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Should Your Organization Have a Project Management Office?

Tom · Mar 19, 2011 · Leave a Comment

Do you have the time and resources to sit down and look at the big picture regarding how your portfolio of projects is managed? Not every organization needs a project management office. But those that do are missing out on some tangible benefits if they fail to put a PMO in place.

PMO vs. PMO

First, it’s important to note that the acronym PMO is often used to refer to a program management office. To find out the difference between project and program management, go here. If you’ve got program management established in your organization, you’ve already reached the level of complexity where a PMO is essential. So, in this post, we’ll just use the term PMO to refer to a project rather than a program management office.

IT Leads the Way In PMOs

Information technology is one of the most common areas where a PMO is implemented. The term “office” in this context refers to a function rather than a physical place (although a location may be set aside as a headquarters for this purpose if needed). The responsibilities of a PMO include:

Developing and administering project management policies, processes, and principles
Providing a centralized view of the full portfolio of projects (past, present, and proposed)
Planning strategically to ensure the highest rate of success for all projects
Determining how to handle resources to serve the needs of multiple, concurrent projects
Assisting, facilitating, and mentoring individual project managers/teams as needed
Collecting and reviewing knowledge gained from each project (managing lessons learned knowledge base)
Analyzing all data to discover areas for improvement in project processes

Who Needs It?

For an organization that only handles one project at a time, having a separate individual or team fulfill the role of the PMO may not be necessary. A project manager could work in concert with upper management (or a consultant) to ensure all the functions listed above are taken care of.

However, organizations that juggle multiple projects should consider creating a PMO. Otherwise, there is a risk that PMs who are better at negotiating for the resources they need will have success while those with less skill/experience will fail. A PMO plays the role of a neutral third party with the final say in determining how projects are administered.

The Numbers Don’t Lie

Research from the Gartner Group indicates that businesses that establish organization-wide project management standards and a PMO might cut project cost overruns by 50%. According to a survey from PricewaterhouseCoopers, it’s hard to pin an exact dollar amount on how much money is saved by having better control and more in-depth information. However, of those companies surveyed, the ones that had their PMO in place the longest tended to report much better rates of success for their projects (a 65% improvement for organizations with a PMO that had been in place for 4 years of more). Since an enormous percentage of projects in the IT industry experience cost and schedule overruns, instituting a long term solution such as a PMO can make good business sense.

Project Execution Outputs – Work Performance Information

Tom · Nov 6, 2010 · Leave a Comment

In project management, as in politics, knowledge is power. In the process of managing project execution outputs, gathering data on the status of project activities is vital for enhancing communication with stakeholders. It also provides invaluable input for everything from scheduling to quality assurance. Collecting work performance information should, whenever possible, be carried out using protocols established during the planning phase. Automated reporting is an excellent option, but if your organization doesn’t have the resources to implement data tracking tools, the process may have to be done manually. Skipping this aspect of project execution isn’t an option. Without this information, it is impossible to accurately track the progress of a project or anticipate and overcome obstacles to completion.

Progress/status reports should include information such as:

A list of deliverables that have been completed along with those still outstanding
An overview of schedule activities that have commenced and those that are completed
Of the schedule activities currently ongoing, the percentage of work that has been done
Estimated time and/or resources required for in-progress schedule activities

This set of project management data points provides a clear picture of work done, what’s left, and areas where work is currently occurring. The information can also be distilled into a percentage of the total project that has been finished. A quick perusal of this type of report (along with access to the WBS Dictionary) can give stakeholders a realistic idea of whether or not the project, as a whole, is on track. Often, simply providing an updated report on a regular basis is all it takes to reassure upper management about a project’s progress. However, this type of report can also be used to highlight areas for improvement and to make a case for directing more resources toward a specific activity as needed. A smart PM will always review progress reports prior to distribution and have a handle on any questions or concerns that a report is likely to trigger.

Additional items to gather work performance information about include:

Whether and to what extent quality standards are being met
Total costs authorized and the amount of money already spent
Lessons learned documentation added to the project management knowledge base
How project resources are being used

Item number 4 on this list deserves a little more attention. The details regarding the use of project resources might also include an analysis of any underutilized resources. When it comes to monetary resources, available funds that ended up being unnecessary and remaining unspent may be viewed as positive. However, an under-utilization of human resources is often simply a waste. Whether it is labor hours or talent/skills that are being squandered, this is an issue that should be addressed immediately. Similarly, if a component or material ends up not being required it may reflect a loss. Attempts should be made to recapture the value of unused materials through resale, recycling, or use in other areas of the project.

WBS Dictionary Creation Tips

Tom · Oct 23, 2010 · Leave a Comment

If you have already developed a detailed Work Breakdown Structure (WBS), it might seem like a straightforward task to compile the information into a WBS dictionary. However, this step can actually be somewhat complex. That’s because in project management there is no single “right” way to create a WBS dictionary. It isn’t just a matter of taking your WBS and compiling a text version for other people to look at. The data has to be considered from both a big picture and a highly detailed perspective to ensure that stakeholders who view the document can fully understand the scope, activities, and requirements of the project.

Bear in mind that information which might be critical to include for one type of project might simply be extraneous and confusing in another. So, the first step in creating a dictionary from your WBS is to determine what to put in and what to leave out. Generally, the following standard information should be included in a separate entry for each WBS element:

An abbreviated version of the scope or SOW (statement of work)
A list of deliverables with well-defined milestones to measure progress
An outline of activities that will be carried out to complete each deliverable

Start with a Template

If you are stuck on how to structure your WBS dictionary, it’s a good idea to begin with a standard template. These are available from a variety of project management sources. However, if you want to look at a free version, try this one from the CDC. As you can see, it offers further suggestions for pertinent information to include for each WBS component including start and end dates, resource requirements, cost estimates, and so forth.

Prepare for Alterations

In project management, it is very rare to know everything about a project from the outset. This means the WBS and its accompanying dictionary will need to be revised/updated throughout the life cycle of the project. So, make sure to include a log that shows the version history of the dictionary and when/why any changes were made.

If you have the ability to upload the dictionary to a central location (such as your intranet resource library), that’s ideal. You should encourage stakeholders NOT to print out their own copy for reference because the WBS dictionary will be updated over time. Instead, they should always visit the online version to ensure that they are working with the most current information available.

Add an Appendix

Remember that the WBS dictionary is not designed to be a complete compendium of every single detail in the project. It should, however, contain a reference page that lets the reader know where to go to find the full version of each document mentioned. For example, let’s say a contract was signed with an outside vendor who will be supplying a service or product necessary to the project. The gist of the information in the contract (items or services being supplied, delivery date, and cost) should be included in the dictionary. However, all the pages of legal fine print don’t need to be. The location where the contract is stored can simply be noted in the WBS dictionary in case the reader needs to review that original document in full.

Project Management in a Troubled Economy

Tom · Aug 15, 2008 · Leave a Comment

With the economic changes that have occurred over the past year it’s not surprising that project managers might be asked to tighten their budgets and try to get work done more quickly with fewer resources. It has never been more important in project management to avoid costly delays and cut costs wherever possible.

One thing the project manager will have to decide on is where cuts should be made. Most often these cuts should occur across the board so that no single phase of the project is hit too hard. If everyone shares a little in the burden it’s less likely to have a major impact on operations. Focus on needs and eliminate wants.

It’s also important not to sacrifice quality in the final product for the sake of saving money. Figure out what can be trimmed down without affecting productivity.

The project manager must, during difficult times, run a very tight ship. Deadlines must be met and delays must be avoided. By paying close attention to details, problems can be identified early and dealt with expeditiously thereby avoiding irreparable damage to the project’s bottom line.

Choose projects carefully and only take on what can be handled monetarily. Know when to say no to projects that probably won’t have a good return on investment and focus on projects that have more promise. It might also be a good time to invest in project management training which can help promote better performance when the economy takes a turn for the better.