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How Emerging PMO Trends Can Change the
BusinessMichael Cooch
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The emerging importance of ‘intelligent’ PMOsHow Emerging PMO Trends Can Change the Business
Michael CoochThe PMO Conference, 11th June 2015
Objectives for the session…
• Identified challenges for our PMOs
• Discuss how the PMO should evolve to become a trusted advisor
Challenges for the PMO
What are the key challenges facing PMOs?
*Source: The State of the PMO, A Benchmark of Current Business Practices, Center for Business Practices (CBP) Report
**Source: The State of the PMO, A Benchmark of Current Business Practices Center for Business Practices (CBP) Report
***Source: Software Engineering Economics, Prentice Hall, Englewood Cliffs, NJ, p431,Boehm B
In low-performing organisations executive sponsorship is approximately 60% less likely to have an appreciation of the strategic value of a PMO.
In low-performing organisations project management performance (and PMO performance) is not measured nor is appropriate accountability for outputs assigned.
In low-performing organisations PMOs face much greater difficulty in being accepted as a real value-adding proposition, at all levels of their organisation, when compared to high-performers.
A project staffed with uniformly very low-rated personnel on all capability and experience factors would require 11 times as much effort to complete the project as would a project team with the highest rating in all the above factors.***
In low-performing organisations PMO staff are much less likely to have formal project management qualifications, hands-on-experience and extensive project management knowledge.**
What is our collective experience?
How would you characterise the maturity of your PMO?
Our own programme data shows that less than 1% programmes are optimised.
Organisations could substantially benefit from improving the maturity of their PMO.
Optimised; 0% Mature; 14%
Estab-lished; 37%
Immature; 26%
Ad-Hoc; 11%
Absent; 11%
Emergent themes from our Global PPM Survey…
Source: 4th Global PPM Survey, PwC
Our Global Survey revealed that senior executives are struggling to balance their ‘run’ and ‘change’ responsibilities and there is a missed opportunity for PMOs to provide more insight to these time-poor, information-overloaded stakeholders.
Focus area for today
Focus area for today
“…to be honest it often feels like
we’re nothing more than a rubber-
stamping body for giving more
budget”
“surely we all recognise that
unethical behaviour is abundant on the topic of managing and reporting on
change”
“Our level of confidence in non-financial
data is generally low”
“If we don’t get control over CTB soon we may not have a business that can fight for its place in the
market”
“The ‘end-of-the-line’ reporting [at
Board level] is too abstract to
confidently make decisions”
“..the irony is that our RTB reporting is
cross-industry leading which makes the
issue low quality of CTB reporting even
starker”
“…the information is already there – our board has no idea what to do
with it”
“We suffer from an affliction … overly
qualitative reporting which is notoriously difficult
to challenge
“a culture of transparency is not in place – we’re all terrified to report
bad news”
Measure and address the harsh facts…
Linkage of benefits definition and realisation is
generally poor
“I’m continually frustrated by
reports which look great but say
nothing”
Strategic
Tactical
Organisation-orientated
Board-orientated
“We’ll all continue to ‘play the game’
until the game changes”
“Accountability for outcomes seems to be a ‘Teflon-coated’ idea”
“Look, the reality is that divisional
politics still, typically, trump achievement of central strategic
goals “
Key 2
Culture
Process
Quality
Insight
Education
Emergent theme
Strong theme
Key 1
Beyond core Financial reporting the confidence in management information of executive boards is not high. This is exacerbated by multiple cases of unwieldy reports (multiple examples of 100+ page reports) which remove the ability for boards to make targeted, and informed, decisions
“In our sector [construction] poor quality decision-support reporting
would kill us”
“Our supporting technology
architecture is more like a bowl of
spaghetti”
Connect the Executive to Delivery Teams…
Don't know
I have no direct involvement in change activities currently
I have been seconded full time to a change programme
I have delegated most of my core tasks and focus on change activities
I have delegated some of my core tasks in order to take on project responsibilities
I have full time core task responsibilities and fit change activity commitments in as an addition to that workload
1
5
4
10
36
45
Source: 4th Global PPM Survey, PwC
Our Global Survey revealed that senior executives are struggling to balance their ‘run’ and ‘change’ responsibilities and there is a missed opportunity for PMOs to provide more insight to these time-poor, information-overloaded stakeholders.
Case study: the role of the PMO during Change
About:
The National Programme for IT in the NHS (NPfIT) is the largest public sector IT programme ever attempted in the UK, budgeted to cost c.£6bn but terminated after a spend of c. £3bn. The aim of the programme was to digitalise the NHS’ way of working and introduce electronic care record for every patient by 2010.
After delays, stakeholder opposition & implementation issues, the programme was dismantled in 2011, almost ten years after its initiation in 2002.
“Another example of underestimating the scale & complexity of a major IT-enabled change programme.”Amyas Morse, Head of the National Audit Office
At the time of NPfIT’s launch, what proportion of IT healthcare projects ended in failure?
Future state of the PMO?
How are CEOs increasingly viewing their business?
Ch
an
geR
un
Deliver
Deployment and acceptance
Change programmes and projects
Business & Operating
Model
Enterprise Portfolio
Direct
Alignment and prioritisationStrategy &
Governance
Measurement and
refinement
Measurement and
re-balancing
External factors(e.g. geopolitical movement, economic change, technological advancement)
External factors(e.g. geopolitical movement, economic change, technological advancement)
In your experience, what are the attributes of a mature PMO?
A mature PMO needs to balance multiple elements……intelligence or insight doesn’t come for ‘free’. Significant investment in portfolio/programme/project alignment, controls and efficiency is needed as the platform for success.
4 steps to improved insight and decision-makingThe maturity of Executive Board reporting varies greatly across industry.
1 2 3 4Governance
and reporting alignment
Insights and metrics
Reporting delivery model (data, process,
systems, people)
Reporting use, education and
behaviours
…understanding the audience for the
reporting…
…defining what is important to that
audience…
…defining the decisions for each
audience…
...defining what the audience will
receive…
…how the data and analysis will be
created…
…how reporting is presented…
…understanding where education is
needed…
…and which behaviours need to
change…
0 25 50 75 1000
5
10
15
20
25
Budget variance as % of total
Dev
iati
on f
rom
fo
reca
sted
cos
ts (
£m
)
Forecast and actual costs
Original Budget
In progress CRs
Signed-off CRs
Current Budget
Budget Variance
Actual Spend to Date (A)
Estimate to Complete
(ETC)
Estimate at Complete
(EAC)
Variance at Complete
(VAC)VAC (%)
Division 1
Workstream 1.1 21.2 22.58 -7% 10.20 - 20.46 -2.12 -9%
Workstream 1.2 10.4 8.48 18% 0.07 0.75 0.27 56%
Workstream 1.3 5.7 6.15 -8% 2.24 4.72 -1.43 -23%
Division 2
Workstream 2.1 12.0 0.7 21.1 76% 15.59 - 29.82 -1.13 -4%
Workstream 2.2 4.7 6.1 -30% 8.75 15.38 0.88 6%
Workstream 2.3 8.9 7.2 19%
Workstream 2.4 4.2 5.6 -33% 6.84 14.44 -2.01 -12%
Division 3
Workstream 3.1 13.6 1.5 15.4 -13% 17.62 - 33.17 4.14 14%
Workstream 3.2 7.3 6.3 14% 16.56 31.74 5.14 19%
Workstream 3.3 8.2 5.7 30%
Division 4Workstream 4.1 30.0 6.7 49.10 64% 23.75 - 47.50 -1.60 -3%
Workstream 4.2 2.6 2.8 -8% 15.00 32.50 -1.60 -5%
Division 5
Workstream 5.1 4.5 0.5 5.7 -27% - -
Workstream 5.2 16.4 15.7 4% -
Workstream 5.3 13.2 0.2 13.6 -3% -
Workstream 5.4 9.3 8.3 11% -
Cross Divisional
Workstream X.1 23.6 22.3 6%
Workstream X.2 11.2 0.2 11.7 -4%
Workstream X.3 16.5 16.1 2%
Workstream X.4 3.5 0.2 3.7 -6%
Workstream X.5 6.8 6.9 -1%
Corporate
Workstream Corp.1 15.3 0.4 15.3 0%
Workstream Corp.2 11.4 10.8 5%
Workstream Corp.3 3.6 3.8 -6%
Workstream Corp.4 8.3 1.5 8.5 -2%
Workstream Corp.5 2.4 1.5 38%
Workstream Corp.6 5.8 4.5 22%
Workstream Corp.7 9.2 1.1 8.2 11%
Workstream Corp.8 4.6 2.2 52%
TOTAL 122.2 10.8 2.2 315.31 7% 116.62 0 230.48 -0.71 -1%
Large variances
Highlights and decisions required
• Currently 2 initiatives have significant budget issues and exceed the board reporting threshold:o The [2.1] initiative in [Division 2] is
significantly over budget due to scope changes and an uplift in supplier costs which were not originally planned. Additional benefits will also result and these are currently being calculated – these will be presented at the next board meeting.
o The [4.1] initiative in [Division 4] has unapproved change requests amounting to around 20% of the original budget. This is due to having to incorporate additional changes to comply with [regulation] requirements.
• A large proportion of initiatives remain within at least 10% of original budget. • Changes to regulatory deadlines have increased the amount of change requests in progress change
requests. • 2 initiatives are significantly over budget due to scope change and regulatory impact.
F
G
F
G
Sample
outputInsights and metrics
G
F
…and there are clear benefits to ‘getting it right’
Ch
an
geR
un
Deliver
Deployment and acceptance
Change programmes and projects
Business & Operating
Model
Enterprise Portfolio
Direct
Alignment and prioritisationStrategy &
Governance
Measurement and
refinement
Measurement and
re-balancing
Strategy executed to plan Organisation works
on the right projects
Projects on schedule & budget
Project customers satisfied
Source: The State of the PMO, A benchmark of current business practices. Centre for Business Practices (CBP) Report.
A global survey demonstrates a 24% improvement in customer satisfaction between Immature and Mature programmes and a 65% improvement in the optimal allocation of resources.
Michael CoochPartner, PPMmichael.c.cooch@uk.pwc.com
Download our 2014 PPM Global Survey at
www.pwc.com/ppmsurvey
Connect with me
www.linkedin.com
Thanks for your time
pwc.co.ukThis publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2015 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom), which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.
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