The Program Management Office Advantage: A Powerful and Centralized Way for Organizations to Manage Projects

Already a best practice for the majority of Fortune 500 companies, Program Management Office (PMO) is being embraced by large and small organizations eager to efficiently manage all their projects. Now, this essential resource details the groundbreaking business reasons for having a centralized project department and provides easy-to-follow guidelines to help readers set up and run an effective PMO. Pioneered by the IT industry, PMO eliminates the challenges, stressors, and roadblocks involved when running multiple projects and instead creates a central office responsible for allocating resources, setting consistent measures, and monitoring progress. Program Management Office Advantage explains how you can experience these benefits for yourself by showing readers how to select projects, conduct project health checks, provide program management training to organizations, and create and implement a standardized program management process. Filled with key definitions as well as sample forms readers can use in completing administrative tasks and producing reports, the start-to-finish instructional is an indispensable introduction to the most important and powerful trend in project management.

ISBN-13: 9780814437988

Media Type: Paperback

Publisher: AMACOM

Publication Date: 09-28-2009

Pages: 288

Product Dimensions: 6.00(w) x 9.00(h) x 0.63(d)

Age Range: 18 Years

Lia Tjahjana has more than seven years of project management experience in various industries, including finance and construction, both in the public and private sectors. An entrepreneur, she also has had experience with establishing and running an online business. She has a Master of Liberal Arts in Management from Harvard University, a Master of Engineering Science in Project Management, and a Bachelor of Civil Engineering from the University of New South Wales in Sydney. Paul Dwyer, PMP, has been involved in project management in the financial services industry for over ten years. He has worked for many Fortune 500 companies, implementing high-profile information technology projects across multiple organizations, both on- and offshore. A senior development manager for Fidelity Investments, Paul is also president of the Ireland Chamber of Commerce United States, New England Chapter, a trade organization based in Boston, and he runs their small business incubator center in the city's financial district. Paul holds a degree in Computing Science from the University of Ulster, and is a certified Project Management Professional. Mohsin Habib is associate professor of management at the University of Massachusetts, Boston. He received his Ph.D. in Strategic Management from the University of North Carolina, Chapel Hill. He teaches Strategy and International Management at the University of Massachusetts and the Harvard University Extension School. He has been involved with executive education seminars on strategy for management groups in the United States and abroad. His current research interest focuses on strategy, competition, and sustainable development, especially for developing markets. He has presented his findings in numerous conferences, and has been published in reputed journals, including the Strategic Management Journal, Journal of International Business Studies, and Entrepreneurship Theory and Practice.

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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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Table of Contents

Contents
ACKNOWLEDGMENTS
INTRODUCTION
PART I. OVERVIEW
Chapter 1. DEFINING THE PROGRAM MANAGEMENT OFFICE
Chapter 2. JUSTIFYING THE PROGRAM MANAGEMENT OFFICE
Chapter 3. THE PROGRAM MANAGEMENT OFFICE IN THE ORGANIZATION

PART II. THE CENTRAL ORGANIZER
Chapter 4. CUSTOMER MANAGEMENT
Chapter 5. VENDOR MANAGEMENT
Chapter 6. COMMUNICATIONS MANAGEMENT
Chapter 7. PROJECT OFFICE MANAGEMENT
Chapter 8. PROJECT KNOWLEDGE MANAGEMENT
Chapter 9. PROJECT MANAGEMENT TRAINING
Chapter 10. PROJECT RESOURCE MANAGEMENT

PART III. PROCESSES
Chapter 11. PROJECT SELECTION
Chapter 12. CONTROLLING PROJECT PROGRESS
Chapter 13. PROGRAM MONITORING AND CONTROL
Chapter 14. PROJECT AUDIT
Chapter 15. SYSTEMS TO DRIVE THE PMO

PART IV. A BUSINESS DIVISION
Chapter 16. ESTABLISHING A PMO
Chapter 17. IMPLEMENTING A PMO
Chapter 18. LEADERSHIP IN A PMO
Chapter 19. CAREERS WITHIN A PMO

PART V. CONCLUSION
Chapter 20. FINAL THOUGHTS ON PMO

APPENDICES
Appendix A. SAMPLE PMO BUSINESS PLAN
Appendix B. SAMPLE PROJECT OFFICE TEMPLATES
Appendix C. SAMPLE PMO CHARTER
Appendix D. SAMPLE PMO INTEGRATION PLAN

References
Index
About the Authors Show More