How Most PMO’s Function….
Most PMO’s fall into one of two models – either 1) they only
provide overall guidance and governance (they define the process and make sure
everyone follows the process) or 2) in addition to providing overall guidance
and governance, they also serve as the resource pool for all PM’s. For the purposes of this writing, I will
assume the later.
In a typical PMO, there is a pool of project managers which
are provided to the various projects IT engages in who report to a director or
Sr. Project Manager who runs the PMO.
Projects requests come and are logged in some form of a tracking sheet
(typically an Excel spreadsheet, although some organizations may have a
database and/or software packages they utilize). Because PMO’s typically do not have analyst
resources, these activities are done a Project Manager.
As PM’s become available, either via completed projects or
projects that are placed on hold, they are re-allocated to the next available
project. Typically the process to
determine what project is next is rather arbitrary. Very little analysis goes into the
prioritization effort, sometimes it may be based on which project has been on
the list the longest, other times it may be based upon the technology platforms
involved while other times it may be based upon a rudimentary cost-benefit
analysis (please note this is not a true valuation of the project).
So basically there is no real prioritization process. Many times the next project is determined
more by political factors rather than what is truly in the best interest of the
company. Because there was no effective
analysis done, there are no effective benchmarks available against which to
measure the project.
Here is how I would do it instead….
Organization
Obviously this varies based upon the size of an
organization, but in general here is the organization structure I would
implement in a PMO:
- Director:
Owns the overall strategy, vision and direction of the PMO
- Program
Manager (Sr. Project Manager): Manages a portfolio of related projects,
typically these projects have individual project managers.
- Project
Manager: Manages individual
projects
- Portfolio
Analyst: Performs up front analysis
for project prioritization, grouped by line of business, depending upon
the workload each analyst may support one or multiple lines of
business.
Program Manager would be aligned with each line of business
(as well as one for IT). Under each
Program Manager will be a portfolio analyst (in some cases shared among
multiple program directors) as well as individual project managers.
Prioritization
As project requests come in, they are evaluated by the
appropriate portfolio analyst to determine the priority of the project. All
requests are stored in Sharepoint or a similar repository, providing a master
inventory of all outstanding project requests. The first step in the process is
to evaluate the project request against a core set of criteria. I would use the following factors:
- Project
Valuation (not a simple Cost Benefit Analysis)
- Strategic
Goals
- Complexity
Strategic goal mapping analyzes the level of support each
high level strategic goal (both corporate and IT) which is applicable to this
project. These are ranked on
positive-negative scale with zero being neutral.
Complexity is the critical factor in analyzing the effort
involved with the project. Based upon
the complexity, you can estimate the resources required to complete the project
and the expected duration.
Now rather than just making an arbitrary assessment for the
prioritization of the project - one that
is usually based upon who yells the loudest - the prioritization is based upon
a couple of core factors which directly correlate to the goals of the
organization, of which the primary goal is always to make money. All projects are prioritized within the line
of business rather than across the company.
When projects are prioritized across the company, the larger, more profitable
business units get all the resources, leaving the smaller, less profitable
business units to struggle. This sets up
an environment for the larger/more profitable units to continue growing while the
smaller/less profitable business units are basically put in survival mode without
the resources necessary to grow or expand.
Now we have a portfolio of possible applications by line of
business with a true valuation as well as an alignment with the organizations
strategic goals.
Doing the work
Now that we have a core set of factors that the project has
been evaluated against, we can evaluate project progress against those
factors. This opens up a wide range of
tracking and reporting, such as:
- Ability
to show progress against strategic goals based upon project progress
- At a
resource level, you can show the “strategic value” of a specific resource
- At
review time, a resource can easily show how they contributed to the
overall strategic goals of the organization