Project Manager 2014

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GARTNER CONSULTINGVersion #1Engagement: EngagementAlias

Ben MillroodGVP

Gartner Consulting

+44 7540012779

[email protected]

Gartner Special Briefing for ENI University

“Why Should Anyone Be Led by a Project Manager?”

Project Manager 2014

29 April 2011

Engagement: EngagementAlias


Gartner is a registered trademark of Gartner, Inc. or its affiliates. 1

Topics We Will Consider

■ Future Trends and ―Project Manager 2014‖

■ Economic Conditions

■ Tools and Processes

■ New Technology

■ Governance, Portfolio Management Multi-Sourcing and Vendor

Ecosystems

■ Maturity Model and Performance Management

■ Key Take-Aways




Future Trends in Program/Project Management, Our Point of View




Market Conditions and the Project Management Effect

■ Traditional project management (past 20 years) relies on isolating specific work,

while holding all stable.

■ Due to the ―new normal‖ chancy economic condition, this mode is aggressively

becoming counterproductive, because future business environment will require

that change is always to be expected. As such:

– With fewer people doing more work, enterprises need to figure out what they can

deliver in a timely way. For example, instead of aligning 10 projects which may take

a year to complete, it‘s better to focus on 3-4 that can be delivered quickly, and

structure them into smaller pieces so that results can be demonstrated more

frequently.

– People, not processes, drive success. Many enterprises have no plans to replace

those who left during the economic downturn, so those who remain need to lead in

their role and work together with greater flexibility.

– Governance and portfolio management will be focused first on lowering run costs

and driving high-impact business growth/transformational projects.

– Projects and programs create business change, business change requires

leadership at the right time…something that companies still struggle to comprehend.

– Disruptive technologies will force project managers to become more knowledgeable

and fluid in areas such as Cloud (SaaS, PaaS, IasS), Unified Communications, AMI,

Smart Grid, etc.

– Multi-Sourcing will require project managers to manage a multitude of service

providers (internal and external) in a collaborative ecosystems system environment

focused solely on project outcomes.

■ Project management is evolving

from a ―one size fits all‖ to a myriad

of approaches designed to meet

various internal needs.

■ Significant projects and programs

will create business change.

Business change requires a different

brand of leadership perhaps than the

past and at the right times.

■ Diversity of roles, tools and

approaches will typify the next

generation of project managers

(―2014‖).

■ PMOs and PMs will evolve as

―facilitators‖ of strategic change to

support high impact business

programs/projects. Others will be

marginalized into tweaking and

optimizing existing processes or

dissolve completely.

Implications and Recommendations




Industry Relevance

■ The pace and scale of change in the Energy sector over the next five years will intensify—particularly in the

European Union, given the economic situation. This to shape the needs of the ―2014 PM.‖

■ IT project management as a discipline won‘t change that much from industry sector to sector. Gartner expects

to see more outsourcing of IT activities, so more management of external technology/IT resources and further

consolidation of the Business-IT PM role.

■ Changing focus of projects in the Energy & Utility industry sector from internal development (past), procurement

and deployment of COTS (present) to managing BPOs (or cloud or non-cloud BPO).

■ Governance and IS-Lite models is increasing, which means that the project manager role is going down

comparing to the vendor/ecosystem management role that is gaining more prominence.

■ Gartner sees big changes in Energy IT portfolios particularly in the power management solutions and

consequent potential large-scale projects (which most are chopping into smaller pieces). This would include

Smart Grid and potentially Smart Meter.

■ There‘s also the uplift that many companies are applying to their commodity trading environments (integration,

transaction pipeline streamlining, new regulatory requirements).

■ Upstream end there would also be digital oilfield and the related SCADA/OT/IT convergence.

■ The net conclusion is ‗new innovation‘ alongside the efficiencies of more conventional ‗cost optimisation‘. As

Gartner‘s CIO Agenda says—‗reimagining IT‘.




The Emergence of Enterprise Program Office (EPMO)

■ One of the most important trends for PPM. Organizations must consider

moving beyond traditional IT portfolio management to align with mission-

critical business objectives.

■ Key driver is the need to merge technology and business projects under the

same organization. EPMO bridges the gaps between tactics and strategies.

Furthermore, this permits mission-critical communication to allow organic

alignment between technology, people, processes with business

requirements.

■ EPMOs will adopt lean management. While PMOs often focus outward on

changing the enterprises they support, it is important to address internal

efficiency as well. Lean PMO contribute value to portfolio management by

avoiding high levels of inwardly directed support activities that deliver little

or no value to the business enterprise or project.

■ EPMO Lean management targets unnecessary process steps, data that is

collected and never uses and over engineered templates and review cycles.

As such program and project managers should be rewarded for identifying

all types of waste in the system, thus increasing the value of EPMO.


■ Once again, use benefits realization

as an ongoing discipline to ensure

project managers are focused on the

right projects and doing the right

things during projects. Ensure

constant review between strategy

and tactics, enabling corrections to

take place quickly.

■ Consider setting up EPMO on a

strategic basis. The EPMO does not

attempt to do everything, but

specifically focuses on ensuring the

project managers fulfilling program

and project objectives and actually

driving the fulfillment of established

strategy.

■ Inside EPMO, ensure that mature

PPM practices are established by

focusing in on project management

capability to institutionalize great

project management execution.




Punch-line

■ New techniques in project and portfolio management is a growing need for most large

organizations.

■ Investments need to be carefully selected in matching project managers to the right portfolio of

projects and carefully aligned to value of business impact.

■ Most companies carefully have ―projectized‖ these investments, as such, we find a traditional

structured project management and software tools and PMO structures are not delivering

expected results.

■ Program/project managers and the C-level executives they may report into should be change

agents employing a toolbox of approaches to fit particular work streams and different leadership

profiles for each program/project area.

■ Project managers need to manage a diversity of software tools, deployment styles and maturity of

use, because single-platform convergence will be difficult to achieve.

■ Project management value will not happen one project at a time, but in aggregate ability across

projects and programs, consistent delivery of value and overall benefits realization.

■ Project managers should not confuse means (standards and processes) with ends (higher

throughput, stakeholder satisfaction, shorter time to decision, etc.).




Planning for Project Manager 2014




Market Data For Strategy and Planning Assumptions

■ By 2014, companies will invest 30% less time and money in traditional

IT project management than in 2011.

■ By 2014, more than 30% of organizations will experience a proliferation

of software tools installed to support Project and Portfolio Management

processes and projects.

■ By 2014, less than 20% of today‘s PMOs will become an enterprise

unction centered on business change or strategy execution.

■ Since 2008, a high rate of PMO ―startup activity‖ has a correlated PMO

implementation failure rate of more than 50%.

■ Gartner survey 153 organizations in 2010 with revenue of $500+ on their

success and failure of the IT application development projects. Results

showed that smaller project almost always had higher project delivery

success rates than larger efforts.

■ 2010, project management effort on projects increased from 5% to 11%.

■ 2010, cost per function point increased from $38 to $56.

■ 2010, Defect removal increased from 4% to 6%.

■ 2010, use of agile increased from 9% to 15%. (Evidence traditional projects and waterfall development is

decreasing…thus the 30% decline in traditional, expect increase in ―alternative.‖)




Move from Traditional to Contemporary

■ Companies that adapt a linear, phase-by-phase project management will decline in

favor of faster, more iterative and ―lighter‖ approaches that are results, not process

driven. Making this shift is essential for companies like ENI, the current paradigm of

structure project management will not meet the needs of both business and your

personal success.

■ Projectized traditional project management relies on being able to manage work by

designing a specific beginning and ending with associated deliverables before the

project begins. Changes of requirements, scope, timing and budget are the bane of a

well-run project. Linear ―freeze the plan and the requirements‖ approach is the defaults

for almost all project work. This mode in the ―new normal‖ economic climate will

potentially damage achieving real results.

■ Why? Current and future business environment for companies like ENI will have to deal

with high levels of ongoing uncertainty, change needs to be expected, not eschewed.

Given the velocity of change is increasing, linear program and project management

methods will not keep pace.

■ Change needs to be expected, not avoided. As such, no matter how hard an

organization tries to do upfront initiative planning and estimation, rarely does Gartner

see organizations dramatically improve their project delivery success without shortening

the length of project, simplifying or eliminating requirements, or deferring functionality to

the future (which almost never gets delivered!).




Move from Traditional to Contemporary

■ ENI, like other companies, may endure a period of confusion as a variety of

approaches are tried. Success will mean return to focus on internal best practices

and leadership. The mantra of ―we need great project management leaders‖ will

rise. Companies like ENI will be mixing and matching internal and external people,

practices, processes, tools to create a rapid environment.

■ Vendors will approach Fortune 500 companies with vertical and

best-of-breed strategies or attempt to go broad and address many evolving styles

of work. ENI will need to publish project management standards and provide a

variety of certifications if they want to work with ecosystem vendors so that

vendors maintain relevancy and value.

■ Many companies will continue to spend money on getting work done efficiently

and effectively. Gartner predicts however, that the time of traditional project

management being the answer to every problem has ended. Results, value ―in

time‖ to meet rapidly moving opportunities are the only program/project

management drivers that successful companies will recognize.

■ Organizations need to move from traditional to contemporary, leveraging iterative

approaches. Project manager 2014 will be judged in terms of ―value in time‖ to

meet rapid moving business demands and opportunities to make a significant

impact.




Tools


Tools Impact

■ Vision of a single software platform for PPM will not be

achieved during the next three years. 30% of organizations

multiple tools will be installed to meet seemingly unique

needs. These tools will often be deployed even though

functionality clashes with, or redundant to, or could be

expanded from software already in your environment.

Decision should meet short or mid -term need.

Requirements. Focus on quickest path to establish

immediate value.

■ Tools focus will be to better enable visibility, planning,

analysis and holistic decision making. This is driving

organizational trends toward EPMO. This will support portfolio

and optimization of project management and resource

planning/management. Today‘s tools are seen as inflexible,

complicated and too granular.

■ Layering effect of program and portfolio tools on existing

implementations can take longer than a user is willing to wait.

■ New breed of SaaS PMO vendors will emerge, which could

be great solution for short term needs.

■ Evaluate PPM software and tools based on speed and

diversity of environments. This may mean standard difficult

to maintain.

■ Vendors will not react well to best-of-breed options and a

range of emerging solutions for different deployment styles.

■ Focus on leaders first, than tools. Leaders need to have a

strategy on how to manage a diversity of tools and

deployment styles. This will force focus on a

well-integrated toolset that provides converged reporting,

views and analytics.




PPM Magic Quadrant

Source: Gartner Research, June 2010

challengers leaders

niche players visionaries

completeness of vision

ab

ility

to

exe

cu

te CACompuwarePlanview

MicrosoftOracle HP

PowerSteering

InstantisSciforma

InnotasAtTask

Daptiv

Serena Software

BMC Software

SAPPlanisware

Genius Inside

Tenrox

EPM Live

VCSonline

Atlantic Global

Cardinis Solutions

Automation Centre

Onepoint SoftwareOne2team

Project InVision

Clarizen

Augeo SoftwareEPK Group

Project ObjectsProject.net




PMO Implications and Recommendations

Role of the PMO…Should You Decide to Take The Journey

■ 30% to 50% per year failure rate is due to distinctive

mismatch between organization expectations of PMO (such

as reliable results, value based prioritization and delivery of

change through projects).

■ Overemphasis of PMO on process, compliance and

standardization.

■ EPMO is future. Realistically three futures for PMOs— evolve

into EPMO and become strategic, maintain current model and

achieve success or dissolve.

■ New PMOs guided as much by soft skills and people

leadership. Process and external advice is table stakes and

purely foundational.

■ External vendors will focus there advice on skills transfer and

on engagement models and communication plans which will

ensure their customers have successful project engagement

ends.

■ Most successful PMOs are in PPM maturity model starting at

level 3.

■ PMO leaders must focus on demonstrated progress and

value. This does not happen one project at a time but in the

aggregate across multiple reject.

■ PMO leaders should not confuse means (process, standards)

with the ends (higher throughput, stakeholder satisfaction,

shorter time to decision, etc.).

■ PMO need to define opportunities at an aggregate level and

show up with the right ―end‖ metrics to indicate these

improvements.

■ ―Just enough‖ approaches should be the rule on processes

and administration to meet business goals.




Maturity Models




Levels

Non-existent—

Ad hoc (0)

Initial—Reactive

(1)

Developing—

Emerging

Discipline (2)

Defined—

Initial Integration

(3)

Managed—

Increasing

Efficiency (4)

Optimized—

Enterprise

Orientation (5)

Strategy unclear or

unknown.

No workforce

management.People/

Competencies/

Organization

Overall vision, goals and

direction for business, shared

at Executive level but no IT

project direction.

Appropriate staffing by Pole

for critical/priority projects with

high risk efforts or when crisis.

Clear business strategy,

known and understood. IT

Project direction shared by

Pole at Executive level.

Appropriate staffing by Pole

for critical/priority

project/programs with high

risk efforts or crisis.

Clear and articulated Strategy

by Pole shared and

understood at Executive level.

Appropriate staffing by Pole.

Group staffing on priority

projects/programs with high

risk efforts or crisis. Shared

services.

Clear and articulated strategy

shared and understood at

Executive level.

Appropriate staffing on a

Group basis at the whole

enterprise level.

Clear and articulated strategy

shared and understood across

the organization.

Shared staffing and

specializations.

No process.

Processes

Process only for

critical/priority projects

management.

Processes for programs

management

Processes for Project and

Program Portfolio

Management, Application

Portfolio Management,

Enterprise Architecture,

Demand Management.

Processes for Capacity

Planning and Business

tracking.

Processes for portfolio

management extended to

Business.

No tool.

Technology Individual tools. Shared tools then

collaborative tools on

projects/programs and by

Pole.

Centralized Group tools. Shared Group tools. Single integrated system.

Individual.

High-level budgeting.Financial

Management

High-level budget and budget

estimate for projects.

Annual focus by silo.

Project cost and labor hours

captured, Business cases,

ROI, IRR.

3–5 years focus on a Group

basis.

Balance between Silo and

Central.

Initiatives and benefits linked

to strategy in the portfolio with

arbitrations.

Mandated enterprisewide

financial management based

on a portfolio model and

analytics.

Predictable ROI.

Risk mitigation.

Strongly mandated

enterprisewide.

Programs have their own

financial resources.

None.

Governance/

Reporting

Inefficient decision making on

projects due to lack of

information.

Project committees.

More efficient decision making

for high risk efforts or in case

of crisis.

Program committees.

Governance is about fixing the

business/IT relationship.

Decisions are driven by

constrained resources or

compliance issues.

Portfolio committees.

Annual alignment of IT

investments on Business

objectives (during the budget

process).

Decisions are driven top down,

based on a clearly articulated

strategy and guiding principles.

Group and IT governances are

well integrated but not on a

regular basis.

Vendors, Internal and External

Shared services centers and

competency centers. Programs

and projects managed on a

behavior basis and rewarded

on improvements.

Decisions are made quickly

and dynamically in alignment

with strategy.

Group, Business and IT

governance integrated into

on-demand decision making.

Social responsibility aspects

are considered.

Gartner PPM Maturity Model

Focus on Why and What, Before How?




Maturity Model Benchmark Example




PPM Maturity Trends

■ Most IT organizations have not integrated

their processes to ensure better alignment

with demand side of PPM (prioritization and

valuing investment opportunities) with the

supply side (a comprehensive view of

resources, money and time available to

execute the projects resulting from these

invests).

■ Clients are still in the early stages of PPM

maturity. Typically between Level 1 and

Level 2 in the Gartner Maturity Model.

■ Clients are still struggling with the basics of

implementing good process, and leadership

necessary before good automation through

tools can occur.

Ad Hoc

Reactive

Emerging

Discipline

Initial

Integration

Increasing

Efficiency

Enterprise

Orientation

Level 0Nonexistent

Level 1Initial

Level 2Developing

Level 3Defined

Level 4Managed

Level 5Optimizing

Dimensions

■ People

■ PPM Processes

■ Financial Mgmt.

■ Technology

■ Relationships

Progression Toward Increasing Maturity




Final Thoughts




Final Thoughts

■ Need for management of project-based work will change. Start changing now. Develop a

thoughtful and logical plan to get to 2014 which creates ―dynamic tension‖ and stretches your

capabilities, but does not break your company.

■ Economic conditions will create need for ―a series of small success projects‖ which promote agile

and flexible IT working with business. This dynamic will be reflected in the evolving or new

governance and portfolio management structures.

■ Process and tools are not as important as results and accountability.

■ Don‘t start a PMO unless is focuses on demonstrable results and business value, vs. process and

administrative burden.

■ The PMO software marketplace is still emerging. Don‘t confuse software with a solution. Use tools

on a project-by-project basis, avoid standardization for now.

■ Project manager 2014 ultimately will be judged and maybe bonused on business value result

against the delivery business objective….vs. not knowing tools, processes and a project plan.




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Project Manager 2014

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