IT Project Management Office

Presentation Objectives
• Provide an overview and general
understanding of PMO models, functions,
success factors, and implementation
• Introduce the CobiT PM CMM as a framework
for establish and evolving the PMO Project
Management functions
 Outline
• IT PMO Trends
• PMO Models
• PMO Key Considerations
– Charter
– Culture Change
– Implementation Strategies
– Staffing/Skills
– Performance Metrics
• Critical Success Factor
• Introduction - CobiT® CMM
 IT PMO Trends
• 67% of IT organizations in 2003 have PMOs (Forrester Survey)
• More than half established since 2000 (Forrester Survey)
• Government is moving to standardize IT Project Management
– Nov, 2003, Federal CIO Council recommends setting up Federal PMO to
standardize PM practices
– Jun, 2004, SC requires management of major and inter-agency IT projects to
use standard practices and be managed by PMP
– Jan, 2001, NY sets up PMO to standardize management of technology projects
– Jun 2002, CA CIO established objectives for statewide project management
standards
• IT PMOs are becoming strategic
• IT PMOs are gaining more influence
 What’s Driving IT PMO Proliferation?
• Late and over budget IT projects
– Lack of coordination of activities
– Poor project management practices
– Lack of standardization of PM methodology
• Need for consolidated project reporting to drive prioritization/decisions
– More focus on IT project ROI
– More focus on alignment of IT projects with business strategy
– Strategic value and dependency on IT applications/technologies
• Increase in IT Project workload
– Proliferation of IT project proposals
– Delays in getting projects approved
• More complex IT environment and solutions
– Enterprise solutions/cross-functional projects
– Distributed development organizations
– Outsourcing and contracting out of IT projects
 PMO Benefits
• Companies that implemented successful
PMOs achieved:
– 80% ROI
– 20% reduction in project time
– 30-35% successful project delivery
• Companies without a PMO experience 74%
project failure rate

Source: Forrester Research

 PMO Models
• One size does not fit all
– PMO drivers/business needs
– PM maturity
– Vision and goals of sponsor
– Business/organization mission
– Organization size
– Number of projects
– Political and cultural environment
• Tactical vs. strategic
• Internal vs. external focus
• Departmental vs. enterprise (IT vs. LOB)
• Single vs. multiple
• Staff vs. line organization
 PMO Support/Control Model
SUPPORT CONTROL

Project administrative support Project Audits

PM standards, methodology, processes Cost and Schedule Control
Project Consulting and mentoring Business Case
PM coaching/training/certification Project Approval
Integrated Project Reporting Project Prioritization
Issue Tracking/Reporting Project Management
Master Project Schedule Resource Management
Project Document Repository IT Asset Management
PM tools and tools support Project Portfolio Management
 Key Considerations
• PMO charter
• Culture change
• Implementation strategy
• Staffing
• Metrics/Performance
• Success factors
• Maturity of Project Management Practices
 PMO Charter
• Charter Scope
– Business Needs
– Sponsor
– Public vs. Commercial
– PM Maturity
• Charter Document
– Mission/Vision
– Goals/Objectives
– Sponsor
– Service Offering
– PMO Governance
– Key Performance Metrics
– Funding model
 PMO - Culture Change
• Natural resistance to change
• Political landscape
– Winners/Losers
– Management Support
• Degree of cultural change
– PM maturity
– PMO charter
– Existing skill level
– Key driver implementation strategy
• Change Management
– Assess impact of change
– Inform
– Educate
– Involve
 PMO Implementation Strategies
• Strategy drivers
– PMO charter
– PM maturity
– Sponsor and management support
– PMO drivers
– Perception of value
– Political environment
– Culture/Value System
• Evolutionary/Incremental
– Lower implementation risks
– Lower start up costs
– Will take longer to demonstrate ROI
– More suitable if high resistance to change and low management support
• Revolutionary/Wholesale
– Higher implementation risks
– Higher startup costs
– May be able to demonstrate ROI quicker
– More suitable if crisis or recognition at high level that change is imperative
 PMO Staffing/Skills
• Staffing Approaches
– In-house resources
– Hybrid (In-house/contractors)
– Ad hoc contractors augmentation
• Skills
– PMO Director/Manager
– Project Manager
– Project Portfolio Manager
– PM Process/Methodology Trainer
– Relationship/Account Manager
– Tools Support/Administration
– Administrative Support
– Librarian/Document Control
 PMO Performance Metrics
• PMO vs. Project metrics
• Less that 15% of PMOs employ formal metrics program (Source: Forrester Research)
• Metrics are essential for growth and support – demonstrate progress, value, and productivity
• Performance metrics are driven by charter – no such thing as typical metrics
• Business value metrics
– Executive focus - Measure and demonstrate value to business
– Help justify existence during downsizing
– Expressed primarily in dollars savings/revenue or ROI
– Tend to be few and harder to derive
• Functional performance metrics
– Internal focus - Measure and demonstrate performance or quality of PMO functions
– Help justify PMO budget
– Help improve PMO performance
– May require baseline or benchmark to demonstrate performance
– Expressed primarily in percent or counts
– Tend to be many depending on functions performed
– Must be selectively chosen so as not to overwhelm
• Service level metrics
– Customer focus - Measure and demonstrate service level or quality of service to customer
– Help improve and maintain customer satisfaction
– SLA/SLO
– Expressed in a variety of ways
– Select on key and most important value to customer community
 Success Factors
• Clear Charter
– Creates clear expectations
– Defines boundaries for implementation
• Top-Down Support
• Bottoms up Buy-in
• Sponsor - Reporting to senior executive
• Strong LOB representation
• Communication/PR
– Promotion of services
– Education of value
– Performance metrics that demonstrate business and customer value
 PM Capability Maturity Models
• Valuable tool for establishing PMO and help define
objectives, charter, and processes
• Assess current status
• Compare against best practices
• Develop strategy and road map for PMO
• Help communicate vision and get buy in
• Different models (CobiT, OPM3, ISO 15504,
CMM/CMMI)
 CobiT ® Capability Maturity Model
• CobiT® CMM is valuable and comprehensive framework for assessing
maturity of IT organization
• CobiT® CMM
– International Open Standard for IT Governance
– IT Governance Institute (ITGI®)
– Information Systems Audit and Control Association (ISACA®)
• ITIG ® not associated with Software Engineering Institute (SEI), Carnegie
Mellon
• CobiT® CMM uses same conceptual framework as SEI’s CMM
• Defines maturity of IT organizations in four domains
– Planning and Organization
– Acquisition and Implementation
– Delivery and Support
– Monitoring
• PM CMM part of CobiT® Planning and Organization domain

Sources: WWW.ISACA.ORG and WWW.ITGI.ORG

 CobiT® Maturity Levels
• 0 Non-Existent – Not applied
• 1 Initial – Ad hoc and disorganized
• 2 Repeatable – Follow regular pattern
• 3 Defined – Documented/communicated
• 4 Managed – Monitored and measured
• 5 Optimized – Best practices followed/ automated

Source: CobiT 3rd Edition, Management Guidelines

 CobiT® Model Components
• Defines processes within each domain
• Defines high-level control statement for each
process
• Defines maturity levels
• Defines success factors for each process
• Defines key goals for each process
• Defines key performance indicators

Source: CobiT 3rd Edition, Management Guidelines

 CobiT® Project Management
Process Control Statement
• Control of project management process with
the business goal of setting priorities and
delivering on time and within budget
• Is enabled by the organization identifying and
prioritizing projects in line with the
operational plan and the adoption and
application of sound project management
techniques for each project undertaken

Source: CobiT 3rd Edition, Management Guidelines

 Level 0 – Non Existence
• PM techniques not used
• Organization does not consider business
impact of poor project performance

Source: CobiT 3rd Edition, Management Guidelines

 Level 1 – Initial/Ad Hoc
• Aware of need for project structure and risks of poorly managed projects
• Use of PM techniques left to the individual
• Projects are generally poorly defined and do not incorporate business or
technical objectives of the organization or stakeholders
• Lack of management commitment and project ownership
• Critical project decisions are made without user management or customer
input
• Little or no customer and user involvement in defining IT projects
• No clear organization within IT projects and roles/responsibilities are not
defined
• Project schedules and milestones are poorly defined
• Project staff time and expenses are not tracked and compared to budgets

Source: CobiT 3rd Edition, Management Guidelines

 Level 2 – Repeatable but Intuitive
• Sr. Management has gained and communicated an
awareness of the need for IT Project Management
• Organization is in the process of learning and
repeating certain techniques and methods from
project-to-project
• Projects have informally defined business and
technical objectives
• Limited stakeholders involvement in PM
• Some PM guidelines developed, but left to discretion
of project managers

Source: CobiT 3rd Edition, Management Guidelines

 Level 3 – Defined Process
• PM process and methodology formally established and communicated
• IT projects defined with appropriate business and technical objectives
• Stakeholders are involved in the management of IT projects
• Defined project structure with roles and responsibilities
• Defined and updated project milestones, schedules, budget and
performance measurements
• IT Projects have formal post systems implementation procedures
• Informal project management training provided
• No established policies for using combination of internal and external
resources
• Quality assurance procedures are defined

Source: CobiT 3rd Edition, Management Guidelines

 Level 4 – Managed and Measurable
• Formal and standardized project metrics
• PM measure and evaluated throughout organization not just IT
• PM process enhancement formalized and communicated, and project
team members are trained on all enhancements
• Risk management performed as part of PM
• Stakeholders actively participate in projects or lead them
• Project milestones and criteria for evaluating success at each milestones
are established
• Value and risk are measured and managed prior to, during, and after
project completion
• Management has established a program management function within IT
• Projects are defined, staffed, and managed to address organizational
goals, rather than only IT specific ones.

Source: CobiT 3rd Edition, Management Guidelines

 Level 5 - Optimized
• Proven full life-cycle project methodology is implemented and enforced,
and integrated into organizational culture
• On-going program to institutionalize best practices has been implemented
• Strong and active project support from Sr. Management sponsors and
stakeholders
• Implemented project organization structure with documented roles,
responsibilities, and staff performance criteria
• Long term IT resources strategy is defined to support development and
operational outsource decisions
• Integrated Program Management Office is responsible for projects from
inception to post implementation
• Program Management Office is under the management of the business
units and requisitions and directs IT resources to complete projects
• Organization-wide planning of projects ensures that users and IT resources
are best utilized to support strategic initiatives

Source: CobiT 3rd Edition, Management Guidelines

 CobiT® PM Success Factors
• Experienced and skilled project managers are available
• Accepted and standard project management process in place
• Sr. Manager sponsorship of projects, and stakeholders and IT staff share in the
definition, implementation, and management of projects
• There is an understanding of the abilities and limitations of the organization
and the IT functions in managing large, complex projects
• Organization-wide project risk assessment methodology is defined and
enforced
• All projects have a plan with clear traceable work breakdown structures,
reasonably accurate estimates, skill requirements, issues to track, quality plan,
and transparent change process (my note – effective PM methodology
enforced)
• Transition from implementation team to operational team is a well-managed
process
• System development life cycle methodology has been defined and is used by
the organization

Source: CobiT 3rd Edition, Management Guidelines

 CobiT® PM Key Goal Indicators
• Increased number of projects completed on time and on
budget
• Availability of accurate project schedule and budget
information
• Decrease in systematic and common project problems
• Improved timeliness of project risk identification
• Increased organization satisfaction with project delivery
services
• Improved timeliness of project management decisions
 CobiT® Project Management
Key Performance Indicators
• Increased number of projects delivered in
accordance with defined methodology
• Percent stakeholders participation in projects
(involvement index)
• Number of project management training days per
project team member
• Number of project milestones and budget reviews
• Percent of projects with post-project reviews
• Average number of years of experience of project
managers
 Conclusion
• IT PMOs can improve IT project delivery performance
• One size does not fit all
• PMO Support/Control model most useful
• Clear charter, top down support, & bottom ups buy is
key to PMO success
• PMO performance metrics should focus on value to
key stakeholders
• CMM valuable framework for establishing and
evolving PMO