So You Want to Build a PMO Mark

| | So, You Want to Build a PMO Mark S. Kaufman mkaufman@mitre. org* PMI Baltimore Chapter, PDE April 27, 2018 Approved for Public Release; Distribution Unlimited. Case Number 18 -0765 * The author’s affiliation with The MITRE Corporation is provided for identification purposes only, and is not intended to imply MITRE’s concurrence with, or support for, the positions, opinions or viewpoints expressed by the author. © 2018 The MITRE Corporation. All rights reserved.

|2| Mark Kaufman Professional - Department Head, MITRE Corporation, Enterprise Program and Risk Management - PMP, CSM, ITIL Personal - Stevens Tech, BE, Electrical Engineering - University of Maryland, MS, Electrical Engineering - Outside of MITRE, I enjoy: travelling, softball, photography © 2018 The MITRE Corporation. All rights reserved. For Internal MITRE Use. Pictures by Mark Kaufman

|3| Today’s Topics § Why a PMO? § Questions to ask to get started § Process overview § Details to work out § Success factors § Pitfalls Picture by Mark Kaufman © 2018 The MITRE Corporation. All rights reserved.

|4| Why do you want to build a PMO? § Read an interesting article § Boss read an interesting article or went to a conference § Have seen successes in other organizations § Improve project performance § Reduce cost and increase value § Increase number of projects your organization can handle § Better utilization of resources © 2018 The MITRE Corporation. All rights reserved.

|5| The State of Projects Source: PMI 2016 Pulse of the Profession At organizations that place a high priority on creating a culture that recognizes the importance of project management: 89% of projects at highperforming organizations meet original goals and business intent. (High performers complete 80 percent or more of projects on time, on budget and meeting original goals. ) 34% of projects at lowperforming organizations meet original goals and business intent. (Low performers complete 60% or fewer of projects on time, on budget and meeting original goals. ) Having proven project, program and portfolio management practices in place makes a dramatic difference in project performance. 71% of projects meet original goals and business intent, compared with 52% at organizations that make it a low priority But most organizations aren't making the connection: 38% of organizations place a high priority on creating a culture that recognizes the importance of project management. DOWN THE DRAIN US$122 million Amount organizations waste on projects for every US$1 billion invested, due to poor project performance. That's a 12% increase from 2015. © 2018 The MITRE Corporation. All rights reserved.

|6| More from the “ 2016 Pulse of the Profession” Source: PMI 2016 Pulse of the Profession Apply standardized project management practices organization-wide Projects that are strategic initiatives Have a formal knowledge transfer process Projects that have actively engaged executive sponsors 49% of organizations have a project/program management office (PMO). Among organizations that have a PMO: 44% are highly aligned with organizational strategy. Among organizations that align their PMO with strategy: 27% more projects are completed successfully. 42% fewer projects have scope creep. © 2018 The MITRE Corporation. All rights reserved.

|7| Signs that you might need a PMO § Organization is plagued by failing projects § Poor customer satisfaction § Inability to accurately project cost and/or schedule § Poor coordination between projects that make up a program § Inconsistent methods © 2018 The MITRE Corporation. All rights reserved. Picture by Mark Kaufman

|8| What do you mean by a PMO? § Responsible for direct execution of projects that comprise a program – Projects may be directly or indirectly related § Sets process requirements, provides templates, oversees projects § Project/Program execution for a single entity © 2018 The MITRE Corporation. All rights reserved.

|9| Lesson Learned No two PMOs are identical There is not a cookie cutter approach to implementing a PMO But… There is a general process we can use to figure this all out © 2018 The MITRE Corporation. All rights reserved.

| 10 | Simplifying the discussion § Program/Project Management Office – – Execution of a single project/program Integrates multiple task/project schedules into a larger schedule Manages resources/cost Manages dependencies between projects/tasks § Business Unit PMO – Direct execution of projects – Manages multiple related/unrelated projects assigned to the business unit – Common reporting – Integrates resources at a business unit level – Establishes standards for the business unit – May have Project Management Offices reporting in © 2018 The MITRE Corporation. All rights reserved.

| 11 | Simplifying the discussion § Administrative PMO – Develop and maintain processes, templates and tools – Indirect oversight of organization’s projects § Status reporting § Schedule management § Risk management – May be “home” for the project/program managers Most PMOs are hybrids © 2018 The MITRE Corporation. All rights reserved.

| 12 | Lesson Learned Resist the temptation to: Run out and start developing PMO Charters, process documents, etc. © 2018 The MITRE Corporation. All rights reserved. Picture by Mark Kaufman

| 13 | A High Level Approach Determine function and role Approve establishment of PMO © 2018 The MITRE Corporation. All rights reserved. Lay out PMO approach Develop implementation approach Generate governance charters Implement PMO

| 14 | Determine Function and Role § PMO requirements assessment § Identify the benefits to be delivered by the PMO or the problem to be solved § Determine PMO type § Identify PMO vision, mission and goals § Develop executive level PMO Conceptual Model © 2018 The MITRE Corporation. All rights reserved.

| 15 | Lay Out PMO Approach § Determine organizational structure § Determine functions to be assigned to the PMO § Determine source and level of PMO authority § Define roles, responsibilities and key stakeholders § Develop cost and staffing models § Identify potential risks § Identify PMO leadership © 2018 The MITRE Corporation. All rights reserved.

| 16 | Generate Governance Charters Approve Establishing the PMO § Determine governance within the organization § Establish program management culture § Obtain stakeholder buy-in § Obtain executive approval § Finalize and approve budget Picture by Mark Kaufman © 2018 The MITRE Corporation. All rights reserved.

| 17 | Develop Implementation Approach § Identify risks and develop mitigation strategies § Identify pilot projects § Develop implementation strategy § Develop resource plan Picture by Mark Kaufman © 2018 The MITRE Corporation. All rights reserved.

| 18 | Implement PMO § Staff PMO § Generate PMO plans and artifacts § Establish PMO metrics § Implement PMO plans and functions § Train appropriate staff § Implement PM tools § Migrate projects © 2018 The MITRE Corporation. All rights reserved.

| 19 | Details

| 20 | Getting Started § What is the desired impact of the PMO? § What type of investment is required and what is the return on that investment? § Next Level Investigation – – – – – The purpose for setting up the PMO objectives, goals and outcomes The benefits anticipated by the organization resulting from the establishment of the PMO The type of PMO required The functions and authority that will be delegated to the PMO The level at which the PMO will be hands-on versus providing oversight How project and/or program management functions are currently performed The anticipated relationship between the PMO and existing organization(s) Project/program management resources, processes and materials that are in place Issues and associated risks that can be anticipated in setting up the PMO This also helps to educate stakeholders on the value and purpose of the PMO © 2018 The MITRE Corporation. All rights reserved.

| 21 | Determine Potential PMO Benefits Potential Benefits Expected for a PMO 1 - Better availability of resources with skills in 16 - Better availability of information on lessons Project Management learned from previous experiences 2 - Effective transfer of knowledge in project management 17 - Better communication among areas of the organization 3 - Better communication among the project team 4 - Improved reliability of the information provided 5 - Improved availability of information for a better decision-making 18 - Better communication with the executive level 19 - Time and cost estimates more reliable 20 - Better control over project teams 6 - Better project time and project costs control 7 - Improved support from the executive level to the projects 8 - Better definition of roles and responsibilities 21 - Better third parties and subcontractors control 22 - Increased motivation and individual commitment 9 - Better allocation of resources across projects within the organization 23 - Greater agility in project management decisionmaking 24 - Reduction of the projects life cycle 10 - Reduction of risk exposure 25 - Greater integration among areas of the organization 11 - Increased productivity on projects 12 - Improved client satisfaction 13 - Increased visibility of the relationship between projects and strategy 26 - Better quality of projects results 27 - Better projects prioritization 28 - Increased visibility of the relationship among projects 14 - Greater organization commitment to results 15 - Increased visibility of resource demand 29 - Increased visibility of project progress 30 - Increased predictability for decision making © 2018 The MITRE Corporation. All rights reserved.

| 22 | PMO Vision, Mission and Goals § Identification of candidate projects for the organization § Successfully manage the delivery of projects § Increase the probability of on-time, within budget and full scope § § § delivery of projects Serve as a center for project/program management expertise Provide objective project control Alignment of project activity and business strategy Establish a common method for project management based on industry and organizational best practices Provide visibility into project performance for senior leadership Effectively manage risks and issues at the program level Enhance communications between program stakeholders Standardize project reporting and metrics Ensure that project/program managers are qualified and trained Facilitate governance Manage an organization’s project portfolio © 2018 The MITRE Corporation. All rights reserved.

| 23 | PMO Organizational Structure § Functional Organization – Organized by functional areas such as program management and control, systems engineering, IV&V, and information assurance – Typically, hierarchical in structure with a clear chain of command – Desirable where stable, repeatable tasks are involved – Staff may be matrixed to projects § Program Organization – Organized by programs and projects – Desirable when task is less predictable and requires innovative problem solving © 2018 The MITRE Corporation. All rights reserved.

| 24 | PMO Functions – Business Unit PMO § Standardization of project management processes to be followed § § § Portfolio management § § Career development Change management Integration of project reporting Monitoring and oversight Process improvement Sharing of best practices and lessons learned Definition of quality standards Communications Release management © 2018 The MITRE Corporation. All rights reserved. § Organizational and project governance § § Resource management Definition of project metrics Standardize and support tools Maintain project historical information § Internal consulting and mentoring § Project management training § Relationship management § Liaison with organizational and external stakeholders (OMB, Directors, etc. ) § Benefits Realization

| 25 | PMO Functions – Administrative PMO (1 of 2) § Standardization of project management processes § Portfolio/investment § § § § management Change management Risk management Issue management Reporting Monitoring and oversight Process improvement Contract (subcontract) management) © 2018 The MITRE Corporation. All rights reserved. § Acquisition § Legal § Systems engineering § Test Management § Quality assurance § Security § Privacy § Governance § Resource management § (including acquisition of external resources) Metrics

| 26 | PMO Functions – Administrative PMO (2 of 2) § Standardize support tools § Integrated program § § § communications Maintain program historical information Requirements management Systems/software architecture Organizational change management Transition and deployment management Relationship/stakeholder management © 2018 The MITRE Corporation. All rights reserved. § Schedule management § Budget management § Requirements management § Scope management § Performance management § Integrated release § § management Training Lessons learned compilation Document management Benefits Realization

| 27 | PMO Functions – Program/Project PMO § Standardization of project management processes to be followed § § § § Budget management Schedule management § § Maintain project historical information § § § § Document management Change management Risk management Issue management Reporting Process improvement/lessons learned Contract (subcontract) management) Test management Quality assurance Security Quality standards Sourcing and resource management Calculation of project metrics Communications © 2018 The MITRE Corporation. All rights reserved. Requirements management Transition and deployment management Supplies, office space, and other administrative tasks Scope management Release management Privacy Training PM Tools management Legal System engineering System architecture Acquisition Stakeholder management Organizational change management Governance

| 28 | PMO Authority (1 of 2) § What accountability does the PMO have for the success of the organization’s programs/projects? § Will the PMO have the authority to specify the use of standard program/project management practices, processes, tools and methodology? § Will the PMO be required to review and approve project management artifacts such as the schedule and the Project Management Plan? § Will the PMO set standards for program/project manager qualifications? Will the PMO appoint, or have approval authority for, program/project managers? § Will the PMO receive all metrics and status reports from all projects in the organization per a format and schedule established by the PMO? Is data available from which to calculate identified metrics? © 2018 The MITRE Corporation. All rights reserved.

| 29 | PMO Authority (2 of 2) § Will project managers report directly to the PMO? If not, what is the reporting relationship between the project managers and the PMO? § To what extent can the PMO enforce remedies when it is determined that the project is not proceeding as planned or that resources are not executing the appropriate project management tasks? § To what extent will the PMO be involved in risk and issue management § Will the PMO be involved in the review cycle for all project management documentation? § What access does the PMO have to senior management? § Is there an existing governance structure and what role does the PMO play in that structure? § Will the PMO be responsible for PM training? © 2018 The MITRE Corporation. All rights reserved.

| 30 | Governance § The high-level purpose of governance is to: – Control and direct the making and administration of policy – Determine or guide influence over expenditures, objectives and outcomes – Control or influence the actions of an organization § Will the PMO have control over a standard review process – Stage gates – Agile ceremonies © 2018 The MITRE Corporation. All rights reserved.

| 31 | PMO Conceptual Model § Don’t spend time writing a lot (use Power. Point) § Get a formal written approval § Contents – Vision, mission and goals of the PMO – Type of PMO to be established – High level organizational structure of the PMO and its relationship with the Agency/sponsor’s organization(s) – Scope and functions to be performed by the PMO and the core services to be provided – How success/value will be measured? – Authority to be delegated to the PMO – Governance structure – Project management processes and artifacts for which the PMO will be responsible – PMO integration into the organization’s project management culture – Required resources – Risks and issues © 2018 The MITRE Corporation. All rights reserved.

| 32 | PMO Organizational Change/Communications § How will the establishment of the PMO be communicated? § How will the establishment of a PMO change the way program/project management is performed? – – Who will these changes affect? How will the changes be communicated? How will the changes be implemented? How will team members be held accountable to execute the project management processes and the project work? § What training is required for people affected by the PMO or new processes? § Will the establishment of a PMO have an impact on existing entities within the organization? – Will this impact be negative for any organization (e. g. , something for which one organization had authority over that will now be delegated to the PMO)? – In what ways will the establishment of a PMO change the organizational culture? How will the change be managed? – How will “buy-in” be obtained from those affected? § Is there anyone (or any organization) likely to oppose the PMO or the § changes implemented by the PMO? How can this opposition be overcome? © 2018 The MITRE Corporation. All rights reserved.

| 33 | Implement the PMO (Finally!) § Staff the PMO § Develop plans and strategic artifacts § Collect performance metrics § Implement PMO processes and functions § Migrate projects to the PMO, starting with the pilot § Training § Implement PMO tools § Management revalidation Be flexible if things need to change © 2018 The MITRE Corporation. All rights reserved.

| 34 | Some Tips

| 35 | PMO Value Guidance § The PMO value proposition must be clearly defined and communicated. § An executive must fully support the PMO and be its champion. § The relationship between the PMO and individual projects must be § § § clearly understood, communicated and be accepted. A PMO is not a best practice if it is just another layer in the bureaucracy. The expected benefit of having a PMO must be clearly defined for all relevant stakeholders. The PMO must consider the organization’s culture and be consistent with that culture. A PMO that is purely administrative should be avoided. It must do more than approve/disapprove/audit tasks. Define and monitor key performance indicators. A PMO strategy which just adds more process, documentation, formalization and control should be avoided. – More agony is not the solution. – Concentrate on improving project and program outcomes with measurable improvements as a result of implementing the PMO © 2018 The MITRE Corporation. All rights reserved.

| 36 | Key Factors for Success (p 1 of 3) § Executive leadership buys into the PMO in actions, more than words – Leadership funds the PMO and delegates authority to the PMO – Leadership reinforces PMO decisions and activities – Executives are briefed by the PMO on a regular basis § The PMO is supported throughout the organization and is integrated into the organization’s culture § From the top down the organization must be committed to the PMO’s success § Program management is recognized as a core competency § PMO is staffed with experienced program managers and leaders © 2018 The MITRE Corporation. All rights reserved.

| 37 | Key Factors for Success (p 2 of 3) § A methodology/framework with a repeatable process based on standards and best practices is established – Until this is in place program success will be inconsistent – Includes templates, processes and policies § The PM Executive should lead the PMO, not projects (except in the case of a Project Management Office (PMO)) § Needs to be able to knock down obstacles for PMs § The PMO is the focal point for all projects and tasks – Knowledge base for all program information, including decisions, and status of actions, issues and risks § The PMO engages stakeholders (internal and external) and takes actions to make them feel part of the team. © 2018 The MITRE Corporation. All rights reserved.

| 38 | Key Factors for Success (p 3 of 3) § PMO leadership has a history of delivering successful outcomes – Just assigning a group of Project Management Professionals (PMPs) is not sufficient § The PMO communicates clearly and often § The PMO sets expectations § The PMO clearly identifies roles and responsibilities § The PMO take steps to ensure that all team members follow the PMO’s program management processes § The PMO adjusts its operation based on continuous feedback © 2018 The MITRE Corporation. All rights reserved.

| 39 | Potential Pitfalls § Lack of executive or organizational support § Lack of a clear mission, goals and objectives § Failure to monitor and report the program’s and PMOs value, impact and return § § § on investment Lack of transparency in reporting of progress and problems Lack of cohesiveness across key program stakeholders Lack of timely, clear and consistent communication Excessive burdens or bureaucracy placed on delivery organizations Lack of structure or methodology Poorly skilled or understaffed PMO Critical delivery organizations not staffed properly or have conflicting priorities Delivery organizations not held accountable for delivering on commitments or to requirements Training is not provided in the appropriate detail or to the appropriate resources Lack of alignment of products and services being delivered to demand of what customers need or want Not understanding of program resources and how they are allocated (not knowing where resources are applied as opposed to where they are needed) © 2018 The MITRE Corporation. All rights reserved.

| 40 | Picture by Mark Kaufman Questions