cost-effective by managing projects from India for their global customers. Till last year, they met with limited success, and at times high customer satisfaction and retention were challenging. The leadership in the organization realized that project managers leading their projects and programs have struggled to deliver ‘the value’ on time and within budget.
‘Project Management CoE’ was engaged in IT Project management consulting with a clear mandate to improve project delivery, and customer sat. We recommended and executed the upgrade of PMO to level 3 ( Functional ) What is a Project Management Office?
A PMO is a centralized group consisting of one or more individuals within an organization established to perform project management functions for a single or multiple projects and programs; or for a portfolio of projects and sub-projects that make the organization and its projects more effective. A Project Management Office is typically responsible for
• Development of expertise in project management; resulting in faster completion of projects and more substantial value creation through improved work planning, estimation, scheduling, and communication management, and training/reskilling. The constant focus on bridging the skill gap. Accelerated adoption of effective project management in the organization through coaching, mentoring and training.
• Creation, upkeep, custody and optimum utilization of all reusable assets.
• Standardization of project implementation methodology and processes and continuous improvement.
• Structured progress tracking, reporting, and forecasting.
• Robust scope management change control.
• Focus on budget efficiency, reconciliation of financial data and a return of Investment reporting.
• Stakeholders’ communication management.
• Active management of project risks, leading to early warnings of delivery problems and reduced instances of project failures and reduces the number of troubled projects.
• Increase in customer satisfaction.
• Optimized suppliers and sub-contractor management.
• Conducting project audits or reviews. Ensure the required actions are taken.
• Ownership of developing, maintaining and utilization of project management tools & infrastructure.
• Improvement of project management maturity levels in the organization.
• Ownership of best practices and lessons learned databases in the organization.
• Making recommendations to close or recover a troubled project and recovering troubled projects where required.
Standardizing the processes involved in the execution of projects, in document management, status reporting,
and project administration. • Improved control over interdependent projects, leading to the prioritization of the portfolio based on ‘value to the organization.’ Improved project synergies, cross-learning, optimized resource allocation and improved probability of benefits realization.
• Integrating a master schedule for adequate resource allocation.
Organizations with stable PMOs deliver more successful projects.
Many research studies have found a connection between the length of time a PMO has been operating and project success rates are established. While PMOs for less than one year reported increased success rates by 37%, those with a PMO operating for more than four years reported a 65 percent success rate increase. The main reasons PMO failure are lack of clear consensus on its constituents, lack of executive support and the value expected from the PMO and considering PMO as an isolated, stand-alone entity, not an integral part of the organization’s PM practice. Setting up a PMO.
The recommended PMO development roadmap consists of three primary phases: Plan, Implement and Manage. Steps for Setting up a PMO
Project Management Office maturity levels and plan upgrade.
PMOs exist at various maturity levels in many organizations. Organizations need to keep the PMO maturity levels in alignment with the organization’s requirements. Organizations need to assess the maturity level of their PMOs, their capabilities and identify needed improvements.
Level -1 Pilot.
At this beginning stage, a basic PM training is carried out for all stakeholders. The importance of PM practices, processes, methods and tools is communicated. Necessary tools are established. The organization is expected to deliver easy to do projects successfully Level -2 Getting Started.
Roles and responsibilities of PM are defined, basic processes for schedule, cost, and scope delivery are defined. A mechanism for independent reviews is et up. Organization requirement for an adequately qualified PM for each project required methods and tools are established. Risk management and subcontractor management process are defined. Level -3 Functional
At a functional level, the focus is on PM skill development with clearly defined processes on the acquisition, review for startup project readiness and bidding. Well-Defined Risk management process is set up. A communication process for reporting and tracking all projects is set up. PM skills are developed to the next level. A knowledge management process is established. Organization skills to manage multiple projects are developed. PMO’s role in controlling, directing or consult various projects Level -4 Integrated.
The capabilities to manage multiple projects and programs are developed. Earned value management, where required becomes a part of project status reporting. Value delivery is introduced Level -5 Mature.
Lessons learn process is introduced, focus on creating reusable assets. Give back activities are promoted. Mentoring process to develop PM skills is introduced. Projects are predictable; a continuous improvement methodology is introduced. Concepts of meeting conditions of satisfaction and enterprise strategy delivery are introduced. Most organizations will establish a center of excellence to drive What did we do for this client?
PMCoE started with a day-long due-diligence which included meetings with the key stakeholders, which was followed by getting the charter approved from the project sponsor. A 2 days PM concept workshop was carried out with all managers and leaders, in order to bring everyone on the same platform and vision of the top leadership was shared. The consulting team reviewed all the projects being managed by the organization, in parallel the leadership resources for setting up and PMO was chosen.
Adequate processes, tools, methods were established, and transparent reporting mechanism was set up. Projects were selected for control, direction and support depending upon their importance, issues and manager’s skills. A monitoring mechanism with best practices like ‘look ahead’ approach was established. A risk management process was also developed. The skill development plan was developed and is being executed. The support to the client was tapered and in six months after measuring the benefits realized the consultants signed off from the project.
What benefits did the client realize?
Among many other benefits, a significant improvement ( close to 5% ) in the client Sat survey done at the end of 2018 is realized. The PMs understand the concept of business value being delivered by them and have shown more considerable acceptance to the business-driven changes. As a result, the service provider has shown a marginal increase in revenue on accepting a broader scope, and their clients have realized better value through the project. The leadership at this mid-size IT-company is more resilient to the dynamics in the projects due to increased volatility in the business.
There is an increase in predictability of project outcomes with ‘look ahead’ reporting. The project teams can foresee the risks and can take proactive actions. The company is now planning to upgrade the PMO to level – 4 ( Integrated )
Tolerance to project failure has significantly reduced due to increased competition in the marketplace, and the expectations from projects to deliver strategy under VUCA environments have increased. This situation has led many organizations, who rightfully recognize their need for project management office to boost efficiency, cut costs, and improve on delivering projects to implement the strategy.
Author.
Sachdeepak S Arora is the CEO and founder of Project management CoE and also the author of the book ‘Transform and Thrive’ available at Amazon.com