OPM3 - Organizational Project Management

Maturity Model

Walter A. Viali, CSQA, PMP

PMO To Go LLC

Professional Development Day PMI Honolulu - May 3, 2006

2

What is OPM3

• PMI’s Organizational Project Management Maturity Model

• Organizational project management is the systematic management of projects, programs and portfolios in alignment with the achievement of strategic goals

3

Walter A. Viali• Over 32 years in Information Technology• “Retired” from Texaco Inc. in 1999 after 25 years• Co-founder and Principal Consultant for PMO To Go LLC• Certified Software Quality Analyst (CSQA)• Certified Project Management Professional (PMP)• Certified Project Management Instructor• Member of the faculty of the Project Management Program for the Bauer

College Business (University of Houston) • JAD Session Leader with over 4,000 hours of planning and project

facilitation experience • SEI CMM and PMI OPM3 knowledge and assessment experience• Implemented several Project Management Office (PMO) organizations• Experience in Strategic Business and IT Planning • Past President of the Houston Chapter of the Society for Software

Quality (SSQ) and of the Texas Application Process User Group • Sr. Vice President, External Operations, PMI Houston Chapter• Consulting with major companies on Process Improvement, Project

Management, PMO implementation, Strategic Planning, JAD facilitation

4

What are Maturity Models?• Tools for analyzing business and technical

performance of 3 interrelated components– People– Processes– Technology

• Detailed models that help identify performance characteristics of these components at various stages of growth

• Frameworks for benchmarking the effectiveness of an organization

5

The Need for Maturity Models

• Progress and continuous improvement are an integral part of our way of life

• Organizations need a well construed approach to understand where they are, where they need to be and the resulting gap

• Current maturity models offer a well organized and linear roadmap for continuous improvement

• Maturity models offer a quick and often precise snapshot of an organization’s effectiveness and reliability

6

The Standish Group 1994 Chaos Report

• 17% of projects succeed

• 31% of projects fail

• 52% of projects are challenged

• $78 billion dollars total project waste (against $250 billion in project spending)

7

The Standish Group 2003 Chaos Report

• 34% of projects succeed (100% improvement over 1994)

• 15% of projects fail (down from 31% in 1994)• 51% of projects are challenged• $55 billion dollars total project waste (against

$255 billion in project spending)– $38 billion in lost dollars for US projects in 2002– $17 billion in cost overruns

8

Need for Improved Performance with…

Could dismal results be a clue?

9

Where did it all start?

• The DoD and the problem of software bugs• The need to identify reliable contractors• The Software Engineering Institute (SEI) is

established at Carnegie Mellon University in Pittsburgh, PA

• Watts Humphrey, former IBM executive, is placed in charge of the SEI

• The SEI collects “best practices” from large U.S. companies

10

Capability Maturity Model(SM)

Software Engineering Institute1991

Initial- Ad hoc, Informal - Hero Driven

Repeatable- Project Mgmnt. Focus

Defined- Process Mgmnt. Focus

Managed- Focus on QA and QC Measures

Optimizing- Continuous Improvement

11

Proliferation of Maturity Models• SEI People CMM

– Compensation, Participatory Culture, Monitoring and Workforce Innovation

• SEI Software Acquisition CMM– Requirements, Solicitation, Acquisition, Project Management, Risk,

Contract

• SEI Systems Engineering CMM– Engineering, Project and Organization Domains

• SEI Integrated Product Development– Product lifecycle, design, product built, tested, supported and retired

• SEI PSP– Personal Software Process, the SW CMM for the individual

• SEI CMMI– Integration of SW-CMM, IPD, SE, SA maturity models

12

Proliferation of Maturity Models

• Data Management Maturity Model• Testing Maturity Model• Security Maturity Model• Internal Controls Maturity Model• Project Management Maturity Models• PMO Maturity Models• Etc.

13

Project Management Maturity Models

• ESI Framework for Project Management• Dr. William Ibbs’ PM Maturity Model

(Berkeley)• PM Solutions PM and PMO Maturity Models• Institute for International Learning PM and

PMO Maturity Models• Etc.

14

OPM3

• PMI’s answer to the plethora of Project Management Maturity Models is OPM3 – Organizational Project Management Maturity

Model– Comprised of three general elements

• Knowledge – content of the standard

• Assessment – method for comparison with the standard

• Improvement – setting the stage for organizational changes

15

The OPM3 Standard

16

PMI’s OPM3

• Organizational Project Management Maturity Model• Standard developed under the stewardship of PMI• Provide a way to understand organizational project

management• Measure a company’s maturity against a

comprehensive set of project management Best Practices

• Improve organizational project management maturity

17

Bridging the Gap

Moving to Project Driven Organizational Models…

18

19

Links Among the Process Groups in a Project Phase and in OPM3

InitiatingProcesses

Planning Processes

Controlling Processes

Executing Processes

ClosingProcesses

20

Organizational Project Management Processes – the Domains

21

Organizational Project Management Improving Performance

22

PM Maturity Increases Along a Continuum

23

OPM3 Stages of Maturity

24

25

26

OPM3Portfolio Management Process Models

• Portfolio Initiating Processes (1)

• Portfolio Planning Processes (21)

• Portfolio Executing Processes (7)

• Portfolio Controlling Processes (8)

• Portfolio Closing Processes (2)

27

OPM3Program Management Process Models

• Program Initiating Processes (1)

• Program Planning Processes (21)

• Program Executing Processes (7)

• Program Controlling Processes (8)

• Program Closing Processes (2)

28

What About Project Management?4.1

Develop Project Charter

5.1Scope

Planning 6.1Activity

Definition

6.2Activity

Sequencing

5.2Scope

Definition

6.4Act. Duration Estimating

7.1Cost

Estimating

11.1Risk

Management Planning

6.5Schedule

Development

7.2Cost

Budgeting

4.3Develop Project

Management Plan

8.1Quality

Planning

9.1Human

Resource Planning

11.2Risk

Identification

11.3Qualitative

Risk Analysis

11.4Quantitative

Risk Analysis

11.5Risk Response

Planning

10.1Communications

Planning

12.1Plan

Purchases and Acquisitions

12.2Plan

Contracting

8.2Perform Quality

Assurance

9.3Develop

Project Team

10.2Information Distribution

5.4Scope

Verification

5.5Scope Control

6.6Schedule Control

12.3Request

Seller Responses

12.4Select Sellers

12.5Contract Admin

7.3Cost

Control

8.3Perform

Quality Control

11.6Risk

Monitoring & Control

4.4 Direct and Manage Project

Execution

10.3Performance

Reporting

4.6Integrated Change Control

12.6Contract Closure

4.7Close Project

Initiating Processes

Planning Processes

Closing Processes

Executing Processes

Controlling Processes

Project Management Processes

Adapted from the Third Edition of A Guide to the Project Management Body of Knowledge

© Project Management Institute , 2004

5 Scope6 Time7 Cost

8 Quality9 HR

10 Communications

11 Risk12 Procurement

4 Integration

4.2 Develop Preliminary Project Scope Statement

5.3 Create WBS

6.3 Activity

Resource Estimating

9.2 Acquire

Project team

4.5Monitor and

Control Project Work

9.4 Manage

Project team

10.4 Manage

Stakeholders

29

OPM3Portfolio and Program Management

Process Models

Inputs Tools & Techniques Controls Outputs

1. Organizational Objective function description

2. Strategic Plan

3. Historical Information

1. Program and Project Selection Methods

2. Scoring Methods

3. Techniques such as NPV and ROI

4. Expert Judgment

1. Organizational financial expectations or constraints

2. Risk Tolerance

3. Business Goals

4. Investment Decisions

5. Executive Oversight

1. Portfolio Charter

2. Portfolio Leader identified and assigned

3. Portfolio Project Mix

4. Constraints

5. Assumptions

Portfolio Scope Initiation

30

Links Among the Process Groups in a Project Phase and in OPM3

InitiatingProcesses

Planning Processes

Controlling Processes

Executing Processes

ClosingProcesses

21

31

Portfolio Planning Processes• Portfolio Plan Development

– Use the output of the other planning processes, including strategic planning to create a consistent, coherent document that can be used to guide both Portfolio execution and Portfolio control

• Portfolio Scope Planning– Progressively determining and defining the scope of the Portfolio

• Portfolio Scope Definition– Further categorization of the types of Projects and Products that the

organization is expected to undertake• Portfolio Project Activity Definition

– Activities that must be performed to produce the various Portfolio products (Portfolio Program and Project lists)

• Portfolio Project Dependency Analysis– Identifying and documenting schedule dependencies across

Programs and Projects within the Portfolio

32

Portfolio Planning Processes• Portfolio Duration Estimating for Programs and Projects

– Estimating the number of work periods needed to complete the Programs and Projects in the Portfolio

• Portfolio Schedule Development– Analyzing Program and Project sequences, duration and resource

requirements to create the Portfolio schedule• Portfolio Resource Planning

– Define resource options and best fit of resources to proposed Programs/Projects and initiatives, with constraints and tolerances to maximize results

• Portfolio Cost Estimating– Develop an estimate of the costs of the resources needed to complete

Portfolio activities• Portfolio Cost Budgeting

– Establish priorities and make preliminary budget allocations among existing and proposed Programs/Projects

33

Portfolio Planning Processes• Portfolio Quality Planning

– Identify which standards are relevant to the Portfolio and determine how to satisfy them

• Portfolio Organizational Planning– Identify, document and assign Portfolio roles, responsibilities and

reporting relationships• Portfolio Staff Acquisition

– Plan for the continued availability of appropriate human resources needed to support the Portfolio

• Portfolio Communications Planning– Determine the information and communication needs of the

Portfolio stakeholders: who needs what information, when they need it and how it will be given to them

• Portfolio Risk Management Planning– Evaluate and plan risk management activities across the Portfolio

34

Portfolio Planning Processes• Portfolio Risk Identification

– Determine which risks might affect the Portfolio and document their characteristics

• Portfolio Qualitative Risk Analysis– Perform a qualitative analysis of risks and

conditions to prioritize their effects on Portfolio objectives

• Portfolio Quantitative Risk Analysis– Measure the probability and consequences of

Portfolio risks and estimate their implications for Portfolio objectives

35

Portfolio Planning Processes• Portfolio Risk Response Planning

– Develop procedures and techniques to enhance opportunities and reduce threats to the Portfolio’s objectives

• Portfolio Procurement Planning– Determine what to procure and when. Identify

economic opportunities across the portfolio

• Portfolio Solicitation Planning– Document organizational requirements and identify

potential sources to meet procurement need

36

The OPM3 Cycle

• Step One: Prepare for the Assessment

• Step Two: Perform the Assessment

• Step Three: Plan for Improvements

• Step Four: Implement Improvements

• Step Five: Repeat the Process

37

The OPM3 Cycle

38

39

40

41

42

43

44

45

46

47

OPM3 Structure• Best Practices (586)• Capability (two or more) per Best Practice• Measurable Outcomes per Capability• Key Performance Indicator for each Outcome• Paths to each Best Practice

Applicable to Portfolio, Program and Project Management, as well as to the Standardization, Measurement, Control and Continuous Improvement “Maturity Phases”

48

OPM3 Structure

49

50

51

52

53

Comprehensive Assessment

• Determine which capabilities exist or are absent for each Best Practice

• Which outcomes exist and are observable in the organization for each capability?

• Gain a more in-depth understanding of the organization’s maturity in organizational project management

54

55

Dependencies Between Best Practices

56

57

58

OPM3 - What's In It For Me

• Great project management will be of limited effect in the absence of organizational project management

• In fact, PMP certification can be viewed only as the first step in improving internal project management practices

59

OPM3 - What's In It For Me

• Companies wishing to align internal project management practices with PMI’s PMBOK® Guide and future PMI standards, should begin to embrace PMI’s OPM3, especially if ready to embark on a project management improvement journey

• PMOs need the right tools to improve the organization’s project management practices

60

Maturity Models and the PMO

Strategic Business Planning

Business Process

Reengineering

Strategic IT

Planning

Project Portfolio

ManagementProjects

Project Management

Office

Maturity Models

61

OPM3 - What's In It For Me

• PMI will continue to enhance this model and allow third-party vendors to develop and market products and services based on OPM3 – OPM3 2008 Update Project under way– DNV (Det Norske Veritas) and the APS program

• It’s important to embrace organizational project management and make sure we don’t lose the boat the way IT vendors did with the SEI CMM during the past 15 years

62

The Future of Maturity Models

CMMI

OPM3

ISO

Common Standard

?

Baldrige

DoD

63

In Conclusion

• Maturity Models are a very important component of the overall organizational effectiveness picture

• The IT industry has ignored process improvement for too long and is now paying the price

• This is analogous to the way American industry ignored Deming after WWII, as he was “exiled” to Japan

64

In Conclusion• Instead of taking the easy way out, companies need to

embrace maturity models as part of organizational project management and start the long journey towards “survival”

• Fortunately, some of the largest U.S. corporations are embracing organizational project management and not all hope is lost

• However, if organizational project management continues to be ignored by the majority of companies, tomorrow’s project managers and PMOs will go the same way as the programmers and other “outsourced” professionals of today

65

You think you have problems….• The Great Pyramid at Giza….

– Schedule of 10 years• Built starting around 2,550 b.c.

• 3 years to prepare, 5 years to build, 2 years to ´clean up´

– Resources• 13,200 men (peak of 40,000)

• Artisan village (4,000-5,000 people)

• 2 million blocks

– Labor expended• 36.7 million days or 131,200 man-years

– Labor costs• 111 million jugs of beer

• 126 million loaves of bread

OPM3 - Organizational Project Management

Maturity Model

Walter A. Viali, CSQA, PMP

PMO To Go LLC

Professional Development Day PMI Honolulu - May 3, 2006