project executives whose focus is strategic. At the end of a spoke is a regional PSO, which has operational responsibilities for the unit they represent. Obvi- ously, the hub-and-spoke configuration works best in those organizations that have a more mature approach to project management. It is not a structure for the organizations new to project management. Organizational Placement of the PSO There are three organizational placements for the PSO, as shown in Figure 21.1. At the enterprise level they are usually called by some name like Enterprise PSO (EPSO) that suggests they serve the entire enterprise. There are two vari- ations of EPSOs that we have seen—centralized or decentralized: ■■ In the centralized version the EPSO provides all of the services to all proj- ect teams corporate-wide that any PSO would provide. ■■ The decentralized version often has a policy and procedure responsibility with satellite PSOs providing the actual functions in accordance with the established policy and procedures. Figure 21.1 Organizational placement of the PSO. CEO IT Finance EPSOOperations App Dev Systems Support IT PSO Project Project Project Project Project PO PO PO PO PO Project Support Office 411 25 432210 Ch21.qxd 7/2/03 9:34 AM Page 411 Both models can be effective. The size of the organization with respect to the number of projects needing support is the best determinant of structure, the decentralized structure favoring the larger organization. There really are no hard-and-fast rules here. The PSO can also serve the needs of a significant part of the enterprise—such as at the division or business unit level. The most common example is the information technology division. Here the PSO serves the needs of all the IT professionals in the organization (IT PSO in Figure 21.1, for example). Because this PSO is discipline-specific, it will probably offer project support services tailored to the needs of the information technology project. It may also offer services specific to the needs of teams that are using various systems develop- ment processes. In other words, a division-level PSO may offer not only proj- ect management support services but also services specific to the discipline. The PSO can also serve the needs of a single program. As shown in the Figure 21.1, there may be several of these programs even within a single division. This is a common occurrence in the information technology division. These PSOs are temporary. When the program that they support is completed, the PSO is disbanded. How Do You Know You Need a PSO? However you slice it, the PSO is established for the sole purpose of improving the practice of project management for the group of projects and project man- agers over whom it has stewardship. The PSO is an investment, and its ROI is measured in terms of cost avoidance. That cost avoidance is a direct result of a significant reduction in project failures for which the PSO is held directly responsible and accountable. The Standish Group Report The reasons for project failure have been investigated and reported in detail for several years. One of the most thorough research efforts into the reasons for project failure is the work of the Standish Group (we discussed this research in Chapter 2 as well). Their most recent report is “Chronicles 2000.” In the study reported there, they surveyed several hundred IT executives asking them why projects fail. The top 10 reasons why IT projects fail according to this study were as follows. IT projects fail due to a lack of: 1. Executive management support 2. User involvement 3. Experienced project manager Chapter 21 412 25 432210 Ch21.qxd 7/2/03 9:34 AM Page 412 4. Clear business objectives 5. Minimized scope 6. Standard infrastructure 7. Firm basic requirements 8. Formal methodology 9. Reliable estimates 10. Skilled staff After reviewing the major functions that the PSO provides, you can see that a PSO is uniquely positioned to mitigate each of these 10 reasons for project fail- ure. In fact, it is the only organizational entity that is so positioned. Spotting Symptoms That You Need a PSO Several symptoms provide you with clues that you might need a PSO: Project failure rates too high. The data is all too familiar to us. Reports show 70 percent and higher regardless of how you define failure. That is simply unacceptable. Many of the reasons for those high numbers are probably found in the list from the Standish Group. Those that relate to the project management approach that was used—namely, user involvement, clear business objectives, minimized scope, standard infrastructure, firm basic requirements, and formal methodology—can be addressed by choosing the correct approach (TPM, APF, or xPM). It is our contention that by choosing the appropriate approach, the organization can make a serious impact on failure rates. Training not producing results. We are not aware of any systematic study of the root causes of training ineffectiveness. The possible causes are inappro- priate materials, inappropriate delivery, no follow-through on behavioral changes after training, or no testing of skill acquisition. Training needs to be taken seriously by those who attend the training. They need to be held accountable for applying what they have learned, and there needs to be ways to measure that application. We are amazed at how many training professionals and curriculum designers are not familiar with Kirkpatrick’s model. The interested reader can consult Donald L. Kirkpatrick’s Evaluating Training Programs, Second Edition (Berrett-Koehler Publishers, Inc., 1998) In our experience, project reviews that are held at various milestones in the life of the project are excellent points at which to validate the application of training. If there is not clear evidence that training has been applied, some corrective action is certainly called for. Project Support Office 413 25 432210 Ch21.qxd 7/2/03 9:34 AM Page 413 HR project staff planning not effective. Organizations need to do a better job of defining the inventory of project staff skills and the demand for those skills by project. There needs to be a concerted effort to match the supply to the demand and to make better staffing assignments to projects. The PSO is the best place for this responsibility to be carried out. Can’t leverage best practices. The PSO is the best place to collect and dis- tribute best practices. Project status meetings and project reviews are the place to identify best practices. The PSO, through some form of bulletin board service, is the best place to distribute that information. In the absence of that service, the collection and distribution of best practices isn’t going to happen. Don’t have control of the project portfolio. Many senior managers don’t know the number of projects that are active. They haven’t made any effort to find out and to be selective of those projects that are active. That behav- ior has to stop if there is any hope of managing the project work that goes on in the organization. The PSO is the clear choice for stewardship of that portfolio. At least, it can be the unit that assembles project performance data and distributes it to the decision makers for their review and action. No consistency in project reporting. Without a centralized unit responsible for the reporting process, consistent and useful reporting isn’t going to hap- pen. Again, the PSO is the clear choice to establish the reporting structure and assist in its use. Too many resource scheduling conflicts. Most organizations operate with some form of matrix structure. Resources are assigned from their functional unit to projects at the discretion of the functional unit manager. In such situ- ations resource conflicts are unavoidable. The individuals that are assigned to projects are torn between doing work for their functional unit and doing work for the project to which they have been assigned. None of this is news to you. One solution to resource scheduling conflicts is to use the PSO as the filter through which project staffing requests and staffing decisions are made. The major benefit of this approach is that it takes the project manager off the hot seat and puts the responsibility in the PSO where it can be more equitably discharged. Gap between process and practice. This is a major problem area for many organizations. They may have a well-documented process in place, but without any oversight and compliance function in place, they are at the mercy of the project manager to use or not use the process. The PSO is the only unit that can close this gap. The PSO puts the process in place with the help of those who will be held accountable for its use. The PSO, through project performance reviews, can determine the extent of that gap and can put remedial steps in place to close it. Chapter 21 414 25 432210 Ch21.qxd 7/2/03 9:34 AM Page 414 Establishing a PSO When you are planning for a PSO, three critical questions must be answered. One of them deals with defining a desired future for your organization’s PSO—the goal, so to speak. But to reach that goal, you have to assess where you currently are with respect to that goal. The answer to that question identi- fies a gap between the current state and the future state. That gap is removed through the implementation plan for your PSO. This is the definition of a stan- dard gap analysis. The three major questions, then, arranged chronologically, are as follows: ■■ Where are you? ■■ Where are you going? ■■ How will you get there? Before you attempt to answer those questions, you need a foundation for answering them. The Software Engineering Institute (SEI) provides just the foundation you need. Their five-level model described in the next section also gives you a foundation on which you can plan for the further growth and mat- uration of our PSO. PSO Stages of Growth Over the past several years, the Software Engineering Institute at Carnegie Mel- lon University has developed a maturity model for software engineering. It has gained wide support and has become a standard of the software development profession. The model is called the Capability Maturity Model (CMM). It has recently been adapted to project management in the form of a Project Manage- ment Maturity Model (PMMM). We will use the five maturity levels of the PMMM to answer these questions: Where are you and where are you going? Figure 21.2 offers a graphic depiction and brief description of each of the matu- rity levels of the PMMM. Level 1: Initial Level 1 is the level where everyone basically does as he or she pleases. There may be some processes and tools for project management, and some may be using them on an informal basis. Project management training is nonexistent, and help may be available on an informal basis at best. There doesn’t appear to be any signs of organization under project management. Project Support Office 415 25 432210 Ch21.qxd 7/2/03 9:34 AM Page 415 Figure 21.2 Project management maturity levels. Level 2: Repeatable Level 2 is distinguished from Level 1 in that there is a documented project management process available. It is used at the discretion of the project man- ager. There is some training available for those who are interested. The only sign of a PSO is through some part-time support that will help a project team on an as-requested basis. Level 3: Defined The transition from Level 2 to Level 3 is dramatic. The project management processes are fully documented, and project management has been recognized as critical to business success by senior management. A formal PSO is estab- lished and staffed and given the responsibility of ensuring enterprise-wide usage of the methodology. Enforcement is taken seriously. A solid training curriculum is available. There is some sign that project management is being integrated into other business processes. Level 4: Managed Successful project management is viewed as a critical success factor by the organization. A complete training program and professional development program for project managers is in place. The PSO is looked upon as a busi- ness, and project portfolio management is of growing importance. The project portfolio is an integral part of all business planning activities. PSO Maturity Levels Ad hoc- Support but no training from the PSO. Defined PM processes with reactive support from the PSO and intro training. Integrated use of defined PM processes with PSO oversight, proactive support, and more training. PSO manages the project portfolio as an integral part of all business processes and more extensive training. Continuous improvement of all PSO services and processes. Level 1 Level 2 Level 3 Level 4 Level 5 Chapter 21 416 25 432210 Ch21.qxd 7/2/03 9:34 AM Page 416 Level 5: Optimized The PSO is the critical component of a continuous quality improvement program for project management. Progress in the successful use of project management is visible, measured, and acted upon. Planning a PSO You can now put the pieces of a plan together. Based on what we have discussed so far, your plan to establish a PSO might look something like Figure 21.3. Before you can begin the activities shown in Figure 21.3, however, you have to write the Project Overview Statement (POS) for the PSO. CROSS-REFERENCE For a more detailed discussion of the components of a POS and what goes into writing one, see Chapter 3. The POS Figure 21.4 is an example POS for a PSO implementation project submitted by Sal Vation. Figure 21.3 A plan to establish a PSO. Form the PSO Task Force Assess management's opinions of the role of PM Assess the project manager/client relationship Assess how the current methodology is being used Assess the current PM methodology Define PSO mission, functions and organization Plan and deploy the PSO Disband the PSO Task Force Where are you? Where do you want to go? How will you get there? Time Project Support Office 417 25 432210 Ch21.qxd 7/2/03 9:34 AM Page 417 Figure 21.4 An example Project Overview Statement for a PSO implementation project. The next sections take a quick look at what Sal submitted. Problem/Opportunity First, note that the statement describes a business condition that needs no defense or further clarification. Anyone, especially the executive committee, who reads it will understand it and agree with it. The importance of this state- ment will determine whether or not the reader will continue to the goal state- ment. In this case, the situation is grave enough so their continued reading is a foregone conclusion. To restore our lost market share, we must quickly develop our capabilities in the customized furnishings business but are unable to because our project management processes cannot support the needs of the product development teams. Provide a fully mature and comprehensive portfolio of project managment support services to all project teams in less than four years. 1. Provide off-the-shelf and customized project management training. 2. Develop and document a standard project management process to support all of our project teams with special focus on product development teams. 3. Establish a projects review process to monitor and enforce compliance with our project management processes. 4. Establish a portfolio management process for all customized projects. 5. Create a professional development program for all project managers. 6. Design and implement a continuous quality improvement process for project management. 1. Over 50% of all PMs will receive basic training by the end of 2003 Q1. 2. Project quarterly success rates will increase from current 35% to 70% by 2003 Q3. 3. At least 90% of all projects begun after 2003 Q3 will use the new O & P project management process. 4. 100% of all PMs will receive training in the O & P project management process by the end of 2003 Q4. 5. 90% of all PMs will have a professional development program in place by 2003 Q4. 6. The PSO will reach maturity level 2 no later than Q3 2003, maturity level 3 no later than Q4 2004, maturity level 4 no later than Q2 2006, and maturity level 5 no later than Q4 2006. 7. Market share will be restored to 100% of its highest level no later than Q4 2006. 1. Business unit managers will resist change in their operating procedures. 2. The customized furnishings market is not as strong as forecasted. 3. Project managers will continue to practice their old ways. Problem Opportunity Goal Objectives Success Criteria Assumptions, Risks, Obstacles PROJECT OVERVIEW STATEMENT PSO Implementation PSO.001 Sal Vation Project Name Project No. ProjectManager Prepared By Date Approved By Date Sal Vation Del E. Lama1/3/2003 1/6/2003 Chapter 21 418 25 432210 Ch21.qxd 7/2/03 9:34 AM Page 418 Goal The statement is clean and crisp. It states what will be done and by when. Note that it is phrased so that the project is expected to deliver results before the expected completion date. Sal recognizes the importance of early results to the executive committee and doesn’t want the stated time line to shock them and perhaps risk their approval. Objectives The objective statements expand and clarify the goal statement and suggest interim milestones and deliverables. Success Criteria Sal has expressed the success criteria in specific and measurable quantitative terms. This is very important. In this case the criteria will help the executive committee understand the business value of the project. It is the single most important criteria Sal can present to them at this time to help them decide whether the project is worth doing. Assumptions, Risks, Obstacles Sal has called to the attention of the executive committee anything that he feels can potentially compromise the success of the project. These statements serve two purposes: ■■ They highlight for senior managers some of the potential problems that they might be able to mitigate for the project team. ■■ They provide some risk data for the financial analysts to estimate the expected return on the investment in a PSO. They will consider the success criteria versus risk to determine the expected business value that can result from this project. In case there were other projects vying for the same resources, the analysts would have a comparable statistic to use to decide where to spend their resources. Planning Steps Sal will eventually get approval to move into the details of planning the project in anticipation of getting executive committee approval of the plan so that he and his team can get to work. Sal might expect a few iterations of the POS before he gets that approval to proceed with planning. In our experience senior man- agers often question success criteria, especially with reference to its validity. Project Support Office 419 25 432210 Ch21.qxd 7/2/03 9:34 AM Page 419 Forming the PSO Task Force The PSO task force forms the strategy group for this project. They are to be con- sidered members of the project team. Their membership should be managers of those business units that will be impacted by the PSO. The size of the enterprise determines how many members there will be. A task force of four to six should work quite well, but a task force of 15 would be counterproductive. Without the support and commitment of each task force member, the PSO it is unlikely to succeed. Because their operations are likely to be affected by the PSO, they must be a part of its mission and have an opportunity to be heard as decisions are made on the mission, functions, and services the PSO will provide. Measuring Where You Are Several metrics have been developed to quantitatively measure the maturity level of your project management processes. We have developed one that consists of over 800 yes/no questions. (The interested reader should consult us at rkw@eiicorp.com for details on this proprietary product.) These questions cover all five maturity levels for all 39 project management processes identi- fied by PMI in their PMBOK. Figure 21.5 shows the results for a recent assess- ment for one of our clients. The data on each of the 39 processes have been aggregated to the knowledge area level. Figure 21.5 Maturity level data for nine knowledge areas of PMBOK. 5 4 3 2 1 Practice Baseline Practice Problem Best Practices Integration Scope Time Quality HR Communications Risk Procurement Cost Chapter 21 420 25 432210 Ch21.qxd 7/2/03 9:34 AM Page 420 [...]... ——— 1997 The PMI Book of Project Management Forms Upper Darby, Pa.: Project Management Institute (ISBN: 1-880 410- 31-1) ——— 1999 Project Management Software Survey Newton Square, Pa.: Project Management Institute (ISBN 1-880 410- 52-4) ——— 1999 The Future of Project Management Newtown Square, Pa.: Project Management Institute (ISBN 1-880 410- 71-0) ——— 2000 A Guide to the Project Management Body of Knowledge... Project and Team Management Newtown Square, Pa.: Project Management Institute (ISBN 1-880 410- 47-8) Cleland, D I., and W R King, eds 1983 Project Management Handbook New York: Van Nostrand Reinhold (ISBN 0-442-22114-2) Bibliography 441 Conway, Kieron 2001 Software Project Management: From Concept to Deployment Scottsdale, Ariz.: The Coriolis Group (ISBN 1-57 610- 807-4) Crawford, J Kent 2002 Project Management. .. Stephen Ward 1997 Project Risk Management: Processes, Techniques and Insights New York: John Wiley & Sons (ISBN 0-471-95804-2) Cleland, David I., et al 1998 Project Management Casebook Upper Darby, Pa.: Project Management Institute (ISBN 1-880 410- 45-1) Cleland, David I., et al 1998 Project Management Casebook: Instructor’s Manual Upper Darby, Pa.: Project Management Institute (ISBN 1-880 410- 45-1) Cleland,... 1996 Management of Project Procurement New York: The McGraw-Hill Companies, Inc (ISBN 0-07-030552-8) Ibbs, C William, and Young-Hoon Kwak 1997 The Benefits of Project Management: Financial and Organizational Rewards to Corporations Newtown Square, Pa.: The Project Management Institute (ISBN 1-880 410- 32-X) Ireland, Lewis R 1991 Quality Management for Projects and Programs Upper Darby, Pa.: Project Management. .. Management Body of Knowledge Newtown Square, Pa.: Project Management Institute (ISBN: 1-880 410- 23-0) ——— 2000 Project Management Experience and Knowledge Self-Assessment Manual Newtown Square, Pa.: Project Management Institute (ISBN 1-880 410- 24-9) ——— 2001 Practice Standards for Work Breakdown Structures Newtown Square, Pa.: Project Management Institute (ISBN 1-880 410- 81-8) Putnam, Lawrence H., and Ware Myers... Management Maturity Model: Providing a Proven Path to Project Management Excellence New York: Marcel Dekker, Inc (ISBN 0-8247-0754-0) Darnell, Russell W 1996 The World’s Greatest Project: One Project Team on the Path to Quality Newtown Square, Pa.: The Project Management Institute (ISBN 1-880 410- 46-X) Davidson, Jeff 2000 10 Minute Guide to Project Management Indianapolis: Macmillan (ISBN 0-02-863966-9)... Management: Applying Change Management to Improvement Projects New York: McGraw-Hill (ISBN 0-07-02 7104 -6) Harvard Business Review 1991 Project Management Boston: Harvard Business School Press (ISBN 0-87584-264-X) Haugan, Gregory T 2002 Project Planning and Scheduling Vienna, Va.: Management Concepts (ISBN 1-56726-136-1) ——— 2002 Effective Work Breakdown Structures Vienna, Va.: Management Concepts (ISBN... Addison-Wesley (ISBN 0-201-30958-0) Royer, Paul S 2002 Project Risk Management: A Proactive Approach Vienna, Va.: Management Concepts (ISBN 1-56726-139-6) Schuyler, John 2001 Risk and Decision Analysis in Projects 2d ed Newtown Square, Pa.: The Project Management Institute (ISBN 1-880 410- 28-1) Schwalbe, Kathy 2000 Information Technology Project Management Boston: Course Technology (ISBN 0-7600-1180-X)... The Project Office Menlo Park, Calif.: Crisp Publications (ISBN 1-56052-443-X) Burr, Adrian, and Mal Owen 1996 Statistical Methods for Software Quality London, England: International Thomson Computer Press (ISBN 1-85032-171-X) Cable, Dwayne P., and John R Adams 1997 Principles of Project Management Upper Darby, Pa.: Project Management Institute (ISBN 1-880 410- 30-3) Capper, Richard 1998 A Project- by -Project. . .Project Suppor t Office 421 This one graphic conveys a lot of information about this organization’s project management maturity levels First of all, the dashed line shows the maturity level of each knowledge area as documented in the organization’s project management methodology The box and whisker plots are maturity-level data on how project management was practiced in several projects that . Systems Support IT PSO Project Project Project Project Project PO PO PO PO PO Project Support Office 411 25 432 210 Ch21.qxd 7/2/03 9:34 AM Page 411 Both models can be effective. The size of the. appear to be any signs of organization under project management. Project Support Office 415 25 432 210 Ch21.qxd 7/2/03 9:34 AM Page 415 Figure 21.2 Project management maturity levels. Level 2: Repeatable Level. At least 90% of all projects begun after 2003 Q3 will use the new O & P project management process. 4. 100 % of all PMs will receive training in the O & P project management process