Forward Momentum: Delivering Results

By Bruce Beer, PMP

OK – you have been asked to manage a new major project that is an integral part of your company’s strategy (or your customer’s strategy if you are providing project services) and the cost is estimated to be in the 8 to 9 figure range.

Where do you start?

A very large project would probably be a program (a group of related projects) rather than one single project, so you would probably need a Program Management Office – PMO – to manage this juggernaut. I would suggest that in most cases you would start with the PMO management infrastructure. Assuming you are to be the program manager, on a major program you will probably need a deputy to help with the workload and cover for any absences you might have.

I have worked in two different types of programs in the $300m to $500m range. One was global, one was domestic. One of them included individual PMs as part of the PMO; the other just included the key PMO functions and did not include the PMs in the team. My experience leads me to believe that the former – PMs as part of the PMO team – is preferable, so I will use this assumption for the rest of this article.

Let us look at the makeup of the PMO for a major undertaking. Apart from the management and administrative people, most major programs could warrant a full time quality manager, risk manager and schedule manager. You could have someone responsible either full time or part time to manage change. This could include changes within the PMO, but also possibly management of change within the company where introduction of the end result of your program may affect organization, structure, personnel and processes. In other words, they would manage what needs to be changed outside of the program to enable the expected and required result to be effective. You might also assign someone to manage program reporting.

Quality Manager’s Role
This is the person responsible for creating the program plan detailing quality, which could include:

• Policy
• Metrics
• Assurance
• Control
• Audits
• Internal and external standards to be met
• Common tools and applications to be used – type and version/rev level
• Method of updating of common tools and applications
• Archiving policy

The quality manager would try to ensure consistency across all projects to give the program a common look and feel, and plan and manage regular quality reviews/audits throughout the life of the program to ensure the quality plan is being followed by each project. They would also ensure the defined metrics are being measured and reported as defined in the quality plan.

Risk Manager’s Role
This person would be responsible for working with individual PMs to identify and quantify risk on each project, highlighting those that need further effort to minimize risk at the project level, and assess any risks to other projects or the overall program by any one or more individual project risks. The risk manager would attend project level risk meetings and take the high level view on threats (or opportunities) at the program level, implementing risk reduction measures as appropriate. This person would be responsible for coordination between individual projects where appropriate.

Scheduling Manager’s Role
This person would work with individual PMs to ensure they had a schedule at the correct level of granularity, with critical path identified and processes in place for regular updating. They would then amalgamate these plans into a program level schedule at the appropriate level of granularity. This should then identify the critical path through the program showing which projects, or deliverables within a project, are on the program level critical path. This is key for the PMO to know, manage and review on a regular basis. The risk and scheduling managers would need to work very closely together, as any identified time risks can be monitored closely between them, particularly for deliverables/activities on the program level critical path.

Reporting
Reporting may not be a full time position in the PMO but it is a very important one. I was asked to create a reporting system for a major PMO and I designed a three-level reporting system. Each project completed a project level status report which was sent to the PMO on a weekly basis. These were rolled up and a PMO level report was created, automatically hyperlinking project information to a one line status report per project. Use of color was important (red, yellow, green) to identify problems where the PMO management might need to focus or work proactively to avoid or minimize impacts on the overall program.

The final layer of report was for senior management. This needed subjective judgments and assessment from the PMO so it could not be automated.

This role would also include financial reporting – actual costs to date, forecasts for future and comparison to the financial baseline/budget. This report would go to senior management so the specific information, format and frequency would need to be discussed and agreed with them.

Management of this major undertaking may depend on the size and complexity of the program but in my experience, a regular meeting of the PMO (including the individual PMs if possible) would review each project, scheduling and risk issues, changes and project issues, and resolve any conflict or interfaces between individual projects. Any potential threat to the overall program timeline, budget or deliverables can be highlighted, discussed, resolved and reported.

In conclusion, for very large projects (programs), the main PMO team could include the program manager, deputy, admin, scheduling manager, risk manager, quality manager, someone responsible for change, someone responsible for reporting and, in my opinion, each of the individual PMs. How many of these roles, and any additional roles such as external communications, security, networking, infrastructure etc., that may be required depend on the size, complexity and criticality of the program. Rather than assessing just the cost of the PMO which could be relatively high, it is more reasonable to consider the value the PMO provides compared with the cost of failure of the program due to inadequate management. Then a PMO can almost always be cost justified.

What positions have you involved in your large-scale project? What worked? What didn’t?

By Kathy Martucci, PMP

Note: This is part 3 in our series on portfolio management. Part 1 is Projects Projects Everywhere: A Portfolio Management Approach, part 2 is Elements of Portfolio Management: Developing the Compelling Business Case.

Previously we have presented the overall Project Portfolio Management Process and offered some guidance on writing a solid business case.  Business case development is under the purview of the functional manager who is requesting the project be considered for part or all of the organization’s scarce resources. However, the Portfolio Management Committee (PMC) has its work cut out for it, too.

Perhaps the PMC had developed the template for the anticipated business cases. Let’s assume they have, since they know (or should know) what they need to see from the functional managers in order to make decisions on what projects will go forward. Now, as the deadline for next fiscal year’s proposals nears, the members of the PMC must understand and agree on how these new or improved business cases will be analyzed for the initial, high-level evaluation of their size, complexity and alignment with the organization’s corporate strategy. During this process, projects that do not meet these established criteria do not make the first gate and are not analyzed any further.

A thoughtful, proactive approach to developing the criteria, the decision matrix if you will, may include the following:

1.  Brainstorm evaluation criteria
Brainstorm any and all evaluation criteria appropriate to the situation. If possible, involve customers in this process. General categories such as feasibility and effectiveness are difficult to evaluate, so, when possible, drill down into the categories to define criteria that may be more easily scored.  It should also be noted here that annual review of the matrix is key to staying current with corporate strategy, market conditions and other factors. Possible criteria will include:

• cost (order of magnitude costs may be available at this stage)
• time to accomplish
• financial payback
• resources required (for example, money and people)
• customer pain caused by the problem
• urgency of problem
• effect on other systems
• management interest or support

2.  Refine the list
After all ideas are on the table, refine the list (there should not be more than 6-8 key criteria considered or the process becomes too unwieldy) and ensure that everyone has a clear and common understanding of what the criteria mean. Also ensure that the criteria are written so that a high score for each criterion represents a favorable result (more likely to pass the gate) and a low score represents an unfavorable result.  Criteria such as cost, resource use and difficulty can cause confusion: e.g., low cost may be highly desirable.  This can be avoided by rewording the criteria to state “low cost” instead of “cost”; “ease” instead of “difficulty.”

3.  Assign weights to criterion
Assign a relative weight to each criterion in cases where some decision criteria are more important than others. In a tight budget year, low cost may carry more weight than customer pain. Other years, alignment with strategic direction regardless of costs may be more heavily weighted.  The assignment can be done by discussion and consensus or each member can assign weights.  Then the numbers for each criterion are added for a composite team weighting. This step often produces a lively debate!

4.  Determine scoring range and representation
Determine the scoring range and ensure that all PMC members have a common understanding of what the scores will represent.  One of several ways to do this includes establishing a rating scale for each criterion. Some options are:

• 1, 3, 5 (1 = low, 3 = medium, 5 = high)
• 1, 2, 3, 4, 5 (1 = little to 5 = great)
• 1, 4, 9 (1 = low, 4 = moderate, 9 = high)

Enhance the committee’s agreement and understanding by coming to consensus on definition and fully documenting the scale. For instance:

Financial Payback:
Low Score (1 point):
Net profit potential generated in the first 3 years after implementation is expected to be less than $5M per year.

Medium Score (3 points):
Net profit potential generated in the first 3 years after implementation is expected to be between $5M and $15M per year.

High Score (5 points):
Net profit potential generated in the first 3 years after implementation is expected to be greater than $15M per year.

Once the decision matrix is developed and institutionalized (it may require review and approval from other stakeholders), it will be used in the Project Portfolio Management Process to create a prioritized list of open business cases. The prioritization provides a blueprint of which projects will be the ones to receive further attention from both the functional business units and the PMC.

Food for thought: What evaluation criteria are most important to your organization?

by Kathy Martucci, PMP

Note: This is part 2 in a series on portfolio management. Part 1 is Projects Projects Everywhere: A Portfolio Management Approach.

Part of any Portfolio Management process is the decision rendered from the Portfolio Management Committee (PMC) as to which projects will be initiated with the promise of adequate resources to ensure success. The PMC will determine the portfolio upon careful consideration of the business case.

Regardless of who is technically responsible for writing the business case, you and I both know the functional manager will request that you, the potential project manager for the project, write it.  No doubt it will undergo significant scrutiny and even crazy-making wordsmithing; but you can outdo yourself if you follow a few basic rules.

Even if the Portfolio Management Committee has a template for the business case, ensure that you consider and communicate:

- Alignment with Corporate Vision, Mission and Core Competencies -
If you don’t know or don’t fully understand the organization’s strategies and values, find a mentor who can impart that knowledge with a sense of both the big picture and some of the details that will resonate with the executives who staff the Portfolio Management Committee.  This is not “BS”; rather, it is (or should be) an objective look at the proposed project and gaining a thorough understanding how it will contribute to the company’s bottom-line.

- The Project’s Relative Position Within the Mix of Proposed Projects -
Understand the business drivers behind your proposal and behind the other proposals competing for corporate resources.  State the objectives of the project succinctly, no double-talk, in a manner that facilitates decision-making.

- Viable Alternatives and One Recommendation -
There are at least two alternatives – 1) do what you (and the functional manager) want to do, the way you want to do it; and 2) do nothing.  Don’t stop there; be objective.  Inquire. Explore.  Poll your solutions team and the concerned business area for ideas; you’ll be pleasantly surprised at what surfaces.  When you decide which alternatives and which recommendation to put forward, explain why certain routes were not chosen. Have costs and benefits of the throw-aways in your back pocket for discussion purposes.

- Costs and Benefits -
This is a tough assignment so early in the project lifecycle. First, investigate costs from former projects; but use the information wisely.  Second, resist the temptation to sweeten the benefits unrealistically just because you really, really want to do this project. Use intangible benefit statements (e.g., improve morale) sparingly unless there is a uniquely compelling reason to include returns that cannot be measured. Mostly, be conservative and honest in all your assessments.

- Risks -
It’s not difficult to brainstorm and document all the uncertainties that can plague the project. But don’t forget the OTHER risks – the opportunities. Going through this exercise can also assist in identifying costs and contingencies necessary for the project. Indentify and categorize all the negative and positive risks associated with the project and present them in a clear, concise manner.

A well-written business case alone will not guarantee that the project will pass the gates set up by the Committee. However, a business case that misses the mark WILL guarantee that it doesn’t.

What is in your business case?

By Vicki Wrona, PMP

In this new white paper by Bruce Beer, we discuss PMOs (Project or Program Management Office) from A-Z, including:

1. What is a PMO?
2. What is the Business Value of a PMO?
3. PMOs: Why One Might Be Needed
4. Establishing a PMO – How Do We Do That?
5. Integrating the PMO Into the Organizational Culture / Creating a PMO That Lasts

Would you like to learn from the experiences of one who has managed an international PMO for a Fortune 100 multinational organization? Are you setting up a new PMO and want to better understand your options? Do you simply want to learn what a PMO is and what it can do for you? How do you know if establishing a PMO is right for your organization? What are some established best practices surrounding PMOs? These questions and more are answered.