PM 2 Vorlesung 4 Teil 1

Executive board

Portfolio board

Project Management Office (PMO)

Line management

▪ Approval of overall project budget

▪ Highest escalation instance

▪ Strategy implementation and concretisation of the roadmap for all projects

▪ Project approval/rejection of new project requests and project prioritisation

▪ Distribution of the overall project budget

▪ Decisions about escalations from projects (e.g. regarding budgets and resources)

▪ Handling change requests outside the project framework

▪ Operational multi-project management of the overall project portfolio

▪ Administration of the overall project budget

▪ First escalation instance in case of resource conflicts

▪ Steering of the project portfolio, project portfolio controlling and reporting

▪ Assessment of the effects of change requests of individual projects on the organization, the processes, the products and the project landscape

▪ Development and guidelines of project methodologies and tools

▪ Project quality management

▪ Responsible for an effective and efficient allocation of resources

▪ Initiation, supervision and consulting of project manager careers

▪ Acting as a mediator between strategic and operational activities

Steering committee

Project manager

Client

▪ Technical steering of a single project

▪ Budget decisions within the project framework

▪ Operational project responsibility and ensuring project implementation

▪ Reporting and controlling obligations

▪ Project idea and definition of the project objective

▪ Creation of the project application

Temptation to include everyone “who is important” or “everyone even remotely concerned”

▪ “Just show up between other responsibilities”

▪ Lack of procedural agreement leads to breakdown of collaboration when things get difficult

▪ Key stakeholders represented, but not more than 6-8 people

▪ Members understand their own role of what they can contribute

▪ Agree on meeting rules, procedures for negotiation and decision making

▪ Invest in relationship and trust building

▪ Conflicts of interest of stakeholders are “swept under the carpet”

▪ In order to avoid conflicts in the SC, goals become too vague to be measurable

▪ Articulate conflicts of interest and produce workable and stable compromises: build win-win spirit

▪ Translate desired business contribution into clear, operational deliverables that can be translated into measures (to be developed later by the team)

▪ Produce detailed scoping document: required actions, rough budget, important tradeoffs, key barriers & risks

Bonuses lead to “more of the same” behavior, or incentives absent, leading to Project Team having nothing at stake

Micro-manage on the one hand, or overreliance on trust, effectively abdicating responsibility

▪ Ideal PT has right competence mix and experience, but often PT is already in place when SC is established

▪ Incentives: not only quantitative indicators but also process goals: professionalism, communication, and resourcefulness. But here must be no possibility to profit from failure

▪ Motivation: avoid both micro-management and pure trust (verify key tradeoffs), build culture of openness, coach the PT.

Understanding:

▪ SC does not understand key drivers and barriers

▪ SC fails to ensure that information it gets is valid

▪ SC meetings are ceremonial, do not challenge assumptions

▪ Invest in focused understanding: understand logic and risks, force translation of technical issues into business issues

▪ Get truthful information: maintain no-blame culture, don’t rely only on outcome incentives, have first-hand information

▪ Get outside information: field visits, external visits (etc.), but be wary of external expert opinions (which have their own biases).

▪ Obsolete action plan maintained for too long

▪ Inadequate response to changes, e.g., firefighting or incorrect interpretation

▪ Changed situation changes interest constellation among stakeholders, collaboration within SC is lost

▪ SC does not provide clear decisions

▪ Establish SC problem solving procedures at the outset, to maintain win-win relationship

▪ Get informed quickly (standard of proactive reporting)

▪ Understand reasons and consequences of change (“get to the bottom”) and make a clear decision

▪ The PT is responsible for generating solutions

The project portfolio board and the project (portfolio) management office design governance structures, make portfolio-related decisions and coordinate the project landscape.

The project portfolio board…

... determines the governance structures. (processes, reporting,roles)

... decides on priorities in the project portfolio and acts as power promoter for MPM.

... is responsible for all questions concerning the steering of the project portfolio during the year and the project management procedures within the framework of the resolutions of the executive board.

... decides on priorities, order contents, resources and budgets.

... serves not only decision-making but also communication and negotiation.

The project (portfolio) management office…

... has 4 main functions: control, administration, optimisation and coordination.

... is divided into strategic PMO (decision preparation) and tactical PMO (project support and guidance).

... is a decision-making and supporting function for all change projects within an organization.

... can also participate in project execution (e.g. implementation), resource allocation, knowledge management and risk management.

The PMO is the central point of contact for all PM questions. It is an organizationally anchored entity that is responsible for various supporting tasks in the organization.

Insufficient comparability of projects

Lack of uniform planning standards

Insufficient decision support for management

Budget and project controlling processes are not fully developed

Overload of resources due to lack of transparency

Administrative function

Control function

Optimization function

Coordination function

▪ Project planning support

▪ Documentation, reports

▪ Manuals, guides

▪ Software tools

▪ Controlling standards

▪ Control of milestones

▪ Project supervision

▪ Risk management

▪ Early warning system

▪ Process standardization and optimization

▪ Knowledge management

▪ Project management methods

▪ Training & Coaching

▪ Interface management

▪ Portfolio management

▪ Resource management

▪ Use of synergies

▪ Deployment coordination of project managers

Communication

Project organization

Planning

Reporting

▪ Improve and support cross-project communication: create a communication plan within the program

(interfaces – who communicates with whom?, content – what is communicated?)

▪ Encourage regular consultation with stakeholders (regarding project status and risks)

▪ Support of the project managers in developing the project organization (e.g. project team)

▪ Definition of roles & responsibilities

▪ Implementation of an escalation process to accelerate decisions

▪ Group projects by content and dependencies

▪ Define objectives, scope and results in advance

▪ Use standardized PMO template as basis for project planning

▪ Controlling and adhering to milestones

▪ Provide reporting templates based, for example, on input from project managers and reporting cycles

▪ Submit project status reports to management on a regular basis

Top management

Line / Program manager

Project manager

▪ Responsiveness

▪ Flexibility

▪ Transparency

▪ Quality of information

▪ Better coordination of projects with each other

▪ Faster decisions

▪ Better medium-term predictability

▪ Quality of cooperation

▪ Quality of staffing

▪ Support in operative project execution

▪ Removal of „barriers”

▪ Feedback / communication of decisions

Level 3: Strategic PMO

Level 2: Business Unit PMO

Level 1: Project Office

Definition of the PM strategy / roadmap, steering of the entire project portfolio, project prioritization, anchoring of the PM in the company

Program and resource management, preparation of decision templates, PM standardization in the area

Infrastructure provisioning services, individual project consulting and controlling

Clarification of the PMO mandate and competencies

Specification of PM tasks

Development of a step-by-step implementation plan

Definition of job needs

Establishment through internal marketing

Definition of the mission, self-image and perceived benefits of the PMO prior to implementation

Definition and documentation of the desired PM and PPM processes as well as all necessary PM roles

The introduction of a PMO represents a far-reaching intervention in the organization → Consider change management measures

1. Clear communication of objectives and mission.

2. The role of the PMO and the role of the departments and project managers must be clearly defined. What are rights and obligations?

3. Do not over-engineer: Simple methods and processes are sufficient in the beginning. Less is more.

4. The introduction of a PMO is far more than the introduction of an IT solution.

5. PMOs need a “power promoter” in the background, who can act as a godfather in critical situations and also enforce “unpleasant” issues.

6. PMO leader: Should know the organization by heart, should be familiar with the topic and possess a high degree of social competence.

7. PMOs cannot and should not please everyone in the organization. The PMO has a clear mandate and this is usually not voted on in a grassroots democratic way.

8. Identification and involvement of all stakeholders.

9. Active change management.

Unclear definition of “project”

Termination of projects usually too late - if at all

No comparability of projects

Lack of transparency (resources, dependencies between projects)

Large time delays

No uniform planning standards

-> A single failed project costs more than the total effort to define and institutionalize project management processes.

▪ Increasing globalization of the world economy (growing data and knowledge markets)

▪ Greater importance of cross-company cooperation (networks)

▪ Large project portfolios with a high degree of complexity and networking

▪ Projects as a tool for strategy implementation

▪ Increasing coordination requirements between project participants

▪ Distributed project teams

▪ Standardized project execution is a success factor or competitive advantage

▪ Efficient project (portfolio) management enables faster reaction times

▪ Necessity to qualify employees for project work

They are introduced in the company to professionalize project management

▪ The objective of establishing PM standards and methods is often the professionalization of project management and thus the increase of the PM maturity level.

▪ The definition of uniform terms and processes and their application for all projects roughly corresponds to PM maturity 2-3 of a maximum of 5 (here: PM Maturity Model according to Crawford).

▪ The usual duration for the jump between the maturity level is 1.5 to 2 years.

▪ The introduction of PM standards can therefore also take place gradually or in small steps.

Software Engineering Institute (SEI), Pittsburgh/USA:

On behalf of the U.S. Department of Defence as a tool for evaluating software suppliers.

Maturity level model for the determination of process areas with the objective of continuous process improvement.

In order to achieve a degree of maturity, all process areas of this degree of maturity as well as the process areas of the lower degrees of maturity must be mastered.