Every Organization Can Implement OPM~@! (A Comprehensive Playbook for Project Management Process Improvement & PMO Governance)

J. Alan Northmp, PMP

TRIPLE CONSTRAINT, INC.

The author and publisher of this book have taken care in the preparation of this book, but make no expressed or implied warranty of any kind and assume no responsibility for errors or omissions. No liability is assumed for incidental or consequential damages in connection with or arising out of the use of the information or programs contained herein.

Triple Constraint 3801 Meadowknolls Marion, Iowa 52302 (31 9) 310-861 8 . .

jsi tdc@aol.com Visit Triple Constraint on the web: www.tripleconstraint.com

The publisher offers discounts on this book when ordered in quantity for special sales. For more information, please contact:

Copyright O 2007 Triple Constraint, Inc.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior consent of the publisher. Printed in the United States of America. Published in the United States of America.

I ISBN 978-1 -4243-3073-7

First Printing March 2007

Graphics created by Kome Design www.KomeDesiqn.com

Contents

ACKNOWLEDGEMENTS

ABOUT THE AUTHOR

INTRODUCTION

Chapter 1: Introduction to OPM? Chapter 2: Architecture and Components

SECTION I1 - GOVERNING BODIES

Chapter 3: Process Governance Chapter 4: The Executive Branch Chapter 5: The Legislative Branch Chapter 6: The Judicial Branch

Chapter 7: Process Framework Chapter 8: Standardizing 0 ~ ~ 3 ~ Processes Chapter 9: Measuring OPMP Processes Chapter 10: Controlling OPMY Processes Chapter 11 : Improving 0 ~ ~ 3 ~ Processes Chapter 12: Keys to Implementing OPMP

SECTION N - ASSESSING THE ORGANIZATION

Chapter 13: Self Assessment Chapter 14: O P M ~ Productsuite Chapter 15: Where to Go From Here?

SECTION V - APPENDICES

Appendix A - Project Risk Management Process Appendix B - Best Practice Breakout Appendix C - Glossary of Terms Index

vi

vii

ix

xi

Acknowledgements

To my wife, Sara Northrup, who supported me all throught the writing of this book. To Paul Egli, who inspired most of this book. To Doug Williams and Connie Smith, whose strait forward feedback greatly enhanced the book. To Dr. Ken Moffit, whose knowledge helped me get my head around the concept of governance. To my mother, Deanna Northrup, who has been one of my greatest inspirations. To Steve Wilson , Lisa Livingston, Brad Clark, and Andy Anderson, thanks for the feedback. To Paul Postler, who has been a tremendous mentor and leader to me. To Eric Kome, thank you for staying up all night to complete the graphics for this book. Most of all, I give thanks to Jesus Christ, from whom I owe my next breath!

About The Author

Jamie Northrup, PMP is the principal consultant with Triple constraintB, lnc. He is a former US Army Officer and has served as a Sr. Manager, Project Manager, and Program Manager in the Aerospace Engineering, Telecommunications, and Educational Industries. A graduate of the University of Iowa, Jamie holds a degree in Management Science. He is certified as a PMP through the Project Management lnstitute and an original OPM~@ team member and 0 ~ ~ 3 ~ Second Edition Core team member. He is trained in CMMI through the Software Engineering Institute at Camegie Mellon University and has taught technology classes as an adjunct professor with Kirkwood Community College.

Triple constraint5 Inc. is a Project Management Improvement company that specializes in helping organizations realize business objectives through the implementation of Organizational Project Management Best Practices using O P M ~ . OPM~@ is the first standard for organizational project management published by the Project Management Institute (PMI@). It lists -600 project, program, and portfolio Best Practices that organizations may implement in order to increase their project management maturity and capability. Triple ~onstraint@ofTers training and consulting services to give organizations the "pushn they need to get the ball rolling with 0 ~ ~ 3 ~ .

For questions regarding 0 ~ ~ 3 @ a n d this book, please visit us at:

Why the Book?

This book has been in the making since O P M ~ @ First Edition rolled out in 2003. Having "worked at" and "consulted with" many companies over the last 20 years, it has become apparent that most organizations struggle to develop and sustain good project management processes. Organizations pick up standards like PMl's PMBOK, Program, Portfolio, and others and say, "YES ... these are exactly what we need in our organization!" But they then struggle when it comes to implementing the standards.

A disciplined approach to project execution is essential for oraganizational success. Organizations that do not deliver on time, on budget, or on scopefquality do not win future contracts. Triple Constraint, Inc. has worked with fortune 500 clients as well as organizations with only a few projects in the pipeline. This book was written to help those struggling with organizational project management process improvement. It is intended for any project management practicioner or process improvement consultant that has asperations of improving organizational project management maturity. This book provides the tools and confidence needed to radically improve organizational performance.

Whether using OPM~@ as the organization's process framework, or merely augmenting current Lean, Six Sigma, and CMMl implementations, this book serves as a guide to realizing world class process. It is our hope that everyone reading this guide can learn from the tools, tips, and secrets that we have gained over the years. They have made us successful with organizations that we serve and we are certain that they will do the same for you.

SECTION I (Overview of OPM3@)

Chapter 1: Introduction to O P M m Every Organization Can Implement OPM3@!

Chapter 4: lntrodudion to 0 ~ ~ 3 ~

OPM~@ Overview

The Organizational Project Management Maturity Model (0PM3@) is arguably the fastest growing and most comprehensive maturity model available for organizational project management. It was initially developed and released on October 2003 by the Project Management Institute (PMI) with the help of over 800 seasoned project management professionals from around the world. The second edition of the model is scheduled to be released in late 2008.

OPM~@ is a roadmap for implementing Organizational Project Management Best Practices. These Best Practices are listed in globally recognized standards such as PMBO@ Guide - Third edition, The Standard for Program Management, The Standard for Porifoiio Management, Practice Standard for Earned Value Management - Second edition, Practice Standard for Estimation, etc. 0PM3@was created to provide a proven path for organizations to implement these Best Practices in order to increase organizational project management capability and maturity.

PMI has teamed up with Oslo, Norway based Det Norske Veritas (DNV), a premier provider of certification and process improvement services. Together they have created OPM~@ Productsuite, a comprehensive toolset designed to help organizations im lement the OPM~@ Standard. This book has been developed to supplement the DNV OPM 8 Assessor and Consultant training. It is a guide to help internal and external OPMP consultants 'hit the ground running' with 0~~3@Assessments and Implementations.

Why the Book?

Since OPM? was first released in 2003, it has become apparent that organizations have a tendency to get intimidated by the size and complexity of the model. Through the course of conducting OPMY seminars, assessments, and implementations, there is tremendous excitement and enthusiasm regarding OPM~@, but little guidance out there to help organizations.

Many organizations purchase the 0PM3@standard and other PMI standards and say, "Yes, these are exactly what we need, but where do we start and how do we implement these in our organization?!?" This book was written to give internal and external consultants "tried and truen tools, tips, and guidance to implement O P M ~ . Any organization that manages work through projects can use this book as a "how ton guide. Undoubtedly there are many ways to get the job done and neither PMI nor the 0 ~ ~ 3 ~ Standard requires that organizations implement the framework offered by this book. It is merely our formula for implementation success. We hope everyone enjoys the recipe! O

The goal of this book is to help organizations create a contiguous project management process framework. If implemented properly, organizations should realize world class project management execution. Another important point of this book is that or anizations need not have I a cadre of process engineering PHDs to successfully implement OPM . Whether an internal practitioner or an outside consultant all that is required is to understand a few simple improvement principles and have the right tools. People reading this guide have resoundingly exclaimed: "Every Organization Can Implement 0PM3@!"

Chapter 1 : Introduction to OPMm Every Organization Can Implement OPM3@

OPIM~@ Standard

As a globally accepted project management standard, OPMY is not a process flow diagram or performance measurement. It does not require organizations to follow a particular process. It only requires that there be processes in place to address (or encapsulate) industry project management best practices. 0 ~ ~ 3 ~ tells organizations what they should do, not how to do it.

A "standard" is something established by an authorit (27. 1, custom, or general consent as a model or example .

is established by a consensus body which is open to representatives from all materially affected and interested parties. The standard is publicly reviewed and commented on in draft form. Submitted changes are incorporated in accordance with the consensus body requirement with the availability of an appeal process.

When implemented effectively the OPM~@ standard can become an organization's process framework. Or it may serve to augment an organization's current process framework. Many organizations have realized improved operational performance through methodologies such as CMMI, ISO, Six Sigma, and Lean. However project, program, and portfolio management in organizations continue to lag way behind. With OPM~@, any organization can achieve world class project management performance.

0 ~ ~ 3 ~ can be implemented in any company practicing project management. Because of its non-prescriptive nature, small construction companies as well as global aerospace engineering firms can take advantage of its features. 0 ~ ~ 3 @ a l l o w s organizations to implement only the parts of the standard relevant to their industry. Conceivably, there may be project management Best Practices which are not applicable to a particular industry or organization. OPMY leaves it to the organization to implement only the Best Practices positively impacting the organization.

Maturity Models

The term "Maturity Model" has become widely recognized. With the advent of the successful Capability Maturity Model (CMM) for software engineering in the late 801s, many organizations have embarked on journeys to improve their company's process capability and maturity. The use of the word "maturity" implies that capabilities must be grown over time to produce repeatable success. "Maturity" is defined as, "the state or quality of being fully grown or developedn. (3) "Model" implies a progression or series of steps in a process. Therefore a "maturity modeln is the following for the organization:

- Tool: An instrument to assess an organization's current process management capabilities.

Methodoloqv: A system of methods and principles for educating and training people involved in organizational project and process management.

Framework: A structure for institutionalizing process improvement in organizations and increasing project and process management capabilities.

When a child is asked to accomplish a task the expected results are unpredictable. Is the task going to be completed on time? Is the task going to be completed as specified? Is the task going to cost more than anticipated? Many organizations execute projects like immature children. They

Chapter f: Introduction to OPMm Every Organization Can Implement OPM3@!

never know what to expect at project close. By improving project management maturity, organizations improve project performance and predictability. If an organization can consistently capture user intent and operate within the triple constraint of projects (schedule, scope, and cost) it will have an enormous impact on company profitability (and perception by the customer). These organizations have a disciplined conduct of projects. Outcomes of projects are predictable and consistent.

Maturing project management capability in an organization helps to achieve Operational Excellence. Operational Excellence is defined as, "conducting business in a manner to improve quality, obtain higher yields, faster throughput, and less wasten (4'. Operational Excellence can only be accomplished by evaluating current and past performance of processes and enhancing them. The following are characteristics most common to Maturity Models:

- Levels: They have a number of levels (typically 3-6) and recommend that organizations institutionalize one level at a time before moving on to implement later levels

Process Framework: They have an established process framework in place for all levels

Kev Processes: Each level has certain key processes like (e.g. scope management, project planning, quality assurance) that make up the framework

Level Descriptor: A descriptor for each level (e.g. level 1, level 2, standardized, measured, controlled, etc.)

The following are the typical levels of most maturity models:

5. Improved (highest maturity): Focus on continuous improvement, Focus on defect prevention, Cost 1 Benefit analysis of all new initiatives

4. Control: Measures of process and quality analyzed, Measures used to evaluate processes, Processes operate within limits

3. Measure: Measures of process and quality collected, Measures used to isolate processes, Quality issues isolated

2. Standardize: Basic project management processes, Documented standard activities, Identification and capture of quality issues

1 . Initial (lowest maturity): Ad hoc, Non repeatable, Heroics

Chapier 1: Introduction to OPMXQ Every Organization Can Implement OPM3@

Process is the Organization's Playbook

Mature processes in organizations are like the playbooks of professional sports teams. The playbook is the basis of team execution. An organization can have the most talented people in the industry, but if they do not execute their plays, they will not be successful. The 2000 and 2004 USA Olympic Men's Basketball Teams are a great case study for this. All the talent in the world, but a poor playbook and poor execution. Athletic teams are not mature until they consistently perform under diverse situations and scenarios. Assuming both sides have talented, committed people, the organization's playbook "ISn their competitive advantage. Organizations become "mature" when the processes they follow are "maturen. And they can execute those processes consistently.

.Without a good playbook, organizations are forced to use talent and heroic efforts alone to accomplish their tasks. Organizations like this suffer from "tribal knowledge syndromen and "brain drainn. Tribal knowledge refers to unwritten knowledge. It is information only known and understood by tribal elders or the tribal chief. The problem with tribal knowledge is that once the chief or elder goes on to better hunting grounds, no one knows all the information that the former tribal member knew. All this knowledge has to be accumulated once again. Good processes help organizations capture this essential knowledge and reuse it on every project. A good process playbook sets mature organizations apart from chaotic regimes where there is much talent but no way marshal it. Team success is based on the concept of synergy. Synergy says teams can accomplish more together than a group of individuals working separately. Processes establish overlapping responsibilities for teams and draw out the lines of demarcation for each play the team executes. They build and support team synergy.

Success and maturity are so important to athletic teams that they allocate financial and human resources to update and continually improve the playbook. Similarly, companies must devote resources and time to implementing and updating processes. A good process playbook has plays for all situations; processes for large projects and small projects, extended projects and late projects. An organization's strategy can change quickly and dramatically. Processes must be flexible to handle those changes. The goal of 0 ~ ~ 3 ~ implementations is to create a project, program, and portfolio management playbook; a mature, contiguous, series of processes from initiation to closing to facilitate project success. The goal of this book is to give organizations the tools needed to create a world class "process playbook"!

Chapter 1 : Introduction to OPM3B Every Organization Can Implement OPMW

Shrinking the Stovepipes

Since project management is all about marshalling the efforts of the entire team to accomplish a mission, 0 ~ ~ 3 ~ is valuable for breaking down functional stovepipes (or silos) that develop in the organization over time. Stovepipes develop when functional areas focus only on their part of the system and do not look at the system as a whole. Communication breaks down and it becomes very difficult to move a project through an organization. 0 ~ ~ 3 ~ processes bring cross functional teams together to break down stovepipes.

O P M ~ @ is most effective when it is implemented across a Strategic Business Unit. For instance, some organizations have separate training processes in various parts of the organization (e.g. engineering, operations, HR, Sales, etc.) If implemented flexibly enough, OPMY Best Practices can augment other training and development programs. The rigor of O P M ~ @ processes can greatly enhance the effectiveness of other parts of the organization. Synergies can be gained by a unified strategy. For instance, a standardized training process means the effectiveness of training can be measured at an organizational level to determine if training is hitting the mark and meeting expectations. 0 ~ ~ 3 ~ ensures there are standard processes and templates for developing training, soliciting training, training feedback, attendance, future training needs, etc. The diagram to the right is an illustration of what an organization with functional stovepipes looks like and how OPM? ties it together.

I Strategic Business Unit I Hard on the process, soft on the people

Project management is one of the critical factors for corporate success. A company's ability to "plan their work, and work their plann is the difference between success and failure. The Standish Group "Chaos Report" states approximately 80% of projects in corporations fail. They are rarely delivered on schedule. They rarely meet the customer's expectation for scope and quality. When they are delivered, in most cases they are significantly over budget. A knee jerk reaction by immature organizations is to replace project leaders. These organizations feel if they get a better project manager for the job, their projects will be more successful.

Project management history is replete with fallen project managerlheroes who are forever posthumously memorialized in the memories of project past. They toiled night and day in immature organizations only to bum out and quit. Project management professionals know their craft. They understand what it takes to accomplish a mission. They have the skills to lead their teams towards project success. However, in companies where processes are immature, they do not have the support necessary to see their projects to success. Their projects are constantly derailed from meeting milestones by having to struggle with fundamental project processes like resource management, scope management, and change management. These consume a project manager's valuable time and make them ineffective.

Chapter 1: Introduction to OPMm Every Organization Can Implement OPM3@

Mature organizations support their project managers and project teams by implementing a process framework for project success. These organizations develop standardized, measurable, controlled project management processes. They properly charter project teams and give them the tools necessary for project success. Successful Organizations anchor these processes into the company culture to ensure improvement sustainability.

Mature organizations develop a culture of project success and quality amidst their ranks. They learn from mistakes of the past by scrutinizing "lessons learned" documents and "after action reviews". Information gleaned from these reviews is then used to update current processes, checklists, and templates with new doses of knowledge and best practice. Mature organizations set up checks and balances in their project management processes making it unlikely for project details to fall through the cracks.

Project Failure

The Standish group states 10 main reasons for project fai~ure'~). They are as follows:

1. Inadequately trained andlor inexperienced project managers

2. Failure to set and manage expectations 3. Poor leadership at any and all levels 4. Failure to adequately identify, document and

track requirements 5. Poor plans and planning processes 6. Poor effort estimation 7. Cultural and ethical misalignment 8. Misalignment between the project team and

the business or other organization it serves 9. lnadequate or misused methods 10. lnadequate communication, including

progress tracking and reporting

Most of these reasons for project failure are process related! Once again, O P M ~ @ is not a "silver bulletn for magically solving the above reasons for project failure. However, once implemented, organizations will have a standardized, measured, controlled, improved, and sustainable project management life cycle (or playbook). Organizations can then focus on improving the project life cycle for future higher quality and cost reduction. O P M ~ @ mitigates the above risks in the following ways:

I. Inadequately trained and/or inexperienced proiect manaqers: Setting up a project management training program is an essential element of 0 ~ ~ 3 ~ . Upon entering the organization, project managers and other process users are immediately acquainted with company processes and procedures. They are brought up to speed on the tools and skills necessary to manage projects in the company. In a company with mature project management processes, project managers do not need the level of experience one might need otherwise. Good processes encapsulate decades of organizational project management Best Practices. All project managers are trained on the processes. New project managers will have the processes, checklists, templates, procedures, etc. to execute like seasoned veterans.

2. Failure to set and manage expectations: Organizations with mature processes have the capability for project managers to properly set and manage stakeholder expectations. Through proper use of work packages, schedules, status reports, and status meetings, all stakeholders are informed of what is to come and when to expect it.

Chapter 1 : Introduction to O P M S Every Organization Can Implement OPM3@

3. Poor leadership at anv and all levels: An important aspect of 0 ~ ~ 3 ~ is its emphasis on improving leadership. OPMP requires that project leaders have the skills necessary to successfully lead projects. Additionall , one of the more important components of 0 ~ ~ 3 ~ is the 2 internal commitment process. OPM3 secures executive sponsorship and facilitates good leadership at the project manager level to make projects succeed.

4. Failure to adequatelv identify, document and track requirements: 0 ~ ~ 3 ~ contains multiple Best Practices for managing project scope. Project scope management, along with the commitment and change management processes alleviate normal requirements problems plaguing most projects.

5. Poor plans and plannina processes: 0 ~ ~ 3 ~ provides industry Best Practices for project managers to "Plan their work, and work their plan". From scope management to procurement management 0 ~ ~ 3 ~ provides industry Best Practices for all aspects of project management. This insures projects are planned and execute according to plan.

6. Poor effort estimation: OPM? provides industry Best Practices for project task estimation. These estimates then become the basis with which project schedule, effort, and cost are planned.

7. Cultural and ethical misaliqnment: 0 ~ ~ 3 ~ has Best Practices to develop the team not only from a performance perspective, but also from a cultural perspective. It then encourages strong ethics based conduct of project managers.

8. Misaliqnment between the project team and the business or other organization it serves: Business strategic objectives are propagated down through the organization by Best Practices implemented at the portfolio, program, and project domains. This ensures project managers are moving in the same direction as the rest of the organization.

9. Inadequate or misused methods: 0 ~ ~ 3 ~ requires all methods be tailored to the organization so regardless of project size, proper methods will be used. Encapsulating OPM3B Best Practices into processes will set up methods for success in the organization. These methods become the foundation for project execution in the organization.

10. lnadequate communication, including progress trackinq and report in^: 0 ~ ~ 3 ~ has a strong emphasis on project management communication and performance reporting. Through proper use of schedules, status reports, and status meetings, all stakeholders are informed of what is to come and when to expect it.

Focus of this book

The OPMY Knowledge Foundation discusses the three interlocking elements essential for implementation success; Knowledge, Assessment, and Improvement. This book addresses all three interlocking elements but most attention is given to "lmprovement". It is the most complicated. It is the most critical for organizational success. lmprovement can be broken out into three main components:

Chapter 1 : lntroduciion to O P M S Every Organization Can Implement OPM38!

Process Design, Standardization, and Redesign: The creation of the project management processes in the organization. This includes process models, elements, training, etc. (discussed in detail in chapters 8 & 11)

Process Measurements and Control: The measuring and controlling of the processes for quantitative analysis and subsequent improvement (discussed in detail in chapters 9 & 10).

Process Governance: Creating Governing Bodies to govern processes and systems that have been implemented in an organization. Adequate process governance must be in place to support and sustain process implementation. As in political government, if processes are not enforced, they will not be followed (discussed in detail in chapters 3,4,5, and 6).

Should My Organization Implement OPM~@?

If the organization does project management, 0 ~ ~ 3 @ w i l l help with Initiating, Planning, Executing, Controlling, and Closing projects, programs, and portfolios. One of.the best ways to determine if the organization is ready for 0 ~ ~ 3 ~ is to do a strengths, weaknesses, opportunities, and threats (SWOT) Analysis. What are the "strengthsn, "weaknessesn, "opportunitiesn, and "threats" of the organization when considering an OPM~@ implementation? Additionally, the following questions should be asked:

1. Is the leadership well versed in PMI? Are they familiar with the PMBOK, Program, and Portfolio standards? Do they understand the importance of the project management in the organization? Do they understand the need for certified project managers? If yes, this is a BIG first step.

2. Is the orqanization receptive to process improvement initiatives? Has the organization been open to process improvement initiatives in the past? Have they committed financial and human resources? Or has the organization had little interest in truly supporting process improvement? Organizations supportive of process improvement initiatives are difficult, if not impossible, to get executive sponsorship from.

3. Is executive sponsorship secured? Does leadership, from the top down, support and sponsor the need for disciplined organizational project management? Are they willing to support the process in the initial stages when full organizational support has not been secured? Executives may like process improvement, but they must understand the need for disciplined organizational project management.

4. Are there dedicated resources for implementation? Is the organization willing to commit dedicated resources to the implementation? Without resources, it will be difficult, if not impossible to standardize the OPM~@ Process Framework.

5. is the or~anization open to assistance from full time consultants? Many times it is necessary to bring in an outside person for major process improvement. The outside person can serve as the "expert" and be a catalyst for improvement.

Chapter 1 : Introduction to OPMW Every Organization Can Implement OPMW

6. Has the orqanization avoided having conflictins priorities? If there are other major process improvement initiatives going on at the same time this can be a problem. Organizations with improvement initiatives having competing priorities may not be able to successfully implement and institutionalize 0 ~ ~ 3 ~ Best Practices.

7. Are the knowledqe and tools available to implement? Has the organization ever implemented successful process improvement in the past? I.E. has the organization ever achieved a CMMI level or a successful IS0 implementation? Past success can be a good predictor of future success.

8. Will 0 ~ ~ 3 ~ be imolemented alone or alonq side other initiatives? OPMY implementations can be coupled with other improvement initiatives like Six Sigma, Lean, and even CMMI. If 0 ~ ~ 3 ~ has the same commitment and executive sponsorship organizations can have the best of both worlds.

Next Step

If organizations get through these questions and the answer is still, "yesn, then they are ready to move on with OPM?!

REFERENCES

(1) Project Management Institute, Organizational Project Management Maturity Model (oPM~@), Project Management Institute, Inc. 2003. Copyright and all rights reserved. Material from this publication has been reproduced with the permission of PMI.

(2) "standard." Dictionary.com Unabridged (v 1.0.1). Random House, Inc. 18 Dec. 2006.

(3) "maturity." 5ictionary.com Unabridged (v I. 0.1). Random House, Inc. 1 8 Dec. 2006.

(4) "Operational excellence." Wikipedia, The Free Encyclopedia. 13 Aug 2006, 2242 UTC. Wikimedia Foundation, Inc. 18 Dec 2006

(5) Adapted from figure 1-2, page 6 of the Organizational Project Management Maturify Model Knowledge Foundation, 2003 Project Management Institute, Inc.

(6) "The Chaos Report", Copyright O 2005, The Standish Group International, Inc

Chapter 1 : Introduction to OPMm Every Organization Can Implement OPM363

Chapter 2: OPM3@Architecture and Components Every Organization Can Implement OPM3@

Chapter 2: O P M ~ @ Architecture and Components Architecture and Component Overview

Now that the organization recognizes its need for a project management playbook, it must understand the architecture of 0 ~ ~ 3 ~ before proceeding. The 0 ~ ~ 3 ~ model is made up of a number of components, attributes, and dimensions that form its architecture. These various aspects of the model work together to form the building blocks of organization project management. They are as follows:

Domains

The first dimension of 0 ~ ~ 3 ' is "Domain". The 0 ~ ~ 3 ' Knowledge Foundation defines Domain as one of three distinct disciplines of organization project management (*I. Each Domain contains organizational project management practices specific to the work in that sphere of activity. 0 ~ ~ 3 ~ identifies three domains for organizational project management:

Proiect Domain: The project management discipline of organizational project management

Proqram Domain: The program management discipline of organizational project management

Portfolio Domain: The portfolio management discipline of organizational project management

Project Domain

The OPMY Knowledge Foundation describes projects and project management as the following: 'Project - A temporary endeavor to create a unique product, service, or result." 'Project Management - The application of knowledge, skills, tools, and techniques to pmject activities to meet project requirements." The Project Domain concerns the managing of a single project. It is the set of Best Practices specific to managing projects.

An example project in the project domain is a defense contractor initiating an endeavor to add a new feature to a flight management system. A project would be initiated to facilitate this change. The project domain contains approximately 200 industry recognized project management Best Practices. In order to implement and maintain project management processes, Best Practices from this domain will be embedded into project domain processes. The following are the major responsibilities a project manager has in the project domain:

Manaqinq Stakeholder Expectations at a Proiect Level: Providing required communication to stakeholders regarding project status, making sure stakeholder needs are being addressed on the project, being responsive to stakeholder requests.

Manaqing the Proiect's Triple Constraint: Making sure cost, schedule, and scopefquality contractual requirements are being met.

Identify Contentions Inter-Proiect Contentions: Making sure all inter-project handoffs are completed successfully and resource contentions between projects are escalated to the program manager.

Prioritizing Tasks: Scheduling and executing tasks in the right sequence for project success.

Chapter 2: OPfiJ3@Architecture and Components Every Or-nization Can Implement OPMW

Ensure Proiect Obiectives Support Program Strateaies: Working with the program manager to assure the project is aligned with program, portfolio, and organization strategies.

Program Domain

The OPIW~@ Knowledge Foundation describes a program and program management as the following: "Program - A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. Programs may include elements of related work outside of the scope of the discrete projects in the program." C3) "Program Management - The centralized, coordinated management of a program to achieve the program's strategic objectives and benetits." '4) The Program Domain concerns the function of managing multiple related projects.

An example of a program in the program domain is a defense contractor building a new flight management system for military aircraft. All of the projects needed to support this contract (software, hardware, systems integration projects, etc.) would be grouped into a program. The program domain is a higher level than the project domain. Processes in the program domain concern multiple projects, whereas processes in the project domain concern only one project. The program domain contains approximately 200 industry recognized program management Best Practices. To implement and maintain program management processes, Best Practices from this domain will be embedded into program domain processes. The following are the major responsibilities a program manager has in the program domain:

Manaqing Stakeholder Expectations at a Proqram Level: Providing required communication to program stakeholders regarding program status, making sure stakeholder needs are being addressed on the program, being responsive to stakeholder requests.

Coordinating Activities of Multiple Project Manaqers and Teams: Verifying all inter- project handoffs are successful.

Managinq Conflicts amonq Proiects to Achieve Orqanizational Goals: Resolving resource contentions among projects (which includes escalating if necessary).

Prioritizinq Proiects: Scheduling and executing projects in the right sequence for program success.

Ensure Proqrarn Obiectives Support Portfolio Strateqies: Working with the portfolio manager to ensure that programs are aligned with the portfolio and organization strategies.

Portfolio Domain

The OPM? Knowledge Foundation describes a portfolio and portfolio management as the following: "Porffolio - A collection of projects and/or programs and other work grouped together to facilitate effective management of that work to meet strategic business objectives. The projects or programs of the portfolio may not necessarily be interdependent or directly related." "Porkfolio Management - The selection and support of projects or program investments. "* These investments in projects and programs are guided by an organization's strategic plan and available resources." The porffolio domain concerns strategic decisions and investment in organizational project management. It is the managing of multiple related or unrelated projects and programs; the set of Best Practices specific to managing a porffolio of projects and programs.

Chapter 2: OPM3E)Architecture and Components Every Organization Can Implement OPM3m

Investments in projects and programs are guided by the organization's strategic plan and available resources. (6) The previous defense contactor example can apply here as well. In a broader scope, the portfolio domain is a defense contractor building new flight management systems for military aircraft. There are many military aircraft and all have various versions of this system so they are grouped into a portfolio. The portfolio domain is a higher level than the program domain. Processes in the portfolio domain concern multiple programs and/or projects, whereas processes in the program domain concern only one program. The portfolio domain contains approximately 200 industry recognized portfolio management Best Practices. To implement and maintain portfolio management processes, Best Practices from this domain will be embedded into portfolio domain processes. The following are the major responsibilities portfolio managers have in the portfolio domain:

Translating Orqanizational Strategies into Specific Initiatives or Business Cases that become the Foundation for Proqrams and Proiects (7': Working with senior management to develop business cases for the organization. Improvement of organizational project management processes is an important business objective.

ldentifving and Initiating Programs and Projects ('I: Working with senior management to determine which projects and programs will go into the project pipeline.

Providing, Allocatinq, and Reallocatinq Resources to Proqrams, Proiects, and Other Activities ('': Securing vital resources for all projects in the project pipeline and resolving resource contentions between projects and programs.

Maintaining a Balanced Proiect Portfolio (Io): Working with senior management to determine which mix of programs and projects will offer the most balance to the organization.

Supporting the Orqanizational Project Manaqement Environment (I1): Working with senior management to develop a culture of project management support and discipline in the organization.

Stages

Stages refer to the stages of process improvement. Process improvement regards making improvements to a process to make it more "capable" and mature than its current state. Improved process capability was spawned by the works of W. Edwards Deming and Walter Shewhart in the 1920s. Their work and the work of others like Joseph Juran, Philip Crosby, Kaoru lshikawa laid the foundation for most of the process improvement methodologies employed today. These men laid out the sequential stage of improvement S, M, C, I:

S = Standardize: A process is standardized if the organization uses it across functional boundaries

M = Measure: A process is measured if it has been standardized and measurements are taken on the process

C = Control: A process is in control if all measurements are within the upper and lower control limits for the process

I = Improved (Continuously Improve): A process is continuously improved if it is controlled and data is used to improve the process

Chapter 2: OPM3@Architecture and Components Every Organization Can Implement OPM3@

The sequence implies a dependency with each successive stage. To measure a process, it must first have been standardized in the organization. To keep the process in control for consistency and improvement purposes, the process must be measured. To improve a process, it must be in control (or acting predictably within recognized upper and lower control limits). This book devotes an entire chapter for each stage of process improvement in OPM? (chapters 8-1 1 ).

All domain Best Practices are categorized into one of the SMCl process improvement stages. For instance, Best Practice 1170 is defined as: I170 - Project Risk Identification Process Standardization. (I2) This Best Practice is in the "projecr domain and "standardizen stage. It is a process to standardize the identification of risks in the organization. Best Practice 1860 is

(13) . . defined as: 1860 - Project Risk Identihication Process Measurement is ~n the project domain and the "measure" stage because it involves a process to measure the identifying of r i ~ k s in the organization. Similar Best Practices exist in the "control" and "continuously" improve stages.

Best Practices

PMl defines a Best Practice (BP) as, an optimal way currently recognized by industiy to achieve a stated goal or objective 'I4'. For organizational project management, this includes the ability to deliver projects successfully, consistently and predictably to implement organizational strategies("'. As stated earlier, BPS are the building blocks of organizational process improvement. BPS are incorporated into processes to mature project management capability in organizations.

The project management community that created 0 ~ ~ 3 ~ First Edition identified BPS in the project domain by decomposing each of the 44 PMBOK processes. The resulting BPS were then categorized by stage and domain dimensions. In addition to this, the project management community identified BPS to facilitate the previously identified process BPS. This was accomplished by conducting Delphi brainstorming sessions. The results of the brainstorming sessions were categorized best practices (now called Organizational Enablers). All BPS are categorized by Stage and Domain dimensions.

The following is a breakout of the number of OPM~~BPS at each respective stage and domain. The highest domain is the portfolio domain. The highest stage is the improve stage. Organizations mature as they implement lower stage and domain BPS and then move ahead to higher stage and domain BPS.

Chapter 2: OPM3oArchitecture and Components Every Organization Can Implement OPM*

In the first release of 0 ~ ~ 3 ~ there are approximately 586 organizational project management BPS. Each best practice in 0 ~ ~ 3 ~ has a numbering scheme like below; 1030 - Project Scope Planning Process Standardization. (I7)

Capabilities

PMI defines a Capability (Cap) as: a specific competency that must exist in an organization in order for it to execute project management processes and deliver project management services and products. A Cap differs from a BP in that it is an element of the BP. Every BP has a number of constituent Caps. It is mandatory that the constituent Caps be implemented to receive credit for implementing each BP. It is not mandatory that the constituent Caps be implemented in any particular order. However it is recommended that they be implemented in the supported sequence (see the recommended sequence below).

(Prerequisite Capability) 1000.01 0 - Established Standardization Policies

(Constituent Capability) 1 030.020 - Project Scope Planning Process Development

(Constituent Capability) 1030.035 - Project Scope Planning Process Availability

030.030 - Standardized Project

In addition to Constituent Caps, 0 ~ ~ 3 ~ also has Prerequisite Cap relationships. As shown above; BP 1030 requires Cap 1000.01 0 be implemented as part of BP 1030. Prerequisite Caps can be implemented as part of their related BP (BP 1030) or they can be implemented as part of their originally attached BP (BP 1000).

Chapter 2: OPM3fArchitecture and Components Every Organization Can Implement OPM3@

As noted on the previous page, BP 1030 - Project Scope Planning Process Standardization (I9)

has three constituent Caps and one prerequisite Cap. The following diagram shows Caps 1030.01 0 and 1030.020 with their domain, stage, and process group dimensions.

process improvement goals

purchases, or otherwise acquires a Project Scope

The following shows the relationship of Outcomes and Key Performance Indicators to Caps and the OPM~@ numbering scheme for Caps and Outcomes:

Outcomes

-

BP 1030

Outcome 2 030 020 10

PM I defines an Outcome as: a tangible or intangible result of applying a ~a~abi l i ty . '~~) In the 0~~3@framework, a Cap may have one or more Outcomes. The degree to which an Outcome is achieved is measured by a Key Performance Indicator (KPI). The difference between a Cap and an Outcome of a Cap is a demonstrated competency in an organization. An Outcome is the result or output of applying a Cap. The following diagram demonstrates the outcome number, name, and description.

BP: 1030 - Project Scope Planning Process Standardization - Cap: 1030.020 - Project Scope Planning Process Development

Outcome: 1030.020.10 - Documented Project Scope Planning Process

Chapter 2: OPM3B Architecture and Components Every Organization Can Implement O P M m

Key Performance Indicators

PMI defines a Key Performance Indicator (KPI) as: a criterion by which an organization can determine, quantitatively or qualitatively, whether the outcome associated with the capabilify exists or the degree to which it exists. A key performance indicator can be a direct measurement or an expert assessment. ('I) The Outcome is the expected result of the Cap. The KPI is the tangible metric by which the Outcome is measured. The following diagram shows the relationship between a KPI and an outcome.

CAP: 1030.020 - Project Scope Planning Process Development

Outcome: 1030.020.10 - Documented Project Scope Planning

KPI Name: A Documented Project Scope Planning Process

The following diagram shows outcome 1030.020.10 and its' associated KPl(s).

For BP 1030, Cap 1030.020, and Outcome 1030.020.10, in order to demonstrate this competency in the organization, there should be a documented process with a series of steps to plan the scope of the project. All project managers should have access to the process.

Chapter 2: OPM3@ Architecture and Components Every Organization Can Implement O P M m

Governing Bodies

To implement project management processes (and their BPS, Caps, Outcomes, and KPls) 0 ~ ~ 3 ~ requires Governing Bodies be assembled. Governing Bodies approve, oversee, and execute organizational process improvement. They maintain project management process in the organization and review project team performance and process compliance. They provide the governance necessary to sustain project management in the organization.

Governing Bodies are made up of volunteers from throughout the organization who donate a few hours a week to contribute to the governance of the processes. Governing Bodies may be assembled to fulfill roles like; selecting projects for the organization, creating process, auditing process, evaluating process performance, and reviewing proces's feedback from the organization. The following four chapters discuss the different types of Governing Bodies necessary for successful 0 ~ ~ 3 ~ implementations.

Policies

A Policy is a plan or course of action in business intended to influence and determine actions and decisions'22). It is a course of action or guiding principle. Policies are used to authorize the use of processes in the organization. They clearly state the intention and goals of processes. They inform the organization of how deviations from the process will be handled. In project management terms, this is the "charter" of the process. Every process in the organization should have a corresponding policy authorizing it. When crafted correctly it should contain references to all aspects of the process it represents. It should also state how deviations from the process will be handled.

600 Pound Gorilla

As mentioned earlier, the first release of OPM~@ has approximately 600 Organizational Project Management Best Practices and approximately 3000 Capabilities. When implemented, they form the basis of Project Management Maturity in an organization. Implementing OPM~@ may initially seem like stepping into the ring with a 600 pound gorilla! It can be very intimidating to someone looking in from the outside. However, once organizations understand how to build a process framework that supports the Best Practices, the task is not so daunting.

REFERENCES

(1-1 5) Organizational Project Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

(1 6) Adapted from figure 4-4, page 28 of the Organizational Project Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

(1 7-21) Organizational Project Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

(22) "policy." The American klerifage@ Dictionary of the English Language, Fourth Edition. Houghton Mifflin Company, 2004.25 Feb. 2007

(23) Adapted from figure 3-1, page 33 of the Organizational Project Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

SECTION II (Governing Bodies)

Chapter 3: OPM3@ Process Governance Every Organization Can Implement OPM3CO

Chapter 3: OPM~@ Process Governance

Process Governance

Now that the organization understands the architecture of OPM~@, it is essential to understand the governance needed to implement, sustain, and continually improve the process playbook. As the previous chapter mentioned, Governing Bodies are an essential part of 0 ~ ~ 3 ~ . They are one of the more powerful features of OPM? that set it apart from other maturity models. They exist to provide governance over processes in an organization. Governance is defined as: "the processes and systems by which an organization or society6perates:"(l) Governance is not to be confused with Corporate Government which is, "the political di~ection and control exercised over an organizationn(2) 0 ~ ~ 3 ~ requires that Governing Bodies be established to oversee the standardizing, sustaining, and improvement of organizational processes. BPS 1010 - 1390, 3120 - 3500, and 4780 - 5160 specify Governing Bodies be established and be active for a BP to be standardized.

Governance in Most Organizations

There tends to be a utopian view of processes in organizations today that says, "If we build the right processes, people will naturally follow themn or, "If people are not following the processes, then the processes must be NO GOOD". While it is possible that organizational processes have been poorly developed, it is not realistic to assume people want to follow processes. People do things in their own best interest. People do things which involve NO PAIN.

Organizations have an intuitive sense of the importance of good process. They pull large teams of people together and develop processes essential to business success. Then they attempt to persuade the organization to follow them. The following is a commonly heard dialog between a process engineer and a process user.

Engineer: "We have this great new process we want you to try. You will really like it!" User: "Is anyone else doing it? Engineer: 'No, but if you try it, it will help you and the company. User: "Will I be punished for not doing it? Engineec "No, but we think you will like it and it will help you and the company. User: "Will I be rewarded if I do it? Engineer: "No, but we think you'll really, really, like it! User: 'Ok, well ... I'm pretty busy right now but I'll try it sometime.

People are not maliciously opposed to process improvement, but for the same reasons people do not usually have time to read the directions on their DVD players, they probably do not have time to learn organizational processes. Following a new process is not comfortable because it involves change. People tend to do what is comfortable for them and change is not comfortable. Process improvement involves changing behavior. It incorporates measurement, additional steps for quality, control of processes, oversight by management, etc.

A good analogy is driving to work in the morning. Many folks have a hefty commute to work. Most "road warriors" have a healthy respect for the 65mph speed limit because of the governance in place to ensure compliance (i.e. the police and the court system). When state troopers cut back on patrolling, there is a natural tendency for the flow of traffic to speed up. Without governance, few people would even attempt to follow the speed limit. Why? Is it because the speed limit is "no good"? Is it because there are not enough speed limit signs? Is it because people don't agree with the law? No, it's because people are busy and, by necessity, need to

Chapter 3: OPM363 Process Governance Every Organization Can Implement O P M m

complete their tasks quickly. State troopers are a friendly reminder to keep people in compliance. They perform a very important governance function.

Carrot and Stick Governance

Studies have shown that people need the right balance of the Carrot (rewards) and Stick (punishment) governance to really be productive. They need to be rewarded for process compliance and have some penalty for not following organizational processes. In an important research article entitled, "The Carrot or the Stick: Rewards, Punishment, and Cooperationn. Professors James Andreoni, William Harbaugh, and Lise Vesterlunde concluded the enemy of cooperation and synergy in an organization is "selfishnessn.(3) Or in other words, "doing what they want to do when they want to do if'.-They tested four different groups and concluded the following things:

Do no thin^ Group: Organizations not rewarding compliance or punishing non- compliance are doomed to selfish behavior in employees (people doing only what is comfortable for them)

Rewards Only Group: Organizations rewarding compliance "onlyn, do very little to inhibit selfish behavior

Punishment Only Group: Organizations punishing poor behavior get better cooperation than organizations rewarding good behavior

Rewards and Punishment Group: Combining rewards and punishment, however, is the strongest way to reduce selfish behavior in an organization and to encourage process compliance

Some organizations create great processes and then leave them to time and chance, hoping users will adopt them. Other organizations set up elaborate rewards programs to reward those who are process adopters. The truth is, rewards by themselves have little effect on process compliance or organizational cooperation. The study above shows rewards are not a good motivator to move an individual from selfishness to cooperation. Things like "all handsn meetings, kickoff meetings with cookies, movies, and parking spots have little effect to truly move the organization towards cooperation. Only governance, with a combination of rewards and punishments, can realize cooperation in the organization.

The OPM? process framework in this book provides both the carrot and the stick. Projects, Programs, and Portfolios in compliance can be recognized by the organization for their execution success and by having no blemishes on their auditing record. Projects and programs that stray from process requirements can be properly encouraged on their yearly reviews.

Process Entropy

Organizations without process governance suffer from a common phenomenon called "process entropy". This is the tendency for processes to evolve toward a state of disorder ("people used to follow the processes, but now no one does!"). In civil law, if laws are not enforced, societies tend to regress to a state of anarchy or chaos. Countries can have the best leadership with the greatest ideas, but without a good system of governance, the leadership will be ineffective because no one will follow the laws. The same is true in industry. Processes are created to have repeated success in company endeavors. But just like the 2" law of thermodynamics (and those people driving their cars on the freeway) process entropy is constant. There is a tendency for processes to be ignored. Strong forces must be in place to maintain standards, usage, and compliance.

Chapter 3: OPM3@ Process Governance Every Organization Can Implement OPM3@

Process entropy is very detrimental to organizations. It is like the old frog in a pot analogy. If a frog is thrown into a boiling pot of water, the frog will jump out immediately. However if the temperature is turned up ever so slowly, the frog will be lulled to sleep and boiled alive. Most organizations would immediately take action if there was a large and immediate breach of processes. However, organizations will tolerate process entropy little by.. little until the organization is in trouble. This is also called "organizational backslidingn.

Many companies embark on large process improvement efforts and successfully roll out processes. Once the project is over, the organization naturally turns their attention to other areas. This is often accompanied by turnover in the organization's leadership. The new management comes in and is not in full support of existing processes. They do not understand them. They do not understand the pain that was experienced prior to the improvement. All they hear are clandestine and sometimes outright complaints against the process when deadlines are tight.

Another common occurrence is the tendency of companies to look at parts of the process not being used effectively and think the process does not "add valuen. So they throw this part of the process out. In reality, the process may be very important to the company but there has been a breakdown in process governance. Perhaps training has not been sufficient? Perhaps auditing has not been policing the processes? Whatever the case, process entropy is setting in.

OPM~@ Governing bodies establish the governance to oversee the processes and systems by which the organization operates. Governance is essential for the organization to maintain its progress and make improvements. Without governance organizational entropy will affect previous gains. Process Entropy occurs in many forms. A few of the main reasons it is accelerated is because of the following:

Regime Change: Executive Branch is replaced and new team does not understand the struggles of the past.

Loss of Executive sponsors hi^: Executive Branch is now concerned with other initiatives in the organization

Loss of Process Action Teams or Improvement Council: No one is assigned to sustain and improve processes going forward. There is no group to receive feedback on processes.

Cutting the Quality Auditinq Group: To save money after successful implementation, some organizations will cut the Quality Auditing Group all together. While some of the group may not be needed after successful process institutionalization, if it is cut back too much the organization is losing the eyes and ears of the Executive Branch.

Natural Turnover (includinq manaqement): In the organization, new members come in with no perception of how things were in the old days before the process improvements.

Lack of Traininq: New members are not given sufficient training on the processes

Chapter 3: OPM3@ Process Governance Every Organization Can Implement OPM3B

Process Governance Types

To avoid process entropy and organizational chaos, intelligent and rational mankind has come up with the concept of governance. Every organization has some form of Governing Body or governance. Otherwise it would quickly be out of business. The very smallest of organizations like the sole proprietorship often have a form of "process tribalism" which may be effective given the small number of people. Mafiy medium size and larger organizations have a form of process feudalism or process monarchy which can also realize some initial success as the company grows. But the most successful organizations will establish what this book affectionately calls, the "process republic*. Below are the types of process governance found in organizations:

Process Tribalism

Undocumented processes

This is the lowest form of process

Different processes for each Fiefdom Little feedback from Serfs for process

Process Feudalism is better than Tribalism because processes are documented

Receive little feedback from Serfs (process users) for process tailoring

Process Monarchies are better than

Processes consistent among different parts of the organization

Significant feedback from process users

The Process Republic is the highest form of .

Process Tribal organizations are characterized by chieftains who know all there is to know. Knowledge and understanding of the organization is passed on to each successive generation of employee by oral tradition and nothing is written. This organization finds itself in difficult situations when a chieftain passes on to the great happy hunting ground (e.g. gets a job elsewhere). Most medium and larger organizations start out in process tribalism, but quickly

process governance I

Chapter 3: OPM3Q Process Governance Every Organization Can Implement O P M m

progress to Process Feudalism because they know they cannot survive for long in their current state. As an organization grows it must progress to a more mature state of governance or it will be unable to achieve synergies between the various departments. Morale (confidence of the workforce in the face of difficult conditions) becomes either a force multiplier or a serious detriment to organizational productivity. Morale as a force multiplier can only be realized if the type of governance is matured.

There is a common misconception in some organizations that formal documentation is not process improvement. Quality management makes statements like, "Don't worry about formal documentation, just go out and find problems and fix them!" Processes, like laws, need to be documented for compliance and measurement purposes. A process not documented is a process that is not being followed. Thk is little better than Process Tribalism.

Process Feudalism

Process Feudal organizations are characterized by written processes. However, the written processes differ for each little Fiefdom. Each part of the organization manages projects in its own unique way. Three primary elements characterized feudalism: Lords (managers), Vassals (workers) and Fiefs (parts of the organization); in history, a Lord was a noble who owned land, a Vassal was a person who was granted land by the lord, and the land was known as a Fief. Vassals worked for the Lords to earn a share of the Fief. This relation between Lord, Vassal, and Fief form the basis of feudalism. In the same way, the project manager works for the functional manager and follows the processes of that part of the organization.

Process Monarchy

Process Monarchy organizations are also characterized by written processes. The processes are even consistent among the various parts of the organization. However, the processes were created with very little input or feedback from the vassals (workers) in the organization. Often times the processes are out of touch with the actual work being accomplished and there is no .

feedback mechanism in place to update and properly maintain the processes. Process Monarchies are better than process feudalism because they are consistent across the different Fiefdoms and they have executive support from the Monarch. However, because the people have not "bought inn to the processes, they will tend to be dissatisfied with them or devalue them. They may even resist and rebel against the processes (e.g. the French Revolution).

Because of a lack of process governance, many organizations vacillate between Process Tribalism and Process Monarchy. They will go for a while with no processes. Then, when a major crisis happens, management dictates that everyone follow new processes. This happens for a while until management focus shifts to other issues. The processes then become dormant as the organization reverts back to process Tribalism. This vicious cycle can be stopped with the next form of process governance.

Process Republic

Process Republic organizations are characterized by written processes with Governing Bodies and governance. Processes are consistent across the organization and are crafted by constituents of the organization (not just the elite at the top). Governing Bodies have been assembled to assure process compliance. Process users are "bought inn to the processes because they have a voice in the crafting of the processes. If they disagree with the process today, they can influence future changes to the process in true Republic fashion. If some users refuse to follow the processes drafted by their peers, the "stick" is available to maintain tranquility.

Chapter 3: OPM3Q Process Governance Every Organization Can Implement O P M m

Because a Process Republic has true constituent representation with no fear of recourse, a "market of ideasn is fostered in the organization. Improvement ideas are constantly gleaned from the constituency. People are not simply "enrolledn in the improvement effort, they are "committedn to it. When people are only enrolled in processes, very few improvement ideas are generated. Little useful feedback comes in from the organization and there is no commitment to maintain and update processes. A Process Republic gets people committed to organizational processes because everyone has a voice in their development (excluding the small percentage of the people who will not buy in no matter what). , ,

1 .

Monarchies, Feudal organizations, and Tribes are inferior to the Process Republic because they do not handle gisis well. The greatest example of this is regime change (or senior management turnover). In Tribes, Feudal Organizations, and Monarchies, improvement comes to a halt as people try to figufe out who the next leader is going to be and what is to be the "new directionn. Pogroms (changes to middle management and staff) are held as the new regime tries to establish itself to find who is for them and who is against them. People follow the "new" processes out of fear and not because they agree with them. A few elite people tel! everyone what to do and there is no real representation from the people. There is no "voice of the' peoplen or feedback mechanism with which new processes can be sustained and improved. In these types of organizations, people will tend to do whatever they can do to avoid following processes. Why? Because they feel they have no voice. "Taxation without representation!" They may pay eye service or lip service. They may actually follow processes halfheartedly, but they are not committed to them. If users are given the choice, they would most often not follow them.

Conversely, the Process Republic is most powerful when crises appear. Just like countries that have a Republic form of government, many organizations have regime change every 2- 4 years. The "loyal opposition" may not be happy, but the nation never misses a beat because its governance structure has been set up to operate in the face of change. The Process Republic is able to maintain an organized, harmonious, productive work environment governed by the "rule of processn. Process Republics, when set up correctly, can weather any storm.

Enlightened Organizations

"The Enlightenment" occurred in the western world in the 17'~ and 18'~ centuries. This paradigm shift in thinking supported the use of reason to establish systems of government, ethics, logic, etc. Enlightenment thinkers helped lead the world out of a period called the Dark Ages which was known for relying on tradition, superstition, and tyranny.

Organizations today need to be "enlightenedn to realize the value of the republic form of process governance. They need to move away from the old model of tradition, superstition, and tyranny, and move on to rational collaborative efforts to improving organizational performance. They need to understand that it is normal to have people who do not agree with certain parts of the processes. These people may never be completely won over however they will be in compliance if they have a voice in the improvement of the processes. In the political world this is known as the "Loyal Oppositionn. Tribes, Fiefdoms, and Monarchies do not understand loyal opposition, and this is what makes them less effective.

Effective organizational processes are "of the people, by the people, and for the peoplen! The people should own the process (through their elected representatives). History has proven that when the people have ownership of the processes, they are much more likely to comply with them.

Chapter 3: OPM38 Process Governance Every Organization Can Implement OPM3@

Branches of Process Governance Overview

0 ~ ~ 3 ~ helps companies set up an internal Process Republic. Process Republics require a few important Governing Bodies be established to ensure process governance in the organization. Just like in civil government, 0 ~ ~ 3 ~ Governing Bodies are divided into three branches; Executive, Legislative, and Judicial. These branches of governance are not about the "balancing of the power" or even the "separation of power" away from the Executive Branch. Rather they are about the "separation of responsibility" and "checks and accountability" for the sake of process compliance and project management success. The following are the three branches:

. . Executive: This branch of process governance has the power to enforce organizational processes (BPS 1450,1700-2080,3590-3970,5690-6070). It is discussed in detail in chapter four.

Leqisiative: This branch of process governance has the power to create and update processes (BPS 101 0-1 390, 31 20-3500,4780-5160). It is discussed in detail in chapter five.

Judicial (PMO) This branch of process governance has the power to interpret processes and apply corrective action when processes are not followed (BPS 2140,2190, 6100, 6130,6140). It is discussed in detail in chapter six.

The three branches of process governance can be described as a three legged stool. Without these three branches in an organization, major problems occur in project execution and process improvement. All organizations have some type of Executive Branch established to sponsor and police process improvement efforts.

In all but the smallest of companies, if the Executive Branch writes the processes, they are often irrelevant because executives are too far removed from daily operations. Therefore it is necessary to have a Legislative Branch made up of process users from throughout the organization and quality engineering facilitators.

The Executive and Legislative Branches are offen too busy to adjudicate process issues (unless there are major contractual problems). Therefore most process breaches to do not get resolved. This necessitates the need for a Judicial Branch. This Branch has the power to interpret processes, provide guidance, and apply corrective action when necessary. All three branches are discussed in detail in the subsequent chapters.

How the Branches Interact

The Executive Branch authorizes projects and decides which projects will be audited. It empowers the Legislative Branch to write the processes with help from all affected groups and individuals. Just like in the political world, the Executive Branch selects the members of the Judicial Branch which will review processes and adjudicate process issues. The Judicial Branch will keep statistics on organizational project management execution and submit these reports to the Executive Branch. The Judicial Branch will also mentor organizational project and process performance. It will make recommendations to project teams regarding what to do to get their projects back on track.

Chapter 3: OPM3Q Process Govemance Every Organization Can Implement OPM3@

Another way to view the process republic is as a triangle with each side of the triangle representing the Executive, Legislative, and Judicial Braches. The legislators tell the Executive Branch they need to enforce the process. The Judicial Branch tells the Executive Branch who is not in compliance. Legislative Branch tells the Judicial Branch they need to remain true to the processes and uphold them. This healthy tension maintains a productive work environment. JUDICIAL LEGISLATIVE

In the book "Good to great" by Jim Collins, research has shown that sustained great results in an organization depend on a culture of disciplined people.(.r) What keeps people disciplined and helps organizations avoid process entropy? Good processes and good governance!

Governance Facilitators

In addition to the three branches of governance, there are four important organizational functions that need to be in place for process governance to be effective in organizations. They are called governance facilitators. Govemance facilitators help promote a "process culturen in the organization. Governance facilitators are as follows:

train in^: This involves educating process users. Process users cannot be expected to comply with processes until they have received proper training

Peer Review: This involves groups of peers who review each others project work products. There is no better governance than when accountability has been pushed down to the team level

Individual Performance Review: This involves reviewing the performance of individuals in the organization. The organization must have some medium with which individual performance reviews reflect process compliance.

Commitment & TraceabiliM When process artifacts are completed, they need to be "signed off" and agreed to by all affected groups and individuals

Training

The training process is part of the Program Domain discussed in chapter seven. Training takes a significant amount of time and is critical to process institutionalization. If process users understand the processes, they will be more likely to follow them. 0 ~ ~ 3 ~ BPS 5200, 5210, and 5300 specify the need for a training program and processes. Many organizations fail on training because they do not make it mandatory. For example, before students are allowed to drive a car and follow the processes of the roads, they must attend driver's education. The consequences of young drivers not taking driver's education would be catastrophic. Imagine a whole country full of 16 year-olds driving on our roads with no training?! The results are similar for organizations allowing people to manage multi-million dollar projects with little or no training.

Chapter 3: OPM3@ Process Governance Every Organization Can Implement OPM3@

In addition to process training, it is important to have project managers and project teams understand project management in general. The Project Management Professional Certification (PMP), Program Management Certification (PgMP), and Certified Associate of Project Management (CAPM) designations are extremely important for giving project teams a standard level of understanding regarding project management. PMP(s), PgMPIs), and CAPM(s) become little project management "black belts", to borrow the Six Sigma term, of organizational project management and improvement. Additionally, each class can earn PMP Professional Development Unit (PDU) credit.

Training should not consist of lectures about project management. Training should be scenario based, and should focus on PMI knowledge areas and domains. There should be numerous exercises and case studies from the organization's own history prior to improvements. The organization must never forget where it came from! Those who do not learn from history are doomed to repeat it!

Example OPM? Training'Curriculurn

The development of training curriculums is both beneficial and essential for organizations. A training database should be kept to know who in the organization has met training requirements. Everyone impacted by the processes should attend the training. Groups like the Quality Auditing Group, Change Control Board, and PMO must be trained in addition to process users in the organization. A training curriculum may look like the following:

Chapter 3: OPM3d Process Governance Every Organization Can Implement OPM3@

Training strategies

There are a number of training strategies that when implemented correctly can greatly benefit the organization. They are as follows:

Startinq with New Hires: Training should start with new hire new hire orientation to acquaint people with the business domain, organizational structure, etc. New hires should also get a quick overview of organizational processes. Too much process stuff too early can cause sensory overload.

Process Orientation: Once employees have had a few weeks to understand the organization and their role in the organization, employees should be trained in all applicable project, program, and portfolio management processes. This should include process elements, process governance, and all process related topics.

Hands On!: Courses should be hands on and scenario based. dobrses should be tailored based on the specific roles of the project team. Training should address real scenarios process users encounter at work. It should be exercise intensive and not lecture based. If done right, the individuals will fall back on this type of "hands on" training as situations arise in the work place.

Onqoinq Training: Training should be ongoing for those who are new to the organization or for those who want a refresher course on the processes.

Updates Made Known: When significant updates are made to the process, there should be some medium for announcing the changes to the organization without forcing everyone to retake the class. Pizza lunches are an effective communication medium.

B Traininq Database: Organizations should have a database of all classes and training processes users have received. Mature organizations have new hire orientation which includes a heavy emphasis on training to organizational processes.

Operational Definitions: Every organization should have operational definitions for "Project", "Program", and "Portfolio*. Most organizations have slightly different ideas of what a program is. It should be defined in some manner similar to PMl's definition and

Chapter 3: OPM- Process Governance Every Organization Can Implement OPM3@

be standardized in the organization. Processes should point to these operational definitions. The organization should train individuals regarding the operational definitions as part of their standard training program.

Provide PDUs: All project management related training should provide PDUs for certified project and program managers. This serves to reward and motivate training participants.

Peer Review

The Peer Review process is part of the Program Domain listed in chapter seven. It concerns the establishment of a process for peers to evaluate each other's work products. To Peer Review is to have the project team review many or all of the project artifacts to detect defects and breaches of process compliance. Defects can range from "requirements completeness" to "design incompletenessn. By evaluating work products, teams can detect potential defects and parts of the process that are not being followed. Teams keep each other accountable.

Peer Reviews are essential for creating a "process culturen in organizations. -It pushes the need for process compliance to all levels of the organization. Peer Reviews should start early in the life cycle and continue until delivery of the project to the customer. Defects and issues not caught early in the project tend to get more significant as the project progresses. The later in the life cycle they are caught, the more impact they have. When a defect or issue escapes undetected to the next phase of the project, it becomes more difficult to resolve because it gets further away from the point where it was introduced.

Individual Performance Reviews

Performance Reviews are a critical piece of the Organization Project Management Puzzle. OPM~@ BPS 5200,5210, and 5300 specify the need for Individual Performance Reviews. Tying individual performance to process compliance is critical for process success. Many executives start off a process improvement effort by saying, "everyone will follow the processes or else!" However, nothing happens to those who don't follow the process. A few of the more stubborn opponents may be given poor reviews, but in most organizations the performance review process has never been updated to include process adherence?!? Remember, organizational processes are the company playbook. If project teams don't run the right plays, the team will not win!

Commitment and Traceability

The OPM~@ Process Framework generates process artifacts. When these artifacts are completed they should be approved (or "signed o f f on) by all affected groups and individuals. For instance, if the Scope Statement is complete, it should be signed off on by the customer and the project lead before the High Level Requirements are completed. High Level Requirements should also trace back to the Scope Statement. This assures that affected groups and individuals are properly informed and agree to project scope before proceeding to the project activity.

OPM~@ helps break down organizational silos by building cross-functional interdependencies between project work products. Teams execute project activities and receive formal commitment from stakeholders. Quality Auditing Group members then audit project work products verifying commitment. The following chart shows Project Domain documents requiring project commitment.

Chapter 3: OPFA3@ Process Governance Every Organization Can Implement OPM3@

Cost of the Process Republic

Systems lntegration

When talk of process governance surfaces, organizations get concerned about "overhead" costs. Some say, "yet more overhead groups costing money but yielding little return". Smaller organizations are often concerned about incorporating process governance because of limited headcount and funding. While there are a few things that could drive up cost like 100% work product inspections. But if implemented correctly, process governance should have minimal cost impact on the organization. Here are some questions that every organization should ask regarding process improvement:

Functional Requirements Document

Work Breakdown Structure Document: V B s )

Technical Design Document

What does it cost for a new process improvement campaign every few years?

What does it cost to bring in contractors and consultants to redo unused processes?

High Level Requirements I I

Document

Functional Requirements I

Document

Work Breakdown Structure

,

What does it cost the organization to have "process desensitized" employees who have given up on "improvement fads" (this too shall pass!)?

Project Team Engineering Operations Systems lntegration Testing (all functional groups) Project Team Engineering Operations Systems lntegration Testing (all functional groups) Project Team Engineering Operations Systems lntegration Testing (aH functional groups)

When the numbers are added up it is clear that establishing an effective system of governance in the organization actually saves money!

Setting up process governance involves an initial investment in the form of staff working a few hours a week in their governance roles. However this cost pales in comparison to the cost of process noncompliance and project defects.

Chapter 3: OPtd3GD Process Govemance Every Organization Can Implement OPM3@

Improvement Efforts Without Process Govemance

Visit the quality closets of any company, chances are it will not take long to find documentation, posters, and trinkets from failed quality improvement efforts from the past. Virtually every organization has embarked on quality improvement efforts only to see little if any tangible, sustainable results. The reason for this is lack of process governance. The following are some examples:

"Qualitv is our Policv" efforts: This type of initiative starts off with a large "all-hands" meetings and passes out quality binders with fanfare, movies, hoopla, and trinkets. Management wants the organization to start holding quality meetings to brainstorm ideas to improve quality. Almost like a "kaizenn event. It fails because there is no mechanism to ensure that the meetings take place. Those that do go to the meetings often times do not know what to do. They quickly lose interest when they do not see progress.

Total Quality Management (TQMY' efforts: This initiative was very popular with companies in the late 80's and early 90's. In this effort the quality group brings the concept of TQM into the organization with its principles of quality management. There are some guidelines and documented processes, but everyone sees it as the quality group doing its "ownn thing. The quality group is solely in control with little executive oversight. It eventually fizzles out because there is no auditing, no process user buy in, and no senior management enforcement.

"Phase Review System (PRS) efforts: This is better than most. It has guidelines, processes, and training, but it is mostly principles and not a comprehensive process. The quality group oversees this initiative and there is executive support. However there is little process governance and the community is not "bought inn to the processes. There is a phase gate review process accompanied with some well defined processes, but when crisis time rolls around, the processes are thrown to the wind.

Proiect Development Life Cvcle (PDLC) Efforts: Many companies at one time or another have engaged in large scale efforts to create a project life cycle. They bring in process experts to work with end users to craft a slew of processes, templates, and forms. There may even be a small group assigned to assist the consultant (acting as the legislators and auditors). There is executive support for a time, however because processes are developed without cross functional representation (formal PAT teams and process council), there is little true "buy-inn from the organization. This is an example of how an initiative will fail without a solid Legislative and Judicial Branches.

VOPU Noice of the Process User) Many times organizations try to assemble improvement committees independent of process governance. They come up with snazzy code names for the improvement efforts like, Voice of the Process User" (VOPU). These committees are put into place to receive employee suggestions. People from across the organization make up the team (which is good!). However, none of the people on the team are managers higher than the front line level so no one on the committee has the power to enforce anything. Great suggestions may come in and people tend to agree with the problems and proposed solutions, however VOPU is never able to really implement changes or get authority to enforce the changes. People are not allotted appropriate time to engineer the needed changes so they are expected to make changes "as time allowsn. Because of the time and authority problem, only the simplest and least time consuming improvements are put in place. The only thing getting fixed is the pothole in the parking lot!

Chapter 3: OPM3@ Process Governance Every Organization Can Implement OPM3@

Next Steps

Now that the organization understands the need for process governance, it is important to understand the how the implement each branch of governance. The next three chapters explain this in detail!

i

REFERENCES

( I ) Governance. (2007, February 17). In Wikipedia, The Free Encyclopedia. Retrieved 05:08, February 26,2007

(2) Corporate governance. (2007, February 24). In Wikpedia, The Free Encyclopedia. Retrieved 05:13, February 26,2007

(3) "The Carrot or the Stick: Rewards, Punishment, and Cooperation". The American Economic Review, Volume 93, Number 3, 1 June 2003, pp. 893-902(10), James Andreoni, William Harbaugh, and Lise Vesterlunde

(4) "Good to Great: Why some companies make the leap ... and others don't" (2001, October 16). Collins Publishers.

Chapter 4: The Executive Branch of Governance Every Organization Can Implement O P M S

Chapter 4= The Execut'we Branch of Governance Executive Branch

O P M ~ @ requires that Governing Bodies be established for the implementation of BPS and processes in the organization. As mentioned in the previous chapter, the Executive Branch is the first group of Governing Bodies that should be implemented in the organization. The Executive Branch of process governance is the most essential to implement because it authorizes all other Governing Bodies, projects, and improvement activities.

To standardize processes, it is recommended that two Governing Bodies be set up for the sponsorship of projects, and process auditing/measurement. These Governing Bodies make up the Executive Branch of process governance. As the old management adage states, "the three keys to process improvement success are 1. Sponsorship!, 2. Sponsorship!!, and 3. Sponsorship!!!" If executive sponsorship is not established, any project or improvement effort will fail. Projects need sustained executive support otherwise resources may be pulled off the project to other endeavors.

The Executive Branch of process governance has the power to approve and enforce processes. The following are the two recommended Executive Branch Governing Bodies:

Phase Gate Review Board (PGRB): The Senior Management group responsible for approving projects and securing resources for the effort. (BPS 61 60, 61 70, 61 80)

Qualitv Auditinq Group (QAG): The quality group responsible for policing processes and observing if processes are being followed. (BPS 1450, 1700-2080, 3590-3970, 5690- 6070)

The Executive Branch sets the tone of process adherence for the entire organization. It must show "constancy of purposen for organizational processes and not allow them to diminish under benign neglect and process entropy. At the top of the Executive Branch is the President or General Manager of the company.

Like civil government, the Executive Branch is responsible for selecting who will lead the Program Management Office (or Judicial Branch of the organization). In most cases, the PMO leader will report directly to the CEO. The CEO or other executive must hold the Program Management Office Leader and Portfolio managers accountable to process compliance and portfolio execution standards. Otherwise poitfolios and programs will be non- compliant. The executive is, in turn, held accountable by the board of directors and Wall Street for organizational performance and execution.

Chapter 4: The Executive Branch of Governance Every Organization Can Implement OPM3a

Phase Gate Review Board

The Phase Gate Review Board (PGRB), sometimes called the Investment Review Board, is the sponsor and enforcer of all projects and processes in an organization. The Phase Gate Review Board decides which projects and processes will be supported with organizational resources and which ones will not. No project or process improvement effort should get into the project pipeline unless it is first approved by the Phase Gate Review Board. The Phase Gate Review Board must evaluate every project against organizational goals and objectives to determine if they align with organizational strategy. When a project is approved through the Phase Gate Review Board, the project charter is signed by a representative of the Phase Gate Review Board granting resources to the effort.

Organizations with Phase Gate Review Boards will demand a periodic review of the project status (or Phase Gate Review) to determine if the project is still in alignment with organizational strategy. This is separate from the typical management review taking place on projects to evaluate project performance. Some organizations conduct a Phase Gate review at the end of each phase of a project (i.e. initiation phase, planning phase, etc.) This ensures that the project has not strayed from orgariizational goals and objectives during its life cycle. The Phase Gate Review Board may also review project performance issues that are escalated past normal PMO reviews.

Responsibilities of the Phase Gate Review Board

The Phase Gate Review Board has a number specific responsibilities in the organization. They are as follows:

0 Proiect Valuation I Aliqnment Review: The Phase Gate Review Board will review all proposed projects to determine if they align with organizational goals and objectives. They will only allow projects into the project pipeline that are beneficial to the organization.

Sponsor Process Improvements: The Phase Gate Review Board will sponsor process improvements in an organization or they will not be successful.

Phase Gate Review: The Phase Gate Review Board will periodically evaluate the progress of all projects to determine they continue to align with organizational goals and objectives

Review and Approve Processes: Processes that are created must be reviewed and approved by the Executive Branch. If Executives have a problem with a process it can be vetoed (or line item vetoed). Once it is approved, it will be enforced.

Select PMO (or Judicial Branch) Representation: Senior Management will select the PMO leader.

Dangers to the Phase Gate Review Board

The following are several dangers that affect the effectiveness of the Phase Gate Review Board:

Lack of "Constancv of Purposen: Starting out with commitment to process improvement and governance, but then "moving on" to other issues. This is the single biggest killer of process improvement efforts. The Executive Branch must remain committed to the "laws

Chapter 4: The Executive Branch of Governance Every Organization Can Implement OPMW

of the land and support the Judicial and Legislative branches in their work to continuously improve. An example of losing "constancy of purposen is cutting Quality Auditing Group staff after the processes have been implemented. While the organization may not need as many auditors, they should not be cut altogether.

No Due Diliqence Given to Proiects in the Proiect ~ipeline: It is crucial for the organization to have some control over what goes into the project pipeline. Without oversight, the project pipeline will quickly fill up with projects not aligned with organizational goals and objectives. Valuable project resources will be consumed by non-beneficial or non-aligned work.

Overlv permissive: Not following through on recommendations by the Judicial Branch (PMO). Not holding groups accountable for project and process non-compliance is very detrimental to the organization.

Lack of Emotional Fortitude: As management changes and reorganizations occur, organizations tend to forget how bad things used to be. Process users may begin to push back on processes. People's feelings may be hurt by non-compliance citations and the Quality Auditing Group may be viewed as "knit picky". Organizations must have "emotional fortitude" which is the ability for an organization to "stay the course" in the face of opposition. Constancy of Purpose! Moses told the children of Israel to never forget what it was like to be in bondage in Egypt. Those who do not know History are doomed to repeat it.

Tvrannv of the Urqent: This is where the Executive Branch allows process governance to be violated because, "projects need to get out the door quicklyn. Organizations taking this approach will hurt for it in the end. Projects will end up back in the door because of quality and performance issues.

Organizations without the Phase Gate Review Board

As mentioned earlier, all organizations have some form of Executive Branch. However without sponsorship and commitment, organizational projects will not be successful. Organizations without sponsorship and commitment struggle from the following:

Proiect Ex~losion: Too many projects in project pipeline over taxes resources. Many times a large number of projects do not align with organizational goals and objectives.

Lack of Accountabilitv: No recourse for projects falling short of project goals and objectives. Project failure becomes part of the organizational culture.

Sunk Cost Fallacy: Organizations will tend to stay with projects "to the bitter end" and not pull the plug on projects no longer aligning with organizational objectives and goals.

Process disinterest: With no sponsorship and oversight process users feel any improvement ideas they make will not be taken seriously.

Implementing the Phase Gate Review Board

Once an organization recognizes its need for sponsorship of projects, half the battle is won. What remains is to establish the Governing Bodies necessary to ensure this sponsorship. The Phase Gate Review Board is comprised of primarily the President, or General Manager, of the organization and any other Senior Management representative they desire to assist them in

Chapter 4: The Executive Branch of Governance Every Organization Can Implement OPM3@

this role. Many times the PMO Leader may assist with this team. Please see the Phase Gate Review Board Implementation Checklist at the end of this chapter.

Quality Auditing Group

The process arm of the Executive Branch is the Quality Auditing Group (QAG). The Quality Auditing Group is the "police force" of the Executive Branch. They are the eyes and ears of the organization. Just like officer friendly who patrols the interstate, they help enforce the processes. If there is an infraction, the Quality Auditing Group sends the infraction to the Program Management Office Project Management Review for interpretation. Some organizations have taken up the mantra, "you cannot audit in compliance!" This is akin to saying, "you cannot police the laws of the road so let's pull all the police cars of the streets!?!" The organization MUST audit if they expect the processes they've created to be followed. The surest way to kill process compliance in an organization is by dismantling the Quality Auditing Group organization.

Some organizations get concerned about auditors being "additional headcounr on the payroll not adding value. Considering most companies already have well established Quality Assurance departments, they merely need to extend the role of Quality to include process compliance. This should add no great cost strain to the organization. If an organization considers how much it spends to create effective processes, a couple extra auditing personnel are a drop in the bucket to prevent process entropy.

Responsibilities of the Quality Auditing Group

The Quality Auditing Group has a number specific responsibilities in the organization. They are as follows:

Enforce Process Adherence: Processes that have been approved are policed by the Quality Auditing Group. Teams not in compliance are brought to the PMO (or Judicial Branch) for interpretation of the process and to understand and assign corrective action for the breach of process.

Execute Corrective Action: When a process is not adhered to, corrective action is assigned. The corrective action is then enforced by the Executive Branch and verified through the Quality Auditing Group.

Gather Process Metrics: The Quality Auditing Group will compile metrics on organizational compliance and submit them to the PMO. The PMO will analyze the data and submit reports back to the Executive Branch. This data will help support new im~rovement ideas and efforts.

Dangers to the Quality Auditing Group

The Quality Auditing Group has a number of potential problems that should be avoided when implementing process improvement to the organization. They are as follows:

Overlv Riqid When Observinq the processes - If the Quality Auditing Group is too rigid the organization may become upset, start complaining, and push back on management for a looser interpretation of the processes. The Quality Auditing Group needs to have the persona of "officer friendlyn. Example, "I did not want to pull you over ma'am, but you

Chapter 4: The Executive Branch of Governance Every Organization Can Implement OPM3@

were exceeding the speed limit by 50 MPHn. They should issue the citation (or non- compliance) but they should be sure to give advice on how to be in compliance.

Forcinq Process Too Quicklv- If the Quality Auditing Group tries to force mature processes on an organization not ready for them, they may hold a grudge lasting longer than the Executive does. Instead of building a "loyal oppositionn there is a disloyal opposition that waits until the time is right to "throw off the yoken. It is important for the Executive Branch to "feel the pulsen of the organization and make sure process users are "on boardn with the new effort. The Executive Branch should stage improvement efforts to give the organization time to digest the last ones.

Auditinq the Letter of the Law vs. the Spirit of the Law - The Quality Auditing Group needs to understand the intent of the process rather than just the letter of the process. Project leaders quickly get cynical if their projects are "dingedn because they did not "dotn their "i's" or cross their Ys".

Overlv Permissive - A major problem with the Executive Branch is the tendency for them to be overly permissive. .The, "lets just all get alongn type group. Auditors who don't write citations will take the teeth out of the Judicial Branch of process governance. Otherwise everything they do is just advice. The citation makes the Quality Auditing Group effective. If infractions are not documented, then there is no way to get them resolved. They must be submitted to the Judicial Branch for reviews. Auditors are the police arm of the Executive Branch.

Executives Expect the Qualitv Auditina Group to Enforce Compliance - Many times the Executive Branch will leave it to the Auditors to enforce compliance. Auditors do not have the authority or ability to enforce processes. Nor should they.

Executives do not Back the Qualitv Auditina Group: In some cases executives may be quick to pardon teams for not adhering to process. This sets a bad precedent for the organization. It will not stop until the Executive Branch gets its act together

Auditors not Consistent: In some cases one auditor can be lenient while other auditors strictly enforce the process. Auditors must attempt to be as objective and consistent as possible. Otherwise people will "gamen the process.

Organizations Without a Quality Auditing Group

Once sponsorship and commitment are established, the Quality Auditing Group needs to be implemented. Organizations without a Quality Auditing Group struggle from the following:

Process Non-Compliance: Organizations can assemble the greatest processes, but without process oversight through governance, they will fall into disuse.

No Consistencv in Processes: Groups throughout the organization will take processes and tailor them in any way they see fit, including not following them at all. Various parts of the organization will have different levels of commitment.

No Feedback from Qualitv Auditinq Group: In organizations with process governance, the Quality Auditing Group provides a big share of process improvement feedback. They are the "eyes and ears of the Executive Branchn. Not having this Governing Body is detrimental to process feedback.

Chapter 4: The Executive Branch of Governance Every Organization Can Implement OPM3@

Implementing the Quality Auditing Group

As mentioned earlier, most organizations already have some form of Quality Group or Quality Assurance organization. Some groups feel auditors should make up 3 - 5% of the number of people they are auditing. Example: three full time auditors per 300 people. A good rule of thumb for the number of auditors needed per organization is as follows:

Process auditors should have some statistical process control background. They should have experience building control charts and plotting data gathered from auditing processes. They should be trained in auditing techniques from methodologies like CMMl and ISO. The best Quality Auditor is the one who is not afraid of being the "bad guyn. Someone who is detail oriented and has a passion for process. Please see the Quality Auditing Group Implementation Checklist.

Number of Hours Worked Less than 40 hrs Full Time (40 hrs) Full Time (40 hrs)

Number of Projects

c 20 projects 20 Projects 40 Projects

Auditors

1 Auditor 1 Auditor 2 Auditors

Phase Gate Review Board ImpIenten&tion Checkkt Step Descriptioh

Train Senior Management regarding Project Management and the need for it in the organization Secure Senior Management time regarding periodic Phase Gate Review Board meetings. Require all projects submit feasibility documentation including the following:

Project Goals and Objectives Resources Required Dates Desired Project ROI

Designate phases of projects for when they will be evaluated by the Phase Gate Review Board Determine performance criteria for when a pre-approved project is invited to a Phase Gate Review Board Schedule Phase Gate Review Board meetings on a periodic basis Receive project performance information from the PMO (or Judicial Branch) .

Make certain all projects in the project pipeline are known by the Phase Gate Review Board Make certain resources assigned to projects in the pipeline are known by the Phase Gate Review Board Make sure inter-project dependencies are understood. -

J Steps 1.

2.

3.

4.

5.

6. 7. 8.

9.

10.

Chapter 4: The Executive Branch of Governance Every Organization Can Implement OPM3@

Chapter 4: The Execuiive Branch of Governance Every Organization Can lmpiernent OPM3@

Chapter 5: The Legislative Branch of Governance 63 Every Organization Can Implement OPM3 !

Chapter 5: The Legislative Branch of Governance Legislative Branch

0 ~ ~ 3 ' requires that Governing Bodies be established for the implementation of BPS and processes in the organization. The Legislative Branch is the second group of Governing Bodies that should be implemented in the organization. The Legislative Branch of process governance is essential for developing and implementing processes in organizations.

OPMP BPS (1 01 0-1 390,3120-3500,4780- 51 60) require that Governing Bodies be assembled for process creation and improvement in the organization. The Legislative Branch should consist of volunteers from throughout the organization who work on process improvement part time. These "representatives" will devote a few of hours a week to crafting and improving processes in the organization (in addition to their normal jobs). Representatives will comprise one of two Governing Bodies necessary for the Legislative Branch of organizational process governance:

Process Action Teams (PATs): Governing Body required to develop processes in the organization (BPS 101 0-1 390,3120-3500,4780-5160)

Chanqe Control Board (CCB): Governing Body required to evaluate all proposed changes to organizational processes (BPS 101 0-1 390, 31 20-3500,4780-5160)

The PATs and the CCB bring the organization together in cross functional improvement teams to break down functional silos. Disjointed process creation accomplishes little. Processes not crossing internal boundaries do little to move the company away from Fiefdoms. Additionally, there should be a common look and feel for processes. People going from one part of the organization to another should be able to quickly understand and negotiate processes. The Legislative Branch evaluates upstream and downstream impacts of process changes. Individually, process users seldom have this ability.

The Legislative Branch works best when highly skilled individuals are selected by their own teams to represent their needs in the improvement effort (just like in civil government). In larger organizations this branch may be augmented by full time quality engineers to assist in improvement efforts. Process legislators write the processes that must be approved by the Executive Branch and Judicial Branch at all three domains.

Chapter 5: The Legislative Branch of Governance 8 Every Organization Can Implement OPM3 !

Why Two Groups?

There are a couple of important reasons why the Legislative Branch has two Governing Bodies (bicameral) rather than one. It is imperative to get both process user and functional manager participation in improvement efforts. If either of these two groups is missing, a significant interest of the organization is ignored. Additionally, evaluating process issues can be very burdensome and time consuming. It is not fair to PATs to pull representative off process improvement activities to evaluate process issues and change requests. The Legislative Branch works best when PATs can focus on developing processes while the CCB can focus on evaluating change requests. The CCB will, however, routinely work with representatives from the PATs to coordinate change requests. They will also approve or reject updated processes. The Legislative Branch, while mostly comprised of volunteers from throughout the organization, may be facilitated by full time Quality Engineers. These are full time quality people who provide the experience, tools, and talent necessary to assist PATs and the CCB.

Process Action Teams

Process Action Teams (PATs) are comprised of process users from throughout the organization. PAT members work a few hours a week to help improve the processes in the company. PATs are analogous to the "House of Commonsn (from a UK perspective) or the "House of Representativesn (from a US perspective). Larger organizations may augment this group with full time quality engineers who can help legislators develop processes. PATs do less change management than the CCB. Their primary role is updating processes based on feedback from the CCB. In medium and large organizations, it is beneficial to have process engineers to assist PATs in process creation.

Responsibilities of Process Action Teams

Process Action Teams have ownership over the processes and have a number of responsibilities in the organization. They are as follows:

Creatinq Process Documentation: PATs create process artifacts. Using process mapping tools and process elements, PAT members create processes that form the basis of the organizational process framework.

Maintaining Process Documentation: PATs, along with the CCB are the keepers of process design data fi.e. maps, flows, and procedures). The Legislative Branch manages the configuration of organizational processes. All defining documents of the process must be managed, stored, and kept up to date with proper configuration management.

Measurinq I Monitorinq Process Performance: PATs are responsible for monitoring data captured from the Quality Auditing Group and the PMO. Processes are updated when they are not deemed to "hit the markn.

ldentifyinq Problems and Opportunities: PATs should be aware of process problems and issues in the organization. When problems or issues arise, they will develop long term solutions using process engineering principles.

Launching and Sponsoring Improvement Efforts: When the organization identifies potential projects to improve processes, the PATs lead the effort.

Chapter 5: The Legislative Branch of Governance

Dangers to Process Action Teams

Q Every Organization Can Implement OPM3 !

There are several dangers PATs should be wary of when implementing processes in the organization.

Having Quality Enqineers Create all the Processes: Some organizations just hire a few process engineers to map all of the processes for the company. This is generally not effective, and can even be detrimental to organizational "buy-inn. The organization must have representation from the constituency otherwise process users will not be committed to processes.

No Overarchinq Methodologv or Framework: Process maturity models and methodologies are the result of decades of best practice in a particular field. Organizations trying to "go it alonen have to rely on accidental discovery to develop feasible processes. Maturity Models provide the framework needed prioritize the work and focus the teams.

B Givina Teams Chanqe Control of the Processes: Once processes are developed, there is a tendency for organizations to push process governance down to project teams. Some organizations will put processes on a wiki (web based updatable repository) or some other repository. They also give the public free access to update and change at will. This is akin to giving drivers on the road the ability to change the speed limit at whim with no oversight. Process Republics know not everyone has the time to understand upstream and downstream impacts of processes. They may know their own process areas, but do not necessarily understand the impacts of changing the process. People will "game" the system if they are allowed free access to change the laws. People should own the process, but under the oversight of their chosen representatives on the CCB and PATs.

Lack of Time: It is essential for management to allocate time to support the Legislative Branch. Process legislators must be given appropriate time to learn and understand the processes. They should also be given the help of Quality Engineers when available.

Overly Detailed Processes: If processes are too detailed, or crafted in free flowing prose, they will not be effective or easy to use. Processes must be written at the right level of understanding to be auditable. Bullet points are best!

Processes not Detailed Enough: Sometimes processes can be in outline form and not very useful for execution or auditing. Auditing courses are commonly taught through the American Society for Quality and other groups to help process engineers with this.

Organizations Without Process Action Teams

Organizations without PATs tend to struggle from a number of common project management issues. They are as follows:

Over-reliance on Consultants: Process gurus must be brought in to facilitate improvements. Enormous sums of money are given to them without establishing organizational buy-in.

Chapter 5: The Legislative Branch of Governance Q Every Organization Can Implement OPM3 !

e Lack of Consistencv: Different terminology and definitions for project management are used across the organization. In one area work is called a project. In another part of the organization the work is called a program.

Islands of Process: Each little fiefdom out there has its own unique processes and procedures for doing things.

No Overarchinq Process Framework: No communication and commitment between processes. No contiguous end-to-end process keeps project details from falling through the cracks

Implementing Process Action Teams

As mentioned earlier, PATs should be composed of process users from throughout the organization. Ideally they are a cross functional representation from throughout the organization. When needed, PATs should be augmented by full time process engineering staff to facilitate process development. A good rule of thumb for the number of Process Engineering folks that should augment PATs is as follows:

To implement PATs, please review the PAT Implementation Checklist at the end of this chapter.

Change Control Board

The Change Control Board (CCB) is comprised of functional managers from throughout the organization who will work a few hours a week to help improve processes in the company. The CCB is analogous to UK "House of Lordsn or the United States "Senate". The CCB is responsible for managing changes to processes. They work with the PATs to assess and implement changes. No process changes should take place unless approved by the CCB. Just like all process improvements, they should be reviewed by the Judicial and Executive Branches once they are ready for release to the organization.

The CCB receives all organizational process feedback. It then filters out all changes not beneficial. This way the system does not oscillate back and forth at the whims of particular users. The CCB should not be comprised of managers at too high a level or it may lack process user experience and not be effective. The CCB plays a much lesser role in creating processes than PATs because they are often busy with administration duties like; receiving process change requests from the organization, assessing process change impacts, deciding which changes are worthy of pursuing, giving PATs the approval to change the processes, and approving processes. In medium and large organizations, it may be beneficial to have process engineers to assist the CCB in change management and configuration management.

Chapter 5: The Legislative Branch of Governance @ Every Organization Can Implement OPM3 !

Responsibilities of the Change Control Board

The CCB evaluate all process feedback. The CCB has a number of responsibilities in the organization. They are as follows:

Coordinatina and Communicatina with Other Processes: The CCB must make sure process "hand offsn are defined and analyzed. Changing a process in the initial phases of the project life cycle could have a cascading effect on other processes down stream.

Maximizinq the Performance of the Process: All the responsibilities noted thus far lead to this most important objective; the CCB becomes the key driver to achieve Six Sigma levels of quality.

Manaqing Chan~e Requests: When the organization provides feedback to the Legislative Branch, there will be many requests to update processes. The CCB must filter through change requests to determine if they are feasible. They then assess, assign, and approve change requests once they are developed by the PATs.

r Confiquration Manaqement: The CCB, along with PATs, are responsible for keeping all versions of documentation up to date. They manage releases, changes to processes, and storage and retrieval of processes.

Dangers to the Change Control Board

There are several dangers CCBs should be wary of:

No Orqanizational Feedback: The organization must support feedback from the user community for updated processes. Without feedback from the organization, it will be difficult to determine the effectiveness of improvements.

Legislative Complacency: There is common misconception that the groups should come to the process legislators when processes need to be updated or changed. The idea here is the CCB should wait until the organization pulls (or screams) them to fix a process. The CCB must constantly scan the constituency to maintain organizational tranquility (which means: Free from commotion, disruption, anxiety). They should be on top of process issues.

No Cross Functional Representation: If the CCB does not have proper cross functional representation, the needs of certain parts of the organization may not be met.

I Not Evaluatina Downstream Im~acts: If proper due diligence is not performed, changes can be pushed into a process that is detrimental to other parts of the process. If the CCB does not have enough time to evaluate processes, they may have a tendency to "rubber stampn them. The CCB must thoroughly understand upstream and downstream impacts of all process changes.

- Process Huntinq: Systems which include feedback are prone to hunting (processes being changed too often due to positive and negative feedback). If the CCB does not evaluate the downstream and upstream impacts of process changes organizational processes will be updated too often.

Chapter 5: The Legislative Brztnch of Governance @ Every Organization Can Implement OPM3 !

* Groupthink: If there is a lack of cross functional representation or free flow of ideas, "groupthink" could occur. A CCB should not rubber stamp everything, but they should evaluate the rationale of all proposed changes for the good of the organization.

Organizations Without a Change Control Board

Organizations without a CCB tend to struggle from a number of common issues. They are as follows:

No Control of Changes to Processes: Go to various parts of the organization and there will be different processes, templates, and guidelines used for managing projects. Processes are not standardized across the organization. Like islands it is virtually impossible to link all of the different areas together.

No Process Feedback from the Orqanization: One part of the organization may discover a very effective project management best practice but other parts of the organization are left to serendipity because there is no medium for sharing knowledge. No "center of excellence" in the organization.

e No Prioritization of Process Improvement Efforts: The project pipeline gets inundated with improvement projects and there is no discernable priority. The implementation may fail if improvement efforts do not meet organizational expectation.

Implementing the Change Control Board

The CCB is made up of volunteer managers from throughout the organization. Each manager devotes a few hours a week to meet with the group and evaluate process issues and change requests. The CCB is responsible for making sure the organization can provide feedback regarding organizational processes. As the feedback starts coming in, the CCB will categorize the feedback and evaluate each issue and change request to determine if they are relevant.

A good rule of thumb for the number of Process Engineering folks needed to augment the CCB is as follows:

To implement the CCB in an organization, please review the CCB Implementation Checklist at the end of this chapter.

Organizational Process Feedback

Number of Hours Worked Couple hours a week Couple hours a week

Numbet of Projects

20 Projects 40 Projects

Organizational feedback is essential for processes to be institutionalized in organizations. Civil government has built in feedback mechanisms (e-g. emailing a congressman, calling a congressman, lobbying a congressman by providing lunch, etc.). In like manner, Process Republics need feedback from the user community. The voices of the constituency must be heard for processes to be effective.

CCB Participants

1 Process Engineer 2 Process Engineers

Chapter 5: The Legislative Branch of Governance Q Every Organization Can Implement OPM3 !

Feedback loops are essential for any dynamic system to sustain itself. From the thermostat on a heater, to gauges in a car, feedback loops provide the mechanism for keeping systems functioning properly (or in homeostasis). Systems must receive both positive and negative feedback (bipolar). Without bipolar feedback it is virtually impossible to keep a dynamic system functioning properly. When taking the family on long road trip, the driver (project manager) must continuously scan the feedback gauges (dials, sensors, kids, wife, etc.) for positive and negative feedback. If the driver does not continuously scan the gauges, the vehicle could run out of gas, overheat, or the kids could have an accident in the backseat (spoken from experience a).

0 ~ ~ 3 ~ Feedback Loop

The diagram to the right depicts the process feedback loop in 0 ~ ~ 9 . Process governance holds entropy at bay. The feedback loop shows how feedback from process users and process leaders arrives at the CCB. The CCB reviews all feedback and determines whether proposed process changes are beneficial to the organization. If so, the CCB will group all similar feedback and assign priorities to improvements. All process changes will be delegated to the PATs.

Organizations must have a formal process feedback loop for their processes to be truly institutionalized. Process Republics have a natural built in feedback loop because of the representative system. Process users can give vital bipolar feedback on processes to their supported PATs. The following are the elements involved in the process feedback loop in organizations:

User Communitv Feedback Forms: The PATs and CCB develop a form for process users to give positive and negative feedback. Feedback forms are then taken before the CCB to evaluate the rationale behind change requests. Many times users will be brought in to explain desired changes.

Reward System (e.q. Penny for Your Thouqhts): Some companies reward improvement ideas from process users. The users are given incentives to come up with time and money saving ideas. The users are given a percentage of the savings (or additional revenue) it brings to the organization. Organizations not rewarding improvement ideas are developing a culture of non-innovation. An employee of a large U.S tractor manufacturer invented a mechanism to improve tractor assembly job performance. He never shared his innovative tool with other members of the organization because there was no benefit to him. Sharing the device might have actually been a detriment to him (new performance expectations and no reward)!

Proiect Lessons Learned: After every project, a project lessons learned document is completed by the project team. This lists all the things that went well with the project (and processes) and all the things that did not go so well.

Chapter 5: The Legislative Branch of Governance @ Every Organization Can Implement OPM3 !

PMO Judicial Reviews: PMO reviews can look for trends in process compliance and spot any issues with processes that might exist. They can then make recommendations to the Change Control Board.

Qualitv Auditing Group: The Quality Auditing Group has the unique ability to make recommendations based on being in the trenches with the process users. Change recommendations are filtered through the CCB.

PATs: PATs working on a particular area of the process will make process update recommendations to the CCB.

20 Projects (in the organization 1 Process Engineer Full Time (40 hrs)

40 Projects (in the organization 2 Process Engineers Full Time (40 hrs)

4.

4. 5 6.

7.

8

9.

10.

11.

12. -

13.

as a whole)

PAT participants need to be trained on all aspects of OPM? and process improvement tools and techniques. Augment PATS with full time process engineers when needed Schedule weekly PAT meetings Set up phases for process improvement and select the domains and processes to implement in each phase Have the Judicial Branch (PMO) review and approve all process improvements prior to implementation Have the Executive Branch (PRB) review and approve all process improvements prior to implementation Do pilot implementations of all process improvements prior to release to the organization Work with the Quality Auditing Group to determine which parts of the process are most essential to audit Work with the training organization to develop process training on all improvements - Make sure process updates are communicated to all members of the

/ ~ organization Implement the processes -.--

Chapter 5: The Legislative Branch of Governance 63 Every Organization Can Implement OPM3 !

- % ~hahge Cbntiol&4did l @ ~ I ~ & ~ ~ # ~ r i ' ~ ~ f i e c k i f s ) . . ~ *:, ' , 9 ,' .

> * . - , Step Description : - c - . , . L $

Train organization on the need for a Change Control Board (CCB) Secure Senior Management commitment for establishing a CCB Select line level managers from throughout the organization to donate a few hours a week to the CCB. The following guidelines are for the number of part time functional managers needed for the CCB:

10 Projects I 1 Functional Manager 1 2-4 hours a week 20 Projects 1 2 Functional Managers 1 2 4 hours a week

CCB participants need to be trained on all aspects of OPM3@, process improvement tools and techniques, and the updated processes. Schedule weekly CCB meetings Set up feedback processes for the organization to voice process complaints and improvement ideas Review all process change requests to determine if they are relevant to the organization Assign priority to process improvement efforts for PATS - Approve PAT processes Work with the Quality Auditing Group to determine which parts of the process are most essential to audit Work with the training organization to develop process training on all improvements Make sure process updates are communicated to all members of the organization

4 Steps 1 . 2. 3.

4.

5 6.

7.

8 9. 10.

11.

12.

Chapter 5: The Legislative Branch of Governance @ Every Organization Can Implement OPM3 !

Chapter 6: The Judicial Branch of Governance @

Every Organization Can Implement OPM3 !

Chapter 6: The Judicial Branch of Governance

Judicial Branch

0 ~ ~ 3 ~ requires that Governing Bodies be established for the implementation of BPS and processes in the organization. The Judicial Branch is the third group of Governing Bodies that should be implemented in the organization. The Judicial Branch of process governance is essential for interpreting and adjudicating processes in organizations.

OPM~@BPS (2140,2190,5420,6100,6130, and 6140) require that a Governing Body be assembled for project management guidance, project performance reviews, and process compliance issues. This Governing Body comprises the Judicial Branch which has the power to interpret processes and apply corrective action when processes are not adhered to. The Judicial Branch consists of a small number of full time staff hired to facilitate project management in the organization. The following is the Judicial Branch Governing Body:

Proiect Manaqement Office (PMO) Governing Body required to review project and process performance in the organization (2140, 2190, 5420, 6100, 6130, and 6140)

Some organizations do not like the idea of having a judicial role because it has the connotation of a judge and jury handing out harsh penalties to the accused. The PMO should be viewed more like the juvenile court system where their role is to guide troubled project teams. They oversee and make certain projects are in compliance with processes, yet are compassionate and understanding when it comes to breaches of the process. They are not out to punish teams not in compliance, but rather to help them get back on track (although corrective action may be needed if teams persist in not following the processes of the organization).

The PMO evaluates organizational project execution to determine if projects, programs, and portfolios are performing as required. The PMO leader is selected by the CEO or President of the organization and reports to them. PMO staff are selected by the PMO leader. The PMO presides over the different levels of Management Reviews (e.g. project, program, portfolio, enterprise, etc.). It reports performance numbers back to the Executive Branch (e-g. Earned Value, Process Breaches, Issues, Risks, etc.). The PMO also reviews processes to make sure they align with organizational strategy prior to executive approval and implementation.

Chapter 6: The Judicial Branch of Governance @ Every Organization Can Implement OPM3 !

PMO

The PMO is also known as the "Program Management Officen or the "Project Management Center of Excellencen. It is the group that maintains project management standards in an organization. PMOS are built using industry accepted project management standard such as the PMl's OPM~@, PMBOK, Program Management Standard, and Portfolio Management standard.

Companies worldwide accomplishing work through projects are realizing the benefits of the PMO. As mentioned in chapter 1, approximately 80% of projects fail. The PMO is a key element for identifying struggling projects early in the project life cycle. The PMO works with the project team to get the project back on track. If the project does fail, it analyzes the reasons for project failure. It then orchestrates updates to processes and procedures to insure project sukess in the future. In larger organizations, the PMO may be comprised of the following:

PMO Leader / Executive: Reports to the CEO or GlLl and works with executives to develop the strategic plan. Responsible adjudicating portfolio execution and process issues at the portfolio domain. Reports performance statistics to the Executive Branch and authorizes / facilitates PMO reviews of Portfolios, Programs, and Projects. The PMO Leader often times is a participant in the "Phase Gate Review".

Program Review Leader: Reports to the PMO Leader and is responsible for adjudicating program execution and process issues at the program domain. Works with the PMO leader to report PMO statistics to Executive Branch of organization. Facilitates the Program Management Review of programs and escalates when necessary. Some organizations combine program and project reviews.

Proiect Review Leader: Reports to the PMO Leader and is responsible adjudicating project execution and process issues in the Project Domain. Works with the PMO Leader in order to report PMO statistics to the Executive Branch of organization. Facilitates Project Management Reviews of projects and escalates when necessary.

Process Enqineers: Process engineers are typically assigned to quality organization, however in some cases may report to PMO. Responsible for working with the PATS to develop organizational processes.

Trainers: Trainers are assigned to the training organization, however in some cases they may report to PMO. This person is responsible for developing training on all organizational project management processes.

In smaller organizations, the Judicial Branch (or PMO) may only be comprised of a PMO Leader and a Process Engineer.

Chapter 6: The Judicial Branch of Governance @ Every Organization Can Implement OPM3 !

Roles and Responsibilities of the PMO

There are four primary roles of responsibility for the PMO in organizations. Beneath each role are a number of activities that the PMO oversees to assure successful execution of projects in organizations.

Consultinq and Mentoring assisting in the initiation, planning, execution, controlling, and closing of projects in the organization.

Performance Reviews: periodically review the conduct of projects based on performance criteria. Metrics are captured for all projects, programs, and portfolios. Project proposals are also evaluated to determine if they are worthy to pursue.

Process Governance: provide governance of organizational project management processes when conducting projects in the organization.

Traininq and Education: facilitating training and education for project teams to make sure project team members have the skills necessary to successfully complete projects.

Consulting and Mentoring

One role of the PMO in organizations is project mentor and consultant. The PMO should be staffed by seasoned project management professionals who can assist project teams. In some organizations the PMO manages the resource pool and provides resources for struggling projects. The following are the mentoring and consulting activities the PMO provides to the organization:

Proiect Help: The PMO may assemble a ProjectlProgram Start-Up guide to assist project and program managers with initiating and planning a new projectlprogram. It may help with project management tool questions such as, "How do I find the critical path in an MS Project schedule?", or "How do I set up a master program schedule to manage multiple projects?" The PMO may also provide guidance on project management process issues frequently arising with project teams.

Issue Escalation and Resolution: When risks and issues arise during the execution of a project, the PMO helps project teams resolve them. Most projects have varying levels of issues and risks. The PMO helps escalate risks and issues not dealt with at their current level. For instance, if there is a shortage of operations personnel to complete a project, the project manager may not have the power to negotiate a solution. The program manager, portfolio manager, or even the PMO leader may have to get involved to find a solution with the VP of Operations.

Manase Orsanizational Prosram Resource Pool: In many organizations the PMO manages the Resource Pool. Project Resource Pools tell the organization how many projects can be in the project pipeline simultaneously (given the limited resources). The PMO evaluates resource usage to determine the resource needs of all projects and programs in the organization. It can also conduct "what if" analysis of resource needs for potential projects in the future. Resource contentions between projects are also evaluated and monitored as projects progress through the pipeline.

Chapter 6: The Judicial Branch of Governance Q Every Organization Can Implement OPM3 !

Proiect Recovew: When projects are showing signs of failure, the PMO may step in to assist in project recovery. The PMO may assign additional personnel to a project. Or they may lay out specific steps needed by the project team to bring the project back on track. The PMO may assist in determining whether the contract must be renegotiated with the customer. Additional corrective action may include sending project team members to additional training, bringing in consulting help, etc.

Staff Auqmentation: In addition to managing the resource pool and making sure resources are balanced across projects, the PMO makes use of knowledge management databases to keep track of skill sets and competencies of each staff member. With troubled projects, it may be necessary to have a PMO member fill in until the project is back on track.

Organizational Project Management Performance Reviews

Most organizations implement PMOs because of project performance issues. However another crucial role for PMOs is that of performance reviews. Standardized performance reviews should be held at all three domains of organizational project management; project, program, and portfolio. Reviews at the portfolio domain tend to focus more on strategic alignment and cost benefit analysis. Project and program domain reviews are more detailed. They evaluate things like earned value, critical path, and project risks and issues. Reviews at all domains will evaluate process compliance issues.

The PMO receives periodic status reports from all project, program, and portfolio teams. The Quality Auditing Group will submit periodic process compliance reports to the PMO for input. This report indicates which teams are not in compliance with processes. These inputs will help the PMO decide which teams should be invited to periodic performance reviews. Based on performance thresholds established by the PMO, a project may be required to attend a performance review (e.g. Schedule Performance lndex is lower than .85, or Cost Performance lndex is below .85, etc.) Performance review meetings should have agendas, minutes, and action items. The following are the performance reporting activities the PMO provides to the organization:

Proiect Performance Review: The PMO Project Management representative facilitates a review team to adjudicate performance and process issues at the project domain. A corrective action template should be completed by project managers on troubled projects. The PMO should give advice and corrective action mentoring to help bring troubled projects back on track. Some organizations combine the Project and Program reviews.

Pro~ram Performance Review: At the program level of organizational project management, the PMO Program Management representative facilitates a review team to adjudicate performance and process issues at the program domain. The PMO should give advice and corrective action mentoring to help bring troubled programs back on track. The Project and Program Management Reviews are sometimes combined.

Metrics Reportinq to the Orqanization: PMO works with the Quality Auditing Group to aggregate Project, Program, and Portfolio metrics to ascertain overall organizational performance metrics. Metrics are then reported to the organization.

Process Governance

The PMO is an essential component of process governance. Without governance over processes in an organization they will be difficult, if not impossible, to sustain. The following are the process governance activities the PMO provides to the organization:

Chapter 6: The Judicial Branch of Governance @ Every Organization Can Implement OPM3 !

Judicial Review: Reviews all newly developed processes to determine if they align with organizational goals and objectives. Also evaluates each process to determine if it is beneficial to project execution.

Adiudicatina Process Issues: In many organizations, the Quality Auditing Group issues periodic reports to the PMO indicating which project and program teams are not in compliance with organizational processes. Teams not in compliance are summonsed to the PMO performance review. The PMO will determine root causes of process issues and offer guidance or prescribe corrective action.

Customer Relationship Management: The PMO is also a focal point for fostering relationships with customers. The PMO works with project managers to provide the consistent service to the customer. It verifies that all customers are administered a customer satisfaction survey. Results are used to update and improve customer relationship processes in the future.

Training and Education

Since the PMO is intimately involved with every project, PMO staff know what the organization needs in terms of project management training and skills building. The PMO will work with the training organization (or hire training personnel) to assist in training the organization. Additionally, the PMO is responsible for providing training to the Project management community within the company. The PMO should determine who should present the training (Internal staff, external staff, etc.). The following are the types of training the PMO facilitates:

Project Management Traininq The PMO must make sure project management personnel have the right technical and people skills for their positions. The PMO should make training opportunities available for project managers to enhance their skill sets. This training should include all areas of organizational project management (project management, program management, risk management, scope management, time management, etc.). There should be different levels of project management training (basic, advanced, project, program, portfolio, etc.) depending on the needs of the individual. Training and professional development should be linked. Project managers should get CCRs or PDUs for everything they are trained on regarding project management.

Process Traininq: Project management personnel should be trained on all internal project management processes. They should understand the history of the organization and why processes were developed in the first place. They should also be trained on all process artifacts accompanying processes. Unless the organization is trained on processes, they cannot be expected to follow them.

Educational Op~ortunities: The PMO is a project management center of excellence for the organization. It should host monthly Project Management meetings called 'round tablesn (or "brown bag" lunches). It should discuss various topics at these meetings to help the project management community. It may bring in special speakers and have them present their different views of what it takes to successfully execute a project. New trends and techniques in project management should be discussed to further project management in the organization.

Chapter 6: The Judicial Branch of Governance

Dangers to the PMO

@ Every Organization Can Implement OPM3 !

One of the main problems PMOs face is maintaining executive support after implementation. To establish a sustaining need for the PMO, the organization should be assessed prior to implementation using the O P M m Self Assessment or OPM363 Productsuite Assessment. This will serve as a baseline for improvement. The PMO must have a charter with a clear mission containing goals, objectives, and baselines. PMO progress should be tracked and measured against initial baselines. Example: what percentage of projects is over budget? What percentage of projects missed release date? What percentage of projects have production defects? What is the overall customer satisfaction rating? How many repeat customers do we have? Etc.

PMOs need to continually seek feedback from the organization regarding their performance. They may send out surveys. They may solicit anonymous feedback from a feedback page on their website. They may set up a suggestions box. The following are the things to beware of when implementing a PMO:

Not Showinq Value: PMO must show value or it will be cut. As listed above, the PMO needs to establish five or so Key Performance Indicators to that are frequently reported to the organization for success. Organizational performance prior to the PMO must be baselined to do this.

Overlv Permissive: The Judicial Branch must be consistent with how they adjudicate process and performance issues. They must not give in to the "we are 99%" complete excuse. They should demand process compliance and seek answers when teams are not in compliance. They must also demand corrective action for non-compliance and performance issues.

Proiect Bias: The PMO must be objective with all projects, programs, and Portfolios or they will end up alienating other teams. They need to be consistent in their policies.

No Consistentlv Scheduled Reviews: It is crucial for the PMO to have regularly scheduled reviews using tools like the RedNellowlGreen report or Earned Value reports for project teams. If reviews are not regularly scheduled they will start to fall by the wayside.

No Help or Guidance: The PMO must never be viewed as the "mean judge". They must offer ideas and recommendations to struggling teams.

Corrective action for the judicial branch can come in many forms. One form of corrective action might be additional process work (e.g. filling out a corrective action report). Another might be additional training on the processes (e.g. having to attend process training once again). Another might be a report to the team's functional management regarding the project's performance. The most severe form of corrective action might be to replace the project manager of the team.

Organizations without PMOs

As project management knowledge and understanding has matured, it has become apparent that Organizations without PMOs tend to struggle from a number of common project management issues. Some of them are as follows:

Chapter 6: The Judicial Branch of Governance @ Every Organization Can Implement OPM3 !

I Lack of Proiect Manaaement Culture: Many organizations make valiant efforts to instill a project management culture in their organizations however they fail to win the hearts and minds of populace. Lack of user participation, training, and education prevent the PMO inculcating an understanding project management in the organization.

Different Terminolw\~: Different terminology and definitions for project management are used across the organization. In one area work is called a project. In another part of the organization the work is called a program.

No Overarching Proiect Management Process Framework: Go to different parts of the organization and there will be different processes, templates, and guidelines used for managing projects. Processes are not standardized across the organization. Like islands it is virtually impossible to link all of the different areas together.

No Forum to Share Proiect Mana~ement Best Practices: One part of the organization may discover a very effective project management best practice but other parts of the organization are left to serendipity because there is no medium for sharing knowledge. No "center of excellence" in the organization.

Lack of Governance: If the organization has standardized processes, there is no guiding force to assure they will be adhered to. A company could invest millions in developing a process framework only to see it erode because of benign neglect.

Lack of Control of the Proiect Pipeline: Ask most people in the organization if they know what projects are currently in the project pipeline. Then ask them if they know projects are coming in the near future. Not surprisingly, there is little visibility to the project pipeline in organizations.

No Help on Proiects: Project managers are left to fend for themselves regarding project issues. Functional managers, though extremely important in the corporate community, are not always the best source for getting project help.

1 No way to Brina New Project Manaqers up to Speed Quickly: Getting "thrown into the deep endn is the best way to describe the initiation of new project managers in most companies without a PMO.

No Method for Recovering Failinq Proiects: Since there is little project oversight in companies without PMOs, the organization does not recognize the need for project recovery until it is too late. When it is finally recognized, the organization goes into emergency mode which is disruptive to all other projects.

Poor Customer Relationship Manaaement: Because all projects are different, there is no formalized standard for managing customers. There is also no standardized way for projects to get customer feedback.

intra-team People Issues on Proiects: There are no people related processes in the organization. PMOs help projects with people issues. People related activities include: conflict management, consensus building, forming, storming, norming, performing, etc. Process related things include: scope, time, cost, etc.

Chapter 6: The Judicial Branch of Governance @ Every Or~anization Can Implement OPM3 !

Different Flavors of PMOS for Organizations

There are many different ways to set up the PMO in an organization. Every organization is unique; some are functional, some are matrix, some are projectized, some are a mix of all three). The following are common structures:

PMO in a Functional Organization

F&tional Manager- Manager "Manager

___I

*Member Member I [ { T I ' { Y e 7

Member Member ltlernber '

In the functional organization, project work and coordination is managed by the functional managers. The PMO is a provider of guidance and assistance to project teams but has little authority to enforce process compliance. The PMO leader may have a small full time staff or a virtual organization of volunteers from throughout the organization.

PMO in a Matrix Organization

Executive Leader

- - {=I -= Managers

Managers Manager Manager Manager ---

In the matrix organization, project work and project coordination is managed by the portfolio, program, and project managers. Like the functional organization, the PMO is a provider of guidance and assistance to project teams. This PMO has more authority in the matrix than the functional organization because the organization has a project management culture. The PMO leader may have a small full time staff or a virtual organization of volunteers from throughout the

Chapter 6: The Judicial Branch of Governance 8 Every Organization Can Implement OPM3 !

organization. This structure is more common because it has proven more flexible for multi-project management.

PMO in a Projectized Organization

--

~7 Member,, i.1 Member 1~1 MemGr

In the projectized organization, the PMO has the most authority to enforce process compliance. The PMO has formal authority over all projects and project leaders. All team members report up to their project managers. All project managers report up through their program managers. All portfolio managers report up through the PMO leader. This type of structure is not as common today because staff tend to work on multiple projects simultaneously. Other structures are more flexible for multi-project management.

PMO in a Blended Project Functional Matrix Organization

Leader

Chapter 6: The Judicial Branch of Governance @ Every Organization Can Implement OPM3 !

In the blended organization, the PMO leaders are functional managers in the organization. The PMO has a strong amount of influence in the organization. The PMO Leader has a portfolio leader, a program leader, and a project leader reporting to them as well as administrative assistants. The PMO Portfolio leader is in charge of all portfolio managers. Portfolio managers have indirect authority over all program and project managers reporting to them. The PMO program leader is in charge of all program managers. Program managers have indirect authority over all project managers reporting to them. It is expected that all PMO Leaders have advanced organizational project management knowledge and skills.

PMO's Relationship with Other Parts of the Organization

Other parts of the organization must interface with the PMO to successfully deliver projects in the organization. The PMO must work closely with training to deliver project management training to the organization. It must work with the quality and tools departments to ensure process improvement implementation. It must work with Accounting for vital project management metrics.

Training ('-J

Dept .

Quality

The PMO must often work closely with the Quality Department. The Quality Auditing Group provides personnel to facilitate process auditing as new processes are developed. Process compliance information is sent to the PMO for evaluation. Project teams are invited to PMO reviews based on this information. The following are the quality personnel utilized by the PMO:

Qualitv Process Enqineers: These folks are responsible for providing technical guidance to the process improvement teams. Using formal methods, they map processes based on research from the process improvement teams.

e Quality Auditors: These folks are responsible for auditing the newly created processes to verify compliance. They also provide valuable feedback as to the effectiveness of processes.

Training

The PMO must often work closely with the Training department. The Training department provides personnel to the PMO to facilitate training for the organization. When improving organizational project management processes, it is the PMO's responsibility to ensure training is developed to orient the organization to the new processes. The following are the Training personnel utilized by the PMO:

Traininq Develo~ers: These folks are responsible for assisting the PMO in developing new project management training courses. They may work with the PMO to develop general and advanced project management courses or they may develop specific training courses to orient the organization to the new process.

Chapter 6: The Judicial Branch of Governance @I Every Organization Can Implement OPM3 !

Trainers: These folks are responsible for delivering the training to the organization. Some organizations fill this role by having the PMO leaders administer the training. Other organizations bring in outside help from the professionals.

Accounting and Finance

One important role of the PMO is to make sure project personnel time burned on projects is entered properly into the project accounting system. All costs on projects need to be allocated correctly! The PMO will work vefy close with the accounting and finance departments in verify this. Financial analysts may be assigned to projects from accounting and finance to assist the PMO is verifying project cost compliance. The PMO will work with accounting and finance to develop accurate estimating models for upcoming projects. The PMO will also work with accounting and finance to set "risk reserve" amounts for each project.

Tools Support

The PMO will need to work closely with the Tools Support group to distribute and maintain project management software. Many organizations have internal IT groups to manage tools such as the corporate internet, databases, project management software, issue tracking databases, etc. Project managers throughout the organization will need to have the necessary software to conduct their jobs. They will need organizational support to help them when they have tool issues. The PMO also works with the tools organization to set up an archive for all project materials. It also makes sure all teams use a common repository for storing project information.

Other Groups

The PMO may also work with other groups like the proposal group, marketing group, research 8 development group, etc. to help win new projects for the organization. The PMO will many times develop estimating models to put in proposal and marketing material. The PMO also gives technical advice to personnel working on bids for technical projects.

Implementing the PMO

When considering a PMO implementation, there are a number of activities required to determine if a PMO is feasible for the organization. There is typically one full time PMO member for each domain and a PMO Leader. PMO staff should have a professional project management background. They should have experience managing projects, programs, and portfolios. They should be trained in project performance review techniques like Earned Value, Critical Path Method, Critical Chain, etc. They should also understand the principles of quality auditing and process compliance. Please see the following PMO Implementation Checklist for steps to implement the PMO.

Chapter 6: The Judicial Branch of Governance Q Every Organization Can Implement OPM3 !

9. Assemble review boards 10. Implement PMO processes, tools, and training 11. Communicate PMO progress to the organization 12. Work with the Quality Auditing Group 13. Work with Training

SECTION Ill (Implementing OPM3Q)

Chapter 7: OPM3@ Process Framework Every Organization Can Implement OPM3@!

Chapter 7: O P M ~ @ Process Framework

Tying all OPMP Components Together

The first six chapters of this book are intended to give the reader an understanding of the components of 0 ~ ~ 3 ~ and the Governing Bodies needed to support it. The next six chapters (including this one) are intended to give inteknal and external consultants the tools they need to implement the model. To implement OPM3 In organizations, all of the components must be implemented. An analogy for tying the 0 ~ ~ 3 ~ components together is the construction analogy.

Buildinq Materials: At the lowest level of 0 ~ ~ 3 ~ are Caps, Outcomes, and KPls. They are the material that organizational processes are made out of. There are one or more Outcomes and KPls per Cap. And there are three or more Caps for each BP. All of the Constituent Caps of the BP must be fully implemented in order to take credit for the BP. These materials though need to be assembled into a strong foundation. That is what the BPS are for.

Foundation: The building bbcks or foundation of 0 ~ ~ 3 ~ are the BPS. BPS consist of Caps, Outcomes, and KPls. It is through implementing BPS that Organizational Project Management Maturity and Performance are increased. Without BPS, improving organizational project management maturity is like trying to build a house on sand. BPS, however, need forms or a framework to be assembled properly. That is where the process framework fits in.

Framework: To build on the foundational BPS, a "process framework" is needed. The 0 ~ ~ 3 ~ Process Framework provided in this book is needed to encapsulate BPS and Caps. It is through assembling these processes that the frame of organizational project management is assembled. Once the process framework is assembled, nothing stands in the way of Operational Excellence(1) in an organization.

Implementation: The goal of OPM? is to provide a path for organizations to implement Organizational Project Management BPS to increase perfomlance. When the 0 ~ ~ 3 ~ Process Framework augments or becomes the Organization Quality Management System, it helps organizations deliver projects on schedule, on budget, and rock solid on scope and quality! It also has the governance and Governing Bodies necessary to sustain all improvements.

Chapter 7: OPM3@ Process Framework

Framework Processes for each Domain

Every Orsanization Can Implement OPM3@

As stated in earlier, the goal of this book is to give Internal and external consultants the tools and tips they need to create a contiguous organizational project management process framework. Processes should address every aspect of organizational project management. Additionally, there should be inter-domain touch points between processes. Processes from one Domain should interact with processes from another domain.

Project Domain Process Framework

To successfully implement OPM~@, a framework of processes and sub-processes should be developed in each Domain to encapsulate BPS. The following diagram depicts the framework of processes recommended at the Project Domain. Companies and consultants are encouraged to tailor the framework below or to come up with their own framework. Appendix A contains an example of the Project Risk Management sub-process with encapsulated BPS, Caps, Outcomes, and KPls.

Project Domain processes are broken out into two separate categories. Project Management processes and Technical Processes. Within the Project Domain there is one Process and twelve Sub-Processes. Sub-processes are called out by Processes. While no OPM~@ BPS cover technical processes, it is recommended that project management processes be coupled with a product development life cycle for technical projects. Technical processes may consist of CMMI@ processes, Agile, SCRUM, etc.

I ,= <,,.-.., &Il.u~,r,r*r"

I i - 7 I Brr,ma Sc.ror rululrall~nmni I. Project Integration Management

I I / I / Prgnrl ?i."~ YI-smCnt 1 2. Project Scope Management

1 3. Project Time Management

4. Project Cost Management

5. Project Quality Management

6. Project Communications Management

7. Project Risk Management

8. Project Procurement Management

9. Project Human Resource Management

10. Project Requirements

1 1. Project Design

12. Project Development

13. Project Verification and Validation

Chapter 7: OPM3@ Process Framework Every Organization Can Implement OPM3@

Project Management Process Category

1. Proiect lnteqration Manaqement: The Project Integration Management process concerns the overall initiation, planning, executing, controlling, and closing of a project. From developing the project charter to project change control, this process calls out all of the more detailed processes like time management, cost management, and risk management. This process is the backbone of the OP& Project Domain Process Framework.

2. Proiect Scope Manaqement: The Project Scope Management sub-process concerns the necessary steps to manage the scope of the project to completion. The sub-process helps verify that all project work, and only the work essential to the project, is completed. This includes getting a detailed definition of project scope, creating a work breakdown structure, and verifying and controlling the scope of the pro'ect. The Project Scope Management sub-process is

I.4 comprised of the following PMBO processes: Scope Planning, Scope Definition, Create WBS, Scope Verification, Scope Control.

3. Proiect Time Manaqement: The Project Time Management sub-process concerns the steps necessary to manage the completion of a project to scheduled objectives. This sub-process requires activities like the following be accomplished to complete a project on time; defining and sequencing project activities, estimating resources and durations of tasks, and calculating critical path.

4. Proiect Cost Manaqernent: The Project Cost Management sub-process concerns the work necessary to manage a project's cost objectives. This process includes determining an accurate estimate of project costs, budgeting project costs during execution, and controlling project costs as the project proceeds.

5. Proiect Qualitv Management: The Project Quality Management sub-process concerns the work necessaryfor meeting the quality requirements of the customer upon delivery of the project. This sub-process includes determining the quality standards that the project should adhere to, scheduling quality activities throughout the life cycle to verify project quality, and monitoring project outputs for quality purposes.

6. Proiect Communications Manaqement: The Project Communications Management sub- process concerns the work necessary for communicating project status to all stakeholders and configuration management of project artifacts. This sub-process includes planning for project communications, distributing project communications, configuration management of team artifacts, and internal review of team performance.

7. Proiect Risk Management: The Project Risk Management sub-process concerns the work necessary for proactively managing project risks. This sub-process includes planning for potential risks on a project, identifying and crafting of risks, analyzing and responding to risks, and controlling risks as the project proceeds.

8. Proiect Procurement Manaqernent: The Project Procurement Management sub-process concerns the work necessary for acquiring or purchasing the necessary project scope (or outside services) to meet project obligations. This sub-process includes planning for purchases, acquisitions, and contracts, requesting and selecting sellers, and administering and closing contracts.

9. Proiect Human Resource Management: The Project Human Resource Management sub- process concerns the work necessary for facilitating and managing the project team. This process includes human resources planning, acquiring and developing the project team, and managing the project team. BPS from this sub-process ensure process compliance is a part of every individual's performance review.

Chapter 7: OPM3@ Process Framework Every Organization Can Implement OPM3@

Project Technical Process Category

10. Proiect Requirements: The project requirements sub-process concerns the work necessary for developing and managing project requirements for new product development. It includes eliciting and developing technical requirements based on project scope. The technical requirements are typically in a Use Case format for scenario modeling. The output of the project requirements sub-process is the Functional Requirements Specification which is the functional requirements of the product / project.

1 1. Proiect Design: The project design sub-process concerns the work necessary for developing a technical design for the product I project. This sub-process includes eliciting and developing design specifications based on project scope. Technical design documents show the horizontal design of the system across the system. The output of this sub-process is the design document. The design document is a description of the architecture of the product.

12. Proiect Development: The project development sub-process concerns the work necessary for developing the product based on the functional specification and the technical design. This sub-process includes the steps necessary to develop the product calling out all necessary tools, templates, and checklists. The output of this sub-process is the functional product or the code the product is based on.

13. Proiect Verification and Validation: The project verification and validation sub-process concerns the work necessary for testing and validating the product i project. This sub-process includes eliciting and developing test cases based on project scope. Verification and validation documents are developed to verify and validate all aspects of the system based on the functional specification. The output of this sub-process is the verification and validation document.

0 ~ ~ 3 ~ Project Domain Process Framework Best Practices

The Project Domain in 0 ~ ~ 3 ~ has a framework of processes to meet organizational pro'ect management business needs. Encapsulated within each process is a number of OPM4 BPS. The following table shows the 0 ~ ~ 3 ~ Framework processes and which PMBOK processes and BPS are associated with them.

Chapter 7: OPM3@ Process Framework Every Organization Can Implement OPM3@

Project Ti me Activity Definition 1050,1740,2280,2670 Management Management Activity Sequencing 1060,1750,2290,2680

Activitv Resource 1090,1780,2320,271 0

Project Management

Project Management

Cost Management

Quality Management

. ~stimation Activity Duration 1070,1760,2300,2690 Estimating Schedule Development 1080,1770,231 0,2700 Schedule Control 1340,2030,2570,2960 Cost Estimating 11 00,1790,2330,2720 Cost Budgeting 11 10,1800,2340,2730 Cost Control 1350,2040,2580,2970 Quality Planning 1 130,1580,1820,2360,2750 Perform Quality 1240,1930,2470,2860 -

Assurance Perform Quality Control 1360,2050,2590,2980

Project Human Human Resource 1590,1830,2370,2760,1140 Management Resources Planning

Management Acquire Project Team 11 50,1400,1840,2380,2770 Develop Project Team 1250,1940,2480,2870,

I I Manage Project Team 1 1680 Project 1 Communications 1 Communications 1 1 160,1850,2390,2780 1

Management

Manage Stakeholders (part of Information Distribution and Performance Reporting)

Proiect Risk Risk Management 11 20,1810,2350,2740 Management Planning

Risk Identification 1 170,1860,2400,2790 Qualitative Risk Analysis 11 80,161 0,1870,241 0,2800 Quantitative Risk 1 190,1880,2420,281 0 Analysis Risk Response Planning 1200,1890,2430,2820 Risk Monitoring and 1370,2060,2600,2990

I I Control I Project I Procurement 1 Plan Purchases and 1 121 0,1900,2440,2830 ~ a n a ~ e m e n t Management Acquisitions I

Plan Contractina 1 1220.191 0.2450.2840 - - - -

Request Seller 1 1270,1960,2500,2890 Responses Select Sellers 1280,1970,251 0,2900 Contract Administration 1290,1980,2520,291 0 Contract Closure 1380.2070.261 0.3000

Zhapter 7: OPM3@ Process Frarnel~ork Every Organization Can Implement OPk4363

Program Domain Framework

The following is a framework of processes recommended for the Program Domain. Companies and consultants are encouraged to tailor the framework below or to come up with their own framework. It is essential to have all 0 ~ ~ 3 ~ BPS encapsulated in a framework of processes at the Program Domain.

Program Domain processes are broken out into two separate categories. Program Management Processes and Program Governance Processes. The Program Domain has one Process and twelve Sub-processes. Sub-processes are called out by Processes.

Program Scope Marlagement

Program Trme Management

I. Program lntegration Management

2. Program Scope Management

I Program Cost Management I / - j ( 3. Program Time Management - 1 r 1 I 4. Program Cost Management

LTanagernsnt 5. Program Quality Management

Program R15k 1Cqanagement I I r 7 Program M~man Resources

Management

6. Program Communications Management

7. Program Risk Management

8. Program Procurement Management

9. Program Human Resources Management

10. Training

11. Peer Review

12. Individual Performance Review

13. Commitment and Traceability

Program Management Process Category

1. Proqram Integration Manaaement: The Program lntegration Management process concerns the overall initiation, planning, executing, controlling, and closing of a program. From initiating the program to contract closure, this process calls out all of the detailed procedures like program time management, program cost management, and program risk management. It also includes interface planning and transition planning. This process is the backbone of the OPMY Program Domain Process Framework.

2. Program Scope Manaaement: The Program Scope Management sub-process concerns the necessary steps to manage the scope of the program to completion. The sub-process helps verify only the work essential to the program is completed. This includes getting a detailed definition of program scope, creating a work breakdown structure, and verifying and controlling the scope of the program.

3. Proqram Time Manaaement: The Program Time Management sub-process concerns the steps necessary to manage the completion of a program to schedule objectives. This sub-

Chapter 7: OPM3@ Process Framework Every Organization Can Implement OPM34

process requires activities like the following be accomplished to complete a program on time; defining and sequencing program activities, estimating resources and durations of tasks, and calculating critical path across projects, etc.

4. Pro~ram Cost Manaqement: The Program Cost Management sub-process concerns the work necessary to manage a program's cost objectives. This sub-process includes determining an accurate estimate of program costs, budgeting program costs during execution, and controlling program costs as the program proceeds.

5. Program Qualitv Manaqement: The Program Quality Management sub-process concerns the work necessary for meeting the quality requirements of the customer upon delivery of the program. This sub-process includes determining the quality standards the program should adhere to, scheduling quality activities throughout the life cycle to verify program quality, and monitoring program outputs for quality purposes.

6. Program Communications Management: The Program Communications Management sub- process concerns the work necessary for communicating program status to all stakeholders and configuration management of program artifacts. This sub-process includes planning for program communications, distributing program communications, configuration management of team artifacts, and internal review of team performance.

7. Pro~ram Risk Management: The Program Risk Management sub-process concerns the work necessary for proactively managing program risks. This sub-process includes planning for potential risks on a program, identifying and crafting of risks, analyzing and responding to risks, and controlling risks as the program proceeds.

8. Program Procurement Management: The Program Procurement Management sub-process concerns the work necessary for acquiring or purchasing the necessary program scope or outside services to meet program obligations. This sub-process includes planning for purchases, acquisitions, and contracts, requesting and selecting suppliers, managing supplier performance, and administering and closing contracts.

9. Program ~ u m a n Resources Manaqement: The Program Resource Management sub-process concerns the work necessary for facilitating and managing the program team. This sub-process includes human resources planning, acquiring and developing the program team, and managing the program team.

Program Governance Process Category

10. Traininq: The Program Training sub-process concerns the establishment of an organizational training program for project managers, program managers, portfolio managers, and all other process users. The Training program educates and certifies process users. It prepares process users to successfully negotiate organizational process. It provides useful skill building for project, program, and portfolio managers.

11. Peer Review: The Program Peer Review sub-process concerns the establishment of a work product peer review process which is essential for creating a culture of project management in the organization. To Peer Review is to have the project team review process artifacts and work products to detect defects. Peer Reviews should start early in the life cycle and continue until delivery to the customer. Defects and issues not caught early in the project tend to get more significant. The later in the life cycle defects are caught, the more impact they have. When a defect or issue escapes undetected to the next phase of a program or project, it becomes more difficult to resolve. An error made on a customer order by a service representative becomes increasingly more difficult to resolve by the time it reaches production.

Chapter 7: OPM3@ Process Framework Every Organization Can Implement OPM3@

12. Individual Performance Review: The Program Individual Performance Review sub-process concerns updating the performance review process of the organization to reflect process adherence. Process user performance evaluations at the end of the year should reflect process compliance.

1 . I ,

13. Commitment and Traceabilitv: The Program commitment and ~raceebi l i t~ sub-process concerns receiving stakeholder sign-off on all relevant process artifacts. Commitment must occur prior to moving on to the next project activity.

OPMP Program Domain Process Framework and Constituent Best Practices

The Program Domain in OPMY has a framework of processes to meet organizational program management business needs. Encapsulated within each process is a number of OPMP BPS.

Chapter 7: OPM3@ Process Framework Every Organization Can Implement O P M N

r

.

Perform Quality Assurance Perform Quality Control Resource Planning Human Resource Planning Acquire Program Team Develop Program Team Resource Control Communications Planning Information Distribution Communications Control Performance Reporting Interface Planning Risk Management Planning and Analysis

Risk Monitoring and Control Plan Program Purchases and Acquisitions Plan Program Contracting Request Seller Responses Select Sellers Program Contract Administration Contract Closure NIA

NIA

NIA

NlA

3350,3820,4230,4620

3470,3940,4350,4740,

3200,3670,4080,4470,

3250,3720,4130,4520,

3260,3730,4140,4530,

3360,3830,4240,4630, 3080

3270,3740,4150,4540,

3370,3840,4250,4640,

(part of lnformation Distribution) 341 0,3880,4290,4680,

1670,3540,3570,

3230,3280,3290,3300, 331 0,3700,3750,3760, 3770,3780,4110,4160, 41 70,4180,4190,4500, 4550,4560,4570,4580, 3480,3950,4360,4750, 2200 3320,3330,3790,4200, 4590,

3800,421 0,4600,

3380,3850,4260,4650

3390,3860,4270,4660, 3400,3870,4280,4670,

3490,3960,4370,4760, 51 80,5190,5200,521 0,61 90,7000,1600, 1320,201 0,2550,2940, 3430,3900,431 0,4700, 5090,6000,651 0,6900 1530

3550

Management

Program Management

Program Management

Program Management

Program Management

Program Governance Program Governance

Program Governance

Program Governance

Management

Program HR Management

Program Communications Management

Program Risk Management

Program Procurement Management

Training

Peer Review

Individual Performance Review Commitment

Chapter 7: OPM3@ Process Framework Every Organization Can Implement OPM3@

Portfolio Domain Framework

Where there is no vision the people perishn (Solomon the Great). The Portfolio Domain is the medium in which the vision and goals of the organization are promulgated to the people. Interview people in most organizations and they will not be able to tell what their corporate vision is. They cannot explain what their organizational objectives are, or what their strategic vision is. They have no idea what projects are currently in the project pipeline or how the projects contribute to organizational objectives and strategy? By having portfolio processes for Phase Gate Review Board, Resource Pool, Process Action Teams, etc., every part of the organization managing projects is infused with an understanding of organizational goals. The following are a framework of processes recommended for the Portfolio Domain. Companies and consultants are encouraged to tailor the framework below or to come up with their own framework. It is essential that all OPM~@ Best Practices be encapsulated in some framework of processes.

b i d i o Governance 7

- - 1 1 Portfolio Monitoring and Control

! P&lio Phase Gate Rewew Board

--

-

Recess Acbm Teams

2. Resource Pool

3. Phase Gate Review Board (PGRB)

4. Quality Auditing Group (QAG)

5. Process Action Teams (PATS)

6. Change Control Board (CCB)

7. Program Management Office (PMO)

PMO

PortFolio Management Process Category

1. Portfolio Monitorinq and Control: The Portfolio Domain Monitoring and Control process concerns the overall initiation, planning, executing, controlling, and closing of a portfolio. From the identification of which projects should go into the pipeline through their authorization, this process calls out all of the detailed procedures like the Phase Gate Review Board, Quality Auditing, etc.). This process is the backbone of the OPMY Portfolio Domain Process Framework.

2. Resource Pool: The Portfolio Resource Pool process concerns the establishment of organizational resource pools. This process provides the formal procedures for how to set up and manage resource pools.

Chapter 7: OPM363 Process Framework Every Organization Can Implement OPM3m

Portfolio Governance Process Category

3. Phase Gate Review Board (PGRBl The Portfolio Phase Gate Review process concerns the establishment of a periodic review of portfolio performance in an organization. This process provides the formal procedures setting up the review, facilitating the review, and the outputs of the review. It also concerns evaluating projects to determine if they belong in the project pipeline or not. This is often called the Investment Review Board. It is an essential function of any organization that executes strategy through projects. The Phase Gate Review Board is comprised of senior management and the PMO Leader. This group evaluates each proposed project to determine if it is worthy of investment and a place in the project pipeline. Every project making it through Phase Gate Review Board evaluation is assigned to a portfolio or program. Some projects are broken up into phases (or gates) to determine at certain points in the project if it continues to align with corporate strategy. It is assumed that projects will be cancelled at the review gates unless the business case and project plan still support the project being in the pipeline.

4. Qualitv Auditing Group (QAG) The Portfolio Quality Auditing Group process establishes the Quality Auditing Group for process users. It provides the formal procedures to establish the Quality Auditing Group and has steps and guidance on how the Quality Auditing Group executes. This group has a number of checklists for each phase of the project and performs audits of projects. They may also conduct spot audits of the organization to verify compliance.

5. Process Action Teams (PATsI: The Portfolio Process Action Team process concerns the establishment of Process Action Teams in organizations. It provides the formal procedures for an organization to establish a CCB. PATs create and improve organizational processes. PATs are an essential element of process governance.

6. Chanae Control Board (CCB): The Portfolio Change Control Board (CCB) process concerns the establishment of a Change Control Board (CCB) for oversight of process development. This process provides the formal procedures for an organization to establish a CCB. It has steps and guidance on how the CCB and PATs execute. These groups will oversee the creation of processes.

7. PMO: The Portfolio Program Management Office process concerns the establishment of a Program Management Office (PMO). It provides the formal steps and guidance for an organization to manage the project pipeline and resource pool during the project life cycle. They will also verify the organization is trained on all processes.

0 ~ ~ 3 ' Portfolio Domain Process Framework and Constituent Best Practices

The Portfolio Domain in 0 ~ ~ 3 ' has a framework of processes to meet organizational portfolio management business needs. Within the Portfolio Domain framework are a number of processes. Encapsulated within each process is a number of OPM~@ BPS.

Management Monitoring and Control

Reporting and Review (3.2.2.1)

Strategic Change (3.2.2.2)

5990,6100,6130,6140,6420,6500 4830,5740,6250,6640,6810,6890 11 0,2120 5440,1640,1520

Chapter 7: OPM30 Process Framework Every Organization Can lmplement OPM3fB

5230,5620,5220,6120,1400,141 0 1420,1430,1470,3550

4780,4790,4800,5690,5700,571 0 6200,621 0,6220,6590,6600,661 0 3530 481 0,4820,5720,5730,6230,6240 6620,6630 4840,4850,4860,4870,4880,4890 4900,491 0,4920,4930,4940,4950 4960,4970,501 0,5020,5030,5040 5050,5060,5060,5070,5090,5100 51 10,5120,5130,5140,5150,5160 5750,5760,5770,5780,5790,5800 581 0,5820,5830,5840,5850,5860 5870,5880,5890,5900,5920,5930 5940,5950,5960,5970,5980,6000 6010,6020,6030,6040,6050,6060 6070,6260,6270,6280,6290,6300 631 0,6320,6330,6340,6350,6360 6370,6380,6390,6400,641 0,6430 6440,6450,6460,6470,6480:6490 651 0,6520,6530,6540,6550,6560 6570,6580,6650,6660,6670,6680 6690,6700,671 0,6720,6730,6740 6750,6760,6770,6780,6790,6800 6820,6830,6840,6850,6860,6870 6880,6900,691 0,6920,6930,6940 6950,6960,6970 5540,6160,6170,6180,3060 21 70 5640

5340,5570,3520 6080

51 70,5260,5270,5280,5290,5300 5320,5390,541 0,5420,5480,5490 5520,5600,5630,6110,1000,6980 701 0,1460,2090,3980,6980,701 0 1490 (part of Process Action Teams)

c

3050,5240,5250 . ,r .'+ .

NIA

Identification

Categorization

Evaluation

Selection Prioritization Portfolio Balancing Authorization NIA

NIA

NIA

1 ".. '1 ,

NIA < ' '-, '.

Portfolio Governance

Resource Pool

Phase Gate Review Board (PGRB )

Quality Auditing Group (QAG) Process Action Teams (PATS)

Change Control Board (CCB) Program Management Office (PMO)

Chapter 7: OPM3@ Process Framework Every Organization Can Implement OPM3@

Relationships Among Process Groupings

The OPMP Process Framework should be a contiguous set of processes set up to enhance organizational project management. Individual processes in each Domain should have touch points with others in the same domain. There should also be touch points between each domain. It is important to understand the touch points between the processes and the domains to prevent gaps in the framework.

Recommended Order of Implementation

The following is the recommended order of implementation for the O P M ~ @ Framework Processes.

Portfolio Governance Cateaorv Processes: Process governance Governing Bodies are required for process improvement and process compliance. They should be implemented prior to any improvements in the organization.

Project Management Catesrow Processes: After process governance is established, it is advised that Project Management Processes be implemented first. Programs consist of projects. If projects are not well defined and well structured it will be virtually impossible to manage them in a coordinated way.

* Proiect Technical Cateqorv Processes: Once Project Management Processes have been implemented, it is important to have a product development life cycle in place.

Proqram Governance Cateqorv Processes: It is extremely important to make process governance a part of organizational culture as soon as possible. Implementing Program Governance processes instills process compliance into the fabric of the organization.

Proqram Manaqement Cateqory Processes: Once projects are properly defined they can be managed in a coordinated way using program management processes.

Chapter 7: OPM3B Process Framework Every Organization Can Implement OPMW

Portfolio Manaaement Cateqory Processes: The last category of processes to be implemented are the portfolio management processes. Implementing these last processes after successfully implementing the previous ones will help the organization perform like a world class project management organization.

REFERENCES

(1) Operational excellence. (2006, August 13). In Wikipedia, The Free Encyclopedia. Retrieved 05:22, February 26,2007

Chapter 8: Standardizing OPM3@ Processes Every Organization Can Implement O P M m

Chapter 8: Standardizing 0 ~ ~ 3 ~ Processes

What Does it Mean to "StandardizeJ' Processes?

The first stage of O P M ~ @ improvement is called the "standardize" stage. A "standardn is an acknowledged measure of comparison for quantitative or qualitative value; a criferion.(l) Before a process can be truly beneficial to an organization it must be "standardn. That is, it must be the acknowledged measure of comparison for the organization. It must serve as the operating sub- process for the activity to be accomplished. To be standardized means people throughout the organization use the process consistently and there are no other alternatives.

Immature organizations say things about process like, 'Lvhy do we need all of this process stuff?" Why don't we just follow the principles of project management?" The answer is; if processes are not standardized, they cannot be evaluated or maintained! There is no way to determine if they are under control. And there is no way to continuously improve what does not exist. For instance, if a Risk Identification process exists in the organization but is only used by certain groups and individuals, it is impossible to accurately measure "organizational risks per projectn.

All improvement methodologies are dependent on standardization to measure and accurately assess organizational capability (e.g. Six Sigma, Lean, TQM, etc.). Measuring, as discussed in the next chapter, provides the basis of process predictability. It allows organizations to predict future performance based on past performance. This, in turn, leads to overall Project Predictability (the project consistently executing within the boundaries of the Triple Constraint)

An example of a standardized process is a class of 20 students taking a 10 question exam. The students may not be completely knowledgeable about the material, or the teacher may not have had time to make sure everyone knows the material, but the process is standardized. Everyone is taking the same test in the same way. As with all newly standardized processes it is expected that there be a great degree of variation in the results. Once the test is complete, results can be analyzed to determine why some students scored poorly and some scored well. Standardization is the first stage of process improvement.

The diagram above shows the degrees of variation in processes. When processes are initially standardized there is a great degree of variation. The wide bell curve shows measurements are all over the board. Some good, some very bad, and most scattered around the mean. The goal of process improvement is for measurements to form a tight bell curve with little variation in process measurements.

Process Performance (Yariation). .

-=z5cll

-dL??L-

A

Stage of Improvement

Standardized

Measured

Controlled

Improved

Process Characteristics

The process is implemented and standardized in the organization

The process is measured and variation is identified

The process is controlled and variation outside the upper and lower control limits negligible

The process is improved. Variation is decreased along with the upper and lower control limits

Chapter 8: Standardizing OPfvl3@ Processes Every Organization Can Implement OPM3@

Characteristics of a Standardized Process

A standardized process has the following characteristics:

Documented: The process has been written and is readily available to all process users.

Communicated (and trained if necessarv): All stakeholders know the process exists and is available to them. Users can easily access the processes. Training is available for processes.

a Implemented Consistentlv: The process has been implemented across the organization and is being adhered to by participants.

Governina Bodv Established: The process is being audited for compliance. The Governing Body meets on a regular basis to discuss process management issues and suggestions for improvements.

Who Standardizes Processes?

Process Action Teams (PATs) and the Change Control Board (CCB) will create, manage, and update processes in the organization. The process legislators will spend a few hours a week helping to craft and improve processes in the company. Full time process engineers may facilitate the PATs. The Legislative Branch works best when highly skilled individuals are selected by their own teams to represent the needs of the process. The legislators write the processes that must be approved by the Executive Branch and adjudicated by the Judicial Branch.

The portfolio Change Control Board (CCB) / Process Action Team (PAT) framework processes concern the establishment of a CCB and PATs for oversight of process development. They have the steps and guidance for how the CCB and PATs execute. These groups will oversee the creation of organizational processes.

Why Standardize Processes?

Studies have found that employee morale and customer satisfaction are higher in organizations where processes are standardized than ones not having standardized processes. Additionally, employee morale and customer satisfaction get higher as organizational processes are, measured, controlled, and improved. Good process enables an organization to repeat successes of the past. Without documented, standardized processes organizations are consigned to rediscovering success on their projects by tribal knowledge or serendipity.

Organizations recognize the need for good process. As a result, processes in many industries are quickly becoming a commodity. Many industries have organizations devoted to developing standard processes. These processes give organizations the luxury of not having to start from scratch when improving their processes (CMMITM is an example of this). In many cases organizations can purchase processes off the shelf and tailor them to the needs of the organization. How many companies go out and create their own ERP (Enterprise Resource Planning system)? The answer is, "very few!" There are many affordable systems out there to choose from so it is not cost effective to "build your own". In a similar fashion, this book provides standard Organizational Project Management processes for all companies that execute projects (although they should be tailored to the organization). Process documenting and tailoring does not require a PHD in process engineering. It simply requires knowledge of project management principles and process modeling. Process models are an essential part of documenting and sustaining organizational processes. There are many models available, and when used correctly they allow organizational processes to be auditable, measurable, contiguous, and improvable.

Chapter 8: Standardizing OPM3Q Processes Every Organization Can Implement O P M m

Why a Process Mapping Model?

Most organizations have some form of processes (flowcharts, step outlines, visio diagrams, etc.), however they do not have a process model to tie everything together. Organizational Project Management is much more complex than assembly line process flowcharting. Because Project, Program, and Portfolio management is an intellectual endeavor, processes are more complex and have many dependencies and relationships with other processes. For instance, the project planning process calls out the scope Identification process, and the scope identification calls the technical requirements process.

Some companies fear that if they have any type of "formal process model" it will bog their projects down in paperwork. Or they believe it will limit creative license and entrepreneurial spirit. Well implemented formal processes allow those trained to quickly negotiate through process steps in a consistent manner. When the automobile was first introduced, there were very few processes for roads. This resulted in major problems; people were spending hours going to and from work because of accidents, bottlenecks, etc. A new process of stops signs were introduced which were initially very effective in reducing accidents and congestions. However as the number of

. cars on the roads increased, stop signs became ineffective because of the "accordion effect". As a result, governments developed a new process of stop lights which greatly improved automobile throughput while decreasing accidents and other problems. The new "complicated" processes however required much more paperwork and study than the old stop sign process. Many people complained about the additional training and studying required to negotiate the new process. But no one will argue today that the processes are much better and faster than the old way of doing things.

Formal Process Models

A formal process model helps organizations document and focus on what they are good at. There are many process models to choose from. The following are some of the more popular:

SlPOC Model

SlPOC stands for 'suppliers', 'inputs', 'process', 'output', and 'customers'. An organization obtains inputs from its suppliers and other tools and processes in the organization. The organization then adds value by conducting a series of process steps. Once completed, the output of the process is provided to the customer. An example SlPOC diagram is provided below:

Suppliers Outside consultant

Internal consultant

Inputs PMI OPM? Knowledge Foundation

PMBOK

Process Process Description: Conduct O P M ~ @ high level self assessment and comprehensive self assessment

1 I<c:v#uw t h e O B - R I 1 L I 'jlnnd.nr.J Plan for

Outputs List of Best Practices that have been implemented

Program Standard

Portfolio Standard

Customers Organization being assessed

improvement

( I n . ~ h , ri.vrl Alwrs,3m,rml

I Measurements

- I

a r-'.,"-,.i.Il l ....,., i.

.% , k > * ~ . , 9 ~ s . 7 ~ - * *..rp>, m x - , +.rrxrdlr os I*. tha C>F'RI)J <:.,,..,,.. h,.: ,... ..7q> *r~....-.-,r.,~>~.*

Chapter 8: Standardizing OPM363 Processes Every Organization Can Implement OPM3@

Each step in the SlPOC document is then expanded out:

ETVX Model

4

,

ETVX stands for 'Entry Criteria', ' Tasks', ' Verification', and 'Exit Criteria'. (2) Entry criteria define what conditions must be met before the process is performed. Tasks specify the actions within the process. Verification identifies test points within the process and defines the tests and criteria for checking these points. This enables problems to be caught close to their cause, reducing rework and scrap costs, and enabling problem causes to be addressed. Exit criteria define what outputs are required and what quality these must be to meet the needs of customer processes. Exit criteria may be derived from the entry criteria of customer processes.

inputs- . --- --

customer request

step 1

2 .

made to initiate a project.

Action Review the 0 ~ ~ 3 ~ Standard

The assessment team lead works with the organization to be assessed to determine 0 ~ ~ 3 ~ High Level Assessment participants.

m The assessment team lead conducts an overview training session to introduce participants to the 0 ~ ~ 3 @ m o d e l and the 0 ~ ~ 3 ~ high level assessment (151 question assessment).

m The assessment team reviews the 0 ~ ~ 3 ~ Knowledge prior to conducting the Assessment.

Guidance = It is recommended that a formal training session be administered to the

assessment team to assure knowledge and understanding of the model. It is recommended that the 0 ~ ~ 3 ~ Self Assessment Method be treated like a project with all project documentation

...

Tasks ' Conduct Project Kickoff Meeting

Complete Project Documents

Submit Project Plan to Customer

Exit High Level

Scope Statement is approved

Technical Requirements are approved

Project

status reviews initiated

High Level I . Quality Audits / Estimates are developed by project manager

Outputs

High Level Scope

Statement

Project Plan

Project Issues Log

Chapter 8: Standardizing OPM3@ Processes Every Organization Can Implement OPM3@

Each step in the ETVX document is then expanded out with bullet point activities needing to be accomplished to comply with the step.

lDEF Model

2

The lntegratea vtfinition (IDEF) model has a number of standards (IDEFO-IDEF14), each of which can be used for modeling specific types of information through graphical representation.(3) From an organizational project management point of view, the IDEF3 standard is most useful for process mapping standards. IDEF3 is a method to model and map business processes.

The project manager conducts project kickoff meeting(s) with affected groups and individuals to:

= Discuss customer request to initiate a project and the high level scope statement. Request high level project estimates as input to the Project Plan Discuss customer requirements.

= Determine key dates and key deliverables for the project = Determine the necessity of scheduling follow-up meetings to track issues, action items,

etc. Ensure meeting minutes are documented and any project issue is tracked and resolved.

-. ,

Program Standard

Chapter 8: Standardizing OPM30 Processes Every Organization Can Implement OPM3@

Each step in the IDEF document is then expanded out with bullet point activities that must be accomplished to comply with the step.

The Paint Engineer retrieves part off of the conveyor and does the following: verifies liquid paint is at appropriate level in painting machine verifies that all protective gear is properly in place applies paint to part verifies that all areas of part surface painted

CIMOSA Model

CIMOSA is a formal process model developed by a consortium of 30 major European vendors (e.g. IBM, HP, DEC, Siemens, Fiat, and Daimler-Benz).(4) CIMOSA is a model-based enterprise engineering method which categorizes manufacturing operations into Generic and Specific functions. CIMOSA maps generic functions which are performed in every enterprise regardless of the type of organization or business area. It also maps specific functions that are dependant upon the individual enterprise. Examples include processes for the design of products, and processes for production activities, processes for the shipment of products, processes for the maintenance of equipment, processes for the processing of orders, etc.

Process Action Teams

Processes should always be developed by a cross functional representation of the organization. As discussed in the Process Governance chapters, if process users do not have a voice in creating the processes, there will be no commitment. PATs are the legislators of process governance. They work with the process engineers to create processes for the organization.

Once processes are created they are reviewed by the CCB. If processes make it past this group, they then go on to the Executive Branch for approval (or veto). Since PATs are comprised of representatives of the organization, processes receive much better reception by the user community. Additionally, PATs do not tend to suffer from "groupthink" which can be detrimental to the organization. PATs need to make sure everyone has a voice in the development of processes. If users are still not satisfied with processes that have been developed, PATs must solicit user feedback so processes can be updated for better use in the future. With many companies electing to purchase processes rather than build them from scratch, PATs are also extremely important in tailoring the processes to each organization's specific needs.

Chapter 8: Standardizing OPM3B Processes Every Organization Can Implement OPM3Q

Process Elements

The outputs of the Legislative Branch are the OPM~@' Process Elements. Process Elements are the processes, sub-processes, and tools project teams use for each project. They are pages of the process playbook. The process elements are as follows:

Policies: A plan or course of action in a business intended to influence and determine actions, decisions, and other matters: A course of action or guiding principle.

Processes: A set of common tasks used to creates a product, service, process, or plan to satisfy a customer or group of customers. A sequential series of steps leading to a desired outcome.

Sub-Process: the sequence of specific actions or instructions to be followed in solving a problem or accomplishing a task.

Templates: A pattern or gauge used as a guide in development or creation of something accurately

Guidelines: Document to help process users fill out templates. Serves as a standard way of completing process templates.

Sub-Processes

Checklists: A list of items or tasks for comparison, verification, or other checking purposes. A list of items to be noted, checked, or remembered

Every process must have a policy authorizing it. Processes call out sub-processes and templates. For instance, the Project Integration Management process calls out the Risk Management sub-process which in turn calls out the Risk Management Register template and checklist. Each template has an associated guideline explaining how to complete the template with the correct fields.

Why Process Elements are Necessary?

It is important to have all of these elements when developing organizational processes. Without templates, processes are convoluted, unwieldy, and difficult to manage. Without guidelines, templates are difficult to fill out or complete. Checklists are called out by both processes and sub- processes. They provide a mechanism for process users to quickly negotiate a process in expert mode.

Transactional processes (or service processes) can be more complicated than manufacturing processes because of the uncontrolled environment. In a manufacturing environment, processes are set up in almost an assembly line fashion which makes process compliance somewhat easier (less choices). In a transactional environment there are many more variables and therefore more difficulty in setting up processes. Project management involves much service oriented or transactional work.

Chapter 8: Standardizing OPM30 Processes Every Organization Can Implement OPM3@

Policies

A Policy is a plan or course of acfion in a business infended to influence and determine actions, decisions, and other mafters. It is a course of action or guiding principle.(s) Policies are used to authorize and empower the creation and use of processes in the organization. They clearly state the intention and goals of organizational processes and inform the organization of how deviations from the process will be handled. In project management terms, this is the "charter" of the process.

Every process in the organization should have a corresponding policy authorizing it. When crafted correctly, Policy should contain references to all aspects of the process it represents and . . state how deviations from the process should be handled.

Title

Purpose

Scope

Goals

Policy

Approvers Signatures

Risk Management Process Oversight and Compliance Policy

The purpose of the Risk Management Oversight and Compliance Policy is to ensure oversight, accountability, and compliance to the Risk Management Process.

This policy applies to all project teams within XYZ organization throughout the project's life cycle.

The goals of the Risk Management Process Oversight and Compliance is as follows:

8 To ensure: A thorough understanding of the requirements of the Risk Management Process by all project team members. All project team members are accountable and expected to comply with the process as it applies to their applicable roles on the project team

= Oversight by Quality Auditing Group and functional managers to ensure compliance to the Risk Management Process by applicable staff members.

In order to meet these goals, XYZ organization will implement, adhere, and improve the Risk Management Process:

8 Any deviations to the Risk Management Process Oversight and Compliance policy within XYZ organization must be documented in the Project plan and approved by the PMO Project Management Review.

General Manager and Staff Company XYZ

Director of Quality Company XYZ

Vice President, Program Management Company XYZ

Chapter 8: Standardizing OPM3G3 Processes Every Organization Can Implement OPM3@

Processes

A process is a set of general tasks over time that creates a product, service, or plan that will satisfy a customer or group of customers; a sequential series of steps leading to a desired outcome.(s) A process adds value and transforms inputs into more useful outputs. The processes become the playbook or marching orders of the organization. They guide and direct daily activity using documented steps to add value to organizational inputs. Example processes can be seen above in the SIPOC, ETVX, and IDEF diagrams.

A sub-process is the sequence of specific actions or instructions to be followed in solving a problem or accomplishing a task. Sub-processes tend to be more detailed than processes. Some organizations avoid the concept of sub-processes in favor of calling everything processes. This is acceptable and works for many organizations. Sub-processes seem to work best when defining a specific low level process and being called out by a higher level process. The following is an example of the Risk Management Sub-Process.

Title Scope

Purpose

Usage

Inputs

Outputs

Definitions

- --- -- Risk Management Sub Process This process is used by all XYZ company projects.

The purpose of the Identify and Manage Risks process is to identify and document a project's risks.

Project teams will use this process to:

m ldentify and document risks during initiation and planning. This process is called from:

Process 123: initiate the Project Plan

Following are the inputs to the Identify and Manage Risks process:

m Risk Assessment Checklist Risks from most recent year or version

Project WBS work packages

The following list describes the outputs of the Identify and Manage Risks process:

Risk Assessment Worksheet Assessed and prioritized risks, documented in the Project Plan

Contingency: A set of actions that will be taken in the event that a risk trigger is realized.

Mitigation: A set of actions that is taken to reduce the probability that a risk will occur.

Risk: A calculated possibility of suffering loss.

Risk Impact: A measure of the degree of loss that would result if a given risk were realized.

Risk Probability: A measure of the likelihood that a given risk will be realized.

Risk Score: Overall risk rating for a risk (Risk probability x Risk Impact).

Chapter 8: Standardizing OPM3@ Processes Every Organization Can Implement OPM3@

The project team, identifies and documents all risks that apply to the project, using the Risk Assessment Checklist and the Risk Assessment Worksheet. This activity must take place in a meeting (not as individuals working alone).

$j:$(&j!%: ,,, , ,r:

I

I Performing this process step requires the following:

. . . ;,.*:!,~,.,.,;, .... :.- . -:,. , s&.d ~ $ Z . L < . ~ %;,., ,,,: :., ,~,, :,.\: ,? ,,!.::.A; :;:.T;.,, ;:,::;$>y-%?i$; ,!j,:Y..:,d,<;:,!?:.?,

~.v#,>..X<., ;$:;L$..;;;~;;;.:$2~2/>g@:.~i:~;;j~;.<~;;;<~$i~i;;~~;i~$~<..:~;.~ ~ $,*,-% ;,>~: ,L?,<~, ;-:,4 ,,..>. %, . c*>zz,-. ,< p* -,- <-.> 5 , " ,:,:- ;, i;:$'<F$;.,;: ~* <..,,; ,L,:; %,..,%,..,.? .:-, ,!., ~4 ,<@$*$:!$.:: ,; ,::,~;:S~~;~~.%~;?&;:Z;;~~~>~%~&~~. a$:gr; *.@ $&&p. ,+ wt ; &;;;~,$Gcy;:;::~;: >s.*5:-;?i::t. ::? ..:. < . - ".% .:

Identify and Document Risks

m All members of the project team must be invited. It is strongly recommended that all identified members of the project team be present in order for this meeting to take place.

I The Risk Assessment Checklist and Risk Assessment Worksheet are ~ s e d as follows: I m The Risk Assessment Checklist should be considered during identification of risks. A

project's identified risks may also include risks that are not listed on the Risk Assessment Checklist. Each identied project risk must be documented in the Risk Description Table portion of the Risk Assessment Worksheet. The fields of the Risk Description Table are completed as fo tbs :

Risk # Risk Description Mitigation

Contingency

Trigger Probability

Impact

Score Category Work Package

-'I Guidance

Risk Identification Number Description of the identified risk An action orset of actions that is taken to reduce the probability that a risk will occur. An action orset of actions that will be taken in the event that a risk trigger is realized. Event that signals the need to engage a contingency The percentage of likelihood that the risk will occur. Both current and original probability are listed The percentage effect on the project if the risk occurs. Both current and original are listed. Product of Probability and Impact Category number as listed on the Risk Assessment Checklist Work Package Number that the Risk Corresponds to

Risk process material should be distributed to all project team members at least one week prior to this meeting. Risk management meetings should be incorporated into a regularly scheduled project team meeting.

= The project team should designate a facilitator and a recorder for this meeting. Analyze risks for probability and impact

3 . . .

Prioritize Risks ... I

4

5

Resolve Risks ... Monitor Risks ...

Chapter 8: Standardizing OPM30 Processes Every Organization Can Implement OPM3@

Templates

A Template is a pattern or gauge used as a guide in development or creation of something.m Templates are also known as forms. In organizations where process is valued, templates are an extremely important element of success. Even when organizations diligently map processes, they are still open to interpretation and hence, variability. Templates provide a mechanism for limiting variation. Templates limit the amount of subjective interpretation and aid in the communication process. The following is an example of a Risk ldentification Template.

Guidelines

A guideline is a document developed to help an organization conform to a standard of measurement or value.(8) Without a guideline, templates could be completed incorrectly (which makes process compliance difficult). The following is an example of a Risk ldentification Template Guideline:

Risk #

Risk Description

Mitigation

Contingency

Trigger

Probability

This is the sequential number or computer generated number of the risk.

This is a textual description of the Risk. A risk statement should always start off with, "The risk is that . . . because . . .". The description should also highlight what condition the risk is expected to result in (should be quantitative if possible and affect one of the triple constraints; Cost, Quality, Schedule).

The Actions taken to reduce probability of risk or actions taken to lessen impact of risk. Reducing the probability andlor impact of a risk to below an acceptable threshold. A risk mitigation statement starts off with, "The risk is mitigated by ... in order to ...". The mitigation should include the activity that will be performed in order to reduce the likelihood of the risk occurring. What condition the risk mitigation is expected to result in. Alternative strategy used to ensure project success if specified risk event triggers occur. Actions taken in the event a risk trigger is realized so project objectives may still be met. A risk contingency statement starts off with, "The contingency for the risk is ... in order to ..." It should specify what condition the contingency is expected to result in given project cost, quality, and schedule objectives. An indication that a risk is about to occur. A risk symptom or warning sign, that if occurs, has a negative effect on the program. The probability index is the measure of the likelihood that a given risk will occur. A risk's probability of occurrence falls between 0.0 (no probability) and 1.0 (has occurred). Using the Risk Probability Table, the probability index is determined.

Chapter 8: Standardizing OPM3@ Processes Every Organization Can Implement OPM3@!

Checklists

Impact

Score

Category

Work Package

Risk Realized Date Additional Comments

A checklist is a list of items such as names or tasks, for comparison, verification, or other checking purposes. A list of items to be noted, checked, or remembered.(g) Checklists are a great aid in negotiating through a process in expert mode. Checklists should be tailored to an organization. As the organization becomes more mature it will record all potential reasons for failure. Results may be added to the checklist. Checklists are most often associated with the aviation world. Before every flight, a series of checklists are used by airline maintenance staff to make sure the plane is ready for flight. The same should be true for the Organizational Project Management world. No project should get off the ground unless checklists have been utilized.

The Impact Index is a value that relates the relative net affect on the business. An impact index of 0.0 has relatively no impact to the business, an impact index of 1.0 has a very high impact to the business (where sustaining the line of business may be very difficult). The risk score is categorized by the product of the probability index and the impact index.

(1) A risk with a risk score greater than .35 is considered to be High risk, and requires risk response strategies (identify risk owners, mitigating activities and contingency plans).

(2) A risk with a risk score between . I8 and 3 5 is considered to be a Medium risk and requires a risk mitigation only.

(3) A risk lower than . I 8 is considered to be a I6w risk and requires no response planning.

The grouping of the risk as defined in the risk management checklist. Risk category is very helpful for tracking of types of risk in the organization. A deliverable at the lowest level of the Work Breakdown Structure that is typically between 8 - 80 hrs and can be confidently estimated. A work package cannot logically be subdivided further. Risk occurrence date, that is, the date that the risk event actually happens.

Appropriate comments as needed.

-

Chapter 8: Siandardizing OPM3@ Processes Every Organization Can Implement OPM3@

Mapping Processes

Mapping processes is simply documenting the process steps required for the process. Documented steps give the guidance necessary to successfully negotiate project activities. The key to mapping processes is "freedomn and "formn. PATs must be given the freedom to define processes in a manner encouraging creativity and expression. Yet the processes must also have the necessary form for the Quality Auditing Group and the PMO. Processes must be developed to capture everything an organization has learned over the years. The "nuggets of wisdom" captured can then be implemented into the process without unnecessary "red tapen. The processes should be developed at the right level of understanding for the end user without getting too detailed. Processes should be efficient, helpful, and auditable.

A valuable method for initially mapping processes in an organization is the Value Stream Map. Value Stream Maps are most associated with Lean and Six Sigma. Value streams are process flows that identify every action required to make a product or execute a project from initiation to close. When developing processes, all activities fit into three categories:

1. Those creating value as perceived by the customer

2. Those creating no value but are currently required by proiect or product development

3. Those creatinq no value as perceived by the customer and can be eliminated (called "Muda" or waste)

In order to categorize process steps into one of the above categories, the process must first be standardized. Each activity can then be categorized to determine whether or not it creates value. 0 ~ ~ 3 ~ Best Practices create value. They incorporate decades of project management best practice for successful project planning and execution. Without this wisdom, projects are doomed to repeat the failures of the past. As the old saying goes, "those who do not learn from history are doomed to repeat it!"

An example of this is an organizational inspection process. Inspections may not seem to add value (or make and end product more valuable), but how many organizations are willing to scrap their inspection processes? 0 ~ ~ 3 ~ BPS are time tested and proven activities that help organizations deliver projects and products on time, on budget, and on scope. They all fit into categories one & two.

Quality Engineering Group

Some organizations employ a quality (or process) engineering group. This group is responsible for the overall design and maintenance of organizational processes. It should never be in lieu of, but rather working with, the PATs and CCBs. Many times process engineers have specific skills that PATs and CCBs do not have (e.g. process engineering methodologies, engineering backgrounds, 0 ~ ~ 3 ~ improvement training, facilitation, etc.). Process engineers often have more time available to measure, update, and maintain processes. They also may have a better view of upstream and downstream impacts of processes.

The process engineering group can also be extremely beneficial in the institutionalization of organizational processes. They have more time to tutor process users on how to successfully use processes. Process engineers are most successful when they have a high degree of domain knowledge.

Chapter 8: Standardizing OPMm Processes Every Organization Can Implement OPM3@

Communicating Processes

Prior to rolling out processes, organizations must have a communication medium to notify process users. The last thing processes users want is to be surprised by a slew of new processes when they come to work on Monday morning. As discussed in chapter four, it is essential for all process users to receive training. This training should not be in lecture format, but rather real world scenarios with hands on exercises. This is the best way to assure everyone knows what is expected of them. The following are a number of ways processes can be communicated to the organization:

Formal Traininq Classroom or CBT training where all process users receive compulsory training on processes and process updates

Informal Traininq: Classroom or CBT training where process users partake in optional training on processes and process updates

Pizza Lunches or Brown Baq Lunches: Informal meeting where new processes or process updates are discussed. Process users can bring their lunch or pizza may be provided by the organization.

Newsletters: A periodical highlighting new processes or updates to processes

Of the top 10 reasons for project failure listed in chapter one, "Inadequately trained andlor inexperienced project managersn is number one, with "Inadequate or misused methodsn being number nine, and "Inadequate communication" being number ten. Making sure processes are communicated and understood by the organization is essential for implementation and adoption success.

Processes and Tools

Some organizations purchase or develop tools to take the place of process. When appropriate, tools can be very powerful. Each process in the framework has associated tools (e.g. Project Scheduling software like MS Project, Risk Management Database, Defect Database, Change Request log, Issue Log, and Problem Report Database, Project Estimation Tool, etc.). However, if a tool is used prior to a process being mature it often results in reinforcing a bad process. For instance, if project managers in an organization are not good at putting together a proper project schedule with critical path and critical dependencies identified, MS Project Server will not solve these problems. It will only exacerbate them. Tools function best when they support mature processes.

The use of tools must be discussed upfront in planning process improvement. PATs and process engineers should drive tool selection and the integration of tools with the process. Many organizations allow the tools group to function autonomously or have each group select the tools it needs without organizational oversight. The result of this is many "islands of automationn with no strategy. If the PAT feels a tool purchase is necessary, it should be brought to the process legislature (CCB and PATs). If the CCB approves it, then it should go through the Executive Branch for approval.

Piloting processes

Processes should be piloted before every implementation. Piloting is rolling out a process to a small control group before it is rolled out to entire organization. In every OPM? Process lmplementafion there are unforeseen problems that will catch teams by surprise. Piloting exposes process problems in a controlled setting and gives the team ample time to fix the

Chapter 8: Standardizing OPM3@ Processes Every Organization Can Implement OPM3@

problems. Some organizations resist pilots because of time constraints. But experience dictates that piloting mitigates risks that occur with every implementation. Piloting should be done for every process improvement initiative.

Since the process pilot is in a controlled environment, it does not completely match the real world. Problems are certain to arise in the conversion from the pilot to the final rollout of a new process. Some critical ingredients of a successful pilot of a process include the following:

Training: Pilot teams should be trained on new approaches

Trouble shootinq: Responsibility needs to be assigned. When issues arise, the improvement team needs respond

Measurement: Results need to be documented and tracked

Timeframe for lmplementing 0 ~ ~ 3 ~ Processes

lmplementing all three domains of 0 ~ ~ 3 ~ along with the process governance infrastructure is no small endeavor. A committed organization should generally take about 6 months to implement each domain (developing the processes, piloting the processes, and implementing the processes). Processes are not effective unless they are tailored to the organization's specific needs. The organization must allocate sufficient time for PATs to develop the processes.

Emotional Fortitude

Process users will complain about how "overburdeningn the processes are once they are implemented. Senior Management must have "emotional fortitude" to deal with these complaints. Emotional fortitude is the ability to do what is right in the face of complaints and opposition. Remember, PATs were properly assembled and a "value streamn was created with streamlining in mind. Redundant steps were not added (unless by accident). The organization needs to stand firm and enforce processes even when there is significant "nay saying". The CCB must field all process change requests and filter them appropriately. Without emotional fortitude organizations will experience process entropy.

Things to Beware of when lmplementing Processes

When developing and implementing processes in an organization there are a number of things PATs should beware of:

Prosaic Process: Processes should consist of bullet points (or metrical) tasks people follow under given situations. They should be quick and easy for the user to negotiate and easy for auditors to assess compliance. Beware process prose or free flowing text. It may be good for newspapers, magazines, etc, but it is not good for process. Some organizations pride themselves on how long and detailed their processes are. If process verbiage is not in bullet point format, it will be difficult to quickly negotiate and audit.

Process Ex~losion: Beware of creating processes for processes, or checklists and templates for the checklists and templates they are using. This is also called "process explosionn. This can cause many problems like "sensory overload" where folks do not know where to go to get their respective processes because there are thousands of them available in the process repository.

Chapter 8: Standardizing OPRn3@ Processes Every Organization Can Implement OPM3@

Who is Responsible?: Every process step should have a party responsible for completing the step.

No Visuals: 60 - 70% of people learn better with visual diagrams.

0. No Guidance: Process should have optional guidance built into the process to help process users.

Too Manv Steps: Processes should not have too many steps or they become difficult to negotiate. The rule of thumb is no more than 9 steps and no less than 5.

lnconsistencv Terminolocrv: Make sure all processes use the same terminology. Calling something a process in one place and a procedure in another is confusing.

REFERENCES

(1) "standard." The American ~ e r i t a ~ e @ Dictionary of the English Language, Fourth Edition. Houghton Miffiin Company, 2004. 18 Dec. 2006.

(2) The IDEF Process Modeling Model, Robert P. Hanrahan, Software Technology Support Center, June 1995

(3) The IDEF Process Modeling Model, Robert P. Hanrahan, Software Technology Support Center, June 1995

(4) ClMOSA - European Enterprise Integration Concept, ClMOSA OVERVIEW, Last updated August 21, 2000 by Ted Williams O reserved

(5) "policyn. (n .d.). The American HeritageB Dictionary of the English Language, Fourth Edition. Retrieved February 25,2007

(6) "processn. (n .d .). The American Heritagee3 Dictionary of the English Language, Fourth Edition. Retrieved February 25, 2007, from Dictionary.com website

(7) "templaten. (n.d.). Dictionary.com Unabridged (v 1.1). Retrieved February 25, 2007

(8) "guideline". (n.d.). The American Heritage@ Dictionary of the English Language, Fourth Edition. Retrieved February 25, 2007

(9) "checklist". (n .d.). The American HeritageB Dictionary of the English Language, Fourth Edition. Retrieved February 25,2007

Chapter 9: Measuring OPM3@ Processes Every Organization Can Implement OPM3@

Chapter 9: Measuring 0 ~ ~ 3 ~ Processes

What does it mean to Measure a process?

There is an old management axiom that states, "If you can't measure it, you can't manage itn. The second stage of the improvement process is the "measuren stage. To manage a process it must first be measured. In order to measure a process it must first be standardized across the organization (like discussed in the previous chapter). Measurement is the basis for improving processes in the organization. Most organizations stop at-standardization. They assemble a great team and create great processes. They successfully !mplement the processes in the organization, only to leave the processes unattended and unmeasured.

Without measures there is no way to know the effectiveness of the process. As a wise man once said, "In God we trust, all others must show data!" Process measurement gives organizations the data they need to know if the processes are working (or not). If an organization does not take measurements, every process decision made is subjective. Measurements drive improvements. Knowing what, and where, process issues are gives organizations the information they need to optimize processes.

Organizations not measuring processes are also less likely to have process compliance. The Hawthorne effect(1) says that measurement can drive behavioral change. The simple act of measuring (or paying attention) will change behavior. Like parents who are involved in their children's schooling or athletics. The very fact parents are watching, involved, and interested in their children's activities tends to result in better performance. In this same way, organizations measuring processes tend to have better adoption because users know the organization is serious.

Measuring is the second stage of the OPM~@ improvement cycle. The Quality Auditing Group is responsible for most process measurement in the organization. Notice in the diagram above that measuring alone will not decrease process variation. It is what the company does as a result of measurement that greatly impacts the company.

Standardized

Measured

Controlled

Improved

Characteristics of a Measured Process

A measured O P M ~ @ process in an organization has the following characteristics:

The proass is implemented and standardized in the organization

The process is measured and variation is identified

The process is controlled and variation outside the upper and lower control limits negligible

The process is improved. Variation is decreased along with the upper and lower control limits

Critical Characteristics of the Process Identified: The critical steps and activities of the process have been identified, mapped, and are ready to be audited.

-&LI?~L

&

A

Chapter 9: Measuring OPtvl3@ Processes Every Organization Can Implement OPM38I

e Critical Characteristics of the Process Measured: The critical steps and activities of the process are measured in audits.

r Upstream Measures of the Process Identified: Upstream processes providing input to the process have been identified and are ready to be audited.

Critical ln~uts of the Process Measured: Upstream processes providing input to another process are measured in audits.

Customer Performance Requirements Incorporated into Process Measures: Customer performance requirements are incorporated into the process. The Quality Auditing Group focuses on measures significant to the customer.

What to do with Data?

Data gathered from the measured stage of OPM~@ tells organizations the level of variance in the process. The diagram below shows arrows on a target. The acceptable range being the yellow and red center. Measuring reveals the variation in each shot. Based on measurements, the process can be updated to attempt to bring it under control. The second round of measurement shows a controlled process with far less variation but with shots still not on target. The process is reengineered after it is under control and now all shots are in the targeted range.

Initially measured target Target after initial Target after process measures used to control reengineered

Drocesses

A project management example would be identified Risks for each project. When initially implemented, a Risk Management process may have some projects with 100 risks and some with 0. Once the organization is properly trained and gains experience using the Risk Management process, more consistent results are expected. The process can then be tweaked and improved based on data.

Who Measures Processes?

The Quality Auditing Group is the group primarily concerned with measurement. They are the "police force* of the Executive Branch. They perform process audits to verify they are in compliance. If there is an infraction, the Quality Auditing Group sends the infraction to the PMO for interpretation (generally in the PMO Program and Project Review).

Chapter 9: Measuring OPM3Q Processes Every Organization Can Implement O P M m

It is important to understand that very few BPS in OPM~@, or any formal process, need to be quantitatively managed by the Quality Auditing Group. Most BPS will be qualitatively measured. It would be overwhelming to any organization to quantitatively measure 586 Best Practices. It would require an army of Quality Auditors deployed for every domain.

Audits should be tailored based on the size of the project. A small, low dollar project should have a less rigorous audit than large high dollar projects. Additionally, program audits will be different from project audits. Portfolio audits will be different from program audits.

Artifact Repository

Every project and program team should have a central repository to store and manage all project artifacts. There are great version control software packages out there that support document control. Even a central file server can be effectively used to store all project documents. Whatever the case, Quality Auditors will need access to all of these repositories to verify process compliance.

Attribute Measurement

The Quality Auditing Group has two primary forms of measurement. The most common form of measurement is the 'attribute" (or binary) measurement. Attribute measurements are qualitative (vs. quantitative). They are the most basic form of measurement. This type of measurement asks, "is the process being followed or not, yes or no?" The Quality Auditing Group should verify through audits whether process steps are being complied with. For instance; the following are the first few steps in the Project Integration Management process.

' # '

Step I

Step 2

.. .

. "

~ , - , L fi .Tasks a , - ,+ ;weq,:,&~:%,: ,lL, ,,

Prepare for kickoff meeting(s)

The project manager ensures that the project team is selected.

The project manager: = Requests a Quality Auditing Group representative for the project team. = Ensures that representatives from the cross-functional areas are represented on the

project team. Ensures the project artifacts are under configuration management Ensures the Project lssues Log is developed according to the Project Issues Log Guideline.

Conduct proposal kickoff meeting(s)

The project manager conducts kickoff meeting@) with the project team to: = Initiate a project and the Project Plan (Scope, Time, Cost, Qualify, Communications,

Risk, Procurement, and Configuration Management), the Project lssues Log, the High Level Requirements (Scope Management).

= Obtain agreement regarding high level customer requirements. = Determine the necessity of scheduling follow-up status meetings to track issues, action

items, etc. = Ensures that meeting minutes are documented and any project issues are tracked and

resolved. . . -

Chapter 9: Measuring OPM3B Processes Every Organization Can Implement OPM*

Some attribute measurements for the process above would be as follows:

Project kickoff meeting was conducted (Yes or No)?

Project kickoff meeting had a Quality Auditing Group representative present (Yes or No)?

Project kickoff had cross functional representation (Yes or No)?

Project kickoff meeting agenda and minutes are under configuration management (Yes or No)?

Program Kickoff high level scope statement is available under configuration management (Yes or No)?

Variable Measurement

The second form of measurement is variable (or quantitative) measurement. This measurement asks, "To what degree is the process being foliowed?"(2) This is accomplished through taking

.

routine measurements of data from the process during the project life cycle. The Quality Auditing Group should verify each measurement is being taken. Variable measurements are primarily for triple constraint (schedule, cost, scopelquality) related measures. The following are examples of variable measurements:

Numbers and types of defects found in work product Peer Reviews

Number of production defects Issues

Number of scope changes

Schedule Performance lndex

Cost Performance lndex

Critical Path

Variable measurements signal the need for quality improvement in the organization. For instance, if 85% of defects in project requirements are "Requirements Completeness and Clarityn issues, the organization may decide to bring in outside help to enhance the requirements development and training process.

Quality Auditing Group Checklists

Many organizations break the project life cycle into four main phases; the initiation phase, the planning phase, the management (executinglcontrolling) phase, and the closing phase. Each of these phases should have a checklist enabling the Quality Auditing Group to quickly ascertain process compliance. Quality Auditing Group checklists have a number of checkboxes to make sure the project team has met the minimum requirements of the process. A Quality Auditing Group Initiation Checklist might look similar to the following:

Chapter 9: Measuring OPMm Processes Every Organization Can Implement O P M m

Quality Auditing Group checklists should have two sections. One section is for attribute data and the other for variable data (if there are variable measurements). Both attribute and variable data will have their own control charts (which will be discussed in the next chapter).

1. 2. 3. 4. 5.

Citations

Project Initiation Kickoff meeting conducted with project manager present Quality Auditing Group representative was notified of the project and invited to the meeting. --- Representatives from all affected functional areas were in attendance. Project meeting agenda and minutes were used and are filed in configuration management A project issues'log was created and filed in configuration management

When a group is not in compliance with an attribute or variable process step, a citation is issued by the Quality Auditing Group. The citation lists the non-compliance and asks for a corrective action plan. A citation is simply a reminder that a process step has not been completed. A citation becomes an issue that is brought up in the next PMO ProjectlProgram Management Review. In the review, the PMO ascertains the reasons for the noncompliance. It also determines if there is a process problem or a team execution problem. The team must complete the corrective action form and detail the steps they intend to accomplish to get the project back into compliance. The citation form might look as follows:

, . Citation Template Audit Type: Auditor: Citation Status: Citation Severity: Citation Assigned to:

Audit Date: Process Reference: Citation #: Citation Closed Date: Corrective Action Due Date:

Citation Description: Audit Tym: Initiation: Audit conducted at the conclusion of the initiation phase of a project. Planning: Audit conducted at the conclusion of the planning phase of a project Executing I Controlling: Audit(s) conducted during the executing/controlling phase of a project. Closing: Audit conducted at the time a project is being closed. Auditor: The name of the auditor who observed the citation.

Citation Status: Open: Citation has been written and is not through the process to closure at this time. Escalated: Citation subrniifed to the second person in the escalation chain or above. Closed: Citation has been tracked to closure. -

Audit Date: Date the audit took place

Process Reference: Process with which the project team has not been in compliance

Citation #: Unique number assigned to each citation

Chapter 9: Measuring OPld3Q Processes Every Organization Can Implement OPMW

Groups receiving citations must generate corrective action reports. Citations must be resolved within a predetermined number of days. This whole process is closed loop. The corrective action form might look as follows:

Citation Severitv: Major: A failure to comply with an element of the processes or procedures which has caused or increases significantly the risk to the program. Requires urgent attention. Moderate: A failure to comply with an element of the process or procedures which could increase the risk to the program and could result in a correction to the program at a later date. Minor: Isolated failure to comply with a process or procedure or a requirement which has not caused or increased significantly the risk to the program.

Citation Closed Date: Date with which the citation was closed

How Many Auditors?

Citation Corrective Action Template

Considering most companies already have well established quality assurance departments, they merely need to extend the role of quality to include process compliance. This should add no great cost strain to the organization. A rule of thumb for companies might be as follows:

Citation Assiqned To:

Individual Performing Corrective Action : Audit Type: Auditor: Citation #:

Correct Action Due Date:

Corrective Action Date: Process Reference:

Citation Severity:

Auditing Report

Citation Rescription: Description of the non-compliance or description of how the process is not being followed.

Citation Description:

Corrective Action:

An auditing report should be submitted to the PMO on a regular basis. Teams not in compliance with organizational processes will appear before the PMO Program and Project Reviews. An auditing report might look like the following:

Number of Hours Worked Less than 40 hrs Full Time (40 hrs)

Number of Projects

c 20 projects 20 Projects

Auditors

1 Auditor 1 Auditor

Chapter 9: Measuring OPM3@ Processes Every Organization Can Implement OPM3m

Metrics

Metrics collected by the Quality Auditing Group should align with organizational strategy. Conflicting metrics not aligned to strategy can be detrimental to the organization. For example, suppose a company's goal is "improved customer servicen. The company begins to send out customer service surveys to measure how content customer's are with the service they are getting. At the same time, the call center group introduces productivity metrics for call duration. Reps are rewarded for completing calls quickly. The customer service rep's motivation is now to get the caller off line as fast as possible, even if it means hanging up on the customer!?! The new performance goal js at odds with the overall organizational goal of better customer service! Quality Auditing Group must work with the executive team to verify performance goals do not conflict with the overall strategy of the business.

Metrics Dashboard

Once processes are in place, the organization should be metrics based going forward. A Metrics Dashboard can be a powerful way to highlight the vital few measurements the organization is. focusing on. A Metrics Dashboard is a visible repository and displays the status of all critical quality metrics. Additionally, it does a good job of broadcasting to the organization the status of the process. Good metrics signal the process is working. Bad metrics signal the process does not work. Metrics show the organization's 'constancy of purposen, which is to show that management still supports the processes.

REFERENCES

(1) Hawthorne effect. (2007, February 15). In Wikipedia, The Free Encyclopedia. Retrieved 0557, February 26,2007

(2) Beyond Capability Confusion, 2000 SPC Press, Donald Wheeler

Chapter 9: Measuring OPM3@ Processes Every Organization Can Implement OPMW

Chapter 10: Controlling OPM38 Processes Every Organization Can Implement OPM3@!

Chapter I O: Controlling O P M ~ @ Processes

What does it mean to Control a Process?

There is a common misconception in the project management world that says if project teams get enough projects under their belt, they will begin to deliver "on time", "on scope", and "on budget". While there may be some benefit to "practice makes perfect", teams will not be able to use past performance as a predictor of future performance. In other wards, it is a gamble trying to guess whether or not the next project coming down the pipe will be executed successfully.

The third stage 0 ~ ~ 3 ~ improvement is the "controln stage. Once a process is properly measured it is analyzed to determine if it is "in control". A process is considered "in control" when it stays within process specifications. The process is compared against itself and if its behavior is consistent over time it is said to be in control. A controlled process has predictability; the ability to predict future performance based on past performance of the process. This in turn leads to Project Predictability: the ability to predict the cost, schedule, and defects of a project based on past performance. A process not consistent or predictable is called "out of controlnl

It is essential to bring a process in control before significant improvements can be made. When a process is created; its natural state is unpredictable and out of control. It must be intelligently engineered and managed into a predictable state. A process not in control is not stable and is therefore constantly changing based on a myriad of factors. A process not in control, from a statistical point of view, does not even exist as a viable process. Once it is in control, process performance can be compared against required performance specifications for improvement.

Characteristics of a Controlled Process

A controlled process or process step in an organization has the following characteristics:

Process Performance

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Level

Standardized

Measured

Controlled

Improved

A control plan for the process has been develoeed, is actionable. and defines how it will be controlled. Process documentation exists to lay out the how the process (and the BPS) will be measured and controlled.

Process Characteristics The process is implemented and standardized in the organization

The process is measured and variation is identified

The process is controlled and variation outside the upper and lower control limits negligible

The process is improved. Variation is decreased along with the upper and lower control limits

Control plan for the orocess has been implemented: The Quality Auditing Group has been trained on the control measures of processes. They are accountable for implementing control measures of the process.

Chapter 10: Controlling OPM3@ Processes Every Organization Can Implement OPMm

Achievement of stable results for the Rrocess: The process operates consistently within the upper and lower control limits and process documentation is updated.

Who Controls a Process?

The Quality Auditing Group measures and organizes control data taken from organizational processes. They will create control charts for all critical aspects of the processes. Data collected is then sent to the Legislative Branch for review. If there are processes with exceptional variation, process legislators can determine the root cause and begin investigating improvement opportunities.

Control Limits

A controlled process must have upper and lower control limits. Control limits are considered the acceptable bounds of process variability. Control limits for a process are set by establishing the "meann (average value) and the "standard deviation" (variability of a distribution) of the data. Three standard deviations of data comprise the upper control limits and the lower control limits. The diagram below shows three standard deviations on either side of the mean which are the upper and lower control limits. Control limits are not to be confused with customer specifications which are the tolerances the customer demands.

Standard deviation is a statistic that reveals how tightly the various examples are clustered around the mean. When the examples are tightly bunched together, the bell-shaped curve is steep and the standard deviation is small. When the examples are spread apart and the bell curve is relatively flat, it indicates there is a relatively large standard deviation. An example of this is the same class of 20 students taking the 10 question exam (in chapter eight). If the range of student scores varies greatly, it will have a high standard deviation and a large spread between upper and lower control limits. Standardization is the first stage of process improvement.

Standard Deviation

. . ., - . Standard deviation is the measure of spread of ri the data about the mean value. Some processes have data with a wide standard deviation, or distant from the mean value. Other processes have data with a very narrow standard deviation, or close to the mean value :. ' I . The following two examples have the same mean however the standard deviation is significantly different. The narrower the spread is, the lower the standard deviation.

Data Set 1: 10,10,9,11,9,11,9,11,10,10 Data Set 2: 2,18,14,6,20,0,5,15,10,10 -_

.. . . . . -

Xbar is the symbol for the "mean" of the data. 2 is the Greek symbol used for "the sum of" all the data n is the number of data points o is the Greek symbol used for standard deviation The mean is calculated by taking the 1 "€he sum of all the data points (100) and then dividing the data by n. The mean of both Data Sets is "1 0".

Chapter 10: Controlling OPM* Processes Every Organization Can implement OPM3@

Standard deviation is calculated by subtracting the mean from each of the individual numbers in the data set and squaring the result. Then add up the results and divide by n - 1. Then take the square root of the result. This is the standard deviation. The calculations for each data set are as follows:

. , - * _ - , , .. Data Sit1 + - - , ( I

In a normal distribution of data, one standard deviation from the mean (on both sides) accounts for 68.27% of the entire set. Two standard deviations from the mean account for 95.45% of the set, and three standard deviations account for 99.73%. This is known as the "68-95-99.7 rule", or "the empirical rule".

> . Data Set2 , ,

X (data) X -xbar XA2

Variation

I I 1 1

Confidence intervals for ea,ch sigma '

la = 68.27% 20 = 95.45% 30 = 99.73% 40 = 99.99366575163% 50 = 99.99994266969% 60 = 99.99999980268% (Six Sigma is also known as 3.4 defects per million opportunities)

All processes have inherent variation or variability. Variation is defined as "inconsistencies in a process or the outputs of a process*. Variation is also referred to as noise. Variation occurs when data points in a process exceed the expected upper and lower control limit values.

10 0 0

t of the results Divide by n - 1 Find the Square root Standard Deviation = Upper Control Limits Lower C~ntrol Limits

X (data) X-xbar XA2

;' Bell curve Showing stilndard ' Run chart showing uppet and 'deviaticins

' lower control iimiis '

, , - _

cL---

Ail data that is measured will tend to vary over time. A low amount of variation denotes a high degree of process compliance. A high amount of variation in a process denotes a low degree of process compliance. If a process is not consistently applied across the organization, there will naturally be a high degree of variation between each group using the process.

9 -1 1

6 .67 .82 .82 - 32.46 7.54

6 -4 16

Z of the results Divide by n - 1 Find the Square root Standard Deviation = Upper Control Limits Lower Control Limits

2 -8 64

18 8 64

10 0 0

5 -5 25

410 45.6 6.75 6.75 -1 0.25 30.25

14 4 16

1 1 1 1

9 -1 I

20 10 100

0 -10 100

15 5 25

9 -1 1

10 0 0

1 1 1 1

10 0 0

10 0 0

10 0 0

Chapter 10: Controlling OPM3@ Processes Every Organization Can Implement O P M m

Donald Wheeler's book "Beyond the Capability Confusionn discusses two types of variation(1):

* Routine Variation: (also known as Common Cause Variation) Variation inherent and predictable in a process.

Exceptional Variation: (also known as Special Cause Variation) Variation not inherent in a process and is unpredictable, and intermittent.

An "In-Control" process is one free of Exceptional (or Special Cause) causes of variation. A process displaying predictable variation is consistent over time. Because of this consistency past data can be used as a guide to future performance. Processes "out of controln display unpredictable variation constantly change over time. Because of these changes past data is not a reliable guide to future performance. Therefore the process must be brought into a predictable (or "in controln) state in order to have any effective improvement.

Once again, every process has inherent Variation. The following chart describes what happens when a process is first implemented in an organization. Nascent processes begin life "out of control" or unpredictable. Their data spread (standard deviation) is large. Variation remains the same as the process is measured. The act of exerting control over a process reduces exceptional variation and the data spread decreases. Then, once a process is improved, the data spread decreases further as the process is re-engineered for tighter tolerances.

Standardized Process I Measured Process I Controlled Process I Improved Process I I I

Control Charts

Control charts are used to differentiate routine variation from exceptional variation. The control chart is a statistical tool intended to assess variation in a process. The control chart is one of the seven basic tools of quality control, which include the Histogram, Pareto Chart, Check Sheet, Control Chart, Cause-and-Effect Diagram, Flowchart, and Scatter Diagram.

Control charts work on the premise that three standard deviations (or three sigma) is sufficient to separate routine variation from exceptional variation. Three standard deviations cover 99.75% of all data points. Any data points outside of these parameters are considered 'exceptionaln.

Chart "A" above shows controlled process data points having routine variation. Chart "B" above shows process data points having exceptional variation (in addition to routine variation) and are out of control. Chart 'Bn must be brought into control before significant improvements can be made.

Chart A: Routine or Normal Variation

r

Chart B: Unpredictable variation in addition to-normal variation

*

b

Chapter 10: Controlling OPM3@ Processes Every Organization Can Implement O P M S

Process Capability

After process predictability is achieved, the way to further improve is to increase process Capability. Simply decreasing the upper and lower control limits is not enough to make the process more capable. Once Exceptional variation has been eliminated in a process, the only variance remaining is Routine variation. Trying to "fixn Routine variation is a form of process tampering and will only result in additional Exceptional variation. The only route to improvement once a process is predictable is to "reengineer" the process. Process steps must be significantly changed and possibly technology used in the process. If done correctly this will lower the control limits and give the customer a tighter specification. "A process is 'capable' if the range of product values falls entirely inside specification limitsn - (Donald Wheeler)(2)

Attribute Data and Attribute Control Charts

As was discussed earlier, there are two types of data the Quality Auditing Group uses in the measurement of process data; attribute data and quantitative data. Attribute data is binary data and is considered the lowest level of process data. Very little analysis can be performed on attribute data until it is converted to discrete data by counting the number of Yes(s) and No(s). Once this is accomplished, the attribute data becomes discreet variable data and qualitative analysis can be performed.

There are a number of control charts based on attribute data (percent chart, number of affected units chart, count chart, count-per-unit chart, quality score chart, and demerit chart). The example below shows an attribute percentage chart or (P Chart) for the initiation phase process step of "initiate a project plan with high level requirements signoff.

In the table above sub-group corresponds with month. Size corresponds with the number of users of the process for the stated month. Nonconformity regards the number of times users were not in compliance. Proportion regards the percentage that users were not in compliance.

Month I: 5 project teams initiated projects with 1 being nonconforming to the initiation process step. (.2 proportion) Month 2: t O project teams initiated projects with 2 being nonconforming to the initiation process step. (.2 proportion) Month 3: 15 project t e a m initiated projects with 3 being nonconforming to the initiation process step. ( 2 propation) Month 4: 15 project teams initi- projects with 2 being nonconforming to the initiation process step. (.I 3 proportion) Month 5: 15 project teams initiated projects with 4 being nonconforming to the initiation process step. (.27 proportion)

Pbar is the symbol for the "meann of the Attribute data. The mean is calculated by taking the E of n which is the number of users per month. Then this number is divided by the t of np which is the overall number of non-conformities. The mean of the Attribute data set is "-2".

The upper control limit is determined by dividing the Sqrt of Pbar(1 - Pbar) by the Sqrt of Z of n. This number should be multiplied by 3 and added to Pbar for the final result.

Chapter 10: Controlling OPM3B Processes Every Organization Can Implement OPM38!

The lower control limit is determined by dividing the Sqrt of Pbar(1 - Pbar) by the Sqrt of 1 of n. This number should be multiplied by 3 and subtracted from Pbar for the final result.

The following chart plots the data points for the "initiate a project plan with high level requirements signor process step.

Variable Control charts

Attribute Control Chart :,- >, - *- . J . - 7 - . ' "

UCL = 35 . -- -

Pbar '= .2

LCL = 05

J. A I I I

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Variable data is quantitative. An example of variable data in organizational project management is project teams conducting peer reviews on customer requirements documents. The peer review process has been institutionalized in the organization and all teams are expected to comply.

,>:?$, ;;-?&- A-J ,, : " < - * * " 5' '" ,, . , .-J 3 Description a> -+, %-,t;,

The Attribute Control Chart to the left lists the data points for the initiation process step of "initiate a project plan with high level requirements signoff". The process is in control. Or in other words, exceptional variation is not present in the process. The process can now be compared against specifications to determine its capability.

' r ~

Even though th'e"pi6cess is technically "in controln, as an organization, it is unacceptable for a single project team to not complete a project plan. The next step is to determine what is keeping teams from completing project plans? Training? Breakdown in Process Governance? Lack of knowledge of the process?

>- 2 ;- c * ,: , ".j+- variable CaAft~s ehm: *

--- - ------ - - -7j(--- - ------- ----+

L $a*> -, Descriptioncc q4 - , . -&::- If using the quantitative measurement of "Number of Defects per peer review of Requirements document" most work products are between UCL and LCL. A work product with only 2 defects or over 35 defects is outside the LCL.

Upon analysis, it may be found that the peer V e v i e w s with 35 defects was for an incomplete

document. It also may be found that the team with only 2 defects did not understand the processes.

Chapter 10: Controlling OPMm Processes Every Organization Can Implement OPM3m

Process Tampering:

There are situations where the best business decision is to take no action. Taking action when it is not necessary actually degrades a process. It is referred to as Process Tampering. Examples of process tampering include:

Updatinq Stable Process Based on Latest Data Point: When a process is stable, it means exceptional variation has been eliminated from the process. Some times companies want to "tighten" the control limits without significantly changing the process or the technology used in the process. This is a form of process tampering. The result is actually worse than doing nothing! Overreacting just adds more variation to the process. For example, if variation is high in a process but "in control", simply tightening the upper and lower control limits will only result in more variation. In order for a process to be improved once it is in control, the whole process must be reengineered, not just tweaked.

1 FalsifV Data To Meet Goal (quota1 This is a common problem in organizations. People "pencil whipping" forms and process artifacts to keep the Quality'Auditing Group off their back. This is recognized by obseniing eight data points on one side of the mean. For instance, project teams doing peer reviews may just write "1 0" defects every time regardless of the type of document they are reviewing.

Assume Every Incident is "Special Case": This might be a manager searching for a special cause or quick fix to show the organization they are "on top of" the issue at hand. When &at is actually needed is a fundamental change to the process involved. If there are no trends, there will be no special causes to find.

REFERENCES

(1) Beyond Capability Confusion, 2000 SPC Press, Donald Wheeler

(2) Beyond Capability Confusion, 2000 SPC Press, Donald Wheeler

Chapter 10: Controlling OPMm Processes Every Organization Can Implement OPM3Q

Chapter 1 1: lmproving OPM30 Processes Every Organization Can Implement OPM3@

Chapter I I : lmproving 0 ~ ~ 3 ~ Processes

What does it mean to Improve a Process?

The final stage of O P M ~ @ improvement is the "Improven or "Continuously Improve" stage. Process improvement is often defined as; "a series of actions taken to identify, analyze and improve existing processes within an organization to meet new goals and objectives. These actions often follow a specific methodology or strategy to create successful results."

A process "in control" is a prime candidate for improvement. Many organizations are satisfied to have "in control" processes and decide to not pursue further improvements. This is ok. Others, however, want to move ahead and make processes more capable in pursuit of organizational excellence. lmproving (or reengineering) processes after they are stable increases process capability; "the ability of a product or process to perform its specified purpose in a manner that satisfies established requirements or specificationsn. To do this, the organization must tighten its process specifications. Improvement lies in reengineering the process (or parts of the process) and changing process steps and technology to improve process capability. If done correctly this will result in lower control limits and tighter product specifications.

The improvement stage is the fourth and final stage of the improvement cycle. To improve a process, it must first be standardized. It must then be measured and subsequently "in controln. lmproving processes results in decreased variance and tighter upper and lower control limits.

Characteristics of an Improved Process

Process Performance

- e f c l L

l!!l / i. i ', LA

Stage

Standardized

Measured

Controlled

Improved

An improved process or process step in an organization has the following characteristics:

Process Characteristics The process is implemented and standardized in the organization

The process is measured and variation is identified

The process is controlled and variation outside the upper and lower control limits negligible

The process is improved. Variation is decreased along with the upper and lower control limits

Root causes for problems with the process are documented: The Legislative Branch of process governance evaluates process metncs to determine root cause of process issues. The findings are documented for possible future improvement efforts.

Widespread participation in improvements to the process: Using the Legislative Branch, processes are evaluated and improvement suggestions are made and reviewed by the CCB.

Sustainable process improvement: Data demonstrates sustainability of process changes resulting from widespread participation in improvements. Process changes are engineered by the Legislative Branch and then piloted in the organization. They are

Chapter I 1: Improving OPM3@ Processes Every Orgznization Can Implement OPM3@

enforced by the Executive Branch and interpreted by the Judicial Branch (PMO). The processes are institutionalized and sustainable.

Who Improves Processes in an Organization?

Improvement teams in the form of PAT(s) and the CCB evaluate process issues, using process data, and make recommendations for improvement. They meet on a periodic basis to create new processes and to evaluate existing ones for issues and improvement opportunities. PATs are made up of users of the process. Larger organizations may augment this group with full time process engineers who use their unique skills to help guide process legislators. PAT members represent the areas they work in. The CCB is made up of a cross functional representation of managers. They are the owners of their respective parts of the organization.

Once processes are analyzed and engineered by the PATs, they are submitted to the CCB for review and approval. The CCB will then send the improvement to the Executive Branch for approval. If the Executive Branch approves the processes they are partially rolled out to the organization (or piloted) and the results of the pilot are evaluated. Process legislators must work with training to conduct process training sessions for the organization. Training is absolutely essential if compliance to processes is expected. Process legislators must be well trained in process models and effective at facilitating groups. Ideally they have some level of,domain experience in the improvement area they are assigned. . .

O P M ~ @ Best Practices vs. Lean

0 ~ ~ 3 ~ BPS are tried and true "best" ways for initiating, planning, managing, and closing projects, programs, and portfolios. They should not be looked at in the Lean Engineering sense as "wasten or "mudan. Rather, they are an essential part of the value stream, which is defined as the steps, both value added and non-value added, in a process the customer is willing to pay for.(i) Waste, in a process, is any activity that does not result in a better or more valuable product. O P M ~ @ BPS have been composed to aid, assist, and move the output of a project to a more valuable state. They are essential value added steps to complete a project within the triple constraint. Imagine 'managing a project without a 'Scope Definition Process'. Or go ahead and run a project without ,'Risk Identification'. See what happens. OPM? BPS take multiple sources of disorganized data and organize them into useful information. E Pluribus Unum. From many jumbled sources to one project outcome! 0 ~ ~ 3 ~ BPS are Lean!

1: *

Main types of "wastesn in processes are:($

Overproduction Too much Inventory Steps that Require Waiting Too much Transportation Too much Motion Process (useless steps in a process); Defects

Proactive Legislature

Legislators must constantly scan their constituency to make sure things are tranquil (free from commotion or disruption). Like true legislative representatives, this group should constantly evaluate organizational process issues. If the PATs and CCB wait until the organization is screaming, they may lose the confidence of the people they represent. Legislators need to be on their toes.

Chapter 1 1: Improving OPM- Processes Every Organization Can Implement OPM3@

How are Processes Improved?

The first activity initiated for any process improvement initiative is to capture the "current" state Value Stream. This is the process map, often in flowchart format, that lays out all of the process steps in the current process. Value Stream mapping is a paper and pencil tool that helps the organization see (and understand) the flow of project information as it makes its way through the organization. Value stream mapping is used in Lean. It tends to be at a higher level (5-10 boxes) than many process maps. It is used to identify where to focus future projects, subprojects, and/or kaizen events(3).

After evaluating the current state Value Stream, the OPMY Knowledge foundation standard suggests the next step is to evaluate the following factors(4):

Attainability: Determine which capabilities can be achieved in the organization. It is important to determine which capabilities are attainable because some Best Practices may not be feasible given the current organizational climate.

Strate~ic priority: Determine capabilities aligned with strategic business objectives. There may be capabilities that do not align with the strategic plan of the organization and they should have a lower priority than those that do.

Cost I Benefit: Determine which capabilities are more beneficial to the organization than others. A cost benefit analysis should be conducted for each Best Practice to determine if the cost and benefits of implementation will bring returns to the organization.

The next step is to engineer a "future" state value stream by evaluating which 0 ~ ~ 3 ~ best practices and capabilities will be beneficial to the process. For instance, if there is a problem with project scope changes affecting delivery dates, the scope planning and execution processes should be updated to include OPM~@ BPS for scope change control.

Plan, Do, Check, Act (PDCA)

A recommended approach to the improvement cycle is Plan, Do, Check, Act (PDCA). W. Edwards Deming developed PDCA which describes the basic flow for process improvement in an organization(5). Also known as the Deming Cycle, this model for improving processes consists of four steps for continuous improvement:

Plan: Gather data for process problems in an organization. Identify root causes of problems. Develop possible solutions.

o - Do: Pilot the planned solution.

Check (or study): Measure the results of the pilot to determine if the desired results are achieved.

- Act: Based on the pilot and the analysis of the pilot, update and expand the solution to for institutionalization.

There are many benefits to using the PDCA cycle. It can serve as the problem solving process for the organization. It can also be implemented as the process improvement cycle of the organization. If implemented with a process model like SlPOC or ETVX, it can greatly aid the improvement process.

Chapter 11: Improving OPMm Processes Every Organization Can implement OPM3@

Define, Measure, Analyze, Improve, Control (DMAIC)

Another improvement cycle is one championed by Six Sigma is called DMAIC(6). DMAIC is a cycle of incremental improvement using the Six Sigma methodology. DMAIC is an acronym for five interconnected phases: Define, Measure, Analyze, Improve, and Control. Each step in the continuous DMAIC Process is required to ensure the best possible results. The process steps are as follows:

Define: Define the Customer, their Critical to Quality (CTQ) issues, and the core processes involved. Define who customers are, what their requirements are for products and services. Define the process to be improved by mapping the process flow.

Measure: Measure the performance of the core processes and develop a data collection plan for the process. Collect data from many sources to determine types of defects and metrics.

Analyze: Analyze the process map and data to determine root causes of defects and opportunities for improvement. Identify gaps between current performance and organizational goals and prioritize improvement opportunities.

Improve: Improve the target process by designing creative solutions to fix and prevent problems. Create innovate solutions using technology and discipline. Develop and deploy improvement plan.

Control: Control improvements to keep the process on the new course. Prevent process entropy or "organizational backsliding". Institutionalize the improvements through the modification of systems and structures (staffing, training, incentives).

There are many benefits to using the DMAIC cycle. The cycle can serve as the problem solving process for the organization. It can also be implemented as the process improvement cycle of the organization. If implemented in a process model like SlPOC or ETVX, it can greatly aid the improvement process.

Feedback Loops

As mentioned in chapter five, feedback loops are essential for any complex dynamic system to sustain itself. The PATs and CCB will receive feedback from process users and the organization. They analyze the data to determine if legitimate reasons exist to warrant improvement in areas of the process. Improvement ideas will be grouped, and prioritized, then assigned to PATs for update. The following are primary ways that Process Republics incorporate the feedback loop:

User Community Feedback Forms: The PATs and Improvement Council develop a form for process users to give positive and negative feedback on organizational processes. Feedback forms are then taken before Change Control Boards (CCBs) to evaluate the rationale behind the change request. Many times the user will be brought in to explain their desired changes.

Chapter 1 1: Improving OPM3C3 Processes Every Organization Can Implement OPM-

Reward System (e.q. Penny for Your Thouahts): Some companies reward improvement ideas from process users. The users are given incentives to come up with time and money saving ideas for the organization. The users are then given a percentage of the savings or additional revenue it brings to the organization. If organizations do not reward improvement ideas they are unknowingly developing a culture of non-innovation.

e Proiect Lessons Learned: After every project, a project lessons learned document is completed by the project team. This lists all of the things that went well with the project and the processes and all the things that did not go so well.

PMO Judicial Reviews: PMO reviews can look for trends in process compliance and spot any issues with process that might exist. They can then make recommendations to the Change Control Board.

Quality Auditinq Group: The Quality Auditing Group has the unique ability to make recommendations based on being in the trenches with the process users. Change recommendations are filtered through the Change Control Board.

o Process Action Teams: PATs working on a particular area of the process will make process update recommendations to the Change Control Board.

Process Action Teams

Also mentioned in chapter five, PATs are the primary group responsible for process improvement in an organization. PATs are comprised of volunteer process users from throughout the organization that will work a few hours a week to help improve processes. Larger organizations may augment this group with full time process engineers who can use their expertise to help guide process legislators. PAT members receive approved change requests from the CCB and bundle change requests into small improvement projects. Their primary role is updating processes based on feedback from the CCB.

Change Control Board

Also mentioned in chapter five, the CCB is comprised of volunteer functional managers from throughout the organization who will work a few hours a week to help improve processes in the company. The CCB is the group responsible for managing changes to organizational processes. All process feedback should filter through the CCB. The CCB works with PATs to assess and implement changes. No changes should take place in an organization's processes unless they have been approved by the CCB. Just like all process improvements, they should be reviewed by the Judicial Branch (PMO) and approved by the Executive Branch once they are ready for release to the organization. The CCB receives feedback and filters out all changes not beneficial to the system. This way the system does not oscillate back and forth at the whims of particular users.

The CCB should not be comprised of high level managers or it may lack process user experience and not be effective. The CCB plays a much lesser role in creating processes than the PATs. They are often busy with administration duties like; receiving process change requests from the organization, assessing process change impacts, deciding which changes are worthy of pursuing, giving PATs the approval to change the processes, and approving processes. In medium and large organizations, it may be beneficial to have process engineers assist the CCB in change management and configuration management of organizational processes.

The CCB function is critical to process success in organizations. Systems which include feedback are prone to "hunting" (processes being changed too often due to positive and negative

Chapter 1 1: Improving OPM3Q Processes Every Organization Can Implement OPM3@

feedback). The CCB keeps organizational processes from being updated too often by evaluating the upstream and downstream impacts of proposed process changes.

The CCB must be a place for constructive conflict. A free flow of ideas should be encouraged at CCB meetings and "groupthink" should be avoided. A CCB should not rubber stamp everything, but it should evaluate the rationale of all proposed changes for the good of the organization.

What is an lmproved Process?

An improved process is one having improved control limits. This does not happen by simply narrowing the upper and lower control limits. The process has been reengineered to change a major portion of the process for better process capability. The only route to improvement once a process is predictable is to recreate the process changing process steps and technology used in the process. If done correctly this will decrease the control limits and give the customer a tighter product specification. "A process is 'capable' if the range of product values falls entirely inside specification limitsn - (Donald Wheeler)(srl.

How to Improve an Attribute Data Process

Standardized Process I Measured Process ( Controlled Process

An attribute process is improved by determining root causes for why people are not following the process. There are reasons or triggers causing a process not to be followed. If the identified reasons can be eliminated by improvements to the process (e.g. checklists, commitment steps, peer review), tighter upper and lower control limits will result and process improvement will occur.

lmproved Process

An example of an attribute data process that was diagnosed and improved is a repository for project artifacts. Teams are required to keep all project documentation in a network folder. Auditing revealed that many teams did not keep their folders up to date and properly organized. A tool was purchased based on feedback from auditing to create a standard repository format for all project artifacts. Necessary artifacts were pre-populated in a standard structure to ensure that projects have all the necessary documentation. Many teams went from not filing project artifacts to having a standard automated structure that ensured compliance.

How to Improve a Variable Data Process

A variable process is improved by determining what is causing the degree of routine variation (not exceptional variation) in a process. There are reasons or triggers causing a process not to be followed. If the reasons can be eliminated by good process, tighter upper and lower control limits will result and process improvement will occur.

An example of improving a variable data process is a process to detect defects in project artifacts (prior to release to the customer). Once under control, the peer review process revealed 80% of requirements defects were due to clarity and completeness issues. Advanced requirements training was brought in to the company along with the necessary process changes to support it. As a result, clarity and completeness requirements defects were lowered from 85% to 50%. The overall number of defects was decreased by 25%.

Chapter 1 'I: Improving OPM% Processes Every Orsanization Can implement OPRn30!

REFERENCES

(1) Muda (Japanese term). (2007, February 19). In Wkipedia, The Free Encyclopedia. Retrieved 06:09, February 26, 2007

(2) 7 Wastes Adapted from the ISixSigma online web site, ISixSigma, LLC, http:l/www.lSixSigma. org

(3) Value Stream Mapping. (2007, February 24). In Wikpedia, The Free Encyclopedia. Retrieved 06:05, February 26,2007

(4) Organizational Project Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

(5) PDCA Adapted from the ISixSigma online web site, ISixSigma, LLC, http:llwww. ISixSigma .org

(6) DMAIC. (2007, February 24). in Wikipedia, The Free Encyclopedia. Retrieved 06:15, February 26,2007

(7) Beyond Capability Confusion, 2000 SPC Press, Donald Wheeler

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Chapter 12: Keys to Implementing OPIi43Q Every Organization Can Implement OPM-

Chapter 12: Keys to implementing OPMP 0 ~ ~ 3 ~ SWOT Analysis

Before embarking on an improvement initiative, it is very helpful to conduct a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of the organization's current state. The 'Strengths" of an organization are those traits the organization possesses favorable to process improvement. uWeaknesses" are those traits the organization possesses not favorable to process improvement. "Opportunitiesn are the things that stand to be gained by the organization by embarking on the improvement effort. "Threatsn are the things that the organization stands to lose by embarking on the improvement effort. The following questions are helpful for completing the SWOT analysis:

a Is leadership well versed in Proiect Management? It is essential that organizations have an understanding for the need for project management. They must have an understanding of organizing work into discrete projects and of managing project chan es B and the triple constraint. Without this base understanding, any efforts to push OPM3 will be fruitless.

Is the orqanization rece~tive to process improvement initiatives? The organization must be open to process improvement. Some organizations have cultures steeped in tradition and aversion to change. Senior management is the best catalyst for breaking organizations out of this rut.

Is executive sponsorship established? As mentioned earlier, it is said the 3 keys to process improvement success are; 1. Sponsorship, 2. Sponsorship, 3. Sponsorship! If the organization believes and supports the initiative it will have a great chance of success.

Are dedicated resources available for im~lementation? Even though improvement should be accomplished through virtual teams using cross-functional representation, there must be some dedicated resources in charge of the overall effort.

Is the orqanization open to assistance from full time consultants? Process improvement may require temporarily getting insight from outside the organization. Effective consultants "train the trainern.

Does the organization have conflictina priorities? If the organization is in the midst of other major improvement efforts, it may not be the right time to implement 0 ~ ~ 9 . 0 ~ ~ 3 ~ requires major changes in the way organizations push projects through the pipeline. Other initiatives can distract from commitment, focus, and prioritization.

Is there OPM? knowledqe & tools to implement? Before embarking on an OPMY initiative the organization should have the knowledge and tools to make this happen. This book is a major first step in giving the organization both the knowledge and the tools to implement 0 ~ ~ 9 .

Chapter 12: Keys to implementing OPM33 Every Organization Can Implement OPM3@

SWOT to Baseline the Pain!

Before proceeding with an 0~~3@implementation the organization must baseline the current pain. For instance; what is the organizations current project success rate? What percentage of projects in the organization are delivered late to the customer? What percentage of projects does the organization lose money on? What is the average defect rate for projects?

Establishing pain baselines is a crucial step for establishing a tangible vision for improvement. They help organizations show improvement. When the accountants start asking questions a year after the improvement begins, organizations that cannot show cost savings and improvement will lose funding.

Cost of Poor Quality

Current Strengths

.--

..-

.--

One example of a cost baseline is "cost of poor quality" or COPQ. This is the current cost to the organization in terms of production defects, rework, realized risks, etc. Research has shown the cost of poor quality in service or transactional companies is as high as 50% while only 10-20% in manufacturing. One of the most accurate ways to determine gains from OPMY is by evaluating the costs of rework, inefficiency, unhappy customers, or defects in production. Then estimate the amount that the organization can reduce them. For example, if the organization is measuring production defects, it would determine the average cost of each defect (taking into consideration people, material, and other factors). It then estimates the total savings for an "X" percent defect reduction. The more specifically the numbers are defined, the more accurate they will be.

Eight Principles for Successful Improvement

Current Weakness

..-

..-

. . .

The OPM~@ implementation should be managed like a project using organizational project management best practices. There should be a project charter, scope statement, project plan, risk management register, etc. The principles of project management should be applied.

Additionally, in his groundbreaking work entitled, "Leading Change", John Kotter lays out eight essential principles for facilitating beneficial change and improvement in an organization (7). The principles are as follows:

Current Opportunities ..- ... -. -

Current Threats ... ... ..-

Chapter 12: Keys to Implementing OPM3@ Every Organization Can Implement OPM3@

1. Establish a Strong Sense of Urgency

It is essential that the organization understand the reason for the improvement. The Executive Branch and the PMO must present issues like the following:

Risinq Costs: Rising costs cut into profit margins and operating income.

Competition: Worthy competition cuts into market share. As the competition becomes more productive and more able to compete, it is important that the organization stay in the lead to maintain and grow market share.

Defects: Releasing defects to the customer is extremely damaging to company image and profits.

- Loss of a Maior Contract: Losing a major contract can be a real stimulus for company change.

Lawsuits: Not meeting contractual objectives brings lawsuits which are very detrimental to an organization.

Marketing of Maturity Assessment: It can be a great competitive advantage to use the results of a Maturity Assessment in marketing material. Maturity Assessments can be a great differentiator.

Executive S~onsorship and Commitment: If management is committed to something, the organization will be as well.

Not all of the organization will immediately feel the sense of urgency the executive team feels. It will take time, understanding, and persistence. In organizations undergoing large change efforts, people tend to fall into one of the following categories:

Earlv Adopters: Members of the organization inclined to support change efforts and are "on boardn immediately.

Middle Adopters: Members of the organization who have a "wait and see" attitude initially but buy in as they see commitment to the process improvement initiative.

0 Late Adopters: Members of the organization who are initially against the idea of improvement. Perhaps they have seen too many improvement initiatives come and go through the years without serious commitment and follow through. Once they see there are actual improvements being made, they come on board.

Non-Adooters: Those members of the organization who are against, and remain against, the change. As mentioned before, they may never completely agree with the change, but if the change is conducted in the right manner, they might become part of the "loyal oppositionn.

It should be noted it is not necessarily a bad thing to have people in the organization opposed to improvement efforts. They provide dissenting opinions helpful for avoiding things like 'group think" and "over exuberancen (that can lead to worse problems). Organizations need the "glass is half emptyn people to keep the "glass is half full" people from being too optimistic. An example of this was in the Battle of Gettysburg in the US Civil War. Fresh off a number of overwhelming victories most of General Robert E. Lee's staff overestimated their ability to win on the Battlefield without good terrain. Had they listened to the "glass is half empty" General Longstreet, they might have avoided the great loss at Gettysburg.

Chapter 12: Keys to Implementing OPM3@ Every Organization Can Implement OPM3@

2. Create a Guiding Coalition

The organization's CEO, President, or General Manager does not have time to oversee improvement efforts therefore in order to implement successful improvements and to have the proper sponsorship, OPM~@ encourages the creation of Governing Bodies. Organizational Governing Bodies make up the Executive, Legislative, and Judicial Branches of process governance. They are the guiding coalition that helps drive improvement efforts in the organization.

Naturally any improvement effort should be managed like a project with schedule deadlines, deliverables, cost budgets, etc. The Phase Gate Review Board, with help from the PMO, becomes the perfect team to evaluate improvement proposals and change the course of improvements when necessary.

3. Develop a Vision and a Strategy

"Where there is no vision, the people perishn (Solomon the Great). Where there is no concept of future state and future improvement, folks will have a hard time, if at all, buying in to an improvement program. And where there is no governance to support improvement, process entropy will be calamitous.

Many organizations come up with new improvement campaigns that are ambiguous and difficult to evaluate from a metrics standpoint. These organizations start off with a big "all handsn meeting and hand out trinkets and cookies and then say something to the effect of, "To get involved, please contact your team leaders with your ideas". Where is the vision? Vision needs to come down from the top and be augmented by staff working in the organization. Visions must be tangible and concrete like, "We will implement all OPMY BPS by the end of the year". Or, "We are going to have six sigma quality in our product before 3 years is up". Or, "Our organization is going to be Project and Program certified by the end of the next year".

Another problem with most improvement initiatives is that there is no incentive for folks in the organization to come up with improvement ideas. There may even be some type of punishment. The person with the idea may be selected against their will to work long hours (on top of an already busy schedule). Additionally, many people are reluctant to bring forth ideas because they are shy or unassuming.

The organization must have a system in place to encourage and rewards those who are willing to put in the effort to help the company establish the vision. People must understand the reason for the vision and where they are today in relation to the vision.

When considering a vision for change, the organization must come up with a business case for the improvement. Staffing requirements must be understood by Senior Management so there are no surprises down the road. Questions like, "Should we go it alone, send someone to training, or hire an external consultant to help us with the 0 ~ ~ 3 ~ implementation?" All alternatives should be carefully considered.

4. Communicate the Vision for Change

Once the vision and strategy are created, they must be communicated to the organization. Every member of the organization should know the vision and be able to repeat it. Some effective ways to communicate the change vision and strategy are as follows:

Chapter 12: Keys to Implementing OPM3@ Every Organization Can Implement OPM3@

All Hands Meetinqs: Have a mass meeting to communicate the change vision and show commitment to it. This can be done periodically to trumpet success or to communicate issues keeping the organization from accomplishing the change vision.

Posters: Posters can be created to remind the organization of the change vision and highlight the timeline in place. They can be placed all over the facility in keep the vision fresh on the minds of all those walking by.

Contests: Contests can be set up to reward those who come up with the best "name" or best "theme" for the initiative. Winners can be given special rewards and recognition.

Popcorn Davs: Popcorn days are a cheap and fun way to keep everyone abreast of the improvement effort.

Parkina Spot Award: Those members of the organization going above and beyond the normal call of duty to help with process improvement can be given a temporary special parking spot close to the building. This is especially effective during the winter months!

Newsletters: Monthly or quarterly newsletters can be developed and sent out to everyone in the organization highlighting the effort and the gains.

5. Empower Broad Based Action

Once the organization knows and understand the change vision, senior management must empower the organization to begin implementing the improvement. As mentioned in chapter four, the CCB and PATs will be created and assigned to specific parts of the OPMY Process Framework. The organization must be trained on 0 ~ ~ 3 ~ and also in the different aspects of process improvement (methodologies, tools, theory, etc.)

Once empowered, the organization must also make sure the improvement teams have the tools to make it happen (ETVX process model, Framework Processes, Tricks of the Trade, etc.) Many times an outside consultant is brought in for a short time in order to be the change agent, or "Bad Guyn. This will often divert anger from the PATs and CCB.

6. Generate Short Term Wins

If the objectives of the improvement effort are pushed too far out in the future, the organization will lose confidence in them. For example, when taking the family a long road trip to visit relatives 12 hours away, it is important to break the trip up into a series of milestones. For example, "our next stop is Omaha in 2 hours kids". If parents do not help kids see progress, they will inundate them with the, "are we there yet?" question. Some examples of setting milestones or short term wins to build organizational confidence and show progress are as follows:

o Self Assessment: OPM~@ Self Assessments give a non-official indicator of the state of the organization's project management maturity. The self assessments can then be conducted regularly, prior to more rigorous official assessments.

Certified Assessments: An official OPM~@ Productsuite "Rigorous" assessment may be conducted to show the progress to the organization. The more wins the organization can get, the more confident they will be in future improvement efforts.

Celebrations: For each milestone achieved by the organization, a celebration can be organized to recognize achievements. Executives can give progress reports and

Chapter 12: Keys to Implementing OPM3Q Every Organization Can Implement OPM3@

recognize individuals who have gone above and beyond the call of duty. This is also an opportunity for management to show constancy of purpose regarding the improvement.

7. Consolidate Gains and Produce More Change

Fresh off the success of the last milestones, organizations must continue the effort so they do not lose momentum. Some ideas on how to maintain momentum are as follows:

New Theme for Each Level: Some organizations come up with themes for implementing 0 ~ ~ 3 ~ like, "Creating Corporate Constitution" where US Flag posters are created along with the change vision. Other companies do more contemporary themes like "Survivor" or '2008: A Process Improvement Odyssey". Whatever the theme, it is helpful to an

- organization to close the book on old improvement efforts and move on with the new and creative efforts in the future which build upon the success of old improvements.

Website 1 Newsletter Highliqhting Performance Metrics: When there is success in process improvement efforts, the successes should be made available to the organization by way of websites, newsletters etc. These mediums are effective in showing the organization that improvement efforts of the past were not "exercises in futility", but rather the first in a long line of intended improvements. Making this information available is a great way to leverage wins and promote more beneficial change. A quality dashboard can be an effective tool for promoting organizational improvement. The dashboard can show run charts or Pareto charts listing the status of critical processes.

Hire and Develop Chanqe Aqents: Successes of the past will prQmote future change in the organization and get more people interested in becoming change agents.

8. Anchor the New Approaches into the Culture

New improvements must be anchored into the culture of the organization. If the Executive Branch polices process use, users will be more apt to follow them. If reviews are held to work with teams on why processes are not being adhered to, teams will be more likely to follow the process. The following are critical activities that help anchor process into an organization:

(Process Governance Facilitators)

Work Product Peer Reviews: Peer reviews bring cross functional project teams together to review work products for quality and process compliance. This is a type of self governance that pushes the concept of governance to the user level and helps establish a culture of governance.

B Traininq: All process users must be thoroughly trained on all processes and procedures developed in the organization. People cannot be expected to follow processes they do not understand.

Chapter 12: Keys to Implementing OPM3@ Every Organization Can Implement OPM3@

Individual Performance Reviews: Process users who are process compliant should be rewarded by the organization. Process users who are not process compliant should have some type of recourse. As stated earlier, the most effective organizations use both the carrot and the stick.

Commitment: When process artifacts are completed, they need to be "signed off" and agreed to by all affected groups and individuals.

(Process Governance)

e Le~islative Branch: Process user representation in the form of PATS and the CCB create - organizational processes and prioritize all process updates.

Executive Branch: This Executive Branch Governing Bodies decide which projects are worthy of getting into the pipeline and which projects are in compliance with processes.

Judicial Branch: Teams who are not compliant and have project performance issues attend PMO Project Management Reviews. The PMO uses Quality Auditing Group RedNellowlGreen reports to highlight citations and other project issues.

(Other)

* Process Asset Librarv: Process artifacts must be readily available to all process users. Otherwise they will not be adhered to. The corporate internet is perhaps the best place to put process artifacts.

Process Asset Library (for Processes, Templates, Etc.)

The Process Asset Library (PAL) is a "must" for organizational process improvement. It is the repository for organizational processes. It should be under formal "configuration managementn. Files should be protected from inadvertent change andlor deletion. Process assets should be available to every part of the organization using them. The corporate internet is a great medium for making them available.

The CCB and PAT Governing Bodies of the Legislative Branch are responsible for overseeing the PAL. They make sure processes are available to the organization. The PAL contains all process elements (e.g. policies, processes, procedures, templates, guidelines, and checklists). It will also contain Operational Definitions such as, "What is a project in our organization?" Or, 'What is a program in our organization?" It will also contain a glossary for all key organizational project management terms.

Communities of Practice

Establishing communities of practice for the Project, Program, and Portfolio managers can be extremely beneficial to the organization. These serve to facilitate communication between different parts of the organization and to hasten idea transfer. Good ideas from all over the organization can be shared and related. Internal BPS can be established across functional areas to augment 0 ~ ~ 3 ~ BPS.

Chapter 12: Keys to Implementing OPM3@ Every Organization Can Implement OPM3@

Model Tailoring

Tailoring is absolutely critical for processes to be successful in a company. Every organization is unique and has its own nuances. OPM~@ processes are flexible and must be tailored to each organization's specific needs. Small projects should not have the same rigor as medium or large projects.

Timeline for 0 ~ ~ 3 ~ Implementations

Organizations should expect to take three to six months when implementing and tailoring one of the 0 ~ ~ 3 ~ domain frameworks. For example, it will typically take three to six months to implement the project domain. This, of course, depends on a number of factors like:

Are there dedicated resources for the improvement?

How experienced is the organization in process improvement?

Have process governance and the process governance facilitators been implemented?

Normal Implementation Scenario

The following is a recommended OPIW~@ improvement implementation scenario:

PHASE 1 - Conduct 0 ~ ~ 3 ~ Hiqh Level Self Assessment: Conduct an O P M ~ @ High Level Self Assessment and establish an assessment report.

. PHASE 2 - Conduct OPM? Comprehensive Self Assessment: Perform an OPM~@ Comprehensive Self Assessment on BPS identified in the 0 ~ ~ 3 ~ High Level Self Assessment. This may take five days, depending on how many areas are examined. Add two days to create a report.

PHASE 3 - Develop Improvement Plan: The scope of the improvement plan depends on how many improvements are needed according to the Comprehensive Assessment, which domain and stage, and other constraints.

PHASE 4 - lmplement Improvements: Implement improvements based on the improvement plan created in the previous phase. The organization" may chose to "go-it- alonen or secure consulting support from outside.

PHASE 5 - Conduct OPM? ProductSuite Riqorous Assessment: Once improvements have been implemented in the organization, a thorough ProductSuite assessment of the maturity of the organization is recommended. The ProductSuite "rigorousn assessment is analogous to the CMMI SCAMPI "A" assessment for CMMI. This assessment is conducted by an 0~~3@Cert i f ied Assessor. This person will interview a cross functional representation of the organization to verify the organization's relative organizational project management maturity.

PHASE 6 - GO BACK TO STEP 1 OR STEP 3!

Chapter 12: Keys to Implementing OPM38 Every Organization Can Implement OPM3@

Staged Approach to OPM~@ Implementation

0 ~ ~ 3 ~ can be implemented in either a continuous or staged manner. The staged approach differs from the continuous one in that the organization chooses a recommended implementation path rather than its own unique path. This might include implementing all the processes in the OPM~@ process framework. Keep in mind that OPMY is not prescriptive. If a particular process or BP does not fit, the organization can document the incompatibility and move on to the next BP. Many companies prefer to pursue a staged implementation strategy because of ease of implementation. The staged approach offers companies tried and true path for incremental organizational project management maturity.

A staged approach might consist of an organization implementing a particular domain's processes prior to another domain. The following is the recommended order of implementation for the OPM~@ Framework Processes.

Portfolio Governance Catworv Processes: Process governance Governing Bodies are essential to process improvement. Organizations should implement the Governing Bodies first and then pursue further process improvement. Governing Bodies ensure project performance and process sustainability.

Proiect Manaqement Category Processes: After process governance is established, it is advised that the Project Management Process Category of processes be implemented first. Programs consist of projects. If projects are not well defined and well structured, it will be virtually impossible to manage them in a coordinated way.

Proiect Technical Categorv Processes: Once the Project Management Processes have been implemented, it is important to have a product development life cycle in place.

Proqram Governance Cateqorv Processes: It is extremely important to make process governance a part of organizational culture as soon as possible. lmplementing Program Governance processes instills process compliance into the fabric of the organization.

Proqram Management Cate~ory Processes: Once projects are properly defined they can be managed in a coordinated way using program management processes.

Portfolio Management Cateqorv Processes: The last category of processes to be implemented are the portfolio management processes. lmplementing these last processes after successfully implementing the previous ones will help the organization perform like a world class project management organization.

Continuous Approach to OPM~@ Implementation

The continuous approach differs from the staged implementation in that the organization chooses its own implementation path for improvement. Since 0~Ad3@ is not prescriptive, a particular best practice can be excluded if it does not seem compatible with the organization. The organization simply documents the incompatibility and moves on to the next BP. Many companies prefer to pursue a continuous implementation strategy for more flexibility in tailoring processes to organizations.

What About Both?

It may make sense to use a little bit of both implementation strategies! Depending on what level of maturity the organization aspires to, it may decide to start out with the staged approach, and move into the continuous approach as the organization gets more comfortable with process

Chapter 1 2 Keys to Implementing OPM3@ Every Organization Can Implement OPM3@

improvement. The staged approach could be used to implement the Project Domain BPS and then a continuous approach could be used to implement the Program and Portfolio management domains.

Implementation Mistakes Many Organizations Make

There are a number of mistakes organizations make when implementing 0 ~ ~ 3 ~ . The following are a number of them:

e Heavv Handed Implementations: Process users must be involved and supportive of processes or processes will not be successful. A heavy handed approach could alienate process users and inhibit organizational process institutionalizafion.

Assuminq clearly defined process = good process: Just because processes are clearly defined does not necessarily mean they are "well" defined. Processes must encapsulate 0 ~ ~ 3 ~ best practices in order to provide benefit to the organization. Processes not effectively encapsulating best practices are not necessarily good.

Accountinq System not set up to evaluate impact of improvement activities: If the accounting system is not integrated with the project management system to track planned costs against actual costs the true cost of improvement cannot be tracked.

No baseline data prior to the improvement effort: It is important to quantify the problems that the organization experienced prior to improvements. If this data is not captured, it will be virtually impossible to assess the return on investment (ROI) of the improvement effort. Without a baseline, target goals of the improvement effort cannot be evaluated.

No plan to work with other "quality" initiatives in the orqanization: In today's organizational environment, it is not uncommon to find multiple improvement efforts going on at one time. With its focus on Organizational Project Management, it is a perfect fit to augment other improvement initiatives not so project focused.

Not initiallv aliqninq the improvement effort with orqanizational obiectives: When the improvement effort is not aligned to organization objectives, it will not fare well in the long run. It will become de-prioritized and marginalized as other efforts that align better take precedence.

REFERENCES

(1) "Leading Change" Harvard Business School Press; 1st edition (January 15, 1996)

SECTION IV (Assessing the Organization)

Chapter 13: OPMm Self Assessment Every Organization Can Implement OPM3@

Chapter 13: O P M ~ @ Self Assessment

O P M ~ @ Cycle

OPMY was designed around a cycle of assessment and improvement. The steps of the O P M ~ @ Cycle are as follows(7):

Step 1: Prepare for Assessment: The organization is trained and understands organizational project management within the constructs of 0 ~ ~ 3 ~ . The organization understands the O P M ~ @ model and the contents of the model. The organization becomes familiar with directories (e.g. best practice, capabiliiies, improvement planning) to grasp the nature and scope of organizational project management*.

Step 2: Perform Assessment: The organization conducts an O P M ~ @ Self Assessment. Once improvements have been made and the organization feels ready for an official assessment, a Productsuite Rigorous or Desk assessment will be conducted to officially confirm improvements (discussed in the next chapter). The results will be reviewed and the organization will determine which Best Practices it demonstrates.

Step 3: Plan for Improvement: The results of the first !wo assessment steps will provide a basis for the improvement plan. The organization ranks capabilities according to their priority. The organization develops a specific plan to achieve the outcomes associated with each capability.

Step 4: Implement Improvement: The organization implements an improvement plan over time. The organization executes development activities to attain the needed capabilities. Any changes the organization makes should be considered projects.

r Step 5: Repeat the process: Having completed the improvement activity, the organization reassesses where it is at on the 0 ~ ~ 3 ~ continuum. The organization may then address other best practices identified in the initial assessments by repeating these steps.

0 ~ ~ 3 ~ High Level Self Assessment

Once an organization has completed Step one of the OPMP cycle, they are ready to perform an initial assessment. 0 ~ ~ 3 ~ has provided a free tool for organizations to get a quick understanding of their perceived maturity. This tool is called the 0 ~ ~ 3 ~ Self Assessment. The OPM~@ Self Assessment is comprised of two parts: The High Level Assessment, and the Comprehensive Assessment. The High Level Assessment is a self administered survey that organizations can take to evaluate their perceived maturity. The Comprehensive Assessment takes the results of the High Level Assessment and does a more thorough analysis. Both are self administered methods and both are free.

People familiar with CMMl SCAMPI Assessments often confuse the OPM~@ Self Assessment with an A, B, or C level of SCAMPI assessment. The High Level Self Assessment is not intended to provide a true assessment of organizational project management maturity. Rather, it is intended to be a perception of an organizations project management maturity. The High Level Self Assessment consists of a 151 question yes / no survey. All of the approximately 600 0 ~ ~ 3 ~ BPS are attached in small clusters to each of the 151 questions. There are between one and eleven BPS per question with each BP being only attached to one question. Answering "yesn to any of the 151 questions tells the organization the participant feels the organization has implemented the BPS behind the question. If participant marks question 17 of the High Level Self

Chapter 13: OPM3@ Self Assessment Every Organization Can Implement OPM3@

Assessment as a "Yesn, the individual feels the organization has a standard process in the project domain for project planning and feels the associated BPS have been implemented.

Paper and Pencil Self Assessment

Organizations who wish to use the High Level Self ~isessment have two methods for administering it. The first method is the paper and pencil technique using the OPM~@ Knowledge Foundation. This involves having all participants take the survey using the questionnaire in the 0 ~ ~ 3 ~ Knowledge Foundation and then collecting the results into some type of repository like a spreadsheet or MS Access database.

Online Self Assessment

The second method is the 0 ~ ~ 3 ~ Online tool provided by PMI. The site is located at htt~:IIOPM30nline.~mi.orq/. This tool allows multiple users to enter their responses simultaneously into the website. The assessment must be set up and administered by an Assessment Leader who then prints out a report giving all the results. This tool can be accessed online from PMI. Users can purchase a Single-User Version or Multiple-User Version (for up to 15 users). The advantages of the O P M ~ @ Online Self Assessment tool are as follows:

Multi-User System: Allows multiple users to enter data simultaneously into the system.

Re~orting 0 ~ ~ 3 ~ Online has a number of canned reports allowing organizations to see the different breakouts of the data.

Data Repository: Data is stored on the 0 ~ ~ 3 ~ Online site and subsequent Self Assessments can be compared to previous Self Assessments.

When licenses are purchased, users have access to the O P M ~ @ Online site which includes the following:

Access to the O P M ~ @ User Comm unity

Access to the Schedule of upcoming O P M ~ @ Events

Access to the online Version of the OPM? Knowledge Foundation

Access to the online O P M ~ @ Self Assessment

Access to the online OPM~@ Improvement Directory

The weakness of the online tool is that it will not aggregate Self Assessment results. It will not look across all the Self Assessment participants and report on aggregate results. It will only report on individual results.

Chapter 13: OPIM3@ Self Assessment Every Organization Can Implement OPM3m

0 ~ ~ 3 ~ Online High Level Self Assessment Tool

When users are ready to begin the O P M ~ Online Self Assessment they may "log in" at the followina screen:

Orgsnizationsl Project Management Msfurify Model ( ~ ~ 3 9

- SNOVLCLEUCE

Organizmional Project Management, i r s marurify, rclrvanc Best Practicer, and how ro use O N 3

' ASCES5MEt\lT

Methods Tor eYiUuaang Best Pramicts and Capabilmes, Learn more abour OPM3

; I?,lPFOVEMEMT

Sequence for developing CapabilLies aggreganng ro Besr

Once logged in the following screen appears providing access to virtually all 0 ~ ~ 3 ~ information. Users can review the 0 ~ ~ 3 ~ Knowledge Foundation or begin a new assessment. They can complete partially completed assessments from the past or review reports on completed assessments.

.I Welcome to 0m3@

#CEO Do.wnk&the OW3@ K.vwM~Lay.r.&em~

NWb Download t h e CZPIIS3o Y ~ L ( ? & ~ P Four&tm 2006 &rat+

Reamns fortha L\Ddar~

Beqm a New A%ressmen$

cllrk a date below ro complete an As~ssessrnehr in Progress saved dn rhar dare

Click a dare below to view Reports for a cornplered Assessmem -t 46 lilcnvmber 2006- terxtan 3

Chapter 13: OPMm Self Assessment Every Organization Can Implement OPM3@

When beginning - - a - new assessment, the user sees the following screen:

?,pr..,;.,' -,.., ,pi:#: : ..,ril.n,nr?! : *- lp:J '+ ,"^TJ,. ' .-.. .. . - , , , d , , ; ,..>.,. f c::,Jt:~?.>!,r. .! .... ,*. ~..>3*5?.rla*:,!..

Create Seif'Aksessment

A 3 s e ~ ~ ~ e n t Name PZ ~ o r n ~ a n y Assessment 1

After entering the assessment name, the user begins entering responses to the 151 "Yes 1 Non assessment questions. Users can also enter comments for each question regarding rationale for their answers.

Responses 0 Yes, 0 No, of 151 Questions f& Download Assessmenr

1 Are tf~e sponsor and orher srakehotders involved in setting a difection far the project that is In the besr. Interests of dl stakeholders7

Comments

d - >

- . 2 Does ydur organization consider nsk dunng project selectlor?? ., , .

2 , - - = Comments: I <

d I C . . . * $ ;*

ik4 3 ,are your organization's goals and objectives cammuniw~ed to and

understood by the project teams?

Chapter 13: O P M m Self Assessment Every Organization Can Implement OPM3@

Once users complete the 151 question High Level Self Assessment they are given the option whether or not they would like the assessment to be included in anonymous benchmarking. Users are also given the option of whether the data is valid production data orjust test J training data.

OPW3 SclF- Assessment. - -- - Response% 1 0 1 Yes, 5 0 No. of 153 Questions Do5wnlowI nssessmeat

I5 1 Does your organtzarion idemdy, assess, and hnplemenr. improvemems aI %he Portfdlio kvei for the Closlng Processes IComracr Closeour, P.drn~nisrratrve Ciosurer;

OPMP High Level Self Assessment Reports

The OPMY High Level Self Assessment Tool provides a number of reports giving different views of response data. The Assessment Report shows how participants answered each question:

[XYZ Company Asessinent -- (43a

1 Are the sponsor and axher stakeholders invDIved m setting a direction for Yes the project that is in the be% interests of all stakeholders? Cornmeats:

2 Dbes y 6 u i ' ~ ~ k k o n consider nsk during projecr selection7 Yes 'Eainmllis: - ,

m

Chapter 13: O P M S Self Assessment Every Organization Can Implement OPPvl364

The OPM? Continuum Report shows the percentage of BPS that the participant perceives the organization to have implemented.

Reports

Report: User. As5:sesmen ts:

The PPP (BPS per Project, Program, and Porffalb Domains) Report shows the percentage of BPS that have been implemented per domain as perceived by the participant

View Reyam: iJsea Ar;sessmet~ts:

~ P P P .- - f ~ = ~ - p a " ~ ~ , 5 5 = ? ~ ! n t ~ @ ) s

Chapter 13: OPMm Self Assessment Every Organization Can Implement OPM3@

The SMCi (BPS per Standardize, Measure, Control, and Improved Stages) Report shows the percentage of Best Practices that have been implemented per stage as perceived by the

, - ?- , * - , . - . -?- -- --- ---? - -. *- .- .- horitc, I; about +6&rniiniry - k o w d o d s f st# b

The PPPfSMCl Report shows the percentage of Best Practices that have been achieved for each Stage and Domain as perceived by the user.

V i e u R e p o r t : Vsel : ASS95511eI.f S:

1 PPP/SIVICI 1- ~ X Y Z Company Assessment (4) A

Project Program Pomfollo

S M C I S M C I S M

76% 100% 88% 56% 33% 56% 88% 62% 8096 27%

I : hojecr Sfandardize. 79% Roj ecr Measure' 100% Roject Conrrol: 88% Roject Improve: 56%

Rogram Srandardize: 33% Rogram Measure: 5696 Program Control. 88% Rogram Improve: 62%

Porrfolfo Standardize 80% P~rrfolio Measura- 27% Porrfol~o Comrol. 62% Porrfolto Improve 54%

' a ~ ! + ~ e ~ d $sag p e a sls!l uayll1 .uo!lez!ue6~0 aq+ U! paluauraldur! uaaq ahey slaa~luedp!ued ayl s a ~ e ~ d s a g 40 Jaqunu, am s ~ o q s uodaa Sa3!peJd $sag a q l

-Jam ayl Aq pan!a3lad se u!europ pue aDElS y3ea 104 pa~a!q3e uaaq aheq ley1 saqpe~d ]sag 40 a6elua3~ad aql s ~ o q s ~ o d a y dddjlgws a q l

Chapter 13: OPM363 Self Assessment Every Organization Can Implement OPM3@

The Improvement Path Report shows the Capabilities that need to be implemented per Best Practice in order to satisfy the requirements for each OPM~@ Best Practice.

I Reports -- ---- -- -.

i view R e y o l t : Vser: Assttssmenf s:

]lrnpmvsment P a t h H 1-a IX ' IL Cornpeny Assessment (4)

The organtzarton has polrnea dascrib~ng the smndard~zation, measurement, eomrol, and CDMIRUOUS improvewm of organizwtonaf project management pracesser. I I

Measurement Policies are documented and communicated to all nakeholders. KPI Wane Dururnenttlr! ivleasurrrnerrt rc%lic~es

(34) The results of the OPM? Self Assessment can be downloaded from the OPM? Online site in the form of a PDF file. For organizations with multiple users performing tfw self assessment, a PDF can be downloaded listing all of the participant's results.

OPM3 Self Assessment Survey

I 1 A;c zhc sponsor a;.@ aihrr statthotdtr: m.cok+d an ztrirnp a d ~ r ~ f i c n far &t prajea rhai 1s in rF*c in:c~e= af aN rmkekddcrs? I

3 .arc your wpan~zarioa's W s am! &iCtSbctr- mmnii*LBWd -a and ~lndwstood by the prwect I

Chapter 13: OPMm Self Assessment Every Organization Can Implement OPM3@

Aggregation of Results

To conduct a truly meaningful assessment of the organization, there must be a cross functional representation. If projects touch the marketing department, there should be participants from Marketing. If projects touch operations, operations representatives should be present. The weakness of the 0 ~ ~ 3 ~ Online Assessment is it will not aggregate the results of the assessment. For instance, the organization might find it valuable to know how each of the departments scored on the assessment. They might want to look at the responses of Project Managers vs. the responses of Program Managers. They might want to look at how each individual answered compared to their peers.

Perhaps the most important overall aggregation is, "what % of responses constitutes a 'yes' or a 'no'?" For instance, if there are 10 participants performing the assessment, how many of the 10 need to respond 'yes' for an aggregated yes answer? Some organizations may wish to look for unanimous results (1 00%). Other organizations may set the bar at 75%. Others may decide anything 50% and above is a 'yes' answer. These different levels of aggregation are not available through the OPM~@ Online tool. 1

2 ' ' *

Aggregation Tool . - A.

Even though 0 ~ ~ 3 @ o n l i n e does not have an aggregation tool, one can easily be developed using MS Access, MS Excel, or some other tool. Additionally, the CD in the back of this book provides a tool that can be used to aggregate 0 ~ ~ 3 ~ Assessment Data. The assessment leader will conduct the OPM~@ Self Assessment by using the 0 ~ ~ 3 ~ Online Tool or by paper. The results will be entered into the Self Assessment Aggregation Tool. The assessment leader should track the following information:

o Different Roles of Assessment Participants (e.g. project manager, program ' manager, etc.)

o Projects worked on by participants o Programs worked on by participants o Portfolios worked on by participants o Functional areas of participants o User's Responses

. For total aggregated Best Practices, there will be 3 main business rules for aggregation

o 100% (unanimous) 0 75% o 50%

Reports can be generated to display the following information (business rules not used for the following)

o Best Practices per person o Best Practices per program o Best Practices per role o Best Practices per portfolio o Best Practices per project o Best Practices per functional area

Chapter 13: OPMS@ Self Assessment Every Organization Can Implement OPM3RY

Data from the aggregation tool can be used to generate the Best Practices per lndividual chart. This chart listed the number of BPS that each participant felt was implemented in the organization.

Best Practices per Individual

600

500 cn a,

400 U

300 Q. Y g 200 m

100

0

Individuals

Data from the aggregation tool can be used to generate the Best Practices per Role chart. This chart aggregates the roles of all participants. It then displays the number of BPS that each role felt was implemented in the organization.

Best Practices by Role

P rd FM PE s PRI

Data from the aggregation tool can be used to generate the BPS per Functional Area chart. This chart aggregates the roles of all participants. It then displays the number of BPS that each role felt has been implemented in the organization.

Best Practices by Functional Area 1

MIS. 0 Operations, U

Chapter 13: OPMm Self Assessment Every Organization Can Implement OPM3@

The following chart is the result of setting aggregation rules (e.g. 50%, 75%, and 100%). Data from the aggregation tool generates the Best Practices per Domain / Stage chart. This chart is used to determine target Best Practices for the O P M ~ @ Comprehensive Self Assessment.

Dangers to the OPM3@ i-@h Level Self Assessment

There are a number of things to beware of when conducting an O P M ~ @ Self Assessment. They are as follows:

Not Providinq Sufficient Training: Training on PMI terminology is essential for assessments to get reasonable results. If everyone in the group has different definitions for what projects and programs are, results will not be reliable.

Attributinq Responses to Participants: Participants must not feel like the information they provide can be used against them. There must be non-attribution when the assessment is being conducted. Otherwise they will clam up.

Organization Thinkinq 0 ~ ~ 3 ~ Self Assessment Results are "Official": As mentioned previously, 0 ~ ~ 3 ~ Self Assessment results are a perception of how participants see the organization. It is not validated by data. The Comprehensive Self Assessment is validated by data, but because it is subjective, it is not official. The only official OPMY assessments are the Productsuite Rigorous and Desk assessments.

Recommended Steps for Conducting a High Level Assessment

There are a number of important activities that should be conducted in order to administer a successful O P M ~ @ Assessment. These steps are as follows:

Select Assessment Leader: The assessment leader is the most critical position to acquire in order to have a successful OPM? High Level Self Assessment. A qualified candidate should be selected to administer the Assessment. This person should be a Certified Project Management Professional and have some experience conducting assessments. The assessment Leader should also be able to deliver a quick training course on the O P M ~ High Level SeJfAssessment and terms.

! ,

Chapter 13: O P M S Self Assessment Every Organization Can Implement O P M m

Select the Assessment Team: Participants should be selected from a cross functional representation of the organization. Any group affected by projects in the organization (e.g. Operations, Accounting, Marketing, MIS, etc.) should have representation on the assessment team.

Educate Assessment Team: Participants on the O P M ~ High Level Self Assessment should have a high degree of familiarity with the OPM3 Standard and PMI Terms. They should understand all 0 ~ ~ 3 ~ terms like Domains, Stages, Best Practices, Capabilities, Outcomes, etc.

-e Administer Hiah Level Assessment: After participants are trained, the Assessment Leader should administer the assessment. Participants should be able to conduct the assessment at their desks or all together in a training room or something. The administrator should be available to answer any questions participants have regarding the assessment.

Aaqreqate Assessment Results: Data from assessments should be .entered into the 0 ~ ~ 3 ~ High Level Self Assessment Aggregation tool for reporting purposes. Based on reports the tool offers, a Powerpoint presentation can be assembled to show the organization how it rates in each aspect of the assessment.

Deliver 0 ~ ~ 3 ~ Hiqh Level Self Assessment Final Findinas Remrt: The results of the O P M ~ High Level Self Assessment should be delivered to the assessment team. It should also be delivered to senior management in order to show the perceived level of organizational project management maturity in the organization.

O P M ~ @ High Level Self Assessment Process

The following is a recommended OPM~@ High Level Self Assessment process with steps.

' > , - OP&~$, S,elf Assessment Method Process

Methodology: SlPOC I Version: 0.01 Outputs List of Best Practices that have been implemented

Process - Process Description: Conduct 0 ~ ~ 3 ~ high level self assessment and comprehensive self assessment

Suppliefs Outside consultant

Internal consultant

Customers Organization being assessed

Program Standard

Portfolio Standard

Inputs - - - PMI O P M ~ Knowledge Foundation

PMBOK

1. R e v i e w the QPM3 Standard

I Assessment

2. ~bnd&ct the OpM3 High - Levei A%aessment (QAG will provide input)

Chapter 13: OPM3@ Self Assessment Every Organizztion Can Implement OPM3@

Chapter 13: OPM3@ Self Assessment Every Organization Can Implement OPM3m

elements and artifacts to confirm or reject the results of the OPM? High Level Self Assessment. The comprehensive assessment is most valuable when it is conducted just prior to a Certified ProductSuite Assessment because it gives the organization a truer picture of organization project management maturity.

The key activity required when conducting an 0 ~ ~ 3 ~ Comprehensive Assessment is verifying the existence of capabilities, outcomes, and KPls of Best Practices. This is accomplished by examining project work products (e.g. requirements documents, project plans, etc.) and process artifacts (e.g. templates, checklists, processes, etc.).

Dangers to the OPM~@ Comprehensive Self Assessment

There are a number of things to beware of when conducting an 0~~3@Comprehensive Self Assessment. They are as follows:

Not Providinq Sufficient Traininq: Training on PMI terminology is essential for the assessment to get reasonable results. If everyone in the group has a different definition for what a project and a program are, results will not be reliable.

Attributing Responses to Participants: There must be non-attribution when the assessment is being conducted. Participants must not feel like the information they provide can be used against them. Otherwise they will clam up.

Orqanization thinkinq OPM? Comprehensive Self Assessment Results are "Official": Even though O P M ~ Comprehensive Self Assessment results are corroborated, the assessment results are still unofficial. The organization must conduct an OPMY ProductSuite Rigorous or Desk Assessment to get official results.

Participants Feelinq Like they are Being Audited: If participants feel like they are being audited they may only respond with answers that will not get them in trouble.

Recommended Steps to Conducting an 0 ~ ~ 3 ~ Comprehensive Self Assessment

There are a number of important activities that should be conducted in order to administer a successful 0 ~ ~ 3 ~ Comprehensive Self Assessment. These steps are as follows:

Select Assessment Leader: A qualified candidate should be selected to administer the 0 ~ ~ 3 " Comprehensive assessment. This person should be a Certified Project Management Professional and have some experience conducting assessments. The Assessment Leader should also be able to assemble a quick course on the OPM~@ Comprehensive Assessment. PMI glossary definitions should also be familiar to participants. The assessment leader selected for the OPM~@ High Level Self Assessment is generally the best person for this position.

Select Assessment Team: This team should be a subset of the original High Level self assessment team. Like the original team, participants should be selected from a cross functional representation of the organization. Any group affected by projects in the organization (e.g. Operations, Accounting, Marketing, MIS, etc.) should have representation on the assessment team.

Educate Assessment Team: Participants on the OPM~@ Comprehensive Assessment team should have a high degree of familiarity with the OPM3 Standard and PMI Terms.

Chapter 13: OPMS Self Assessment Every Organization Can Implement OPM3@

They should understand all O P M ~ @ terms like Domains, Stages, Best Practices, Capabilities, Outcomes, etc.

Select Proiect, Proqram, and Portfolio teams with Cross Functional Representation to be Assessed: A number of teams across the organization should be invited to attend assessment sessions. Each team should bring all process artifacts being used for organizational project management or at least provide access to their artifact repositories.

Administer Comprehensive Assessment: The Assessment Leader administers the 0 ~ ~ 3 ~ Comprehensive Self Assessment. All artifacts are reviewed against the Caps of the BPS identified in the 0 ~ ~ 3 ~ High Level Self Assessment to determine if they are implemented in the organization.

Agqregate Assessment Results: Data from the assessment should be entered into the O P M ~ Comprehensive Self Assessment "Red I Yellow / Greenn Report. This report shows to what degree each of the BPS has been implemented. Each constituent capability of a BP will be scored Red, Yellow, or Green based on whether or not process artifacts confirm the existence of the Cap.

o Red: The Cap has not been implemented o Yellow: The Cap has been partially implemented o Green: The Cap has been fully implemented

Deliver OPMY Comprehensive Self Assessment Final Findinqs Report: The results of the 0 ~ ~ 3 ~ High Level Self Assessment should be delivered to the assessment team and to senior management to show the perceived level of organizational project management maturity in the organization.

What to Look for when Conducting an OPMP Comprehensive Self Assessment

When conducting an 0 ~ ~ 3 ~ Comprehensive Self Assessment, assessors should look for a few key items that will corroborate O P M ~ @ High Level Self Assessment Results. The following items are what separate good process from poor process:

Process Elements: The organization should have policies in place to support process implementations. Processes and Sub-Processes should be readily available based on the boundaries set in the policies. Templates and supporting Guidelines should be available to support the processes. Checklists should be available to assist with process negotiation.

Process Models: Formal process models (e.g. ETVX, IDEF, SIPOC) should be used for mature process implementations.

D 0 ~ ~ 3 ~ Process Framework: A contiguous framework of processes should be available that encapsulate Best Practices with constituent Capabilities, Outcomes, and KPls.

Process Governance Facilitators: Organizations should have organizational facilitators in place to support process governance. This includes a training program, a peer review process, commitment process, and an individual performance review process tied to process compliance.

Process Governance Executive Branch: Some group in the organization should be established to provide executive sponsorship and approval for all processes and projects in the organization (Phase Gate Review Board). There should be some form of Quality

Chapter 13: OPM38 Self Assessment Every Organization Can Implement OPM3@

Auditing Group set up to audit process adherence. Senior management should enforce process adherence.

Process Governance Leqislative Branch: Some group in the organization should be established to create and implement processes. It should have Governing Bodies for the creation of processes and the administering process changes.

Process Governance Judicial Branch: Some group in the organization should be established to oversee process implementation and adherence. They receive reports from the Quality Auditing Group and evaluate process and project performance.

Red I Yellow I Green Report

The 'Red I Yellow I Green Report" is a great way to present overall final findings of the O P M ~ @ Comprehensive Self Assessment. If process artifacts to confirm the existence of a Cap, the Cap is scored "Greenn. If process artifacts only partially confirm the existence of a Cap, the Cap is scored "Yellow". If no process artifacts confirm the existence of a Cap, the Cap is scored "Redn. On questionable calls, it is up to the Comprehensive Assessment Team to determine what score each Cap gets. The only time a BP gets a Green score is if all of the constituent Caps are confirmed implemented. The Yellow score is when some of the Caps are confirmed and some are not. A Red score is given when no constituent Caps are confirmed.

Chapter 13: OPMm Self Assessment Every Organization Can Implement OPMW

0 ~ ~ 3 ~ Comprehensive Self Assessment Process

4 Step 1

m The assessment team lead works with the organization that is to be assessed to determine the projects to be reviewed for the 0 ~ ~ 3 ~ Comprehensive Self Assessment.

The assessment team lead conducts an overview training session to introduce participants to the OPM~@ model and the O P M ~ @ Comprehensive Self Assessment.

m The assessment team lead selects participants to be a part of the 0 ~ ~ 3 ~ Comprehensive Self Assessment review panel. - . , .

m The assessment team reviews the O P M ~ @ Knowledge Foundation prior to conducting the Assessment.

Guidance It is recommended that a formal training session be administered to the teams being assessed to assure knowledge and understanding of the model. It is recommended that the O P M ~ @ Comprehensive Self Assessment be treated like a project with all project documentation.

Chapter 13: OPMB Self Assessment Every Organization Can Implement O P M m

REFERENCES

3

(1) Organizational Project Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

m The assessment team lead schedules facilities for the assessment.

The assessment team lead with the Comprehensive Self Assessment review board administers the OPM? Comprehensive Self Assessment to participating teams and is available for answering questions. Process artifacts for each project are reviewed by participants of the Comprehensive Self Assessment review board.

The assessment team lead compiles the results of the OPM? Comprehensive Self Assessment using feedback from the Comprehensive Self Assessment review board.

Interpret Results

The assessment team lead and Comprehensive Self Assessment review board compiles the results of the OPMY Comprehensive Assessment and creates a presentation based on the findings.

The assessment team lead and Comprehensive Self Assessment review board presents the results to project team participants and then the organization's management team.

Guidance It is recommended that the Comprehensive Self Assessment results presentation be in the form of a Power Point presentation or other using graphs and charts showing results.

(2-15) Reproduced from the OPM3@ online web site, Project Management Institute, Inc. http://opm3online.prni.org

Chapter 13: OPU3C3 Setf Assessment Every Organization Can Implement OPM3m

Chapter 14: O P M S ProductSuite Every Organization Can Implement OPM3@

Chapter I& 0 ~ ~ 3 ~ Productsuite ProductSuite

OPM? ProductSuite is a comprehensive toolset designed to help organizations implement the O P M ~ Standard. The toolset helps users apply the standard globally and consistently. Prior to ProductSuite organizations had access to the 0 ~ ~ 3 ~ Standard but there was no guidance for organizations to consistently administer Assessments and Implementations. 0 ~ ~ 3 ~ ProductSuite is comprised of 3 primary things:

Tools: The ProductSuite Assessment tool provides certified 0 ~ ~ 3 ~ A s s e s s o r s with a useful tool to rigorously assess an organization's project management maturity. The Assessment tool provides a quick and flexible user interface to capture assessment data. The Assessment tool can be used in any type of organization, regardless of industry, size, or maturity. The ProductSuite Improvement tool allows 0 ~ ~ 3 ~ Certified Improvement Consultants to evaluate an organization's current project management practices to identify opportunities for improvement. The output of the tool is an actionable improvement plan. This book helps users implement that plan.

Training: ProductSuite offers two courses of training. The first training is the 0 ~ ~ 3 ~ Certified Assessor's course. This course is offered to train qualified candidates to be Certified OPM~@ Assessors. The second training offered is the OPM? Certified Consultant's course. This course is offered to train qualified candidates to be certified 0 ~ ~ 3 ~ Consultants.

Services: ProductSuite lists OPM~@ certified Assessors and Consultants in an online registry. This gives organizations wishing to implement OPM? a list of rospective P service providers. The registry is globally accessible through the OPM3 ProductSuite site. It enables interested parties to search for certified assessors and consultants based on name, region, or industry affiliation criteria. A list of all certified 0 ~ ~ 3 ~ Assessors and Consultants is available online at (www.OPM3productsuite.com/registry).

In order to develop ProductSuite, PMI contracted Oslo, Norway Based Det Norske Veritas (DNV) to assist in the development of ProductSuite. DNV is known world wide as a trusted provider of certification services and process improvement. PMl's global leadership in project management standard development coupled with DNV's 100+ years of experience in certification and process improvement has made ProductSuite a powerful tool for business improvement.

Why do Organizations Want a Rigorous Assessment?

There are many reasons why organizations want to be formally assessed. They all tend to fall into two categories:

Intrinsic: Organizations are self motivated to improve their processes to increase performance. All organizations must have some level of intrinsic motivation in order to have sustained improvement. The most successful organizations develop a culture of improvement and reward individual contributions.

Extrinsic: Equally significant is the extrinsic Category of improvement which regards outside forces that drive an organization toward process improvement. Examples of these include market pressure, competition, changes in technology, etc. Many organizations use certification levels or credentials on marketing material. Certifications can be a powerful differentiator between companies competing for the same contracts.

Chapter 14: OPM3@ ProductSuite Every Organization Can Implement OPM3@

ProductSuite Rigorous and Desk assessments are more comprehensive and objective than a Comprehensive Self Assessment. ProductSuite assessments are administered by OPM~@ Certified Assessors who meet stringent qualification standards. If an organization is motivated intrinsically it will receive a formal assessment and recommendation for internal improvement. If an organization is motivated extrinsically it will do the same for external goals. Whether doing it for intrinsic, or extrinsic reasons, the OP& Rigorous Assessment can be very beneficial to the organization.

ProductSuite Certification

0 ~ ~ 3 ~ ProductSuite has a certification program for prospective Assessors and Consultants. Certified 0~~3@Assessors assess organizations and recommend paths for improvement. Certified 0 ~ ~ 3 ~ Consultants help organizstions implement paths of improvement. The ProductSuite Certification progra; ensures that OPM? Certified Assessors and Consultants are adept at all aspects of the OPM3 methodology and the ProductSuite Toolset. All candidates interested in becoming ProductSuite Assessors and or Consultants must go through a rigorous screening process. Qualified candidates are trained by industry experts on various Assessment Techniques, the ProductSuite Toolset, and Best Practices for implementing the OPM? Model, etc.

0 ~ ~ 3 ~ ProductSuite training and tools are valid for any industry regardless of size and complexity. Any organization managing work via projects can benefit from the OPM~@ ProductSuite toolset. In ProductSuite Assessor training, candidates are trained on the Best Practices for gauging an organization's maturity against the OPM~@ Maturity Continuum. They learn the terminology, the standard, the methodology, and the toolset necessary to take organizations the next level of maturity. 0 ~ ~ 3 ~ ProductSuite participants desiring to be Assessors will be trained on all aspects of the model including conducting Rigorous and Desk assessments of organizations. The definitions of the assessments are as follows:

Rigorous Assessment: A thorough assessment of applicable functions including interviewing personnel, verifying documents and checking records of evidence prior to awarding credit. The ProductSuite Rigorous assessment is analogous to the SCAMPI "A" assessment for CMMI@. This assessment is conducted by 0 ~ ~ 3 ~ C e r t i f i e d Assessors who interview a cross functional representation of the organization.

Desk Assessment: A thorough assessment of applicable functions including interviewing the process owner, verifying documents, and checking records of evidence prior to awarding credit. This ProductSuite Desk assessment is conducted by an 0 ~ ~ 3 ~ Certified Assessor interviewing the process owners of the organization.

In OPM~@ ProductSuite Consultant's training, candidates are trained on Best Practices for creating organizational improvement plans. They are then trained to use the plans to help guide the organization to implementation success. They understand the terminology, the standard, the methodology, and the toolset necessary to take organizations to the next level of maturity. Participants need not take the Consultant training if they want to become an Assessor; however Assessor training is a prerequisite to the Consultant training and certification.

OPMP ProductSuite training teaches candidate consultants to align the project, program, and portfolio domains to the strategic and tactical goals of the organization. It is also flexible enough to not prescribe a single path for organizations to implement. They are able to implement the parts of the model having the greatest ROI and making the most sense for the organization.

Chapter 14: OPM3B ProductSuite Every Organization Can Implement OPM3CY

OPMP ProductSuite Online

Once 0~~3@Assessors and Consultants have gone throu h training and have acquired the certification credential, they are given access to the OPM ProductSuite Online site ~http://OPM3productsuite.dnv.com).

P

Once logged in to the site, there are immediately four options available for the user.

Assessment Tool: This tool assists certified assessors in performing assessments on organizations.

Or~anizations: This option allows certified assessors and consultants to set up organizational profiles on the system for the Assessment and lmprovement Tools.

User Profile: This option allows certified assessors and consultants to update their own organizational profiles on the system for the Assessment and lmprovement Tools.

User Administration: This option allows certified assessors and consultants to add and configure new users on the system for the Assessment and Improvement Tools.

Chapter 14: OPM3@ ProduciSuite Every Organization Can Implement OPM3@

Home

Once into the 0~~3@Assessment Tool, new assessments can be added to the system.

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Chapter 14: OPM- ProductSuite Every Organization Can Implement OPM34

Once assessment information has been added to the system they must be "scoped". Scoping an assessment is determining its extent. Assessments can be scoped by domains and stages, or by business results. Business Results are defined as, "a series of BPS that have been identified as a relevant subset of the BP pool that can be used to address specific business results or organizational pain pointsn(4). Assessments not scoped by domain, can be scoped by a specific business result.

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Chapter 14: OPM3Q Productsuite Every Organization Can Implement OPM3@

This next screen lists the number of Best Practices, Capabilities, and Outcomes affected by scope of the assessment.

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Chapter 14: O P M S Productsuite Every Organization Can Implement O P M m

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Additionally, the assessment must be "made available for checkout". When the assessor is ready to input the results of the Assessment into the tool, a screen will be available to do so.

After this, "Launch Smartclient" must be selected to bring up the Smartclient Assessment Input tool. The Assessment must then be checked out by pressing the check out selection.

Chapter 14: OPbA3@ Productsuite Every Organization Can Implement OPM3@

Once the file is checked out the following screen will display.

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The assessment can then be opened up and responses to all assessment questions can be entered in the tool.

Chapter 14: OPM30 Productsuite Every Organization Can Implement OPMW

When all assessment questions are complete, the assessment should be saved and checked back in to the system. Once the assessment is checked back into the system, results of the assessment can be reviewed.

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After users review results, they can "Order a Final Report" which will email a summary of the assessment results to their desks. The 0 ~ ~ 3 ~ ~ r o d u c t ~ u i t e ~ Assessment Report is mailed to the OPMP productsuite@ Assessor. The report provides statistics regarding the organization's level of project management maturity.

OPLVD'~ Productsuite Assessment Report

Chapter 14: OPM33 ProductSuite Every Organization Can Implement OPM3@

What to look for when Conducting a ProductSuite Rigorous or Desk Assessment

When conducting an 0 ~ ~ 3 ~ ProductSuite Rigorous or Desk Assessment, it is essential to be able to differentiate between good processes and poor processes? The following things need to be looked for:

Process Elements: The organization should have policies in place to support process implementations. Processes and Sub-Processes should be readily available based on the boundaries set in the policies. Templates and supporting Guidelines should be available to support the processes. Checklists should be available to assist with process negotiation.

Process Models: Formal process models (e.g. ETVX, IDEF, SIPOC) should be used for mature process implementations.

0 ~ ~ 3 ~ Process Framework: A contiguous framework of processes should be available that encapsulate Best Practices with constituent Capabilities, Outcomes, and KPls.

Process Governance Facilitators: Organizations should have organizational facilitators in place to support process governance. This includes a training program, a peer review process, commitment process, and an individual performance review process tied to process compliance.

Process Governance Executive Branch: Some group in the organization should be established to provide executive sponsorship and approval for all processes and projects in the organization (Phase Gate Review Board). There should be some form of Quality Auditing Group set up to audit process adherence. Senior management should enforce process adherence.

Process Governance Leqislative Branch: Some group in the organization should be established to create and implement processes. It should have Governing Bodies for the creation of processes and the administering process changes.

Process Governance Judicial Branch: Some group in the organization should be established to oversee process implementation and adherence. They receive reports from the Quality Auditing Group and evaluate process and project performance.

Assessing the Organization

There must be non-attribution when the assessment is being conducted. The assessment participant must not feel like the information they provide can be used against them. Otherwise they will clam up. Organizational leadership should not be present in the meeting with assessment participants. Responses could be used against them, or be perceived to be used against them. Assessment participants may only answer in such a way to not get themselves in trouble. Assessments must have trust or they will not give the information. There is a difference between an audit and an assessment.

REFERENCES

(4) O P M ~ @ ~roduct~uite@~ssessment Training Guide, 2006 Project Management Institute, Inc.

(1-3, 5-17) Reproduced from the OPM3@ online web site, Project Management Institute, Inc. http:llopm3productsuite.dnv.com

Chapter 15: Where to Go From Here? Every Organization Can Implement OPM3@

Chapter lk Where to Go From Here? External Consultant

For the external consultants that want to implement OPM? in organizations, the following steps should be taken:

Purchase the 0 ~ ~ 3 ~ Knowledge Foundation and become acquainted with it

Attend the DNV Certified Assessors course and the DNV Certified Consultants course

Use the tools in this book and other process improvement books to assess and implement the model in organizations

1 Develop presentations showcasing your talent

Offer 0PM3@training sessions to the communities you serve

Make It Happen!

Internal Consultant

For individuals in organizations that want to implement OPM? internally, the following steps should be taken:

Have the organization purchase the 0 ~ ~ 3 ~ Knowledge Foundation and become acquainted with it

Baseline the current project management problems the organization is experiencing

Develop a presentation highlighting the problems and 0 ~ ~ 3 ~ ' s features to resolve them

1 Have a representative(s) attend the DNV Certified Assessors course and the DNV Certified Consultants course

Use the tools in this book and other process improvement books to assess and implement 0 ~ ~ 3 ~ in the organization

Develop presentations showcasing how the organization was able to improve

1 Use the improvement data to convince the organization to approve more change

Make It Happen!

Chapter 15: Where to Go From Here? Every Organization Can Implement OPM3@

SECTION V (Appendices)

Appendix A Every Organization Can Implement OPMW

Appendix A - Project Risk Management Process Project Risk Management Process Elements

The following Project Risk Management Pro~e~ss is provided to show how BPS are embedded in a process model to effectively implement OPM3 . The Project Risk Management Process includes all process elements necessary to support the following BPS (1 120, 1170, 1180, 1190, 1200, 1370,1610,181 0,1860,1870,1880,1890,2060,2200,2350,2400,2410,2420,2430,2600, 2470,2790,2800,2810,2990)

Project Risk Management Policy

To ensure:

Policy

Approvers Signatures

A thorough understanding by all project team members of the requirements of the Project Risk Management Process. All project team members are accountable and expected to comply with the process as it applies to their applicable roles on the project team

Oversight by the Quality Auditing Group and functional managers to ensure compliance to the Project Risk Management Process by applicable staff members.

In order to meet these goals, XYZ organization will implement and adhere to the Project Risk Management Process. Any deviations to the Project Risk Management Process Oversight and Compliance policy within XYZ organization must be documented in the Project Plan and approved by the PMO.

General Manager and Staff Company XYZ

Director of Quality Company XYZ

Vice President, Program Management Company XYZ

Appendix A Every Organization Can Implement OPM3@

Project Risk Management Sub-Process

The Project Risk Management Sub-Process has a title sheet and then the process steps. This process is typically called out by the Project Integration Management Process.

Purpose The purpose of the Project Risk Management Sub-Process is to identify, document, and manage project risks.

I

Usage Project managers will use this process to: 1 D Determine and document risks during initiation and planning. For this usage, this

process is called from: Process XXXX: Initiate and Plan the Project Plan

m Update risks during planning or managing. For this usage, this process is called from:

Process XXXX: Manage the Project Plan

Outputs

Inputs

Definitions

Following are the inputs to the

Risk Assessment Checklist

If a previously completed project or next version: D Risks from most recent year or version

. - - - - - - - -. - - - -. - The following list describes the outputs of the Project Risk Management Sub-Processf-

D Risk Assessment Worksheet m Assessed and prioritized risks, documented in the Project Plan

Contingency: An action or set of actions that will be taken in the event that a risk is realized.

Mitigation: An action or set of actions that is taken to reduce the probability that a risk will occur.

Risk: A calculated possibility of suffering loss.

Risk Impact: A measure of the degree of loss that would result if a given risk were realized.

Risk Probability: A measure of the likelihood that a given risk will be realized.

Risk Score: Overall risk rating for a risk (Risk probability x Risk Impact).

Appendix A Every Organization Can Implement OPMm

The project team, with input from affected groups and individuals, identifies and documents all risks that apply to the project, using the Risk Assessment Checklist and the Risk Assessment Worksheet. This activity must take place in a meeting.

The project manager, on the RiskAssessment Worksheet, must list the names of all indiiiduais invited to attend this meeting and the names of all individuals who did attend. Involvement in performing this process step is required as follows: -

All identified members of the project team must be invited to participate. It is strongly recommended that all idenuied members of the project team be present in order for this meeting to take place.

R If a risk is related to or affects a group or individual, the group or individual must be invited to participate. It is recommended that these groupslindividuals be present in order for this meeting to take place.

The Risk Assessment Checklist and Risk Assessment Worksheet are used as follows:

All items on the Risk Assessment Checklist must be considered. A project's identified risks may also include risks that are not listed on the Risk Assessment Checklist. Each identified project risk must be documented in the Risk Description Table portion of the Risk Assessment Worksheet. The fields of the Risk Description Table are completed as follows:

Risk # Risk Description Risk Probability

Risk impact

Current Risk Score Original Risk Score Checklist Item #

Risk Realized (Date)

- the sequential number by which the risk will always be identified - a brief description of the identified risk - the percentage of likelihood that the risk will occur. Both current

and original probability are listed - the percentage effect on the project if the risk occurs. Both

current and original are listed. - most recent overall amount of risk to the project

- the initial amount of risk to the project

- the number with which this risk is labeled on the Risk Assessment Checklist

- the date on which a risk becomes realized (not used when first performing this process, only used for subsequent updates)

Guidance It is strongly recommended that risks be initially documented on a flip chart or a marker board for all participants to view. It is recommended that the Risk Assessment Checklist and the Risk Assessment Worksheet be distributed to all project team members at least one week prior to this meeting. This meeting may be incorporated into a regularly scheduled project team meeting. It is recommended that the project team designate a facilitator and a recorder for this meeting.

Appendix A Every Organization Can Implement OPMW

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~ n ~ l y z e "sks for probability and impact

w The project team analyzes all risks to determine their probability and impact. The project team must strive for consensus in the Risk Description portion of the Risk Assessment Worksheet. If consensus can not be reached, then the lack of consensus must be documented in the Project Issues Log and escalated accordingly.

w The probability and impact are used to determine a risk rating of High, Medium, or Low.

For each risk, m Determine and record probabilitv on the risk matrix:

= Typical Probability Values (.I, .3, .5, -7, .9)

For each risk, w Determine and record impact on the risk matrix (i.e., What is the consequence or loss if

the risk occurs? For example, schedule, cost, and leqal impacts.): = Typjcal Impact Values (-1, .3, .5, .7, .9)

Prioritize and Map Risks

w The project manager prioritizes risks based on risk score. Risk score is calculated by multiplying the risk probability by the risk impact. All risks will be listed in the Risk Assessment Worksheet and prioritized based on risk score.

= For each risk that is deemed a "high" risk on the risk impact table, a mitigation and contingency strategy will be developed.

= For each risk that is deemed a "high" risk on the risk impact table, a triggering event (or triggers) will be identified.

Resolve Risks

w The project manager develops mitigafions and contingencies for each risk that is identified as High in the Risk Description portion of the Risk Assessment Worksheet.

= Each mitigation must document any actions that have been taken or will be taken to reduce the probability that the risk will occur andlor lessen the impact if the identified High risk is realized.

= Each contingency must include an explanation of the contingency actions that will be taken if the identified risk triggering event occurs.

w Risk mitigations and contingency strategies will require additions to the project schedule, however they should not affect the project baseline. Scheduled contingency activities must be clearly identified in the schedule so that they are easily distinguished from the initially scheduled activities.

Appendix A Every Organization Can Implement O P M m

I 5 I Monitor Risks I At a minimum, the project manager will conduct risk planning meeting once a month. The project manager will update the project plan to reflect monthly changes to risks and additions I deletions of risks

I At a minimum, the following information must be updated monthly:

Risk Description section of the Risk Assessment Worksheet ..- Mitigations and Contingencies for all risks that are identified as High-in the Risk Description portion from the Risk Assessment Worksheet. This constitutes a commitment to carry out the planned mitigation activities. It also constitutes a commitment to carrying out the planned contingency activities if a triggering risk event occurs. Project P /an ~ o n t h l ~ ' ~ r o j e c t Status Report

The completed Risk Assessment Checklist(s) and the Risk Assessment Worksheet(s) must be retained and stored in the project's Central File.

Project Risk Assessment Checklist

This checklist is typically called out by the Project Risk Management Sub-Process.

Appendix A Every Organization Can Implement OPM3@

Project Risk Management Worksheet Template

The following Risk Management Worksheet Template lists each project risk and its related information:

1 Attendees I I

Appendix A Every Organization Can Implement OPM3@

The following tables document the Mitigation and Contingency Plans for all of the applicable High risks:

Appendix A Every Organization Can Implement OPM3@

Project Risk Management Worksheet Guideline

The following Project Risk Management Worksheet Guideline has been developed to help process users complete the Project Risk Management Worksheet Template.

Risk Description r Risk #

Mitigation

This is the sequential number or computer generated number of the risk.

This is a textual description of the Risk. A risk statement should always start off with, "The risk is that ... because ...". The description should also highlight what condition the risk is expected to result in (should be quantitative if possible and affect one of the triple constraints; Cost, Quality, Schedule).

The Actions taken to reduce probability of risk or actions taken to lessen impact of risk. Reducing the probability and/or impact of a risk to below an acceptable threshold. A risk mitigation statement starts off with, "The risk is mitigated by ... in order to ...". The mitigation should include the activity that will be performed in order reduce the likelihood of the risk occurring. What condition the risk mitigation is

Contingency

I occurs, has a negative effect on the program. Probability I The probability index is the measure of the likelihood that a given risk will occur. A

expected to result in. Alternative strategy used to ensure project success if specified risk event triggers occur. Actions taken in the event a risk trigger is realized so project objectives may still be met. A risk contingency statement starts off with, "The contingency for the risk is ... in order to ..." It should specify what condition the contingency is expected

Trigger

Score t-

to result in given project cost, quality, and schedule objectives. An indication that a risk is about to occur. A risk symptom or warning sign, that if

risk's probability of occurrence falls between 0.0 (no probability) and 1.0 (has occurred). Using the Risk Probability Table, the probability index is determined. The Impact Index is a value that relates the relative net affect on the business. An

I impact index of 0.0 has relatively no impact to the business, an impact index of 1.0

Work Package r l ~ i s k Realized

has a very high impact to the business (where sustaining the line of business may be very difficult). The risk score is categorized by the product of the probability index and the impact index.

A risk with a risk score greater than .35 is considered to be High risk, and requires risk response strategies (identify risk owners, mitigating activities and contingency plans). A risk with a risk score between -18 and -35 is considered to be a Medium risk and requires a risk mitigation only. A risk lower than .I8 is considered to be a low risk and requires no response planning.

The grouping of the risk as defined in the risk management checklist. Risk category is very helpful for tracking of types of risk in the organization. A deliverable at the lowest level of the WBS that is typically between 8 - 80 hrs and can be confidently estimated. A work package cannot logically be subdivided further. Risk occurrence date, that is, the date that the risk event actually happens.

Date Additional Comments

Appropriate comments as needed.

Appendix A Every Organization Can Implement OPM3@

Project Risk Management Plan Template

In many cases the Project Rjsk Management Plan will be part of the overall Project Plan, however for larger projects this plan may be pulled out into a separate plan for better management of project risks. This template is annotated. That is, guidelines for filling it out are built into the template therefore a separate Guideline is not needed.

. .

Prepared by:

Date (MMIDDmw):

Risk Management Planning: - What are the inputs to the risk planning process (example: historical database, commercial database, WBS)?

What date is the initial risk planning meeting scheduled? - Have the recurring risk management meetings been scheduled?

Risk Identification: - Where will the risks be stored?

= Qualitative and Quantitative Risk Analysis: = What are the risk probabilities, impacts, and risk scores?

= What are the priorities?

= Risk Response Planning: = Are risk mitigations and contingencies devebped for all relevant risks? = Has the schedule been updated?

= Risk Wlonitoring and Control: = How often will risk planning meetings be conducted?

Where will the risk planning meeting minutes be stored? = Are relevant risks being kept in the risk repository? - Is the risk identification checklist being updated?

Appendix A Every Organization Can Implement OPM3@

Risk Score is defined as Impact Scare x Probability and is shown in the following chart. Priority is based on Risk Score.

Impact Score .I -3 -5 .7 -9

-1 .01 .03 .05 -07 .09

.3 -03 .09 .I5 .# .m Probability -5 -05 .I5 .@ .m

-7 -07 a -m .a -9 -09 a .m .m -m

Green = Low Risk = Medium Risk

High Risk

$>

u The Project Team develops a full response plan for each d as risk.

The Project Team should create a response plan for any risk item where they deem it necessary.

No action is required for Low risk items.

Appendix B Every Organization Can Implement OPN13CU

APrrendix B - Best Practice Breakout

Appendix B Every Organization Can Implement OPM3@

Every Or~anization Can Implement O P M M Appendix C

Appendix C - Glossary of Terms

Attribute Measurement Qualitative measurements that are the most basic form of measurement.

Best Practice* An optimal way currently recognized by industry to achieve a stated goal or objective.

Capability* A specific competency that must exist in an organization jn order for it to execute project management processes and deliver project management services and products

Checklist A list of items or tasks for comparison, verification, or other checking purposes. A list of items to be noted, checked, or remembered

Citation A reminder that a process step has not been completed

Control Chart A statistical tool intended to assess variation in a process

Control Limit Acceptable bounds of process variability (typically 3 sigma)

Executive Branch Branch of process governance that has the power to enforce organizational processes

Framework A structure for institutionalizing process improvement in organizations and increasing project and process management capabilities

Governance Creating Governing Bodies to govern processes and systems that have been implemented in an organization

Governance Facilitators Functions that need to be in place for process governance to be effective in organizations

Governing Bodies Governing Bodies approve, oversee, and execute organizational process improvement. They provide the governance necessary to sustain project management in the organization

Guideline Document to help process users fill out templates. Serves as a standard way of completing process templates.

Judicial Branch Branch of process governance that has the power to interpret processes and apply corrective action when processes are not followed

Key Performance A criterion by which an organization can determine, quantitatively IndicatoP or qualitatively, whether the outcome associated with the

capability exists or the degree to which it exists.

Legislative Branch Branch of process governance that has the power to create and update processes

Maturity The state or quality of being fully grown or developed

Methodology A system of methods and principles for educating and training people involved in organizational project and process management

Appendix C Every Organization Can Implement OPM3@

Outcome*

Policy

Process

Process Elements

Process Entropy

A tangible or intangible result of applying a Capability

A plan or course of action in business intended to influence and determine aac@ns and decisions

A set of common tasks used to creates a product, service, process, or plan to satisfy a customer or group of customers. A sequential series of steps leading to a desired outcome

The processes, sub-processes, and tools project teams use for each project

Tendency for processes to evolve toward a state of disorder

, . I Process Republic Type of organization with written processes with Governing

.! Bodies and governance. Processes are consistent across the organization and are crafted by constituents of the organization

Program*

Project*

Portfolio*

Standard*

A group of related projects managed in a coordinated way to - obtain benefits and control not available from managing them

individually

Template

Variable Measurement

A temporary endeavor to create a unique product, service, or -.* . result." "Project Management - The application of knowledge,

skills, tools, and techniques to project activities to meet project requirements

A collection of projects andlor programs and other work grouped together to facilitate effective management of that work to meet strategic business objectives

. > . . . , , . . Document established by an authority, custom, or general consent as a model or example. It is established by a consensus body which is open to representatives from all materially affected and interested parties

I The sequence of specific actions or instructions to be followed in solving a'problem or accomplishing a task

A pattern or gauge used as a guide in development or creation of something accurately ,

Quantitative measurements ;hat are more complex than attribute measurement. 1 , .

(*) Organizational Project Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

Index @

Every Organization Can Implement OPM3 !

A Aggregation 143, 147 Artifacts 31, 118, 148, 149 Assessment 1, 7, 84, 128, 134-138, 143, 145-149, 152, 154, 155,157-163 Assessment Checklist 170 Assessment Report 138 Assessment, rigorous 125, 128, 154, 155 Assessment Techniques 155 Assessment tool 154, 156 Assessors, certified OPM3@ 154 Attribute 11, 99, 101, 109 Attribute Control Charts 109, 110 Auditing 23, 33, 39, 40, 45, 62, 118 Audits 38, 50, 51, 95, 98,99, 101, 163

B Baseline 58, 122, 130, 164 Bell curve 81, 106, 107 Best Practices 1, 2, 6, 7, 11-15, 18, 45, 48, 59, 70, 115, 129, 130, 134, 140-146, 155, 159 Branches 24, 27, 43 Business results 158

C Capabilities vii, 2, 6, 15-18, 110, 115, 134, 142, 146, 148, 150, 151, 159, 180 Caps, constituent 15, 16, 150 Certified OPM3@ Assessors 154, 155 Certified Productsuite Assessment 148 Change Control Board 29, 43,46-48, 50, 51, 76-78, 82, 116, 117 Change vision 124-126 Checklists 6, 70, 77, 87, 92, 96, 100, 118, 127, 148, 149, 163, 172, 180 Citation 38, 39, 101, 102, 180 Commitment 7, 9, 26, 31, 36, 37, 39, 46, 72, 74, 75, 86, 121, 123, 125, 127, 172 Compliance 22, 25, 26, 28, 38, 39, 41, 53, 56-58, 62, 77,82, 88,95, 101, 102, 109, 168 Comprehensive Assessment 83, 128, 134, 148, 149 Configuration management 44,46,47, 69, 73, 99-101, 117, 127 Constituent Capability 15, 149 Contingency plans 92, 174, 175 Control

charts 101,106,108, 109 limits 106, 109, 111, 118

Cost of Quality 122 Critical path 29, 55, 56, 94, 100

D DMAIC 116 Domains 11-14, 16, 29, 43, 50, 56,63, 68, 79, 95, 99, 128, 129, 139-141, 145, 146, 158

E Emotional fortitude 37, 95 ErTVX 84,89, 115, 116, 149,163 Exceptional variation 106, 108-111, 118 Executive Branch 23, 27, 28, 35-39, 46, 50, 53, 54, 82, 86, 94,98, 114, 117, 123, 126, 127

F Feedback loops 49, 116 Formal Process Models 83, 86

index @ Every Organization Can Implement OPM3 !

Formal Training 94 Framework processes 68, 74, 82, 125

G Governance iii, vi, 18, 21-25, 28, 32, 34-64, 67, 124, 126, 180

branches of 27, 28, 33 facilitators 28

Governing Bodies v, 16, 18, 19, 21, 24, 25, 35, 37, 39, 43, 44, 53, 67, 82, 124, 129, 150

H High Level Assessment 134, 145, 146

I IDEF 85, 149, 163 Impact Score 177 Implementing OPM30 v, 18, 65, 121-131 Improvement initiatives 9, 121, 123, 124, 130 Improvement Tools 156 Individual Performance Reviews 28, 31, 72, 74, 75, 126 ~nit iat ion phase 36, 100, 101

J Judicial Branch v, 27, 28, 33, 35-41, 50, 53, 54, 58, 82, 114, 117, 127

K Key Performance Indicators 16, 17, 58

L Legislative Branch 27, 28, 41, 43-45, 47, 87, 106, 113, 127

M Mapping processes 93 Methodologies 2, 40, 45, 113, 125, 155, 180 Metrics 17, 38, 55, 56, 103, 116 Metrics Dashboard 103

N Nonconformity 109

0 Operational Excellence 3, 67 O P M ~ @ Cycle 134 0 ~ ~ 3 ~ Framework Processes 129 O P M ~ @ High Level Self Assessment 128, 134, 145-149 O P M ~ @ Knowledge Foundation 7, 11, 12, 135, 136, 147, 164 0 ~ ~ 3 ~ Online site 135, 142 0 ~ ~ 3 ~ Process Framework 8, 31, 67-80, 125, 149, 163 O P M ~ @ Process Governance 21-34 O P M ~ @ Produdsuite v, 154, 155 Opposition, loyal 26, 39, 123 Organizational Enablers 14 Organizational Feedback 47 Organizational pain points 158

P PATS 43-47,49-51, 54, 76-78,82, 86, 93-95, 114, 116, 117, 125, 127 Peer Review 28, 31, 72, 73, 75, 118 Performance reviews 31, 55, 56, 69

Index @ Every Organization Can Implement OPM3 !

Phase Gate Review Board 35-37,40, 76-78, 124, 149,163 Piloting 95 Playbook 4, 6, 89 PMBOK 8,54,83,85, 146, 151 PMI vii, 1,8, 14-17, 135, 154 PMO 27, 29, 36-38, 40, 41, 44, 50, 53-64, 76-78, 93,98, 101, 102, 114, 117, 123, 124, 127 PMO Leader 37, 54, 60-64, 77 Policies 18, 33, 58,64, 87,88, 96, 127, 149, 163, 168 Probability 89-92, 169-171, 173, 175, 177 Process

capability 2, 109, 113, 118 elements 30, 44, 87, 127, 149, 163, 168 entropy 22-24, 28, 35, 38, 116, 124

Process Adion Teams 23, 43-45, 50, 76-78, 82, 86, 117 Process artifacts 28, 31, 44, 57, 74, 111, 127, 148-150, 152 Process Asset Library 127 Process Governance Facilitators 126, 128, 149, 163 Process models 8, 82, 83, 114-116, 149, 163, 168 Productsuite 128, 154, 155 Program domain 11-13, 28, 31, 54, 56, 72 Program Kickoff 100 Project communications 29, 69 Project Issues Log 84, 99, 101, 171 Project pipeline 13, 30, 36, 37,40, 48, 55, 59, 76, 77 Project Predictability 81, 105 Project Verification and Validation 68, 70, 71

Q Quality Auditing Group 31, 35, 37-41,44, 50, 51, 56, 62, 64, 76, 77, 93, 97-101, 103, 117

R Rework 122 Risk Assessment Checklist 89,90, 92, 169, 170, 172

S SIPOC 83,89, 115, 116, 149, 163 SMCI 140, 141 Stakeholders 6, 7, 11, 12, 17, 31, 69, 71, 73, 82 Standard deviations 106-108 Standardize 3, 8, 13, 14, 140, 178 Sub-Processes 68, 87, 89, 149, 163 SWOT 8, 121, 122

T Templates 5, 6, 33,48, 59, 70, 87, 91, 96, 127, 148, 149, 163, 176, 180 Traceability 31, 72, 74 Training, developing 5, 54 Triple constraint iii, iv, vii, ix, 3, 81, 91, 100, 114, 121, 175

v Value Stream Maps 93 Variable data 101, 110 Variable Measurement 100, 101 Variation 81, 97, 98, 105, 107, 108, 111, 113, 180

routine 108, 109, 118 unpredictable 108

W WBS 29, 32, 173, 175, 176