Digitalize Your PMO: How to Build a Strategic Enterprise PMO
The PMO- From Shock and Awe to Winning Hearts and Minds
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Transcript of The PMO- From Shock and Awe to Winning Hearts and Minds
The PMO From Shock and Awe
to
Winning Hearts and Minds
Eric J. Brown, EVP & CIO
NCI Building Systems
Agenda
• Setting the Stage
• Shock and Awe
• Shift Happens
• Redraw the Battle Plan
• Winning Hearts and Minds
• End Game
Setting the Stage:
NCI Building Systems
Setting the Stage:
NCI Building Systems
• Second largest consumer of steel in the US behind the
Automotive Industry
• Revenue of 2B
• EBITDA of 200M
• 43 Manufacturing Plants in US & Mexico
• Produce over 1M tons of finished goods
• All manufactures in India combined produce 650,000 tons
Shock and Awe:
PMO…The Early Days at NCI
• Industry stats: Only 28% of projects
started ever reach their time / cost / quality
targets*
– 32% - Inadequate project management and
improper use of PM tools
– 20% - Lack of communication
– 17% - Lack of understanding of scope
• Knew from past experience – no PMO
meant NCI would suffer same casualty
rate
• SOX – compliance required PMO
guidance
* Standish Group Chaos Report
Shock and Awe:
Pre-PMO… NCI Fit the Stereotype
Shock and Awe:
PMO…The Early Days
PMI Methodology
PMBOK Processes
Resource Management Scope Control
Requirements Gathering
Shock and Awe:
PMO Competency
Stage One:
Project Office
Independent project
offices and project
managers
Applies project
management
techniques
No program level
authority
Stage Two:
Basic PMO
Provides standard
and repeatable PM
methodology for all
projects
Develops common
tools for all projects
Emphasizes the
foundation of a
viable PM
environment
Stage Three:
Standard PMO
Improved PM
capabilities and
maturity
Introduce project
reporting tools
and collaboration
techniques
Interface between
the business,
executives and
project teams
Full set of PMO
functions in use
Stage Four:
Advanced PMO
Focuses on
integrating
business
objectives into the
PM environment
Applies common
practices to
projects and
business; a
“projectized”
organization
Can be a separate
business unit
State of the art
PM practices and
tools
Advanced staffing
Stage Five:
Center of Excellence
Direction and
influence for
enterprise project
management
Manage continuous
improvement and
cross-department
collaboration to
achieve strategic
business goals
Continues to build
relationships with
stakeholders,
customers and
vendors
Oversight and
control to other
PMO units
Strategic Alignment
Business Maturity
Process Support
Project Oversight
Process Control
* The Complete Project Management Office Handbook
Shock and Awe:
Getting Ahead of Your Supply Line
If you are riding ahead of the herd, take a
look back every now and then to make
sure it’s still there
- Will Rogers
Shift Happens:
Great Depression….. Again?
Shift Happens:
New Orders: Keep the Lights On
• 60% Market drop in Non-Res Construction Starts
• Revenue from 2B to under 1B
• EBITDA from 200M to 16M
• Shutdown 25% of our Manufacturing Plants
• Reduced workforce by 50%
Shift Happens:
Why Do I Need PMO?
• Autonomous decisions being made
• PMO adaptation and flexibility
becomes key
• A new mindset was introduced
– Value proposition
– Strategic alignment
– Value-Driven ROI
– Elimination of low value projects
• Enterprise perspective of the PMO
function is part of the answer
Redraw the Battle Plan:
Think Different
The significant problems we have cannot
be solved at the same level of thinking
with which we created them
– Albert Einstein
Redraw the Battle Plan:
Cut the Rations in Half, Double the Work
• Evaluate financial impact
• View projects from enterprise
perspective
• Assess risk
• Avoid conventional text book
project approach
Redraw the Battle Plan:
Tools & Techniques
PMOLC / SDLC Risk Assessment Model
Project Dashboard Business Value / ROI Project Request Form
Project Life Cycle
Impa
ct
Com
plexity
Risk Level
High High
High Medium
Medium High
High Low
Medium Medium
Low High
Low Low
Low Medium
Medium Low
Tie
r 1
Tie
r 2
Tie
r 3
Tie
r 4
Redraw the Battle Plan:
Project Request Form
• Getting executive management to
the table
• Look at it from their perspective
• Understand what they’re going to
ask
• Find a way to make it work in your
size company
• Use a project dashboard that’s
clear and concise
Redraw the Battle Plan:
Executive Management
Redraw the Battle Plan:
Project Dashboard
Redraw the Battle Plan:
Risk Assessment
• Impact and
complexity drive
the risk level
• Risk level results
in Tier 1 – Tier 4
project
• Project tier drives
level of project
management
• Depth of
deliverables,
amount of testing,
Internal Audit
participation
• Determine if the project is capital
or expense
• Major cost categories:
– Software / hardware
– Consulting services
– Employee labor
– Expenses
• Often overlooked cost categories:
– Training
– SOP 98
– Capital interest
– Sales tax
– Maintenance
Redraw the Battle Plan:
Financials – Cost Estimates
• Use the financial experts in your
company
• NPV, IRR, ROI, Payback period;
what else do you need to know?
• Every project now demands
financial justification
• Benefit categories from the project
request now come into play
Redraw the Battle Plan:
Financials - Justification
• Compare planned to actual costs
• Show project completion statistics
• Build metrics history and use for action
Redraw the Battle Plan:
Benefit Realization & Metrics
Winning Hearts and Minds:
Building Alliances
• Alliances can be the key to continued success
• Working with IT, Accounting, Audit can have its rewards
• Gaining understanding of each other’s objectives can help
move everyone’s projects forward
Winning Hearts and Minds:
FastTrack Model
Request It
Scope It Do It
Deliver It
• Streamlined approach
• Agile response to the business
• Uses the project request process
• Reduces the quantity of deliverables
• Timeline is generally 1-3 months
• Goal: To deliver smaller, quick-win
projects faster
Winning Hearts and Minds:
Focus on Listening
Understand the job your customer is trying
to do. Don’t try and understand your
customer
– Clayton M. Christensen
Winning Hearts and Minds:
Growing the Culture
• Choose quick win projects to
show success
• Educate your peers
• Understand the maverick /
cowboy mentality and how to
help
• Wear multiple hats
• Today’s economy demands
higher performance and results
• Get senior management involved
• Tailor the approach to your
company
• Adopt a methodology…but plan to
be flexible
End Game:
Elevator Speech
Questions
Eric J. Brown
EVP, CIO and Co-Author of:
“The Effective CIO”, Taylor and
Francis, January 2009