IT Project Management Office

Paul R. Astiz, MBA, PMP, CDP

Paul.Astiz@Mitretek.org (703-610-2435)

Presentation Objectives
Provide an overview and general understanding of PMO models, functions, success factors, and implementation Introduce the CobiT PM CMM as a framework for establish and evolving the PMO Project Management functions

Outline
IT PMO Trends PMO Models PMO Key Considerations
Charter Culture Change Implementation Strategies Staffing/Skills Performance Metrics

Critical Success Factor Introduction - CobiT CMM

IT PMO Trends
67% of IT organizations in 2003 have PMOs (Forrester Survey) More than half established since 2000 (Forrester Survey) Government is moving to standardize IT Project Management
Nov, 2003, Federal CIO Council recommends setting up Federal PMO to standardize PM practices Jun, 2004, SC requires management of major and interagency IT projects to use standard practices and be managed by PMP Jan, 2001, NY sets up PMO to standardize management of technology projects Jun 2002, CA CIO established objectives for statewide project management standards

IT PMOs are becoming strategic IT PMOs are gaining more influence

Whats Driving IT PMO Proliferation?

Late and over budget IT projects Need for consolidated project reporting to drive prioritization/decisions
Lack of coordination of activities Poor project management practices Lack of standardization of PM methodology

Increase in IT Project workload

More focus on IT project ROI More focus on alignment of IT projects with business strategy Strategic value and dependency on IT applications/technologies Proliferation of IT project proposals Delays in getting projects approved

More complex IT environment and solutions

Enterprise solutions/cross-functional projects Distributed development organizations Outsourcing and contracting out of IT projects

PMO Benefits
Companies that implemented successful PMOs achieved:
80% ROI 20% reduction in project time 30-35% successful project delivery

Companies without a PMO experience 74% project failure rate

Source: Forrester Research

PMO Models
One size does not fit all
PMO drivers/business needs PM maturity Vision and goals of sponsor Business/organization mission Organization size Number of projects Political and cultural environment

Tactical vs. strategic Internal vs. external focus Departmental vs. enterprise (IT vs. LOB) Single vs. multiple Staff vs. line organization

PMO Support/Control Model

SUPPORT
Project administrative support PM standards, methodology, processes Project Consulting and mentoring PM coaching/training/certification Integrated Project Reporting Issue Tracking/Reporting

CONTROL
Project Audits Cost and Schedule Control Business Case Project Approval Project Prioritization Project Management

Master Project Schedule

Project Document Repository PM tools and tools support

Resource Management
IT Asset Management Project Portfolio Management

Key Considerations
PMO charter Culture change Implementation strategy Staffing Metrics/Performance Success factors Maturity of Project Management Practices

PMO Charter
Charter Scope

Business Needs Sponsor Public vs. Commercial PM Maturity

Mission/Vision Goals/Objectives Sponsor Service Offering PMO Governance Key Performance Metrics Funding model

Charter Document

PMO - Culture Change

Natural resistance to change Political landscape Degree of cultural change
Winners/Losers Management Support

Change Management

PM maturity PMO charter Existing skill level Key driver implementation strategy

Assess impact of change Inform Educate Involve

PMO Implementation Strategies

Strategy drivers PMO charter PM maturity Sponsor and management support PMO drivers Perception of value Political environment Culture/Value System Evolutionary/Incremental Lower implementation risks Lower start up costs Will take longer to demonstrate ROI More suitable if high resistance to change and low management support Revolutionary/Wholesale Higher implementation risks Higher startup costs May be able to demonstrate ROI quicker More suitable if crisis or recognition at high level that change is imperative

PMO Staffing/Skills
Staffing Approaches
In-house resources Hybrid (In-house/contractors) Ad hoc contractors augmentation

Skills
PMO Director/Manager Project Manager Project Portfolio Manager PM Process/Methodology Trainer Relationship/Account Manager Tools Support/Administration Administrative Support Librarian/Document Control

PMO Performance Metrics

PMO vs. Project metrics Less that 15% of PMOs employ formal metrics program (Source: Forrester Research) Metrics are essential for growth and support demonstrate progress, value, and productivity Performance metrics are driven by charter no such thing as typical metrics Business value metrics
Executive focus - Measure and demonstrate value to business Help justify existence during downsizing Expressed primarily in dollars savings/revenue or ROI Tend to be few and harder to derive

Functional performance metrics

Service level metrics

Internal focus - Measure and demonstrate performance or quality of PMO functions Help justify PMO budget Help improve PMO performance May require baseline or benchmark to demonstrate performance Expressed primarily in percent or counts Tend to be many depending on functions performed Must be selectively chosen so as not to overwhelm Customer focus - Measure and demonstrate service level or quality of service to customer Help improve and maintain customer satisfaction SLA/SLO Expressed in a variety of ways Select on key and most important value to customer community

Success Factors
Clear Charter
Creates clear expectations Defines boundaries for implementation

Top-Down Support Bottoms up Buy-in Sponsor - Reporting to senior executive Strong LOB representation Communication/PR
Promotion of services Education of value Performance metrics that demonstrate business and customer value

PM Capability Maturity Models

Valuable tool for establishing PMO and help define objectives, charter, and processes Assess current status Compare against best practices Develop strategy and road map for PMO Help communicate vision and get buy in Different models (CobiT, OPM3, ISO 15504, CMM/CMMI)

CobiT Capability Maturity Model

CobiT CMM is valuable and comprehensive framework for assessing maturity of IT organization CobiT CMM
International Open Standard for IT Governance IT Governance Institute (ITGI) Information Systems Audit and Control Association (ISACA)

ITIG not associated with Software Engineering Institute (SEI), Carnegie Mellon CobiT CMM uses same conceptual framework as SEIs CMM Defines maturity of IT organizations in four domains
Planning and Organization Acquisition and Implementation Delivery and Support Monitoring

PM CMM part of CobiT Planning and Organization domain

Sources: WWW.ISACA.ORG and WWW.ITGI.ORG

CobiT Maturity Levels

0 Non-Existent Not applied 1 Initial Ad hoc and disorganized 2 Repeatable Follow regular pattern 3 Defined Documented/communicated 4 Managed Monitored and measured 5 Optimized Best practices followed/ automated

Source: CobiT 3rd Edition, Management Guidelines

CobiT Model Components

Defines processes within each domain Defines high-level control statement for each process Defines maturity levels Defines success factors for each process Defines key goals for each process Defines key performance indicators
Source: CobiT 3rd Edition, Management Guidelines

CobiT Project Management Process Control Statement

Control of project management process with the business goal of setting priorities and delivering on time and within budget Is enabled by the organization identifying and prioritizing projects in line with the operational plan and the adoption and application of sound project management techniques for each project undertaken
Source: CobiT 3rd Edition, Management Guidelines

Level 0 Non Existence

PM techniques not used Organization does not consider business impact of poor project performance

Source: CobiT 3rd Edition, Management Guidelines

Level 1 Initial/Ad Hoc

Aware of need for project structure and risks of poorly managed projects Use of PM techniques left to the individual Projects are generally poorly defined and do not incorporate business or technical objectives of the organization or stakeholders Lack of management commitment and project ownership Critical project decisions are made without user management or customer input Little or no customer and user involvement in defining IT projects No clear organization within IT projects and roles/responsibilities are not defined Project schedules and milestones are poorly defined Project staff time and expenses are not tracked and compared to budgets

Source: CobiT 3rd Edition, Management Guidelines

Level 2 Repeatable but Intuitive

Sr. Management has gained and communicated an awareness of the need for IT Project Management Organization is in the process of learning and repeating certain techniques and methods from project-to-project Projects have informally defined business and technical objectives Limited stakeholders involvement in PM Some PM guidelines developed, but left to discretion of project managers
Source: CobiT 3rd Edition, Management Guidelines

Level 3 Defined Process

PM process and methodology formally established and communicated IT projects defined with appropriate business and technical objectives Stakeholders are involved in the management of IT projects Defined project structure with roles and responsibilities Defined and updated project milestones, schedules, budget and performance measurements IT Projects have formal post systems implementation procedures Informal project management training provided No established policies for using combination of internal and external resources Quality assurance procedures are defined

Source: CobiT 3rd Edition, Management Guidelines

Level 4 Managed and Measurable

Formal and standardized project metrics PM measure and evaluated throughout organization not just IT PM process enhancement formalized and communicated, and project team members are trained on all enhancements Risk management performed as part of PM Stakeholders actively participate in projects or lead them Project milestones and criteria for evaluating success at each milestones are established Value and risk are measured and managed prior to, during, and after project completion Management has established a program management function within IT Projects are defined, staffed, and managed to address organizational goals, rather than only IT specific ones.

Source: CobiT 3rd Edition, Management Guidelines

Level 5 - Optimized
Proven full life-cycle project methodology is implemented and enforced, and integrated into organizational culture On-going program to institutionalize best practices has been implemented Strong and active project support from Sr. Management sponsors and stakeholders Implemented project organization structure with documented roles, responsibilities, and staff performance criteria Long term IT resources strategy is defined to support development and operational outsource decisions Integrated Program Management Office is responsible for projects from inception to post implementation Program Management Office is under the management of the business units and requisitions and directs IT resources to complete projects Organization-wide planning of projects ensures that users and IT resources are best utilized to support strategic initiatives
Source: CobiT 3rd Edition, Management Guidelines

CobiT PM Success Factors

Experienced and skilled project managers are available Accepted and standard project management process in place Sr. Manager sponsorship of projects, and stakeholders and IT staff share in the definition, implementation, and management of projects There is an understanding of the abilities and limitations of the organization and the IT functions in managing large, complex projects Organization-wide project risk assessment methodology is defined and enforced All projects have a plan with clear traceable work breakdown structures, reasonably accurate estimates, skill requirements, issues to track, quality plan, and transparent change process (my note effective PM methodology enforced) Transition from implementation team to operational team is a well-managed process System development life cycle methodology has been defined and is used by the organization
Source: CobiT 3rd Edition, Management Guidelines

CobiT PM Key Goal Indicators

Increased number of projects completed on time and on budget Availability of accurate project schedule and budget information Decrease in systematic and common project problems Improved timeliness of project risk identification Increased organization satisfaction with project delivery services Improved timeliness of project management decisions

CobiT Project Management Key Performance Indicators

Increased number of projects delivered in accordance with defined methodology Percent stakeholders participation in projects (involvement index) Number of project management training days per project team member Number of project milestones and budget reviews Percent of projects with post-project reviews Average number of years of experience of project managers

Conclusion
IT PMOs can improve IT project delivery performance One size does not fit all PMO Support/Control model most useful Clear charter, top down support, & bottom ups buy is key to PMO success PMO performance metrics should focus on value to key stakeholders CMM valuable framework for establishing and evolving PMO