Tag Archives: OPM3 ProductSuite

Valuing Project Procedures

I am frequently asked to quantify the value of improving an organisations project management capabilities or how to establish the ROI for a new PMO.

Whilst these questions are sensible they are nearly impossible to answer. Certainly there are strong indicators of the value generated by an effective PMO, this has been demonstrated repeatedly in studies by KPMG, PWC and others (Download the PMO studies).

OPM3 is more difficult. The most useful option is a comparison with CMMI.  The larger user base for CMMI makes statistical analysis possible and demonstrates a consistent value proposition for improving organisational maturity and capability (see more on OPM3).

The question is can the generic data generated by these studies be translated to a specific proposal in a single organisation. Unfortunately the answer is no.  On average an organisation can expect a significant return on monies invested in PMOs and improving project, program and portfolio management maturity but as risk practitioners know only to well, on average, nothing is average.  Some situations will fail, other will generate stellar returns.

This is not a new problem.  In June of 1962 the USA Dept. of Defense promulgated PERT/COST as a new general purpose management system for use on major military system acquisition programs. In 1964 a major study was undertaken by The Mitre Corporation to investigate the question of how to evaluate the design of the PERT/COST management system. This study still makes interesting reading today.

The overarching conclusions in the report were:

  • That there is no single, simple straightforward way of deriving value judgments as to the PERT/COST system design, or probably any other general purpose management system.
  • The interrelationships between a management system and the quality of its implementation operation (including the capability of the managers who use it), presents serious difficulties in the assessment of the value of the management system alone.
  • The value of the system is intimately related to both the quality of its implementation and the capability and willingness of the appropriate managers to use it.
  • An evolutionary approach is a good way to evolve the development of the system capability in an orderly fashion over period of time. It is ideal in cases where the ultimate capability to be required of the system cannot be precisely defined, but where the direction toward which increasing system capabilities should be oriented are predictable.

My post on Cobb’s Paradox asked the question why do executive managers allow poor quality systems to exist in their organisations. Possibly one answer is the difficulty of generating a simple investment proposition discussed in this post.

Better informed executives are capable of bypassing set minimum ROI values or payback periods, focusing instead on the demonstrated competitive advantage to be gained by selecting the right projects and programs to do, then doing them right!  The challenge for project management professionals in other organisations is making the necessary information available in ways that can be received and understood by the executives.

In conclusion, Harry S Truman said The only new thing in the world is the history you don’t know.”  To help you avoid this problem, the 1964 Mitre Report, authored by R. L. Hamilton, can be downloaded from the link (Handle) on  http://oai.dtic.mil-AD0603425

Cobb’s Paradox

Cobb’s Paradox states, ‘We know why projects fail; we know how to prevent their failure – so why do they still fail?’  PMI has recently published its latest Pulse of the Profession survey which shows some improvements on the 2008 and 2006 results but not much. Nearly half the projects surveyed in 2010 still failed to meet time and cost targets.

However, the PMI survey did highlight a stark difference between high performing organisations with a better than 80% success rate, and low performing organisations with a greater than 40% fail rate. And, the survey also clearly showed the processes typically used by the high performing organisations (and ignored by low performing organisations) are straightforward to implement and use; they include:

  • Using standardised project management processes.
  • Establishing a process to mature project, program and portfolio management practices.
  • Using a process to increase project management competency.
  • Employing qualified project managers.

Most of these elements coalesce around an effective project management office (PMO). Simply by standardising project management processes, the survey shows an organisation can expect a 25% increase in project success.

None of this new is new, KPMG demonstrated exactly the same point in its 2002 and 2003 surveys, supported by similar findings by PwC in 2004 (see: http://www.mosaicprojects.com.au/Resources_Papers.html#Proj_Off).

What’s worrying me is the large number of organisations whose middle and senior management are simply failing their stakeholders by not implementing these simple pragmatic steps. The question that should be asked is WHY?

The stakeholders whose rights are being ignored include the owners who have a right to expect efficient use of resources entrusted to the organisation and the people employed on the failed projects whose work life is made unnecessarily stressful.

As Deeming pointed out in the 1950s, quality is a management responsibility. Therefore, allowing poor quality project management processes to exist in an organisation is a management failure. To quote another mantra: quality is designed in not inspected in. Workers and project managers cannot be expected to retrofit quality into defective systems; systemic failures are a failure of management.

What makes the situation even more worrying is that the tools to develop a quality project management system are readily available. Models such as CMMI, P3M3 and PMI’s OPM3 maturity model has been around for years and are regularly updated.

PMI has recently moved to improve the availability and support for its OPM3 Self-Assessment Module (SAM). This basic assessment system is now sold and supported by organisations such as Mosaic that are qualified to deliver the full range of OPM3 services and help businesses achieve the best return on their investment (for more see: http://www.mosaicprojects.com.au/OPM3.html). OGC have similar arrangements for P3M3 as does CMMI.

So, given the tools are available, the knowledge is available, and the value has been consistently demonstrated; why are organisations still prepared to squander $millions on failed projects rather than investing a fraction of that amount in simple systems that can significantly improve the value they deliver to their stakeholders?
I would be interested to know the answer.

Maturity Modelling

Mature organisations firstly select the right projects to do, then do them ‘right’. The pyramid of returns on effort demonstrates the power of investing time to ensure the right processes are in place to support the right people to do the right things.

Sourced from: Breaking through the Project FOG. Author, James Norrie, Published, Jossey-Bass. See: http://www.projectgurus.org/project-fog.html

Identifying, developing and using the right processes is a key factor in organisational maturity. Research by Carnegie Mellon University and the Software Quality Institute shows that organisations who improve their process maturity gain:

  • improved schedule and budget predictability
  • improved cycle time
  • increased productivity
  • improved quality (as measured by defects)
  • increased customer satisfaction
  • improved employee morale
  • increased return on investment
  • decreased cost of quality.

And the best way for an organisation to improve its process maturity, is to use a process maturity model. Three models seem to dominate, these are:

  • CMMI from Software Engineering Institute (SEI): Carnegie Mellon University. CMMI (and predecessors) has been used by organisations for many years, there is statistical proof of effectiveness and two approaches to maturity assessment (staged and continuous). CMMI is a systems engineering maturity model with project management as one aspect of systems delivery.
  • OPM3 from PMI: offers most comprehensive assessment and reporting, supported by software (OPM3 ProductSuite). OPM3 offers reports on a continuum of best practice by project, program and portfolio and by stages of improvement. OPM3 is a project, program and portfolio management model supported by hundreds of best practices. For more on OPM3 see: http://www.mosaicprojects.com.au/OPM3.html
  • P3M3 from Office of Government Commerce UK (OGC): offers a staged approach that supports an organization’s journey through progressive maturity in all three domains. P3M3 is more aspirational in its approach, lacking some of the rigor and detail of the other two systems.

For a more in-depth discussion see: Modelling Your Maturity, P3M3, CMMI and/or OPM3

These basic processes closely align with my SRMM model for Stakeholder Relationship Management Maturity. For more on this see: http://www.stakeholdermapping.com/

Maturity modelling is an important step to attaining process maturity, the challeng is choosing the best model.

Methodologies

Methodologies define a step-by-step process for delivering projects. Each methodology will describe each step in adequate depth, so that the project team understands what has to be done to deliver their project. This is quite different to a standardised knowledge framework such as the PMBOK® Guide (for more on this see: PMBOK -v- Methodology).

By using the same steps for every project the organisation undertakes risks and uncertainty are minimised and there is likely to be an overall saving of time and effort on projects.

Defining ‘your’ methodology

The key steps to follow are:

  • Define what it is that you want from your methodology, the type of content it should contain and the way in which it will be used.
  • Create a set of specific requirements. Some options include defining:
    • How much of the project lifecycle needs to be incorporated
    • How much detail should be included? What practical templates and examples are needed to help to complete the step quickly and easily?
    • Should it follow one of the worldwide project standards such as the PMBOK® Guide?
    • Can/should the system be easily customised suit all project types and sizes?
  • Determine the best methodology to use:
    • Review the methodologies used currently by your organisation and compare them to your requirements to see if there is a good fit.
    • Review the commercially available methodologies to see if there is a good fit.
    • Select the option with the best fit to your requirements
  • The best methodology is still only likely to have a 90% fit (or less), this is normal. Make sure you can customise the remaining elements to meet your requirements.
  • Ensure adequate flexibility for the range of projects in your organisation.

Implementing the methodology

The key steps are:

  • Create an Implementation Plan supported by a change management plan. Implementing a methodology is a significant organisational change.
  • Run the implementation as a change management program, including customising the methodology for your environment. Stakeholder engagement is vital to the overall success of the initiative.
  • Train the users and support staff in the methodology and ensure ongoing support.
  • Ensure the methodology is followed.
  • Start improving the methodology (for more on measuring and improving the organisations project management maturity see Mosaic’s OPM3 home page).

Improving the methodology

Processes are always capable of improvement. Observing the actual implementation of the methodology will define actions and outcomes within the following matrix.

Unauthorised, unproductive activities need to be stopped and authorised productive processes supported. The two zones for process improvement are refining or removing elements of the methodology that do not add value to the overall management of the project and incorporating unauthorised processes that are not in the methodology but that are being used add value.

The easiest and most important area for action is rectifying the unproductive processes already in the methodology. Care need to be taken to ensure the definition of ‘unproductive’ is understood. Most planning processes don’t produce anything and consume effort; superficially they can be classified as ‘unproductive’. In reality, effective planning contributes significantly to the efficient delivery of the project and its value to assist in the efficient execution of the work being planned is significant.

Excessively detailed planning though is usually counterproductive. Value judgements are needed to assess the point at which adding more detail or rigour becomes ‘planning overkill’ reducing the overall value of the process and conversely, how much detail can be safely removed from a planning processes to improve overall productivity before insufficient planning starts to cause problems.

Ensuring the methodology is seen as ‘productive’ is essential for it to be generally accepted and supported by your stakeholders.

Once the existing methodology is optimised and firmly in the ‘authorised and productive’ segment, the next area is to examine unauthorised processes that aid productivity and progressively incorporate these into your methodology. The ‘unauthorised and productive’ quadrant is where you find genuine innovation and opportunities for organisational gain.

Summary

No methodology works ‘out of the box’ they all need customisation and tailoring. However, the effort is worthwhile. OPM3 has demonstrated standardised processes that incorporate best practices can provide significant benefits to an organisation (see more on OPM3).

The challenge is balancing systemised processes with the need for adequate flexibility to deal with the circumstances of each unique project. An effective project management methodology needs core components, scalable components and optional components designed to meet the needs of your organisation.

High Performance Project Management

I have just seen some information on a 2007 survey undertaken by the PMO Executive Council (part of the Corporate Executive Board: http://www.executiveboard.com/). This snapshot survey, Attributes of a High Performance PM – 2007, found very little correlation between project management certification and project management effectiveness, or the number of years a person has been in project management roles and project management effectiveness.

The survey found the drivers for project management effectiveness were behavioural attributes such as problem solving and the ability to relate effectively with key stakeholders. Whilst many people may initially want to disagree with these findings, they are consistent with many other trends and on reflection quite logical.

Firstly, the survey did not look at the PM’s track record, merely the time the PM had been in project roles. It is reasonable to assume highly effective PMs will have a relatively short PM career and then move on and up the organisational hierarchy. Less effective PMs are likely to stay in their PM role focused on process and technology.

Secondly, whilst PM credentials such as PMP remain very effective tools in the job market; passing your PMP does not make you an effective project manager (see more on PMP). The PMP knowledge framework gives you the knowledge to be an effective project manager. Being effective requires you to become a competent project manager.

Competency has three aspects, knowledge, skills and behaviour:

  • what you know,
  • your ability to apply the knowledge (essentially personality traits) and
  • your willingness to use the skills effectively (essentially behavioural traits).

Qualifying project managers based on behavioural competencies is in its infancy. The Australian Institute of Project Management (AIPM) has recently moved its professional certification program (RegPM) from a procedural view of competency (eg, do you have a project schedule – the artefact?) to a behavioural view of competency (how effectively do you manager the schedule on your project?). This is ground breaking work.

PMI have adopted a different, but similar approach in their program management certification (PgMP) with a 360 degree review testing how effective the candidate is in the workplace. These trends have a long way to go but are likely to be the next step in project certification.

Of more direct interest in the short term is the demonstrated link between how effectively a project manager engages with his/her key stakeholders and high performance outcomes. These skills are a core element in a number of workshops we run including Successful Stakeholder Management and The Science and Art of Communicating Effectively, and are supported in part by our Stakeholder Circle® methodology and tool set.

Learning how to apply the skills in the workplace though is not quite as simple as attending a workshop or buying a set of tools. Soft skills are very hard to acquire and use. My feeling is they are called ‘soft’ because they change shape and texture depending on the environment they are being applied within. The calculations for EV or CPM are universal; the best way to engage a senior stakeholder is totally dependent on the culture of the organisation. Some elements remain consistent (eg, the need for an effective relationship) but the way this is achieved varies.

Developing these advanced skills that are the attributes of high performance project managers requires context sensitive coaching and mentoring rather then formal courses (see: Executive PM Coaching & Mentoring). Ideally organisations seeking to develop high performance PMs will move beyond certification towards implementing internal mentoring systems – it’s the best way to ensure they are contextually relevant.

However, where we differ from the survey findings is that we believe certifications such as PMP are still relevant. Passing a PMI credential such as PMP or CAPM (see more on the PMI credential framework) is a positive demonstration of the initial knowledge component of competency; it’s just that knowledge alone is not sufficient.

Achieving this next level of high performance PMs will also require organisational competence in at least two domains. Process competence measured by tools such as PMI’s OPM3® framework and relationship management maturity measured by tools such as my SRMM® framework.

These are definitely interesting times for our profession.

State of the Profession

The project management profession would appear to be in a confused state!

PMI’s 2008 Pulse of the Profession survey shows improved performance from 2006 with over 55% of project completing on time and over 58% on budget.  The survey also found a strong correlation between the project management maturity of the organisation and improved project outcomes.

Meanwhile, the new Standish Group report (April 23, 2009) shows a marked decrease in project success rates,

  • 32%   Successful (On Time, On Budget, Fully Functional) – worst in 5 years
  • 44%   Challenged (Late, Over Budget, And/Or Less than Promised Functionality)
  • 24%   Failed (Canceled or never used) – worst in 10 years

These numbers represent a downturn in the success rates from previous studies, as well as a significant increase in the number of failures.

Around the same time as PMI, Human Systems International Ltd and the Association for Project Management (APM – UK) conducted a survey. The results of this survey reported in the May 2009 edition of Project Manager Today which showed that whilst value realisation is a long way from satisfactory it is not as bad as Standish would suggest. The survey showed 48% of organisations do not measure benefits realisation and of the remaining around half achieve more than 80% of the expected benefit and 22% less than 60%.

It’s hard to know what to make of the conflicting data – superficially, it would appear that organisations that employ professional project management staff (APM and PMI members) do better then organisations overall. But even then, the results are not that good. 

An alternative view may be the definition of a project with the APM & PMI membership being more focused than the Standish survey. For more on this see: What is a project?

The last alternative is IT projects (surveyed by Standish) are worse on average than projects in general.

Confused????  I certainly am. The real key seems to lie in the area of project management maturity. Maybe OPM3’s time has come at last?? (PMI’s Organizational Project Management Maturity Model).

PMI Standard Updates, OPM3 and Project Governance

PMI launched four updates to its range of standards on the 31st December 2008. The four standards are aligned and consistent which will help ensure all levels of the profession are using the same terms, have the same understanding and can promote harmonisation across all levels of an organisation. Earlier blogs have discussed the changes in the PMBOK® Guide and their impact on the credential examinations for PMP, CAPM, PgMP and PMI-SP. This blog focuses on the changes to OPM3 and The Standards for Program and Portfolio Management and their potential benefits for organisations.

The second edition of PMI’s Standard for Portfolio Management describes good practices in the discipline of portfolio management focused on ‘doing the right work’. It does not matter how good an organisation is at delivering projects and programs if the outputs are of no real benefit to the organisation. On-time, on-budget and not used is just a wast of money and resources.

The new standard builds on the processes for managing a portfolio of projects and programs defined in the first edition to include Portfolio Governance to include the responsibility of senior management to be accountable for investment decisions throughout the portfolio lifecycle; and Portfolio Risk Management. The key element in portfolio risk management is not avoiding risk, but balancing the types of risk accepted to deliver the maximum potential return from the organisation’s overall investment in its portfolio of projects and programs. Portfolio Governance makes sure the investmant is managed effectively.

We have been advocating the need for PMI’s standards to include Governance since 2005, Patrick Weaver presented a series of papers at PMI Congresses that appear to have had some influence on the new Standard. For copies of the papers see: http://www.mosaicprojects.com.au/Resources_Papers.html#Governance

The most significant difference between the First edition and the Second Editions of the Standard for Program Management is in the development of program-specific knowledge areas. These included knowledge areas that are critical to successful program management as well as knowledge areas that are significantly different at a program level than at a project level.

A second significant difference between the two editions was in the removal of “themes” that were introduced in the first edition.

  • The theme of Program Stakeholder Management was expanded into a knowledge area.
  • The theme of Program Governance was significantly expanded and also became a knowledge area.
  • The theme of Benefits Management was incorporated into the body of the document. 

The challenge now facing organisations is to make effective use of the resources represented by these new PMI Standards; this is where OPM3 comes into play.

OPM3® – Second Edition

OPM3 is a model for measuring project management maturity against a comprehensive set of best practices based on the PMBOK® Guide (projects), Program and Portfolio Management Standards. The updated OPM3 Standard, its self assessment module and the more capable OPM3 ProductSuite are fully aligned with the new PMI standards and have incorporated the concept of Organizational Enablers, previously only found in ProductSuite. Organizational Enablers are the attitudinal and structural elements of an organisation that enable the efficient management of projects and programs.

The updated OPM3 tools and reports allow assessment results to be categorised by Knowledge Area, by Business Results, and by Balanced Scorecard to ensure any planned improvements are focused on the areas of a business that provide the greatest return on investment. In short, OPM3 is the tool that allows organisations to create a better value proposition from their investment in projects and programs.

For more on OPM3 see: http://www.mosaicprojects.com.au/OPM3.html (this page will be progressively updated as we develop a better understanding of the new OPM3 tools – Mosaic is one of the very few organisations in the Asia Pacific region with consultants qualifed to deliver OPM3 ProductSuite assessments ).