Tag Archives: OPM3

The Management of Project Management

A significant gap in the current standardisation of project, program and portfolio management relates to the senior management functions necessary to effectively manage the projects and programs initiated by the organisation.

Project Management, as defined by PMI, ISO21500 and a range of other standards commences when the project is funded, and concludes on the delivery of the outputs the project was established to deliver.

Program Management focuses on the coordinated management of a number of projects to achieve benefits that would not be available if the projects were managed in isolation. Different types of program have been defined by GAPPS ranging from optimising annual budgets to maintain a capability (eg, the maintenance of a railway system) through to creating a major change in the way an organisation operates.

Processes for identifying the best projects and programs for an organisation to invest in through portfolio management and tracking benefits realisation are also well defined within the context of strategic management, but are generally not as well implemented by organisations.

Finally the overall governance of organisations and its key sub-set, project governance is recognised as essential for the long term wellbeing of the organisation.

Within this overall framework, the element not well defined, that is essential to achieving the optimum benefits from the ‘doing of projects and programs’, is the organisation’s ability to manage the management of its projects and programs.

At the overall organisational level, the management of project management includes developing and supporting the capabilities needed to provide executive oversight and leadership so that the organisation is able to undertake projects and programs effectively. This includes the organisations ability to develop and enhance its overall project management capabilities, develop project and program managers and project team members, implement appropriate methodologies, provide effective sponsorship, and achieve the benefits and value the projects and programs were set up to facilitate.

At the individual department level, the ability to manage multiple projects in an effective way is equally critical. Typically the role of a Project Director, multi-project management differs from program management in a number of key aspects:

  • There is limited correlation between the objectives of the various projects, eg a number of design and fabrication projects may each have a different external customer.
  • The function is relatively stable and permanent (programs close once their objectives are achieved).
  • The primary focus of this management function is resource optimisation, minimising conflicts and process clashes, and developing the project/program delivery capability of the department/facility.

A number of recognised roles such as the Project/Program Sponsor, project governance and PMOs contribute to the organisations ability to manage the management of projects and programs and develop effective multi-project management capabilities, what is missing is an overall framework that supports the ongoing development of these functions to facilitate the effective governance of projects, programs and portfolios.

Peter Morris and Joana Geraldi have recently published a paper focused on ‘Managing the Institutional Context for Projects’ (Project Management Journal, Vol.42, No.6 p20-32), this paper defines three levels of project management:

Level 1 – Technical ‘project management’; the processes defined in standards such as the PMBOK® Guide and ISO21500.

Level 2 – Strategic ‘management of projects’; the overall management of the project from concept to benefits realisation, starting with identifying and validating concepts, through portfolio selection to delivery and the creation of the intended value.

Level 3 – Institutional context; developing an institutional context for projects and programs to enable them to succeed and enhance their effectiveness. The focus is on creating an environment that encourages improved levels of success in all of the organisation’s projects and programs.

The theoretical framework described in Morris’ paper covers the same concepts (but from a different viewpoint) to the technical framework of organisational entities and roles defined in our White Paper, a PPP Taxonomy (and the linked White Papers focused on specific elements of the structure), see: http://www.mosaicprojects.com.au/WhitePapers/WP1074_PPP_Taxonomy.pdf

What developing the PPP Taxonomy identified within our White Papers, and Morris highlights in his paper, is the critical need for organisations to develop an intrinsic capability to manage the overall management of projects and programs. Over the next few weeks I hope to complete two additional White Papers to start filling this gap:
The Management of Project Management – the institutional context.
Multi-project Management – the departmental context.

In the meantime, a PPP Taxonomy defines the overall project governance and control framework these two critically important elements fit within.

On reflection, many of the project and program failures identified in our earlier posts as generic ‘governance failures’ are likely to be shown to be directly caused by the absence of systems designed to ‘manage project management’, this is still a governance failure but now the root cause of some of these failures may be able to be specifically defined.

This is an emerging area of thinking, you are invited to download the White Papers and post any thoughts, comments or disagreements, as well as make use of the ideas to help improve your organisations. There’s a long way to go, at present there’s not even a clearly defined term for this aspect of project governance/management……

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Project and Organisational Governance

One of the themes running through several of my recent posts is the importance of effective Governance. Both organisational governance and its sub-set project governance.

Good governance is a synonym for ‘good business’, structuring the organisation to deliver high levels of achievement on an ethical and sustainable basis. This requires the optimum strategy and the right approach to risk taking supported by sufficient processes to be reasonably confident the organisations limited resources are being used to achieve the best short, medium and long term outcomes.

Project governance focuses on the portfolios of programs and projects used by the organisation to deliver many of the strategic objectives. This process focuses first on doing the right projects and programs constrained by the organisations capacity to undertake the work – Portfolio Management; secondly, creating the environment to do the selected projects and programs right- developing and maintaining an effective capability; and lastly systems to validate the usefulness and efficiency of the ongoing work which feeds back into the selection and capability aspects of governance.

 

Within this framework, portfolio management is the key. Strategic Portfolio Management focuses on developing the best mix of programs and projects to deliver the organisations future within its capacity to deliver. This means taking the right risk and having sufficiently robust system in place to identify as early as possible the ‘wrong projects’, so they can be either be reframed or closed down and the resources re-deployed to other work.

It is impossible to develop an innovative future for an organisation without taking risks and not every risk will pay off. Remember Apple developed the ‘Apple Lisa’ as its first GUI computer which flopped in the market, before going on to develop the Apple Macintosh which re-framed the way we interact with machines.

Apple Lisa circa. 1983

Obviously no organisation wants to have too many failures but good governance requires ‘good risk taking’. Apple had no guarantees the i-Pod and its i-Tunes shop would succeed when it started on the journey of innovation that has lead to the i-Phone, i-Pad and Apple becoming one of the largest companies in the world based on capitalisation. As Richard Branson says – ‘you don’t bet the company on a new innovation’ but if you don’t innovate consistently, obsolescence will be the inevitable result.

The balance of project governance focuses around creating the environment that generates the capability to deliver projects and programs effectively, effective sponsorship, effective staff development, effective and flexible processes and procedures, simple but accurate reporting and good early warning systems to identify issues, problems and projects no longer creating value (a pharmaceutical industry saying is that if a project is going to fail it is best to fail early and cheap!).

Good questions outrank easy answers! Every hour and dollar spent on governance processes is not being spent on developing the organisation. The challenge of good governance is to have just enough reporting processes embedded in an effective culture of openness and accountability to provide an appropriate level of assurance the organisation’s resources are being used effectively; whilst at the same time allowing innovation and development. Restrictive and burdensome governance processes are simply bad governance – they restrict the organisation’s ability to achieve excellence.

To help organisations understand these key governance processes we have updated our two White Papers on the subject:
Corporate Governance: http://www.mosaicprojects.com.au/WhitePapers/WP1033_Governance.pdf
Project Governance: http://www.mosaicprojects.com.au/WhitePapers/WP1073_Project_Governance.pdf

For more discussion around the subject of governance see the previous posts on this blog.

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.milAD0603425

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.

CPO – Chief Project Officer

CPOs should become CP3Os – Chief Project, Program and Portfolio Officers! It is impossible to deliver value to an organisation if any of the layers of project governance are ineffective. Like C-3PO in Star Wars, the CP3O needs to be an expert in communication and understand the right language and protocols to use at different levels of the organisation to tie the project, program and portfolio management processes directly to the creation of value.

The original C-3PO

At the portfolio management level, selecting the ‘right’ projects and programs to continue, cancel or start is vital to the future success of the organisation. The CP3O should be a key advisor to the executive team responsible for the strategic plan and selecting the on-going mix of work for the organisation; balancing high-risk, high-reward projects that may define the future of the organisation with ‘safer’ projects that help keep the lights on and grow today’s business. The capacity and capability of the organisation’s program and project delivery systems is a key enabler and the primary constraint on this process. The CP3O should be the person with the knowledge to facilitate effective decision making.

Program management focuses on the efficient coordination of multiple projects to deliver benefits. Each program is focused on delivering key elements of the organisation’s overall strategy and consequently has a significant contribution to make to the organisation’s ability to deliver value to its stakeholders. The CP3O should be actively engaged in ensuring the programs meet their businesses objectives. The program sponsor and other managers may have line responsibility for the initiative, the CP3O focuses on skills and support.

Project management is focused on the efficient creation of the deliverables defined in the Project Charter. Projects are most effective when their objectives are clearly defined and unnecessary change is minimised. Whilst Project Managers may report to a variety of managers, the CP3O should focus on skills development and performance.

Most organisations have developed PMOs to support the delivery of Projects and Programs and to provide the data needed for both governance and Portfolio Management decisions. The development and operation of the organisation’s PMO structure should be a core responsibility of the CP3O.

The role of a Project Director (at least in Australia) is as the manger of project managers. The difference between Project Directors and Program Managers is the Program is created to deliver a defined benefit (the responsibility of the Program Manager) and projects are created to deliver the outputs required to enable the benefit. The Program Manager has overall responsibility for both the performance of the projects within the program and enabling the benefit; whereas Project Directors tend to be responsible for oversighting the performance of the projects within their area of responsibility. The Project Director is typically discipline and location based; eg, the Director for IT projects in Sydney. The project deliverables may contribute to a range of initiatives within the organisation. Project Directors should be direct reports of the CP3O.

The CP3O (or CPO) role is becoming more common. Defining the value proposition for this executive will be critically important to the improvement in delivering value through projects and programs. One of the key initiatives a CP3O can use to drive continuing improvements within the organisation is to develop a focus on process improvement using an effective maturity model. PMI’s OPM3 is probably the best tool from the perspectives of rigour and its focus on projects, programs and portfolio management.

This post has covered a lot of ground. For more information on specific topics see:
Portfolio Management: See White Paper1017
Types of Program: See White Paper1022
Programs -v- Projects: See White Paper1002
PMOs: See White Paper1034
OPM3: http://www.mosaicprojects.com.au/OPM3.html

A Project Manager’s Mangers

Projects are a very effective way of creating the new products, services or results required by organisations to effect change. The concept of a project is well understood, as are the roles and responsibilities of the project manager. A range of international standards exist defining project management processes, with the PMBOK® Guide being the most widely distributed. Despite the range of standards, there is general agreement and consistency across cultures and languages. But projects are only the building blocks of organisational change and improvement, other management structures determine what projects should be undertaken and how their outputs will be used to create beneficial outcomes and value.

The purpose of this post is to look at the three main management processes that govern the project processes; Portfolio management, Program management and the role of Project Directors as the managers of project managers.

Portfolio management
Portfolio management is, or should be, a collective process undertaken by the senior managers within an organisation to select the best mix of projects and programs to achieve the organisations short, medium and long term objectives. Every organisation is constrained by the available funding, the available resources and its inherent capabilities; so for every project selected or continued many others are rejected.

This process defines the organisation for the future; the correct mix keeps the organisation functioning in the present, builds on existing strengths for the mid-term and creates new opportunities for the future. Taking a too conservative and risk adverse stance guarantees others will seize the future and the organisation will fade into insignificance or failure. Taking on too many risks can destroy the business in the short term.

These decisions are too important to delegate to a ‘portfolio manager’; they have to be the responsibility of the chief executive and the senior management group. However, making this type of decision needs viable and reliable data, both on current projects and on the evolving environment the organisation operates within.

Effective strategic planning processes at the executive level should lay out the environment and opportunities. The role of an effective Portfolio Manager should be to provide these decision makers with recommendations and suggestions based on accurate and meaningful data on the status of current and proposed projects and programs. In this context, meaningful data refers firstly to the alignment of the projects and programs to the organisations strategic objectives and secondly the value contribution expected from the project’s outputs; on time and/or on budget are largely irrelevant other than to appreciate the impact of any variance on the value currently expected as a consequence of effectively deploying the project’s outputs.

Portfolio management requires an effective PMO structure to gather analyse and manage the information flows from current and proposed projects and programs. However, given the executive decision making role the Portfolio Manager supports, within an ethical governance framework, it is probably inappropriate for the same person to be directly involved in the management of the projects and programs.

From the perspective of a project or program manager, whilst the Portfolio Manager should have little or no input to the day-to-day running of the work, he or she is a key stakeholder and the critical aspect of managing the relationship is understanding the current value proposition for your project or program and making sure this is communicated effectively.
[for more on Portfolio Management see: White Paper1017 ]

Program management
Programs are created to create a business benefit. Whilst there are several different types of program they all initiate and run multiple projects to obtain benefits that would not be achievable if the projects were managed in isolation. Programs are quite different to large projects. Programs typically create multiple deliverables that achieve a range of benefits desired by the organisation. Whilst not as well defined a project, there is a strong consensus world-wide as to the role of the program manager and the purpose of programs.

If a project is part of a program, the Program Manager is the project managers direct line manager and will have significant involvement in the running of the project. Also, as the project is an integral part of the program, the project manager will be a key player in the program manager’s team. This stakeholder relationship is probably the most important for the project manager to maintain as is the corresponding relationships between the program manager and her project managers.
[for more on program types see: White Paper 1022 ]

Project Director
The role of the Project Director has been somewhat overshadowed by the emergence of portfolio and program management; this is unfortunate. Project directors are managers of project managers. This role should be focused in two areas, firstly providing oversight and governance to projects that are outside of programs (this is probably the majority), secondly providing management input to the organisation’s project managers to help them develop and grow.

PMI recognise the role as the ‘Manager of Project Managers’ in composite and strong matrix organisations. AIPM as a ‘Certified Practising Project Director’ in their competency standards and RegPM credential structure. The role of the Project Director can be subsumed into an appropriate PMO as long as the PMO is focused on driving value and creating excellence.

Unfortunately at the moment, there is very little focus on this aspect of developing project management capabilities within an organisation. Unless there is a renewed focus on developing project managers and project management capabilities within an organisation it will rapidly lose any competitive advantage. Buying in ‘talent’ from elsewhere will become increasingly expensive and is largely counter-productive to the development of an effective corporate culture and enhanced organisational project management maturity.

Where Project Directors exist, they are another important stakeholder for the project manager to work with.

Advising upwards
Each of the managers defined above are important stakeholders and the project manager needs to effectively manage the relationships if their project is to be successful and the PM’s career enhanced. My new book, Advising Upwards: A Framework for Understanding and Engaging Senior Management Stakeholders is focused on the skills needed to build and maintain robust relationships, focused on engaging the support of senior executives, understanding their expectations and managing them through targeted communication. For more on the book and the expected publication date, see: Book Outline.

Summary
The three distinct roles defined above are critically important to the development of effective project management practices within an organisation. However, it is important to note each role is distinctly different and should be separated in a mature organisation, even if they are incorporated into an overall PMO structure.

PMI’s OPM3 assessment processes can help develop an organisations Project, Program and Portfolio management maturity see: more on OPM3

The roles and functions of various types of PMO are discussed in White Paper 1034

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.