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Copyright 2010 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

Evolving your PMO

30

th

September 2010

Michael Cooch

Adam Cowmeadow

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Copyright 2010 Accenture All Rights Reserved. 2

Seminar Structure

The Theory ofEvolution

Introductionto the conceptof maturityand summaryof the Valueof a PMO

The EvolutionaryProcess

Differingviews ofevolution anditerative stepsto improvePMO maturity

EvolutionaryAspiration

Understandthe businessmotivationbehind PMOaspirations

EnvironmentalAssessment

Going beyondthe functionalto build aplatform forPMO success

EvolutionaryPlan

Definingactivities toimprove PMOfunctionalityand mitigateenvironmentalrisks

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The Theory of Evolution

In our previous Value of a PMO presentation

we demonstrated that*:

PMO uptake is increasing (from 47% in

2000 to 77% in 2006) but project

performance is not**

Deploying a PMO does not lead to

performance improvement in itself. It isonly when the PMO increases maturity

that tangible improvement occurs***

AccentureKnowledge

Base

PublishedWorks &Articles

Center for

BusinessPractices (CBP)

LinkedInPMO

Groups

Gartner WhitePapers

Sources Background

*Source:Value of a PMO Keynote at ProjectChallenge Spring Show 2010

**Source:Project Management The State of theIndustry, Centre for Business Practices (CBP) Study

***Source:Value of Project Management Centrefor Business Practices (CBP) Study

****Source:Making the Business Case for a HighlyFocused and Effective PMO Michael Hanford,Gartner 2010

The key to obtaining an approval toform a PMO rests with the

identification of solid benefits, andvalue, to the organization and

their quantification that willaccrue to the organization if a PMO is

enabled and functioning****.

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0

1

2

3

4

5

0: Absent 1: Immature /

Initial

2: Established /

Repeatable

3: Grown-up /

Defined

4: Mature /

Managed

5: Best in Class /

Optimised

What is PMO Maturity?

PMO Maturity levels indicate the effectiveness of project execution support

Level 0:Absent- No identifiable PMO operating. No

influence on project success.

Level 1:Immature/Initial A named entity (identified

as a PMO) is operating but, in general, processes are

inconsistent, project data isnt collected/used and

reporting is broadly qualitative. Has little influence on

project success.

Level 2:Established/Repeatable A recognised PMO is

operating but is in need of improvement. Some

processes have consistency, some project data is

collected but little of it is analysed and reporting is still

primarily commentary based. Plays a limited role in

project success.

Level 3: Grown-up/Defined Standard Processes

A solid PMO which experiences more

successes than failures. Most processes have

consistency, most key project data is collected

but only basic analytics are done and

reporting has introduced some metrics. Playsa role in some project successes (and failures).

Level 4: Mature/Managed A very

successful PMO which has good

sponsorship. All core processes are

consistent, all key project data is

collected, solid analytics are undertaken

and reporting is primarily data-driven.

Plays an important role in the success of

the project environment.

Level 5:Best in Class/Optimised A world-class

PMO which has complete sponsorship. All core

processes are consistent and continuously

improved, all key project data is collected,

analytics are comprehensive and reporting is

completely data-driven. Plays a critical role in

the success of the project environment.

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Organisational Performance Improvement between Levels of PMO Maturity

0% 0% 0% 0% 0% 0% 0% 0%0% 0%

10% 10% 11% 18%

36%

27%

11%

23%

39%

24%

43% 44%

64% 65%

0%

10%

20%

30%

40%

50%

60%

70%

Organisation

financially

successful

Shareholders

satisfied

Projects aligned to

strategy

Project customers

satisfied

Organisation w orks

on the right projects

Strategy executed

to plan

Projects on

schedule & budget

Resources allocated

optimally

Measures of Performance

PerformanceImprovement

How does building PMO maturity help?

A recent global survey demonstrates the performance differentiation (against

schedule, budget and quality) between high and low maturity PMOs.

This includes a 24% improvement in customer satisfaction between Level 1 and Level

3 PMOs (Level 4 and 5 are not included due to lack of statistical data at these points,

however extrapolation clearly trends positively) and a 65% improvement in the

optimal allocation of resources

*Source:The State of the PMO - 2007-2008

A Benchmark of Current Business Practices

Center for Business Practices (CBP) Report

Level 3 (Grown up) PMOs support

project delivery on schedule & tobudget 64%more often that their

Level 1 (Immature) PMO

competitors.

Maturity Level

1 2 3

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Level 1: Immature

25.7%

Level 2: Established, in

need of improvement

34.4%

Level 3: Grown up, more

successes than failures30.4%

Level 4: Mature, verysuccessful

8.7%

Level 5: Best in class

0.7%

How mature are organisational PMOs?

Less than 1 in 10 PMOs are considered high-performers (Level 4 or 5)

Less than 1 in 100 is considered Best in Class (Level 5)

Evidence suggests the cost to implement a Level 3 to 5 PMO is heavily

outweighed by the delivery benefits realised within an organisation.




60%of all organisations could

substantially benefit fromimproving the maturity of their

PMO.

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Seminar Structure









EvolutionaryPlan


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The LinkedIn PMO Maturity

Case Study*

Over 150 responses**

Lots of vigorous debate

Highest proportion of responses - it is Impossible

Nearly 7 in 10 said it was Impossible or Very Challenging

How realistic is it to move a

PMO from Level 0 to Level 4in 12 months?

* Responses were categorised according to ourinterpretation i.e. This was not a formal survey

** Multiple responses, from the samecontributor, were unified where possible (but it ispossible that some slipped through the net)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Impossible Very Challenging Difficult Intermediate Simple

44%

24%

18%

12%

2%

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The Evolutionary Process

DefineAspiration

AssessEnvironment &PMO Maturity

DesignIntegrated Plan

ImplementChange

Track PMOValue

Match the pace of evolution

with the knowledge of theongoing (and possibly

changing) organisational

conditions

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Seminar Structure









EvolutionaryPlan


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Business Driven Aspiration/Motivation of

Project Sponsor

Aspiration/Motivation

Focus on tracking allwork (no off-radaractivity)

Understand high-levelproject risk

Level 1 Controlled progress

through formalcheckpoints

Processstandardisation

Hub of best practice

Improve PMcompetency

Enhance ROI from

Level 1

Level 2 Comprehensive

process standardisation

Data-driven decision-making

Manage projectinterdependencies

Monitor and managescope/change control

Use risk to calculate

project contingency Enhance ROI fromLevel 2

Level 3 PMO provides analytics

& intelligence

Project prioritization (inPortfolio environments)

Integrated resourcemanagement (andcapacity planning inPortfolio environments)

Enhance ROI from

Level 3

Level 4 PMO Organisation is

self-iimproving

Enhance ROI fromLevel 4

Level 5

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EvolutionaryPlan


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3. Findings andRecommendations

1. The Interviews2. The Quantitative

Results3. Findings &

Recommendations4. Improvement

Log5. PMO Functional

Plan

The Accenture Model isbased on quantitativeassessment of functionalcapability in 11 key areasover 261 questions:

Assessment of PMOfunctional capability against a5 tier scale for eachFunctional Area

Functional Maturity by areadetermines the main focusareas.

Based on Knowledge-baseand prior, collective, lessons-learned, the assessor willdefine a series of specificimprovements

Improvements are thencrafted into a project plan forimplementation.

PMO Functional Maturity Assessment

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Maturity is a concept to help frame improvement. It is not the panacea to all ills

Whilst this maturity representation is staged there are also models that are continuous which areequally valid and beneficial as frameworks

Project Management Maturity Models can be substituted in lieu of PMO models

The maturity spectrum was established by benchmarking a number of PCS-controlled PMOs

Sample PMO Maturity Assessment (1/2)

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Maturity Model Examples

Portfolio, Programme and ProjectManagement Maturity Model(P3M3) cross referenced to P30

OPM3 Organizational ProjectManagement Maturity Model

Project Management MaturityModel J Kent Crawford

Kerzner Project ManagementMaturity Model (KPMMM)

Harold Kerzner Gartner PPM Maturity Model

Accenture PMO MaturityAssessment

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(The PMO) must drive much

higher ROI than the projects itoversees. In this sense, it becomes

a value machine... (it) must helpexecutives meet their strategic

goals by providing a single point ofknowledge for PM intellectual

property... (it) must helpexecutives execute*

Structural considerations for PMO

* Source:Advanced project portfolio managementand the PMO (paraphrased), Gerald I. Kendall,Steven C. Rollins, J. Ross Publishing, 2003

** Source:Clearly Define Your Goals BeforeCreating a PMO Clearly Define Your Goals BeforeCreating a PMO Daniel B. Stang Gartner 2009

***Source:PMOs: One Size Does Not Fit All DonnaFitzgerald Gartner 2008

PMOs fail, by some estimates,more than 50% on their first

try... We believe that this is thedirect result of not matching

the PMO mission andobjectives to the real needs of

the organization***

When creating a PMO...first clearlyarticulate the main business

problem you are trying to solve,and then define some key goalsfor the PMO in addressing that

problem **

Structural LegacyThe Socio-political factors

affecting a PMOs organisational environment

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It has been shown thatdeploying a PMO does notleadto performance improvement in

itself. It is only when the PMOincreases maturity that tangible

improvement occurs*.

Functional considerations for PMO

*Source: Value of Project Management

Center for Business Practices (CBP) Study

**Source:The State of the PMO - 2007-2008



*** Source:Closing the Gap - Economist

Intelligence Briefing Unit

To prove that a project was a success, it isnecessary to measuremore than

timeliness and adherence to budget;companies should also measure outcomesagainst project goals, determine whetherthe project delivered bottom-line resultsand assess the satisfaction of clients and

stakeholders with the project. ***

In low-performing organisations

project management performance

(and PMO performance) is not

measured nor is appropriate

accountability for outputs

assigned**

Functional Legacy The operational factors that

influence PMO processes and tools

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Resource considerations for PMO




**Source:Software Engineering Economics

Prentice Hall, Englewood Cliffs, NJ, p431

Boehm B (1981)

*** Source:Closing the Gap - Economist



PMO staff are much less likely to

have formal project management

qualifications, hands-on-experienceand extensive project management

knowledge*

A project staffed with uniformly

very low-rated personnel on all

capability and experience factorswould require 11 times as much

effort to complete the project as

would a project team with the

highest rating in all the above

factors**

Training, mentoring and other

development activities for

project management

professionals should be tied to

specific skills gaps and career

planning.

Resource LegacyThe level of information,

expertise and finance available for PMO activities

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Cultural considerations for PMO




** Source: Closing the Gap - Economist



executive sponsorship is

approximately 60% less likely to

have an appreciation of the

strategic value of a PMO *


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 *

To maintain a competitive

advantage, and maximise value,

leaders must link every PMdecision to the strategic goals of

the organisation. Leaders who

continue to focus on improving PM

strategies and methodologies will

garner the greatest long-term

success. **

Cultural LegacyThe level of organisational

understanding of, and appetite for, PMO activities

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PMO Environmental Assessment Framework

Level of organisational resource competency(e.g. change management/projectmanagement etc)

Level of investment (budget/FTE) availablefor change

Level of PMO team resource competency

Level of PMO leadership experience (todrive change)

Level of understanding of the Value of a PMO

Level of executive buy-in

Level of alignment between goal-setting >results/behaviour > performance assessment

Level of organisational buy-in

Type/magnitude of the cultural/behaviouralchange (e.g. distributed teams)

Required PMO functional blueprint

Level of methodology constraint on PMO Level/value of supporting PM software(and configuration) in place

Breadth of PMO delivery lifecycleresponsibilities (e.g. benefits realisationincluded?)

Level of policy/contractual constraint onPMO

Level of readiness/effectiveness of governance

construct (e.g. unified vs. siloed)Level of project/programme/portfolio complexity

Size of the delivery organisation (headcount)

Level of implicit PMO power

Type of organisational structure(projectized/matrix/functional)

Level of alignment to enterprise strategy

Level of distributed working

Structural

Legacy

Functional

Legacy

Resource

Legacy

Cultural

Legacy

OperationalPMO Maturity

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Seminar Structure









EvolutionaryPlan


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StructuralRiskMitigation

UnderstandPMO Role

Develop PMOCharter

IntegrateDisparate PMO

Functions

Align PMO toEnterpriseStrategy

DevelopFunctional

Relationships

Design Fit-for-

PurposeGovernance

StructuralLegacy

FunctionalLegacy

ResourceLegacy

CulturalLegacy

Position the PMO to enable

Strategy execution through

full involvement in

Programme/Project

Governance

Structural Risk Mitigation

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FunctionalRis

kMitigation

DevelopBusiness Case

Regularly AssessPMO Maturity

Tooling forautomation

Establish andBaseline WBS

DefinePerformance

Metrics

EffectiveKnowledge

Management

Publish Metrics

Tailor / WaiverPMO Scope

Improve PMMethodology

Leverage /Record Lessons

Learnt

StructuralLegacy

FunctionalLegacy

ResourceLegacy

CulturalLegacy

Develop a PMO Business Case

that harnesses Management

Information to evolve

Project/Programme operations

Functional Risk Mitigation

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Re

sourceRisk

Mitigation

Develop PMO

TrainingCurriculum RingfenceSufficient PMO

Budget

Build QualifiedTeam

Build Project

TeamRelationships

Align Roles toPMO Objectives

RecruitExperienced

PMO Manager

Resource Risk Mitigation

StructuralLegacy

FunctionalLegacy

ResourceLegacy

CulturalLegacy

Build and maintain a qualified

and relevant team using all the

resources at the PMOs disposal

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CulturalRisk

Mitigation

Send PMO tothe coal-face

Manage

StakeholderExpectations

Collaborate &Support

(not police)

Design Value -Based Project

Training

Embed Value ofPMO Concept

Develop Systems& Process

Evangelists

Create

CompetitiveSpirit

Embed CulturalFlexibility in

Team

Establish PMOSurvey

Secure andMaintain Buy-In

StructuralLegacy

FunctionalLegacy

ResourceLegacy

CulturalLegacy

Create a PMO value culture on

the Programme/Project and

constantly evaluate stakeholder

expectations and satisfaction

levels

Cultural Risk Mitigation

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Logo

text

text

text

Q6Q5Q4Q3Q2Q1Timeline

PMOMaturity

Level

L5

L4

L3

L2

L1

L0

Accelerating your PMO Evolution*

Baseline Plan Only takes into account the activitiesneeded to address the functional gaps and risks aredealt with on an ad-hoc basis

Accelerated Plan Enhances the functional improvement plan

with a defined environmental risk mitigation activities toaccelerate PMOs improvement

PMO

FunctionalPlan RiskMitigationPlan

* NB: The graphics and statistics on thispage are indicative and used to demonstrateapproximate proportions and trends

EnvironmentalAssessment Results

PMO Functional MaturityAssessment Results

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Summary

Evolving PMO maturity drives real value

Create an integrated plan(process improvement and risk mitigation)

Be clear on the sponsors aspiration

Assess beyond the functional

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C i ht 2010 A t All Ri ht R d 28

Follow-ups, Questions and Answers

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Documents