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O
PM
™
4/19/2016 PMO Value Model © 2016 Robert Frost 1
A PMO Value Model
Robert Frost
PMP, PMOC
For Strategic Execution and Value Delivery
4/19/2016 PMO Value Model © 2016 Robert Frost 2
Why we need a PMO Value Model
Why Capabilities Needed The Challenges*
Projects are Financial
Investments
Organizations need to be able to
quantify and consistently deliver
promised project value so that
executives and sponsors feel the impact
Only 17% of Organizations are
able to realize envisioned
project value
Organizations have
unlimited opportunities
for projects and limited
resources
Organizations need to be able to
optimize resources to deliver more
projects without correspondingly more
resources
Only 17% of Organizations
consider their processes as
“high maturity”
It doesn’t matter how
fast you execute if
you’re working on the
wrong projects
Organizations need to be able to
prioritize projects for execution and pull
projects through based on priorities
Only 42% of projects were
classified as having “high
alignment” with
Organizational strategy
Any project worth doing
is worth doing fast
Organizations need to be able to
execute a continuous flow of projects in
drastically shorter times
Only 9% of Organizations
consider themselves
“excellent” at executing
projects
*PMI’s Pulse of the Profession: The High Cost of Low Performance, 2014
4/19/2016 PMO Value Model © 2016 Robert Frost 3
Why we need a PMO Value Model
“There are two kinds of organizations:
those that are getting better and those
that are dying”
W. Edwards Deming
“All organizational work is project work”
Tom Peters
Organizations that want to stay relevant need to improve at
project execution and delivery
Interactive Exercise:Barriers to Project Success
4/19/2016 PMO Value Model © 2016 Robert Frost 5
Interactive Exercise #1You have 3 projects to complete in this order of priority:
1) Project Whiskey
2) Project Tango
3) Project Foxtrot
One partner will complete the
project and the other partner will
use a stop watch to keep the time.
Start with Project Whiskey and copy
the numbers all the way down using
the black pen.
Move to Project Tango and copy the
letters all the way down using the
blue pen.
Finish with Project Foxtrot by copying the shapes all the way down using the red pen.
Record the overall time to complete each of the projects in seconds.
Project Summary
Average times in Seconds
4/19/2016 PMO Value Model © 2016 Robert Frost 7
Interactive Exercise #2This time you will need to complete the 3 projects while “multi-tasking”
across all three projects.
The same partner will complete
the project and the same time
keeper will use a stop watch to
keep the time.
Start with Project Whiskey and
copy 5 numbers using the black
pen.
Then switch to Project Tango and
copy 5 letters using the blue pen.
Switch again to Project Foxtrot and
copy 5 shapes using the red pen.
Record the overall time to complete each of the projects in seconds.
Repeat this process copying 5 at a time and switching pens between projects until
they are all complete.
Project Summary
Average times in Seconds
4/19/2016 PMO Value Model © 2016 Robert Frost 9
Barriers to Project Flow
4/19/2016 PMO Value Model © 2016 Robert Frost 10
Project Flow Density Curve
Density (Throughput)
Flo
w
Maximum Flow,
Optimal Density
4/19/2016 PMO Value Model © 2016 Robert Frost 11
Pushing the Curve
Density
Flo
w
Pushing the Curve
“Pull” Projects through
based on capacity and
project priorities
TM
4/19/2016 PMO Value Model © 2016 Robert Frost 12
Optimize Value Flow
Strategic Execution and
Value Delivery:
Delivering project value as
fast as possible based on
project priorities and
available capacity
4/19/2016 PMO Value Model © 2016 Robert Frost 13
PMO Value Model
ToolsPrioritization
Governance
Vision
Visibility
Value
Risk
Management
Communication
4/19/2016 PMO Value Model © 2016 Robert Frost 14
Vision
• The Vision should be strategic and not tactical,
with a focus on the big picture of all strategic
projects and how the organization creates value
• Determine the Type of PMO desired and what is
needed to realize the vision
• Develop a Plan and Roadmap to address the gaps
between where you are and where you want to go
• Manage the PMO implementation like a project-
include the pieces of this model and what’s
required to realize the vision
• Keep your target in your sight: the vision should
guide all decisions
Vision
The PMO Value Model starts with
a Holistic Vision for the PMO
4/19/2016 PMO Value Model © 2016 Robert Frost 15
Governance
• Governance includes all levels of project and portfolio
management:
• PMO organization design to realize the vision
• PM Capability – Competitive weapon
• PPM governance and escalation
• PMO Processes
• Clear expectations of Roles and Responsibilities- each
level of governance needs to understand the process
and their roles, and be committed to enforcing
compliance
• Clearly Defined Reporting Processes and Cadence for
Governance Meetings
• Without strong governance it will be hard to get
compliance and to deliver business value
Governance
Strong Governance and Executive
Commitment is key to success
4/19/2016 PMO Value Model © 2016 Robert Frost 16
Governance Leadership (Example)
Quarterly
(or Ad Hoc)
Monthly
Bi-weekly
Weekly
Daily
• Execute the Project for Successful Delivery
• Monitor and Control the Project
• Provide Weekly Project Status Reports
• Manage Issues and Risks
• Review Project Status with Teams
• Provide Inputs for integration Roadmap updates
• Help Drive Project Delivery
• Provide Escalation and Support as Needed
• Stage Gate Review and Approval
• Project Deep Dive Reviews
• Resource Visibility and Capacity Planning
• PMLC Process Oversight & Value metrics
• Review Project Status with Teams
• Provide Guidance to Project Teams
• Provide Escalation and Support as Needed
• Investment Planning
• Approve New Capital Projects and Funding
• Prioritize Capital Spending
• Provide Strategic AlignmentCapital
Committee
Portfolio
Review Board
Project Steering Committee
Project Management Office
Project Sponsors
Project Team
Monthly
• Roadmap update reviews
• Monthly Portfolio Review
• Project Scoring and Prioritization
ResponsibilitiesCadence
*Leadership Commitment is more important than the Structure
4/19/2016 PMO Value Model © 2016 Robert Frost 17
Governance Processes (Example)
Vision
Strategy
Policies
Standards
Guidelines
Procedures
• 1 to 3 Sentences
• 1 to 3 Paragraphs
• 1 to 3 Pages
• 2 to 10 Pages
• 4 to 15 Pages
• 5 to 50 Pages
Processes are a critical piece of the PMO Governance
4/19/2016 PMO Value Model © 2016 Robert Frost 18
Scalable and Flexible Processes(Example)
Initiation Planning ExecutionGo-live
and Close
PMO Initiation
Stage Gate 1
PMO Planning
Stage Gate 2
PMO Go-Live
Stage Gate 3
PMO Close
Stage Gate 4
Definition Implementation
Stage Gate
- Project closure
Stage Gate -
FAST TRACK
FULL TRACK
Scaled Agile
process based on
level of Risk and
Complexity
Initiation & Planning Execution/G0-Live and Close
4/19/2016 PMO Value Model © 2016 Robert Frost 19
Scalable and Flexible Processes(Example of Scaling by Project Levels)
Criteria Grades WeightingTotal Possible
Points
BUSINESS PROCESS IMPACTHow many business processes will be impacted by the project?
0: None, 3: One core process, 7: Multiple core processes7 49
SYSTEM CRITICALITYWhat is the classification for disaster recovery response?
1: Business important, 3: Business critical, 7: Mission critical7 49
INTEGRATION COMPLEXITYWhat is the level and complexity of system integrations?
1: Standalone, 3: Non-mission critical integrations, 7: Mission critical integrations7 49
BUSINESS VALUEWhat is the business value (synergies, revenues, savings, etc?
1: Minimal <500k, 3: Moderate 0.6-3M, 7: Significant >3M5 35
LOCATION IMPACTHow many locations will be impacted by the project?
1: Site, 3: Regional, 5: Multi Regional, 7: Global5 35
PROJECT INVESTMENTWhat is the total project cost?
1: Small (<$250k), 3: Medium ($250k - $2M), 5: Large (>$2M) 5 25
BUSINESS RESOURCE
COMPLEXITY
What is the level of business resource commitment?
1: Minimal, 3: Single functional need, 5: Multiple functions involved3 15
LEVEL OF ORGANIZATIONAL
CHANGE
What is the amount of organizational change required for the project to be successful?
1: Limited, 3: Moderate, 5: Extensive3 15
TECHNOLOGY LANDSCAPEDoes the project involve new or existing technologies?
1: Leveraging existing, 3: Modifying existing, 5: Introducing new 3 15
VALIDATION / QUALIFICATION
REQUIRED?
Does the project require validations?
0: No, 5: Yes1 5
BUSINESS RISKWhat is the level of risk to business operations?
1: Minimal, 3: Single functional need, 5: Multiple functions involved7 49
4/19/2016 PMO Value Model © 2016 Robert Frost 20
Why we need Governance
4/19/2016 PMO Value Model © 2016 Robert Frost 21
Prioritization
• Without priorities you lose control and project flow
is negatively impacted by “bad multi-tasking”
• A Standardized Scoring and Ranking method is
essential:
• Strategic Alignment
• Cost benefit method (NPV, etc.)
• Revenue, cost savings, cost avoidance
• Visibility of Priorities is critical for project and
resource planning and to provide focus for project
teams
• Pull Projects Through (vs. Push)
• Governance teams must be committed to the
prioritization method and accept the trade-offs
Prioritization
“If everything’s important,
then nothing is”
4/19/2016 PMO Value Model © 2016 Robert Frost 22
Visibility
• Resources (Supply)
• Project activities
• Non-project activities
• Capacity for new projects
• Active Projects and Initiatives (Demand)
• PMO Projects
• Baseline activities
• Administrative
• Project pipeline (Upcoming Demand)
• Priorities
• Project and Portoflio Risks
• Project Dependencies
• Project Status – Scoreboard
• Visibility must be accurate and relevant
Visibility
Visibility is Key to PMO Success
4/19/2016 PMO Value Model © 2016 Robert Frost 23
Value
• Templates, processes and tools don’t create
value
• Successfully delivering projects creates value
• PMO and Project Value Metrics:
• Project Success
• Project Value
• Cycle Time and Efficiency
• Portfolio Value Tracking- The big picture of how
you measure value at the organization and
portfolio level
• Quantifiable Value “Sells” the PMO and makes
compliance a lot easier
Value
The Number One Goal of the
PMO is to Create Value
4/19/2016 PMO Value Model © 2016 Robert Frost 24
Value Optimization (Example)
• Net Present Value (NPV) is a great method for determining project value because
it takes into account all aspects of cash flow (the project costs, the project
benefits, and the time value of money)
• Whatever value metric is used, it should also include the resource constraints
• Project C looks like the best investment based on the value
• If you factor in the resource hours, Projects A and B are more effectively utilizing
resources to create value
• If we select both projects A and B, we can deliver 50% more value with the same
amount of resources
Which Project is the best investment?
4/19/2016 PMO Value Model © 2016 Robert Frost 25
Communication
• Over-Communicate the Vision
• Develop Organization Change Management and
communications plan for the PMO (You can’t make
people like change, but you can make them feel less
threatened by it)
• Develop Training plans for PMO and Processes
• Create Project and Portfolio Scoreboards that
provide Frequent and Clear information on project
and portfolio status
• Communicate successes, project wins, and value
created to ensure continuing leadership alignment
and executive buy-in
• Share Lessons Learned and continuously improve
Communication
Implementing a PMO Model
requires clear, effective and timely
communications
4/19/2016 PMO Value Model © 2016 Robert Frost 26
Risk Management
• Be Proactive about Risks
• “Walk through the project”
• Canary in a Coal Mine
• Develop a Risk Management Process to
ensure visibility of Issues and Risks and
proactive mitigation
• Identify
• Analyze
• Manage
• Report
• Escalate
Risk
Management
Successful Project and Portfolio
Management requires
Proactive Risk Management
4/19/2016 PMO Value Model © 2016 Robert Frost 27
Tools
• The Vision, model and processes should come
before the tools
• Tools shouldn’t be “draped over” the process,
tools should add value and save time
• Project Management
• Portfolio Management
• Resource Management
• Budget and Cost Management
• Time Reporting
• Automated Status Reports and Portfolio
Dashboards
Tools
Tools should enable the PMO
processes through Automation
and Simplification
O
PM
™
4/19/2016 PMO Value Model © 2016 Robert Frost 28
A PMO Value Model
Robert Frost
PMP, PMOC
For Strategic Execution and Value Delivery
THANK YOU!