The Program Management Office Advantage

A Powerful and Centralized Way for Organizations to Manage Projects

The Program Management Office Advantage

Authors: Lia Tjahjana, Paul Dwyer, PMP, Mohsin Habib, Ph.D
Pub Date: September 2009
Print Edition: $34.95
Print ISBN: 9780814438473
Page Count: 288
Format: Hardback
e-Book ISBN: 9780814414286

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Excerpt

Introduction

Does the situation sound familiar to you? If yes, then a Program Management Office (PMO) might be the solution to your problem. This book introduces the concept of having a centralized office that manages the running of multiple projects at the same time and that has the aim of achieving an optimum performance for the whole organization. Throughout this book, we will draw examples from FAS Inc., which is based on a real-life company, so that we can learn from its experience in finding project solutions through the PMO. Just like FAS Inc., to stay ahead of competitors in today’s complex business environment, an organization must constantly respond to challenges. Organizations are always required to be both reactive and proactive to changes coming from the inside and outside, such as competitors’ moves, changes in regulations, internal restructuring, and so on.

More often than not, responding to all of those challenges results in the running of multiple projects at any one time. The complexity of such a situation creates a number of issues, such as the following:

/ Scarcity of Resources. Every organization, no matter how prosperous it is, has limited access to resources, be it human resources, financial funding, or time. With such limitations imposed on them, organizations must effectively allocate their resources among a number of different projects.

/ Inconsistency in the Management Process. Inconsistency between one project and another is a common problem that plagues a lot of organizations, especially those whose project management capabilities are not yet mature. They are faced with difficulties in consistently measuring the performance of various projects. For example, Project A and Project B are two very similar projects with very similar outcomes. However, due to the lack of a PMO in the organization, these projects are managed differently with different performance metrics. As a result, Project A is deemed a failure and Project B a success, even though that may not be the case if a consistent measure were applied to both projects.

/ Lack of Coordination Between Projects. With multiple projects running at once, a company is confronted with the difficulty of monitoring each project’s success. It is important to be aware of how a lack of coordination will inevitably create disruptions in the organization. Examples are those projects that might have slipped “under the radar.” While still costing the company money, they no longer deliver.

/ Difficulty of Selecting Projects That Are Aligned with the Organization’s Vision and Mission. Most organizations are confronted with this difficulty. Without a proper mechanism, irrelevant projects might be approved instead of those that are more valuable.

The running of multiple projects without the existence of a centralized coordinator will almost certainly result in a number of issues, such as these. Such problems interfere with the efficiency and effectiveness of an organization’s business operation. As we all know, an organization that is not equipped to handle the challenges of today’s competitive environment will soon lose its ability to survive in the market.

Objectives

The importance of having a proper project governance has been highlighted by a number of researches: A team from MIT Sloan Schools’ Center for Information Systems Research found that “firms with superior IT [information technology] governance had more than 20% higher profits than firms with poor governance given the same strategic objectives” (Weill and Ross, 2004).

According to Gartner Research, the world’s leading information technology research and advisory company, “IT organizations that establish enterprise standards for project management, including a project office with suitable governance, will experience half the major project cost overruns, delays, and cancellations of those that fail to do so” (Gartner Research, 2003).

In other words, Program Management Office (PMO)—also known as Project Center of Excellence, Project Management Group, and many other similar names—offers the solution. The Program Management Office Advantage introduces the PMO from a business perspective, as opposed to the narrow and more specific project perspective. Not only does it focus on the PMO’s internal project-related activities (i.e., PMO’s roles in monitoring projects’ progress, implementing project management standards throughout the organization, selecting and auditing projects, and so on), it also discusses how the PMO will fit best into the organization (i.e., the justification to have a PMO, what needs to be taken into consideration before setting up the PMO, how to align the PMO with the organization’s vision and mission, and so on). The concepts offered in this book can be used as a starting point for the readers to create the PMO that will serve their organizations best.

With emphasis on practicality, this book deliberately leaves out the complicated formulas and theoretical metrics associated with the technicalities of project management, which can be found in other, more advanced books.

In addition, the Project Management Institute’s Project Management Body of Knowledge (PMBOK) and the UK Office of Government Commerce’s PRINCE2—the de facto industry standards for project management theory—were referenced closely throughout the book as the main resource to base our overall PMO concept on.

Who Should Read This Book?

It is interesting to note that, although PMO is mainly pioneered (and widely used) in the IT industry, its practice is applicable to various industries, from construction to finance, from health care to education. The same goes for the concepts and ideas we offer here. Because of their generality, readers will easily be able to adopt most of them and adapt the rest to suit differing industries. Regardless of the occupational field, however, we believe this will be of special interest to:

/ Project managers who are already faced with the challenges of managing multiple projects at once

/ Functional managers and company executives who are interested in improving the efficiency of the running of projects in their organizations

/ General readers with an interest in project management and in the use of the Program Management Office (PMO)

How This Book Is Structured

The book is divided into five parts, paralleling the different aspects of a Program Management Office.

/ The first part begins with a general overview of Program Management Office: key definitions used in the book, what a PMO does, the benefits of adopting a PMO, factors to consider before creating one, how a PMO relates to other parts of the organization, and so on.

/ Assuming that by the end of the first part we are successful in convincing you of the useful purposes of a Program Management Office, the second part will discuss the PMO’s role as a coordinator in detail. We outline all the major functions of a Program Management Office, from providing project management training to creating and implementing a standardized project management process.

/ The third part discusses the systems and processes involved in the interaction between the PMO and the projects: for

example, the processes involved in monitoring a program, the processes in selecting and auditing projects, and the processes in choosing the most suitable system to support the PMO.

/ The fourth part looks at the Program Management Office as an independent business division. With sufficient understanding of the various aspects of a Program Management Office discussed in the preceding sections, the readers will then be introduced to the required steps in establishing and running a PMO. This includes preparing for the PMO (facilities wise, establishing governance, and envisioning the right type of leadership), implementing the PMO into the organization (i.e., dealing with resistance, which may be encountered), and measuring the PMO’s performance through key performance indicators (KPIs) and audit processes.

/ The fifth part consists of a brief chapter on the future direction or trend of the adoption of PMO across various industries. As organizations will continue to evolve, so will the PMOs morph their functions and roles to suit the organizations they serve. In this chapter, we discuss our vision of a future PMO and the ourney to get there.

This book is structured in such a way that it can be a starting point for people to become familiar with Program Management Office. Not only does it provide the big picture of the concept, it also provides practical examples and templates that are general enough to be understood easily, yet detailed enough to provide guidance. We hope that, after reading the book, readers would be able to pinpoint how a PMO can improve their organization’s performance and understand what steps are necessary to make it happen.

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