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From: www.cio.com

How to Create a Project Management Office and Select Project

Management Software

Meridith Levinson, CIO

June 23, 2008

What's the most important factor in creatinga strategic IT department, one thatpartners successfully with and is respectedby the business? For Phil Bertolini, CIO ofOakland County, Mich., it's effective projectmanagement.

Project management practiceshave helpedOakland County's IT department gain thetrust of the business. When Bertolini wasnamed director of IT for the county in 2001,

IT was viewed as black hole, and thecounty's elected board of commissionersreferred to Bertolini as "Mr. Money"because IT was always asking for funding.

MORE ON PROJECT MANAGEMENT8 Steps for Project ManagementAn Introduction to Project ManagementWhy You Need a Project ManagementOfficeWhen Project Failure Is Not an Option

Since then, the CIO has enhanced the IT department's project management office with staff, trainingand new tools. The moves have provided much improved visibility into the IT department's work while

keeping costs down. And the improved project management has made Bertolini's group more strategicto county government.

The project management software (CA's Clarity) gives Bertolini the information he needs to explain tothe board of commissioners why IT needs so much money (Oakland County's IT spend is six percentof the county's $700 million budget), what projects all that money is funding and the status of each ofthose projects. The CIO is able to show the board of commissioners exactly what everyone in the ITdepartment has been working on each day for the last two years. The software gives him that muchdetail and visibility.

Now project managementis helping the county cope with an economic downturn that has left 8.5percent of the state unemployedthe highest unemployment rate in the U.S.and that has resulted ina massive revenue shortfall.

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"We've kept the IT budget flat or reduced it over the last seven years. This year we're taking $1.5million out of operations and $4 million out of our capital plan, yet we're still able to deliver to ourcustomers," says Bertolini. "We can be strategic because we can plan effectively, manage andmeasure customer expectations and because we use good tools to do that."

Here, Bertolini offers his advice for creating a project management officeand for selecting the bestproject management software for your organization's needs.

Five Tips for Establish ing a Project Management Offi ce

1. Know what you're trying to accomplish.

When Oakland County's IT department first put its project management office in place in 1997, it hadclear tactical and strategic goals: to better prioritize projects with business partners and to make thebusiness side of government more effective through technology.

Bertolini says it's important to have a clear rationale for creating a project management officefor anumber of reasons. For one, formal project management offices aren't always necessaryor evenrightfor organizations. If you just want to track projects, for example, you may be best served by asimple project tracking application. But if you want to improve how projects are done and get morecontrol over the prioritization process, a well-run PMO can help with both.

"If you want to change your culture and the way you do business, put a PMO in place," says Bertolini.

What's more, few people inside and outside of IT are going to like the idea of a central body in chargeof approving and rejecting projects, reporting on metrics and cracking the whip on managers to keepprojects on track. IT staffers and internal customers will challenge your effort to create a PMO. To gettheir support, you need a clear justification for setting one up that doesn't include the desire to increasebureaucracy.

Finally, instituting a project management office and associated project management processesoftenrequires a significant time and financial investment. It can take a few years to get things in place.People will tire of the effort. When they question the time and money it's requiring to set up, you needto have a clear answer, says Bertolini, or else you risk seeing your project management effortdismantled when your organization needs to cut costs.

Next: Get executive sponsorship.

2. Get executive sponsorship.

Bertolini was a customer of the IT department working as Oakland County's head tax assessor in 1997when IT first put in place its project management office. He says he didn't like having to battle andmake business cases for IT projects his office needed done. He wanted to simply call up the ITdepartment and "place his order," as he had previously.

"As a customer, I was always trying to find ways to game the system or get my project done," hesays. "If I was able to circumvent the process and go to someone else, it would break down."

The reason Bertolini was never successful gaming the system was largely because the executive incharge of the county, L. Brooks Patterson, put his full weight behind it.

"Because the county executive said you will do this and here's why, there was no getting around it," hesays.

In addition to getting everyone to follow the new process, Bertolini says executive sponsorship will alsoease the change management challenges that come with instituting new project managementprocesses inside and outside of IT.

"It takes a great deal to make this work. You have expense on the hardware and software side. Youhave to train people internally. You have to change your culture internally. You have to change theculture of the customers or partners you serve. That takes time and effort. If your executive sponsordoesn't see it as worth the time to get there, you won't."

3. Create a report ing relationship for the project management office.

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The project management officewithin Oakland County's IT department reports directly to the CIO.Bertolini says the IT director who was in charge of the IT department before he came on boardwanted the PMO to report to him so that groups within IT couldn't influence it. By having the projectmanagement office report to the CIO's office, it truly becomes a central place for project managementand mentoring. It also ensures that standards and process changes happen at the highest level insidethe organization, says Bertolini.

4. Put the PMO in charge of process, not punitive measures.

When you create a project management office, you want to be careful that you don't create a project

management police organization that reports to the CIO on everything everyone in IT is doing wrong,says Bertolini.

"The PMO has to be able to mentor people in your organization. They have to be the ones people seekfor assistance," says the CIO. "If I'm a project manager and I'm worried the PMO is going to squeal onme and tell the CIO I'm not getting my work done, I'm not going to go to the PMO for help."

Bertolini adds that combating the impression in his IT organization that the PMO is the projectmanagement police has been difficult. That's why he's emphasized the PMO's role as the keeper ofthe process and as a mentor to project managers. Instead of reporting to the CIO on what's wrong,the PMO provides project managers with tools and dashboards they can use to find out what's late,what's on time and what needs work.

Next: Select project management software.

5. Select project management software.

Bertolini's advice for creating a project management office also goes for choosing project managementsoftware.

Just as you need to know what you're trying to accomplish by establishing a project managementoffice, you need to have a clear end goal in mind so that you can buy software that will bring youtoward your goal. For example, since the IT department in Oakland County wanted its internalbusiness customers to play more of a partner role in making project decisions, Bertolini says theorganization needed a tool that would enable the IT organization to communicate better with itscustomers.

Before you select project management software, Bertolini advises IT leaders to consider the projectmanagement process they wish to put in place. You want whatever project management tool youimplement to support your process.

"If you're putting in technology for technology's sake, you're doing this wrong," says Bertolini. "If youdon't have the process around the technology, it's just a spreadsheet. You just have a list. It reallydoesn't manage anything."

When you start looking at different applications, make sure the functionality meets your process needsand over-arching goals now and into the future, says Bertolini. Your PMO may start out small, he adds,but you will grow it as you see the benefits it brings to your organization, and you don't want to have toforklift out a solution you bought for a one-person PMO when it grows to six people. "Look to thefuture when you select software," he says, not just dollars and cents.

Another factor to keep in mind is integration, says Bertolini. "You don't want standalone solutions thatyou need to integrate. "We look for companies that have multiple tools that integrate together so wecan bring in new functionality as we grow and so that we know we'll be able to pass data betweenthem easily," he says.

Finally, choose a vendor that offers a true project management solution, not just software. Bertolinisays the previous IT director chose software from ABT (which was acquired by Niku in 2000; CAacquired Niku in 2005) because it emphasized the importance of good project management processesto maximize results.

"If you don't have a good process, you're not going to get good results," he says.

2012 CXO Media Inc.

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