Thesis MSIT 2011-12 PMO Gianluca Costanzi v2.3

Building a collaborative PMO A New Transversal Approach of Building a Project and Portfolio Management Office

Gianluca Costanzi 4/30/2012

Executive Mastère Management des SI & des Technologies

Gianluca Costanzi


Gianluca Costanzi

Abstract

Implementing Project and Portfolio Management Offices (PMOs) have become a trendy

topic, occurring frequently, yet also disbanding at an alarming rate. What are the

benefits and what are the risks? The purpose of this thesis is to discuss how a PMO can

add value to an overall business organization. Through this discussion, the paper will

define a PMO, compare various theories with the business reality and recommend ways

to implement a successful PMO. Finally, the paper will conclude with some of the

lessons learned from the Regus case and the best ways to move forward.

In the past two decades, Regus has enjoyed rapid, worldwide growth. The company has

ambitious targets for the future, multiplying its business centers around the globe. In

today’s multicultural environment, the company is in constant evolution in terms of

products and organization. Regus has a centralized corporate structure, but it is also

divided into business units and geographical regions. Combined with the current matrix

organization, these factors can lead to an unclear mix of projects and operational

activities which can create significant challenges.

In the current organizational schema, there is no oversight between the project

portfolio and the business strategy. Projects are sometimes duplicated, in conflict or

unnecessary. New projects are spontaneously launched without a formal review of

estimated benefits, costs or impact. In addition, projects are often not delivered on time,

within budget or within scope. Ownership and sponsorship of projects are not clearly

identified and project team resources have unclear roles and responsibilities. Therefore,

senior management is not properly informed on the status of projects and has no big-

picture visibility.

To improve the situation, Regus has audited all on-going projects and activities across

the organization. Introducing a Project and Portfolio Management Approach (PMO),

Regus has been able to map initiatives and targets. This has created a streamlined

process for approving and monitoring new projects. By enabling a PMO, Regus has

introduced governance among projects and standardization of project management

methodologies tailored to its environment. The PMO also advises the project

community, from the Executives with their roles of Sponsor and Owner, to the Project

Managers and their responsibilities. The PMO establishes Key Performance Indicators

(KPIs) which permit the measurement of project advancement and overall results.

These metrics control project quality and enable Regus to develop with greater rapidity,

produce better products and services.

Beyond Regus specificities, these improvements can be used by other companies facing

similar obstacles in rapid, worldwide growth. Solutions approached in this document

can be mirrored in different environments. Therefore, the efficiency gained, as well as

the lessons learned through implementing a PMO, can be shared.


Gianluca Costanzi

Acknowledgments

I would like to thank my wife, Chantal, for pushing me towards the Executive Education

and supporting me all the way along the process. Without her, I believe I wouldn’t be

able to reach such an ambitious goal.

I would like also to thank my company ,Regus, and specifically the people that were

involved and supported this project: Olivier, Delphine, Genevieve, Brad, Sanjay and the

whole French HR Department . Firstly their support first allowed me to participate in

this Master Program, and secondly, their support has been ineluctable for the richness

and the quality of this thesis.

A special acknowledgment to the HEC and Mines ParisTech institutions, the Master

Program Directors Fabien and Marie-Helene, my thesis advisor Francois and all the

professors who contributed in different ways to this achievement.

Last thank you, as important as the other acknowledgments, goes to my family that

always believed in me without doubt or exception. Without their support, I am sure I

would not be writing this document.


Gianluca Costanzi

Executive summary

Surveys show that 50% of PMOs fail to deliver according to business expectations.

Because of this alarming statistic, they are challenged on their role and value. How can

we learn from this history and its mistakes? How can a standardization process for

PMOs be reached in such a tumultuous economy that is in constant evolution? Project

management is a mature discipline and PMOs have been around for already a decade,

but they are far from being organized in a coordinated manner by organizations. Project

Management can be compared to a language spoken by restricted audience. Nowadays,

considering the uncertainty of the economic environment, the audience must be

broader as projects are enablers of innovation and shape organizations for future

challenges. Therefore the question must be asked: how can a general level of

understanding and comprehension be reached about project, program and portfolio

management?

This document will try to respond pragmatically to these questions, breaking the

traditional business concept of hierarchical models through a transversal and

collaborative approach. In addition, this paper will enhance traditional academic

sources with online sources, such as blogs, forums, and specialized websites.

Throughout this document, three statements will be constantly leading the discussion: One size does not fit all;

The success of the PMO is the success of its customers;

PMO is about people.


Gianluca Costanzi

Table of Contents Abstract ................................................................................................................................................................................ 3

Acknowledgments ............................................................................................................................................................ 4

Executive summary ......................................................................................................................................................... 5

Introduction ........................................................................................................................................................................ 9

Thesis Objectives ...................................................................................................................................................... 10

Chapter 1 ........................................................................................................................................................................... 11

What is a PMO? ............................................................................................................................................................... 11

The Beginnings of the PMO ................................................................................................................................... 11

PMO Definition ........................................................................................................................................................... 12

PMO Functions ........................................................................................................................................................... 16

PMO Maturity Model ............................................................................................................................................... 18

PMO Typologies ......................................................................................................................................................... 20

Conclusions ................................................................................................................................................................. 23

Chapter 2 ........................................................................................................................................................................... 24

The Recent Evolutions of PMOs – A Market Outlook ...................................................................................... 24

PMO State of the Art: 2010 and 2011 ............................................................................................................... 24

Survey ............................................................................................................................................................................ 24

Geography .................................................................................................................................................................... 28

PMO Value .................................................................................................................................................................... 29

Conclusions: PMO Challenges .............................................................................................................................. 32

Chapter 3 ........................................................................................................................................................................... 33

Project Management at Regus: an Audit of Current Practices .................................................................... 33

The Regus Company and its Internal Organizational Structure ............................................................ 33

Project Definition: What is a Project in the Regus Environment? ........................................................ 36

Project Audit ............................................................................................................................................................... 38

Analysis of Project Traits ....................................................................................................................................... 42

Assessment of the Project Organization with Human Resources ......................................................... 43

Selling the PMO to the Business: The PMO Business Case ...................................................................... 44


Gianluca Costanzi

Establish a PMO Tuned to Regus’ Needs ......................................................................................................... 46

Objectives ................................................................................................................................................................ 46

Managing the Expectations of Executives (Stakeholders) Towards the PMO Role .................. 48

Conclusions: The PMO Role .................................................................................................................................. 49

Chapter 4 ........................................................................................................................................................................... 50

Tailoring a PMO for Regus and its Departments Needs: a Collaborative Approach .......................... 50

Difficulties, Risks and Barriers to Overcome: the PMO Critical Success Factors ........................... 50

A Workgroup Based Approach ............................................................................................................................ 52

Workgroup Scope and Objective ................................................................................................................... 52

Workgroup structure ......................................................................................................................................... 53

Findings.................................................................................................................................................................... 54

Member Feedbacks ............................................................................................................................................. 55

A Customized but Standard Project Management Methodology to Suit the Regus Environment.

.......................................................................................................................................................................................... 55

Roles and Responsibilities .................................................................................................................................... 56

Communication Plan ............................................................................................................................................... 58

Standard Templates for Projects ........................................................................................................................ 60

Metrics and Key Performance Indicators (KPIs) ......................................................................................... 60

Conclusions ................................................................................................................................................................. 64

Chapter 5 ........................................................................................................................................................................... 65

A Global View of Projects: How to Manage the Project Portfolio .............................................................. 65

Workgroup Input and Stakeholders’ Expectation Input .......................................................................... 65

Portfolio Management vs. Project Management .......................................................................................... 66

Strategic Alignment ................................................................................................................................................. 67

Project Selection Process – From an Initiative to Delivering a Product ........................................ 68

Initiative Selection: How the Decision Making Tool Works ............................................................... 71

Project Scorecard: PMO Acting as Business Advisor ............................................................................. 77

Project Portfolio Extract – Ongoing Visibility Through a Gantt Chart ........................................... 77

Project Portfolio Snapshot – Scope, Time and Cost for the Executives ......................................... 78

Project Life Cycle Integrated with the Portfolio ...................................................................................... 80

Project Interdependencies ............................................................................................................................... 80

Human Resources Management (Capacity Planning and the Human Value) ............................. 81

Conclusions ................................................................................................................................................................. 85

Chapter 6 ........................................................................................................................................................................... 86


Gianluca Costanzi

Final Considerations and General Conclusions ................................................................................................. 86

Practical Considerations ........................................................................................................................................ 86

Potential Resistance and New Tensions ..................................................................................................... 86

Cost and Value ....................................................................................................................................................... 86

First Implementation Feedback about Enabling a PMO ........................................................................... 87

What Worked Well: ............................................................................................................................................. 87

Even Better If… ..................................................................................................................................................... 87

Comparing Regus’ PMO Setup with Other Companies .............................................................................. 88

Genevieve Guerin’s Feedback Experience in Setting Up a PMO in her Former Company ..... 88

Feedback from the Consulting Company that Worked with Regus on the PMO Setup ........... 89

Sanjay Patel, Former Siemens PMO Manager, Currently Regus Operations Program

Manager: Feedback on Regus PMO Setup .................................................................................................. 90

Next Steps and Maturity Model Perspective ................................................................................................. 92

Final Conclusions ...................................................................................................................................................... 94

Bibliography .................................................................................................................................................................... 95

Blog and Online Sources ........................................................................................................................................ 97

Annexes ............................................................................................................................................................................. 99


Gianluca Costanzi

Introduction

Market analysis shows that most of companies have set up PMOs, but it seems that this

concept is not as well known as the statistics indicate. [1]

The PMO designation is quite recent in my job title. In my professional online network

profile, it still raised many questions among my colleagues, as well as private peers.

Excluding the private sphere, I was quite surprised by the lack of awareness in the

business community.

Questions like “What projects are you working on?” or even more straightforward ones

such as “What does PMO stands for?” or “What does a Project Management Officer

actually do?” raised some doubts about its alleged popularity.

Also, among the senior management at Regus, the role and the objectives of a PMO do

not enjoy a unanimous consensus.

Even investigating the word “PMO” online with a search engine, results are not so clear.

It is fairly possible that some of the results would lead one to the Prime Minister Office

of an English speaking country or to the Palermo Airport Code (PMO).

Is this a pattern for PMOs? Can a clear definition ever be found for this acronym? Or is

the PMO function itself still too young to classified?

As Project Management becomes more readily accepted within organizations, there is a

need to formally integrate the discipline and process with business strategy. In

particular, one aspect of this integration is the function of Project Managers (PMs)

within the organizational structure. The idea of a Project Management Office (PMO) has

begun to fuel debates as to what responsibilities such an entity should carry within an

organization.

The following chapters will try to respond to these questions, comparing real-life

scenarios, market analysis, academic sources and online discussions.

Hold on tightly and enjoy the PMO journey!


Gianluca Costanzi

Thesis Objectives

The objective of this document is to provide a pragmatic approach to enable the

installation of a PMO for a multinational and multicultural environment.

This paper tries to balance both academic with online sources, feedbacks from PMO

professionals with the real case study at Regus, as well as PMO surveys of future

challenges.

The document is structured into four main parts. Firstly, it starts with the definition of a

PMO, taking into account academic texts and a survey of professionals’ opinions.

Secondly, it moves into a market analysis and surveys in order to understand the status

of the PMOs in recent years.

Thirdly, the core of the paper will investigate the Regus case study and the experience of

implementing a PMO.

In conclusion, the last section will be dedicated to practical considerations and the next

steps, not only for the Regus PMO, but also for PMOs in general.


Gianluca Costanzi

Chapter 1

What is a PMO?

The Beginnings of the PMO

Project Management is a discipline which can consider its beginnings as a result of

Scientific Management theories. Henry Gantt and his famous, still-widely used activities

chart (Gantt Chart) is a popular example of Scientific Management. In the 1950s and the

following decades, the US Military and other large corporations developed new

mathematical models such as CPM (Critical Path Method) and PERT (Program

Evaluation and Review Technique)[2]. A more formal approach, with these techniques

and tools was adopted for Project Management.

During the second part of the 20th-century, organizations and markets evolved from

mass production to more global environments. Shifting demands and shorter product

life cycles arose rapidly. Projects and collaborations became a more-adaptive approach

for organizations to have the flexibility to deliver goods and services. New

organizational structures developed, such as project driven organizations, where the

Project Manager (PM) had the highest level of power and control on resources and the

cross-functional structure. This allowed for a merging among hierarchical, functional

and project management structures. Project Management organizations acquired a

great deal of strength in the 1990s, with professional associations and project

management methodologies becoming mainstream and recognized by industry

standards. Some organizations, such as the American-based Project Management

Institute (PMI)[3], the Swiss-based International Project Management Association

(IPMA), and the UK-based Office of Government Commerce Projects In Controlled

Environment 2 (PRINCE2) [4] grew exponentially in members and supporters.

In this scenario, a great number of organizations were working primarily on projects

than ever before, and projects were having a leading impact on the business benefits

and results of organizations. Organizations tend to undertake projects as the correct

approach to deliver their products or services. However, projects face the challenges of

not delivering according to the targets (delayed, over budget or far from the original

requirements). Thus, project management represents a new challenge on how

organizations can improve poor project performance. If projects, by definition, are

bound by their unique objectives, scope, resources and timelines, can they be run as

standalone entities, or should projects be coordinated among themselves within the

same organization? How does each project interact with the organization itself? How do

projects share the common resources of the organization? How do projects and the


Gianluca Costanzi

organization manage conflicts or dependencies between the projects? The need for a

project management coordination and standardization within organizations saw the

rise of the Project Management Office (PMO).

The growing consciousness of the PMO is palpable in professional literature [5] and

among Project Manager Communities. Software vendors have also noticed this trend

and are offering multiple Projects Portfolio Management (PPM) tools for PMOs. There is

a general understanding that the PMO is concerned with the improvement of project

management within an organization. The understanding may touch upon the setting of

standard methodology, reporting to senior management on status, risks and variations,

with the coordination of entire project portfolios, or even directing large and small

projects or programs. However, there seems to be no clear consensus. During the Y2K

scare, PMOs were created to help IT professionals harmonize the software development

and methods for those IT projects related to number 2xxx’s new date format. Since that

Y2K scare, years have passed, and there has been an emergence of Project Offices,

Program and Portfolio Management Offices (PPM), Centers of Excellence, Project

Support Offices (PSO), among others. Is there one, clear answer for what the PMO is and

what can be expected from it?

The objective of the following pages is to understand more about the PMO, what it is, its

functions, its evolution and development. A simultaneous aim is to understand how a

PMO can deliver value to a business organization.

PMO Definition

The Project Management Institute (PMI) in “The Guide to Project Management Body of

Knowledge” (PMBOK) defines the PMO as:

“An organizational body or entity assigned various responsibilities related to the

centralized and coordinated management of those projects under its domain. The

responsibilities of the PMO can range from providing project management support

functions to actually being responsible for the direct management of a project.” [3]

The PRINCE 2 methodology makes no specific reference to the term PMO. Rather, it

refers to the concept of program management and describes it as:

“A vital component in the delivery of change; whether change to public or customer

services, or change within an organization.” [6]

The online encyclopedia Wikipedia gives a slightly different definition:

“The Project Management Office (PMO) in a business or professional enterprise is the

department or group that defines and maintains the standards of process, generally


Gianluca Costanzi

related to project management, within the organization. The PMO strives to standardize

and introduce economies of repetition in the execution of projects. The PMO is the source

of documentation, guidance and metrics on the practice of project management and

execution. In some organizations this is known as the Program Management Office.” [7]

The letter “P” in PMO originally stands for “Project.” PMO also refers to a multi-project

office, that is, one PMO to oversee all projects in an organization rather than one PMO

for each project. Those projects may be independent of each other. They may be related

and contributing together towards the same outcome as a single Program. Or again,

they may be grouped in a Portfolio to facilitate their effective management towards

meeting a strategic business objective. [8]

Over the years, however, the letter “P” in PMO took on different meanings. “Project,”

“Program,” “Portfolio” are three definitions that were chosen by organizations

according to the objectives that this nascent department would undertake.

The new scenario forced Project Management Standards such as PMP (Project

Management Professional) and Prince2 (PRojects IN Controlled Environments 2) to be

reviewed. In fact, both PMP (run by the US-based Project Management Institute PMI),

and Prince2 (run by the UK-based Office of Government Commerce OGC), were focusing

on standalone projects. The multi-projects approach ended up generating two new

standards for PMO management professionals.

PMI released PgMP, where the two letters “Pg” stand for “Program” and means

“Program Management Professional.”

In the UK, OGC, however, released the standard called MSP “Managing Successful

Programmes.”

Also for Portfolio Management, both PMI and OGC released new standards. Certification

papers such as P3O (the 3 P Office) and CPM “Certified Portfolio Manager” were

established.

Although there are many institutes releasing Project, Program and Portfolio

management standards. The two institutes mentioned are still the market reference.

Both organizations propose certification processes and exams in order to be officially

recognized to use those standards, but it is not the purpose of this paper to explore this

angle. This reference, and the acronyms used, however, will be repeated throughout this

paper.

Following are pragmatic definitions of project, program and portfolio.


Gianluca Costanzi

Fig. 1 shows how they relate to each other:

Project – A temporary work effort with a discrete beginning and end undertaken to

meet a unique set of goals and objectives. A project is staffed by a temporary team, and

its output is measured by specific deliverables.

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 the scope of the discrete projects in the program.

Portfolio – A group of projects and programs managed in a coordinated way to meet

strategic business objectives, although they may not necessarily be interdependent.

Fig. 1 (Source: PMI www.pmi.org)


Gianluca Costanzi

In the next figure (Fig. 2), we can see another interactive view of project, program and

portfolio management and the main focus of each area:

Fig. 2 (Source: http://pmstudycircle.com/2012/03/project-management-vs-program-management-vs-

portfolio-management)

Lately, in large corporations, the acronym EPMO has been appearing, with “E” standing

for Enterprise. This kind of PMO is generally a strategic one, working at senior

management level on business strategy in alignment with projects. Another function is

coordinating with the departmental PMOs. Gartner Group in the article “one size doesn’t

fit all” defines this structure as Federated PMO model. [9]

An EPMO or Enterprise Program (Project or Portfolio) Management Office strategically

aligns with the organization and provides holistic management over multiple project

and/or program Management Offices. An EPMO should have the ability to gather,

analyze, and present project data in a style that enables executives to see, a glance, how

the overall project portfolio is running. A PMO, which can be divisional, such as an IT


Gianluca Costanzi

PMO, is tactically aligned with the organization with the purpose of providing

governance over multiple projects and therefore focusing on project delivery. Like the

EPMO, the PMO should have the capacity to gather, analyze, and report project data,

which in this case, is more oriented to a granular level. A PMO provides insights for the

schedule, budget, and risks of each project. EPMO is an entity acting as an umbrella that

governs multiple PMOs, which in turn, provides oversight over numerous projects.

Fig. 3 (Source: Internally created, Gianluca Costanzi)

Fig. 3 shows the functional relationship between divisional PMOs and EPMO.

Hierarchically, divisional PMOs reports to their Department Heads (CIO, COO, CMO, etc.)

while the EPMO reports directly to the CEO.

PMO Functions

The research published by Dai and Wells, “An exploration of Project Management Office

Features and Their Relationship to Project Performance”, [10], is a survey on 234

certified PMP professionals covering ninety-six PMOs. It is one of the earliest and more

extensive efforts to define the functions of the PMO and the interactions to improve

their project performance. The research found a close alignment among most PMOs on

six principal functions:

Creation and maintenance of standards, tools and methodologies;

Centralized archive of lessons learned;

Project administration support (such as publishing internally project related

information, meetings, PM software support, etc.);

Providing Human Resource, staffing and assessment assistance such as the

identification of right people for the project;

PM consulting and mentoring on methodology, and dealing with stakeholders

exceptions;

Tactical

Strategic EPMO

IT PMO R&D PMO Operations

PMO Marketing

PMO Sales PMO


Gianluca Costanzi

Providing PM training.

All ninety-six PMOs had responsibility on standards and methods. In addition, four

other functions were present in more than 66% of the PMOs.

Dai and Wells also introduced the idea of a facilitator (Relationship Management) role

rather than openly interfering with the Project Manager’s influence.

In addition to Dai and Wells, the research published by Andersen, Henriksen and

Aarseth, “Benchmarking of Project Management Office Establishment: Extracting Best

Practices”,[11], suggests a set of top responsibilities that performing PMOs should have,

according to their benchmark from organizations with an outstanding project

management record. According to the research, the core PMO tasks are:

Manage shared methodology and processes;

Perform training, develop competences and set a competence framework;

Support projects, acting as consultants on-demand;

Contribute with recommendations not only to project governance but also

selection of projects;

Supply recommendations only to project quality assurance ;

Support proactively project owner, sponsors and executives in charge of

portfolio management.

Although Andersen’s research proposes a role for the PMO as a catalyst or counselor

similar with Dai’s research, it introduces new roles in areas such as project governance,

portfolio management and support to senior management. In Andersen’s research, the

PMO is presented as being able to function at the different levels of individual projects,

departmental levels for portfolios, and at corporate levels for business strategy or

project prioritization. At each level, the PMO has a different focus, from providing

services to the individual projects to supporting senior management for strategic

alignment. One single list of features or functions does not reflect this new dimension

(One size does not fit all).

Even with the articles of research mentioned, there is no general agreement on the role

the PMO should have within organizations.

There is not a single formula for “the” PMO. A more fruitful question could concern the

consensus on the role and the structure of the PMO for smaller entities. For instance,

there could be a common PMO typology for the IT sector, another type for car

manufacturing, and yet perhaps another for retail businesses. As well, geographical

commonalities could be relevant factors. The survey conducted by Hobbs, “A Multi-

Phase Research Program Investigating Project Management Offices (PMOS): The Results

of Phase 1” ,[12], shows that over 500 PMOs globally distributed did not show any

distinction by economic industry, by region, by organizational dimension or between


Gianluca Costanzi

public and private organizations. Each organization presented diverse PMO structures

with very different performances.

Although there is no single “template” for a standard PMO, there are some

commonalties. Certain commonalities could be between PMOs focusing on project

support and PMOs focusing in strategic management.

The next section of this document explores, in greater detail, the commonalties and

differences of various PMOs

PMO Maturity Model

Through the long-term analysis of the roles of PMOs in different organizations, Garner

has generated a six-level maturity model. This model is similar to the Capability

Maturity Model Integration (CMMI). The CMMI is a process and project improvement

approach with the stated goal of helping organizations improve their performance.

Fig. 4 (Source: http://en.wikipedia.org/wiki/Capability_Maturity_Model_Integration)


Gianluca Costanzi

The Gartner model [9] can help organizations understand where they stand in terms of

project management maturity level and where they can improve and evolve. The

maturity model will be used as a reference for the Regus case study in the core section

of this document. Whenever a maturity model is mentioned, it will always refer to the

Gartner model.

Level 0 Level 1 Level 2 Level 3 Level 4 Level 5

Nonexistent - ad hoc

Initial - reactive

Developing – emerging discipline

Defined - initial Integration

Managed- Increasing efficiency

Optimized- enterprise orientation

Definition – Typology

Community of Practice

Project Support Office

Project Management Office

Portfolio Office, Centers of Excellence, Best-Practice Councils

Federated PMO Program Offices

Enterprise Program Management Office

People Staff

assigned to

projects on a first available

basis. PPM

activity

limited to

interests

and actions of

individual

managers.

Priority

projects

get appropriate

staffing —

everything

else is

"first

available." Nascent

PPM leader

role —

primarily

still an

individual manager

focus.

PMO(s) established.

Programs

Increasingly managed in-house.

Project

staffing/resource

capacity issues

begin to be

addressed.

PPM leader

role

formalized and increasing

specialization

trend beginning.

Shared resource

Pools formalized.

Network of

PPM leaders

exist companywide

in a federated

model. Centers

of excellence

improve

workload management.

Capacity

planning

enabled.

PPM leaders

exist in all

areas of the company.

Accepted

specialization

(program,

portfolio and

strategy) supports

maximum

performance.

Project Portfolio Management (PPM) Processes

Projects are

assigned to

line or staff

managers.

No formal PPM Processes

beyond high-

level budgeting,

except as

provided by

outside vendors.

All internal

processes

centered on

mngmt of

critical Projects.

Vendors

are often

responsible

for large

Initiatives.

Project processes in

place. PMO(s)

organized.

Emerging

Understanding of PPM.

Risk now reviewed.

PPM

Function

established.

Projects are

Approved on a Portfolio basis.

Enterprise

Architecture (EA)

functions

involved.

Similar

projects

managed as

programs.

Portfolio is Actively

maintained.

Portfolio extended

beyond IT.

Comprehensive

PMO.

Pipeline managed in real time.

Financial Management

Projects done without formal

cost/benefit or

risk evaluation.

Projects have

budgetary

estimates,

actual cost

can be

estimated. Some

benefit

statements.

Project cost and labor hours

captured. Estimate

of benefit made for

each project.

Costs are captured

and forecast.

Benefits are

identified

and related

to strategy in the portfolio.

The portfolio is Modeled and

appropriately

optimized,

factoring in

risk. Benefit

realization is tracked.

Programs have their

own financial

resources,

and full life

cycle costing

is available.

Fig. 5 (Source: Gartner - PMOs: One Size Does Not Fit All)

The original Gartner maturity model has a scale value and related activities for

technology which intentionally has not been inserted since it is not relevant for the

objectives of this thesis.


Gianluca Costanzi

PMO Typologies

PMOs have a too great diversity in structure, roles and accountability to be able to

define one “best practice.” The search for a PMO model to simplify the complex reality

moves into classification, defining a spectrum of organizational styles rather than

assuming that there is a one size fits all PMO.

The PMO type and evolution go in close association with what has been called “Organizational Project Management Maturity” (OPMM). OPMM models allow for the assessment of the level of project management capability from the basic project level, to the strategic portfolio level. As it is stated in the white paper ”Assessing Project Management Maturity Comparing Process Definition and Process Practice” by Amir Hossein Rouhi and Shahram shadrokh [13] “Companies with greater maturity should expect to see tangible benefits that include better-performing project portfolios, efficiencies that come with better resource allocation, and increased process stability and repeatability.” There are various popular models for Organizational Project Management Maturity

Model (OPMM), such as the P3M3 from OGC or OPM3 from PMI. They all share the

general purpose of assessing the “status quo” of the organization in terms of project

management, as well as the steps necessary to grow to a higher maturity level.

Through the investigation of the Gartner Group resources, the online information of

consulting firms, professional LinkedIn groups dedicated to the PMO, as well as the HEC

Course on Transformation Programs, three typologies of the PMO emerge. Even though

the terminology used is slightly differently from one player to another, the role and

activities are well identified.

Three PMO Typologies: [14]

1) Supervise: The Weather Station (also called the Lite PMO or Supportive PMO)

This PMO generally provides support in the form of on-demand expertise,

templates, best practices, access to information and expertise on other projects,

and the like. This can work in an organization where projects are done

successfully in a loosely controlled manner and where additional control is

deemed unnecessary. Also, if the objective is to have a "clearing-house" of project

management information across the enterprise to be used freely by project

managers, then the Supervise PMO could be the right type.


Gianluca Costanzi

2) Control: The flying Control Tower [15] (also called Coach PMO)

In organizations where there is a desire to "reign in" the activities, processes,

procedures, and documentation, among others, a controlling PMO can

accomplish that. Not only does the organization provide support, but it also

requires that the support be used. Requirements might include adoption of

specific methodologies, templates, forms, conformance to governance, and the

application of other PMO controlled sets of rules. In addition, project offices

might need to pass regular reviews by the controlling PMO, and this may

represent a risk factor for the project. This PMO can work if a:) there is a clear

case that compliance with project management organization offerings will bring

improvements in the organization and how it executes projects, and b:) the PMO

has sufficient executive support to stand behind the controls the PMO puts in

place.

3) Make: Command Central (also called Directive PMO or Manager PMO)

This PMO type goes beyond control and actually "takes over" the projects by

providing the project management experience and resources to manage the

project. As organizations undertake projects, professional project managers from

the PMO are assigned to the projects. This injects a high level of professionalism

into the projects, and since each of the project managers originate and report

back to the directive PMO, it guarantees a high level of consistency of practice

across all projects. This is effective in larger organizations that often matrix out

support in various areas.

Andersen, Henriksen and Aarseth, in the previously mentioned “Benchmarking of

Project Management Office Establishment: Extracting Best Practices”, [11] observed

development of the PMO like a classic life-cycle model. At the same time that the

maturity increases in the PMO, the organization would follow. It would equally be true

the other way around where an increasing maturity of the organization would drive the

maturity of the PMO. They propose a model which consists of three phases:

Develop common approach and tools for project management;

Introduce governance processes and quality control;

Implement real project portfolio management.

At each of the three phases, the PMO functions and focuses are different. As PMO

maturity increases, the PMO moves to a higher phase, from supporting individual

projects with standards and methods, to working alongside senior management to align

with strategic objectives, project selection and prioritization. In essence, a successful


Gianluca Costanzi

PMO, while gaining maturity, increases in responsibilities and raises in rank within the

organization since it is able to bring value-added to the business.

Fig. 6 (Source: http://www.esi-intl.co.uk/blogs/pmoperspectives)

Taking into consideration real-life scenarios, while I was attending a PMO Leadership

Conference in London (Nov-2011) organized by UK APM (Association of Project

Manager), the demarcation line among phases and typologies is very thin and is, in

actuality, often crossed with leaps from one stage to another, back and forth several

times, the whole PMO life-cycle eventually combining all the phases.

At the same conference, one of the speakers was Peter Taylor, PMO Director at Siemens

and author of the “ The Lazy Project Manger: How to be Twice as Productive and Still

Leave the Office Early” as well as the more recent “Leading Successful PMOs.” Taylor

supported the above statements and also led an interesting discussion regarding the

significance of the “P” in PMOs.

Taylor stated that there are not two disparate offices: a Project Management Office, and

a Portfolio Management Office, but a bit of both since at higher business levels it is

impossible to draw that line. Culture, politics, and economic scenarios pull the PMOs in

different directions. Obviously, with all these variables, a PMO needs a Plan and a

Roadmap with defined objectives and focuses. But, this map must also be flexible and

adaptable to internal and external changes. [16]

http://www.esi-intl.co.uk/blogs/pmoperspectives


Gianluca Costanzi

The same is true for PMO typologies. In real-life scenarios, a successful PMO is a

balanced mix of all three typologies.

Peter Taylor also gave an analysis regarding the definitions of project, program and

portfolio:

Project = Do things in the right way

Program = Do things in the right order

Portfolio = Do the right things

When an audience member asked how the PMO defines itself in relation with these

three elements, and Taylor replied: “PMO is about people.”

In Chapters 4 and 5 of this document, these practical tips will be applied to the Regus

study. An analysis of how the organization reacted to these tips will be included.

Returning to the three PMO typologies and maturity model, it can be said that not all

PMOs need or will evolve to the last maturity stage. In fact, PMOs can be successful by

maintaining the stage where they reach their objectives and suit organizational needs.

But, even in keeping with their original purpose and focus, they will, by necessity shift in

their scope on the other phases in order to fulfill business demands.

Conclusions

If one were to take a snapshot of the PMO life-cycle, the PMO value continuum graph in

Fig. 6 and the Gartner maturity model, might help explain the differences in functions

found in PMOs. If a PMO has only started in an organization that doesn’t have adequate

project management expertise, may pursue a Supervise or Supportive model. It seems

more logical, however, that in organizations where project management practice is

established, senior management expectations are higher from the PMO, possibly

focusing in portfolio management and strategic alignment of business objectives with

the enterprise project portfolio. The PMO evolves from crawling to walking and

potentially running in a shared evolution with its host organization. Also, we must

admit there is not a unanimous consensus about the PMO role in an organization

probably because the PMO function is still relatively young in the project management

and business panorama. The PMO can signify project, program, portfolio or the

combination of all three. The disagreement about the PMO role is also due to different

business expectations from senior management. In the next chapters, the thesis will

further investigate these theories.


Gianluca Costanzi

Chapter 2

The Recent Evolutions of PMOs – A Market Outlook

PMO State of the Art: 2010 and 2011

This section will include PMO market analysis from Forrester in collaboration with PMI

and PM Solutions. [1] [17]

The state of PMO surveys conducted by the above two organizations agree on the main

findings:

The PMO establishment trend has been constantly rising in the past decade;

PMO maturity is creating awareness focusing on strategic business objectives;

PMO size and typology is directly correlated with the size of the host company.

Let us analyze these three key findings in greater detail.

Survey

PMO establishment trend has been consistently rising in the past decade

Fig. 7 (Source: PM Solutions - State of the PMO 2010 Research Report)


Gianluca Costanzi

As previously stated, the PMO establishment, and therefore its statistics, began about

ten years ago. We can see in Fig. 7 how PMOs doubled their presence in companies from

2000 to 2010. Half of the companies without a PMO are thinking about establishing

one. The trend is expected grow in the second decade of the century.

Fig. 7 also indicates, interestingly, how the size of the host company influences the role

of the PMO. Small companies tend to have less PMOs. As the size of the company grows,

the PMO usually follows. This is quite understandable as the needs of a big firm versus a

small one are very different. In large corporations, the coordination of projects is

fundamental to optimize the resources. This generates economy of scale due to the

repetitions of processes. Small companies, including start-ups, live in a dynamic

environment where often the organization itself is a project and the need of overhead

for projects only is less justifiable.

PMO maturity is raising awareness on strategic business objectives


PMO maturity is moving towards reporting to Vice Presidents (VPs) and CEOs directly.

This is due to the fact that senior management is becoming more aware of the

importance of project management.

Back in the early days, the PMO was deeply embedded in the organization, struggling to

prove its value, and even is existence. It was responding to a Business Unit need and

focusing only on pragmatic and tactical targets. Nowadays, the scenario has changed;

PMOs are growing in maturity and their focus is shifting towards supporting the

business strategy in selecting projects. Executives have finally seen the valued-added by

PMOs. It is important to run a project correctly following the tradition triple constraint

(Scope, Time, and Cost) which generates the overall quality of the project. However, this

action focuses only on execution, stated earlier as “Do things in the right way.” But, if

PMO Maturity Defined

» Level 5: Best in Class

» Level 4: Mature, very successful

» Level 3: Grown up, more success than

failures

» Level 2: Established, in need of

improvement » Level 1: Immature, ad hoc processes


Gianluca Costanzi

companies are not doing the right thing, it is pointless to control the execution of

something unnecessary. Therefore, executives are more oriented to the project

selection process (Portfolio Management) and PMOs are a valuable ally in reaching that

goal. In the end, projects are the tools with which we reach the future on the right path,

assuring the perennity of the business. Executives rightly saw this new trend as an

opportunity and wanted PMOs closer to them. (Fig. 9)

Fig. 9 (Source: Forrester/PMI April 2011 – Global project Management Office Online Survey)


Gianluca Costanzi

Even young PMOs focus partially on the strategy delivery value. In fact, in order to

justify their existence and not be seen only as overhead, the focus on strategy is

mandatory if PMOs want to unlock business success. Once again, this appears to break

the rules of maturity models and typologies, but it shows how the market is in continual

evolution and PMOs must continue adapting themselves. One size doesn’t fit all.

PMO size and typology is directly correlated with the size of the host company


PMO size is variable depending on the company

size and the size of the company project portfolio.

It can range from one person to hundreds.

Also, typologies follow the same rule; in small

companies, it is easier to find the centralized PMO

model, where in larger companies, a federated

PMO with divisional PMOs is more frequent.

Commonalities regarding PMOs are found in their

resources where highly experienced Project

Managers normally reside. Seen as “center of

excellence,” the PM certification process is also

important, affecting half of the PMOs surveyed.


Gianluca Costanzi

Geography

Fig. 11 (Source: Forrester/PMI April 2011 – Global project Management Office Online Survey)

The fact that this thesis is written for HEC and Mines Paristech, international business

and engineer schools located near Paris, geography can provide an interesting angle

through which to better understand the global PMO.

As per Fig. 11 above, we can see that a high concentration of respondents to the survey

is in North America, while the other areas are geographically very close to each other.

Europe is mainly driven by the UK, where the PMO concepts and establishment are

similar to the US. Latin American and Asia Pacific are far ahead of Europe in terms of

numbers of PMOs. This is surprising since business in general is less mature than in

Europe, but they are using the Anglo-Saxon model as reference.

PM Solutions, authors of one of the two surveys, is based in Brazil with a core audience

mainly on the American continent and only 8% from Europe.

This trend, as previously mentioned, is confirmed by job posting and events (such as

LinkedIn job and event boards).

PMO roles are more widely advertised in Anglo-Saxon countries than in Europe. PMO

events are hosted mainly in the US and UK, with a few in Pakistan, India and Latin

America. Luckily for Europeans, many events are online (webinar, podcasts, etc.), so

despite the time zone, accessibility is possible.


Gianluca Costanzi

PMO Value

Perceived value depends on what senior management perceives of the PMO

contribution. All PMOs, either in reactive or proactive roles, have an objective to

positively affect the 3P (project, program and portfolio) outcome. This justifies the PMO

existence but managing the expectations of its customers remains a challenge that the

PMO will always face.

The PMO value may be realized in various ways, perhaps through project performances

or some other objectives, set by management.

William Edwards Deming, the inventor of the Deming Route (PDCA), famously said:

“You cannot manage what you cannot measure.”

The PDCA helped many organizations to have a life cycle of product quality

improvement through the constant measuring of outcomes. This aided in the planning

for innovative products. Deming principles have also been, and are still, applied to

project management.

Fig .12 (Source: http://en.wikipedia.org/wiki/PDCA)


Gianluca Costanzi

Fig. 12 represents the reiteration of PDCA cycle:

Plan = Identifying and analyzing the problem;

Do = Developing and testing a potential solution through pilot/trial (Do means

try/test);

Check = Measuring effectiveness of test solution, and analyzing whether it could be

improved in any way;

Act = Implementing the improved solution fully and arguing the case for potential

further improvements.

Although it appears to be a digression from our discussion of PMO value, Deming helps

us to combine quality and value.

If manage = measure (paraphrasing the Deming quote) in order to prove value, we need

to measure our results and give tangible outcomes for the organization. Subjective

decisions based on perceptions are often taken in organizations and they might be very

dangerous if not based on objective findings.

Therefore, PMO value must be assessed with metrics that indicate variances on project

management practice performance over specific timeframes.

An example of such an assessment metrics may be:

Performance indicator: Delivering ahead or within schedule;

Performance indicator: Delivering under or within budget;

Quality indicator: Delivering products and services within agreed scope;

Customer satisfaction indicator: Meeting customer expectations;

Other Indicators: Project Scorecards (combinations of other metrics).

The benchmark performed by PM Solutions backs the above statements and gives some

figures about the influence PMOs can have over projects, and therefore allows an

objective outlook from the management.



Gianluca Costanzi

The survey indicates that other benefits are extremely important to acknowledge the

value of the PMO:

Improvement in productivity: This can be generated by repeating standardized

successful project practices;

Increase in resource capacity: Forecasting a capacity plan to optimize the

resources and foresee upcoming needs.

Other benefits more related to strategic considerations include:

Access to quality project information (progress, status, risks and issues);

Prioritization of initiatives and projects;

Organizations based on decision-making rather than silos.

Fig. 14 (Source: Breaking Silos - http://www.global-integration.com/resources)

Fig. 14 shows how a matrix organization can be challenging. A PMO is more of a cross-

functional structure.


Gianluca Costanzi

Conclusions: PMO Challenges

The establishment of PMOs within organizations is growing rapidly. Those PMOs

already enabled will focus on maturity as per those models we have described earlier.

The question, though, that either new or mature PMOs must continue answering is why

they exist. The generation of continuum value, like in Fig. 6, to the business is the key to

ensure that the PMO is seen as an asset and not as a burden. Businesses are evolving

quickly and therefore they must adapt their objectives to shifting targets. PMOs must do

the same to support these businesses effectively, adapting goals for the organization’s

overall improvement. [18]

Another main challenge that PMOs must be able to address is resource management.

We explained that PMOs are about people, so they need to rationalize even further the

capacity planning of organizations. Every organization is concerned about head count

and overhead models. PMOs must help to meet the supply and demand side of

resources for projects, identifying numbers, profiles and timing.

In mature and dynamic markets, resource management is vital for success and PMOs

can play a strategic role for helping organization meet their objectives.


Gianluca Costanzi

Chapter 3

Project Management at Regus: an Audit of Current Practices

The Regus Company and its Internal Organizational Structure

Regus is a multinational corporation that provides serviced office accommodations in

business centers worldwide. As of March 2011, it operates 1,100 business centers in 85

countries. The company is listed on the London Stock Exchange and is a constituent of

the FTSE 250 Index. Regus is incorporated in Saint Helier, Jersey, and is headquartered

in Luxembourg City, Luxembourg.

History

In 1989, while on a business trip to Brussels, an English entrepreneur, Mark Dixon,

noted the lack of office space available to travelling business people; they were often

forced to work from hotels. He identified a need for office space that was maintained,

staffed, and available for companies to use on a flexible basis and went on to create his

first business center in Brussels, Belgium.

In 1994, Regus entered the Latin American market with a center in São Paulo, and in

1999, it entered the Asian market with its first center in Beijing.

Regus completed a successful IPO on the London Stock Exchange in 2000.

In 2001, Regus acquired Stratis Business Centers, a U.S.-based network of franchised

business centers, thereby expanding into the United States market. Later in 2001, the

Regus business center on the 93rd floor of South Tower at the World Trade Center was

destroyed during the 9/11 attacks; five employees lost their lives. The company was

criticized for a lack of response to the victims' families, though a Regus official said

Regus has made "proactive outreach to each and every family of the team members who

are missing."

In 2002, the Company sold a controlling stake (58%) of its cornerstone UK business to

Rex 2002 Limited, a company created by the private equity firm Alchemy Partners. This

move raised £51 million for the company, which had been facing severe financial

difficulties.

In 2003, Regus filed for Chapter 11 bankruptcy protection for its US business, which had

been struggling in the wake of the dot-com bubble. Less than a year later, it took its US


Gianluca Costanzi

business out of Chapter 11 after restructuring, financed by its share of the profitable UK

business.

In 2004, the company acquired HQ Global Workplaces, a global workplace provider

based in the US. The former headquarters of HQ in Addison, Texas became one of Regus'

headquarters.

In 2006, it re-acquired the Regus UK business for £88 million, marking the end of a

dramatic recovery from the company's near collapse in 2002. The company went on to

acquire Laptop Lane, a chain of American airport business centers later that year.

Also in 2006, Regus entered into partnerships with Air France-KLM and American

Airlines for Preferred Access for business travellers and in 2007, it also entered a

partnership with American Express for Preferred Access for their Business Platinum

cardholders.

In June 2008, Regus introduced Businessworld, a multi-level membership service which

allows users flexible access to Regus services in any Regus location worldwide, taking

advantage of the company's international scale. Businessworld is aimed at clients who

travel frequently.

Effective October 14, 2008, Regus Group PLC became Regus PLC. Regus PLC was created

as a holding company for Regus Group PLC, in order to establish the company's

headquarters in Luxembourg and has its registered office in Jersey. Both Luxembourg

and Jersey are business-friendly offshore financial centers. The company is

headquartered in Chertsey, Surrey, England and Addison, Texas, USA.

Despite recording a net loss in the first half of 2010 due to the effects of the global

financial crisis, Regus has maintained a policy of expansion, opening new business

centers. The company has also renegotiated some leasing agreements with property

owners in the UK to save money, warning owners that the vehicles holding the leases

could go into administration. This has angered the British property industry, which

notes that, as a whole, Regus is financially strong.

Regus in Numbers:

As of 2010, Regus generated revenue of £1,040.4 million;

Operating income of £23.8 million;

Net income of £1.9 million;

Regus Employees worldwide: 5,687 (+10% roughly in 2012).


Gianluca Costanzi

Regus worldwide presence

Fig. 15 (Source: Regus Marketing)

Future

Regus set ambitious targets for the next three years, aiming to double its presence

worldwide, focusing on new markets like Asia, Africa and South America where the

concept of a flexible workplace is growing rapidly. In mature markets, however, the

strategy is different, focusing on acquisitions and partnerships in order to reach

capillarity of service in suburbs, train station, petrol stations.

With the job market in constant evolution and demanding of flexible workplaces, Regus

wants to provide tailored solutions for any business at any time.

Regus also wants to enhance its customer service by providing optimal responses to the

diversity of its clients, which range from individual start-ups to corporate companies.

Regus is also undertaking a program to increase their employee motivation by

introducing bonus plans at every level, encouraging the mobility of employees who

want to work in different countries, and providing training sessions to generate a

constant evolution of its workforce.

In order to reach all the above objectives, as other savvy organizations are doing during

this uncertain economy, Regus undertook a Business Transformation Program which

will allow the company to be steered more efficiently to its objectives and be prepared

for future challenges.


Gianluca Costanzi

As projects, by definition, are transforming the business world, the PMO function has

been positioned under the supervision of the Business Transformation Committee.

Overview of Regus’ Main Products:

Office:

Flexible workspace solutions tailored to the customer’s requirements in terms of

location, size, duration and shared services.

Meeting Rooms:

Meeting Rooms are private and professional work areas for customers to hold

conferences, board meetings or strategy sessions.

Video Conference:

Fully equipped rooms for videoconferencing sessions.

Tele Presence:

Fully equipped rooms to give the true telepresence experience available in most of the

business capitals around the world.

Virtual Office:

Perfect for start-ups, small and home-based businesses or for companies looking to expand into new markets. A “Virtual Office” is a simple, cost-effective way for our customers to give the best impression. Customers can have an impressive business address, their calls and messages managed, a local phone number or a fully-staffed office environment. Regus “Virtual Office” services are designed to meet a client’s specific requirements.

Business World:

“Business World” is a fidelity card that allows customers the usage of Regus Center

Business Lounges worldwide at anytime. “Business World” also guarantees the access

of all the business center services such as internet, printing, telephony, post etc.

Workplace Recovery:

Regus offers a disaster and recovery plan, as well as a business continuity plan.

Project Definition: What is a Project in the Regus Environment?


Gianluca Costanzi

After this overview of Regus, its history, products organization and future targets, we

can now dig into the core of this document, which is how projects are dealt with at

Regus, and later, a Regus PMO set up.

A project is a temporary endeavor undertaken to create a unique product, service or result. [3] This is the definition provided by PMI Organization in the PMBOK guide. Since a project is temporary and creates a unique product or service, it has clearly delineated objectives and scope prior to execution. In order to implement the temporary work a project needs, it is necessary to identify resources in terms of human capital and financials. The project triangle in Fig. 16 covers the project identification and is also used to assess the over quality of a project.

Fig. 16 (Source: http://globalknowledgeblog.com/professional-development/project-management-2/triple-constraints-model) Regus has identified the following questions for ongoing projects:

Do we need/have the resources in terms of dedicated people for the initiative?

What is the cost of the initiative? Do we need/have a budget?

Do we have a start and end date?

These three questions generate a more structured approach which outlines the definition of a project in the Regus environment:

– Projects have a clear scope, objectives and deliverables; – Projects have a clear start and end date; – Projects have resources and budgets allocated; – Project deliverables have enduring value to the business.

The real question is that a well-managed project might still not deliver the expected

benefits to the business for many reasons, such as economic environmental changes,

market changes or perhaps the wrong initial objectives.


Gianluca Costanzi

Project management in general is still struggling with this topic.

The LinkedIn PMO “Project Management Office Group” had an interesting discussion,

asking the PMO community the following question:

“Why is benefits management so hard to do? Almost every company accepts the need to

manage project benefits, but very few actually do it. What is the main cause behind

failure in benefits management?” (Discussion started by Fernando Santiago in Feb

2012)

The responses ranged from:

- Benefits managements cannot be done by the PMO or Project Managers as they

are phased out from the projects/programs;

- Project Managers fear that the results of a benefit realization analysis will

compromise the original Business Case;

- Lack and competency of benefits owners able to check the original planned

benefits against the effectively realized ones;

- It is due to the lack of a governance structure (portfolio management).

These are valuable assumptions, but for the Regus scenario, it is probably the last point

which is the most helpful. As we will see later on, there is a direct connection between

the benefits management and the governance structure focusing on Portfolio

Management. Tailoring the PMO establishment, to manage the business expectations of

the Regus strategic objectives, creates a structure that will focus on project

management with the angle of portfolio management.

Project Audit

Now that a clear project definition has been set, an audit of the current initiatives is

necessary in order to separate “business as usual” activities and tasks from real

projects.

With no coordinated model to manage projects, the Operation Department, sponsored

by the CEO, took the lead and assigned some a pool resources to build a consolidated list

of ongoing projects. Each Department Head was asked to send its list of projects. Each

department submitted what they currently used within their part of the organization,

such as Excel, Word or PowerPoint documents. Tasks were mixed with projects and

activities, as well as ideas that had not yet been approved. Everything was part of the

same pipe line; a pipe line which ended up with more than 500 entries. This was a

rather chaotic scenario that needed some discipline, structure and guidelines in order to

become a consolidated project list.


Gianluca Costanzi

In order to make sense of these lists at the senior management level, the second step

was to check all the information gathered versus the project definition. The task was to

know the difference between what the company is doing to build the future (projects),

from running the business (the business as usual tasks and activities).

Fig. 17 (Source: Internally created, Regus, Gianluca Costanzi)

Fig. 17 illustrates that Regus needs to manage projects efficiently if it wants to reach

the growth target. Projects are the driver that will bring Regus to the future.

An analysis of the Consolidated Project List:

Some projects were duplicated, as each department was tracking them in a

separate list;

Many “projects” were “business as usual” (eg. activities and tasks of a specific

department);

Some other “projects” were tasks, activities and milestones of larger projects.

Thus, this analysis allowed a further consolidation which generated a much shorter

list of real projects. About seventy projects were identified as ongoing or at the

starting blocks.

A further check on the submissions raised interesting points to be analyzed.

In fact, it was important to know the typology of the project by department and the

stage or phase of each project.


Gianluca Costanzi

A simple, preliminary framework of project management was established with a

model of Five Phases to categorize the projects when information was available:

1. Initiate: Idea being formulated or project initiated;

2. Plan: Idea being shaped, planned/evaluated, may include prototype;

3. Execute & Control: Implement the deliverables planned, possibly including a

pilot phase. Then, full rollout ,possibly, in waves, using a chucking approach and

including warranty periods for post go-live purposes;

4. Close: End the project. Prepare for the benefits realization after the project is

complete. Confirm the delivery of benefits.

Fig.18 (Source: Internally created, Regus, Gianluca Costanzi)


Gianluca Costanzi

Fig. 18 contains interesting points to be analyzed:

1) The organization struggles to understand the current status of its projects as 23

(almost 30%) out of 70 were in a TBC (to be confirmed) phase;

2) Finance was in control of its project, having already set a governance structure

for project management within the department to oversee all its project;

3) IT had three major, on-going programs due to the fact that Information

Technology in Regus has a double role (Support and Business). In fact, IT

products are part of the sales portfolio, therefore customer facing and revenue

generating;

4) Product Development had many on-going initiatives, but many were just in the

embryonic phase. In fact, this department in Regus acts as Research and

development;

5) Business Development had few projects but this department is in charge of

property management and new business center openings across the globe.

Opening a new business center is not considered a project in Regus;

6) Some departments, like Marketing, were classified under “Others” as they had

only one or two projects to report;

7) Last, but not least, some ongoing projects were not captured due to the time

constraints of the audit and the commitment of the organization. As with any

new entity, this pool of resources requesting information needed time to gain

authority, reliability and confidence. Some departments felt pressured to reveal

information about projects they were working on.

At this stage, though, many questions had still not been answered:

Project Ownership: many projects had multiple sponsors and project managers;

Project Methodology: the same project could be managed with different

methodologies as each department would use its own references;

Priority: all projects were classified as important and subjective decisions were

taken if projects would conflict;

Quality: Scope, Time and Cost of projects were not overseen; therefore projects

could go on forever, with endless budgets, even while delivering poor results and

no expected benefits.

A step forward was taken by this pool of resources to understand the status of the

projects and do some health checks such as:

Is the project in scope?

Is it within the budget?

Are the resources clearly identified?


Gianluca Costanzi

Is there a tracking of benefits?

Are interdependencies among projects and touch points with business process

under control?

Is there a clear project plan milestone?

Are the project risks and issues controlled?

Analysis of Project Traits

The outcome of this exercise was that 77% projects were challenged in at least one

of the areas listed above. Many projects, however, had more than one challenge:

Fig 19


The challenges which 77% (circa 54) of the projects faced:


15

30

40

25 25 25 30

25

0 5

10 15 20 25 30 35 40 45

Project challenge areas Out of 54


Gianluca Costanzi

Assessment of the Project Organization with Human Resources

At the same time, the pool of resources sponsored by Operations and backed by the

CEO, engaged talks with the Human Resources department to figure out who had

project management skills within the company. The Human Resources, as a corporate

department, is a new function at Regus. Before, each region independently managed the

employees as needed, without a central control. Although the Operations (including the

front office employees in the centers) and the Sales Departments were very structured,

the other overhead functions were fragmented and distributed hierarchically and

geographically. Also, the HR Information Systems varied by region. In this situation, it

was impossible to retrieve useful information.

Fig. 21 below outlines the long-term goal to have a competency framework for project

managers:


In the meantime, since the framework could not be achieved in the short term, an

innovative solution was proposed.


Gianluca Costanzi

There was an internal job board with the purpose of motivating people and encouraging

mobility in terms of skills and geography, even for temporary-based assignments. HR

and the pool of resources decided that as projects arose, demanding specific skills for

project managers, the project itself could be posted on the job board. This solution could

satisfy both short and long-term goals. It could satisfy short-term goals because the

immediate demands from new or ongoing projects would be met. The long-term goals

could be met because the process would build a map of competencies, thereby giving

the basis for a structured human capital approach, as the framework above described.

Selling the PMO to the Business: The PMO Business Case

The expression “better, faster, cheaper” is commonly associated with supply-chain

initiatives, where companies have developed an edge by delivering products to markets

faster and more efficiently than their competitors. [19]

A similar expression can be applied to the PMO as well, an entity that makes sure

projects are within scope, within time and within budget.

The PMO business case, however, is not that easily justified in the current economic

environment. Justifying an overhead structure that will ensure that projects are run

properly when the projects themselves should already have a built-in mechanism of

quality control is challenging.

Therefore, the main question regarding the PMO Business Case is why there is a need

for such a department in a particular company. Since “one size does not fit all,” the PMO

goals and objectives must be aligned with each business expectation.

In the “PMO: Project Management Office” LinkedIn discussion topic “Does your PMO

have established goals?” it was found that more than 30% of PMO managers and

directors had no clear goals or objectives set.

One of the main reasons for PMO failure comes from being unable to prove its value to

the organization.

Although the PMO establishment trend is still going up, as we have seen in the market

analysis, recent figures also show that 50% of the PMOs are challenged within the first

year of their existence [17]. Challenges concern mainly PMOs in being re-defined and re-

scoped. This makes the link with 30% of those PMOs not having clear goals and

objective.

In the Regus environment, the “why” question of “Why is the PMO necessary?” has been

asked directly to the CEO, therefore positioning the PMO at the strategic level.

Along with why Regus should have a PMO, other questions were put on the table:


Gianluca Costanzi

Are the projects aligned with Regus business strategy?

Are the projects visible to the senior management?

Do we know how much we are spending on projects?

Are we delivering projects?

Are the projects delivered on time? Within budget? Within scope?

Are the projects duplicated or in conflict with each other?

Do we measure the results of our projects and the benefits they deliver?

What do we learn from completed projects? Where is the project data stored?

Do we have skilled and trained Project Managers (PMs) in charge of projects?

How many PMs do we have at Regus? What are they working on? What is the PM

organizational structure?

Are the PMs using the same tools for each project?

These questions seem confusing, regarding which type of PMO Regus wants to enable.

Some of the questions lean towards a Portfolio Management Office. Others resonate

more with a Program Management Office. And yet others address Project Management

Office, Project Support Office and Center of Excellence typologies.

The range of questions was deliberately broad for two main reasons:

Retrieve clear business requirements to set clear goals and objectives in line

with business expectations;

Make the PMO effective early on by addressing the needs of the executives,

but also taking into account the needs of the field.

As previously mentioned in Peter Taylor’s book “Leading Successful PMOs”, an effective

PMO that wants to ensure its perennity and value-added to the organization, must have

a parallel strategy impacting the organization itself from top down as well as from the

bottom up.

The business case at this point was practically built, considering the outcome of the

project audit: project success is a critical enabler to helping Regus become the company

of the future. The PMO is the key to unlocking business innovation.

The justification of establishing a PMO within Regus can be summarized by the

following paragraph:


Gianluca Costanzi

With the current business scenario and organizational changes, there is a need to re-evaluate the process in which Enterprise Projects are planned, prioritized, and delivered. Currently, projects engaged by the organization are handled separately by the support group for that functional area; this means that projects are currently run in ‘silos.’ However, the organization is now operating in an environment that is cross-functional in nature, where projects will have outcomes that affect one or more functional areas across the company. Thus, there is a business need to standardize the way projects are planned, prioritized, and delivered. In order to support a successful business strategy, projects need to be completed on time and under budget, while increasing the quality of product implemented end-user satisfaction and increasing the frequency of completed projects. The need can be fulfilled with the practice of Project and Portfolio Management and the creation of a Portfolio Management Office.

Establish a PMO Tuned to Regus’ Needs

Once the case for a PMO has been endorsed by senior management, it is at this stage

that the real PMO journey begins. The pool of resources is converted into a stable team

that will bring the PMO into its first six months to focus on short-term objectives, while

preparing the path for long term objectives.

Objectives

Short-Term Goals:

Provide On-going Project Visibility:

Generate monthly reports on projects for the top management, indicating the status of

the projects in terms of scope, time and cost, allowing the management in a PMO

steering committee session to prioritize projects according to the business strategy.

Approve new projects:

Define a process for new projects approval. From the requestor to the PMO as first-stage

gate, and then ultimately signed off by the PMO steering committee if the project meets

the business strategy.

Develop PMO Methodology:

Create a set of tools, processes and templates, standardized across the organization, to

support the entire project life cycle.


Gianluca Costanzi

Understand Individual Projects:

Gather information on each on-going project in order to effectively advise the project

team and the senior management on the real status of the projects.

Provide Project Support:

Help the project management community with training, project support in deficient

areas like risk assessment, business case, change management and communication plan.

Long-Term Goals:

Manage Interdependencies:

Manage interdependencies and touch points among projects, processes and

departments. Be able to point out critical paths, optimizing resources across projects.

Assess the impact of the change in the field, Business Units and Departments, avoiding

conflicts, duplications and overlapping.

Measure Projects and Benefits:

Establish KPIs and metrics for project performance measurement purposes. Establish

criteria for benefits realization.

Standardize Project Management and Provide Governance:

Deploy across the organization the project management methodology and assure that

project governance is followed by the project managers.

Assess and Coach Project Managers:

Act as Centre of Excellence, coach project managers on the project management

methodology. Ensure that the project team people are at the right place according to

their skills.

Automate Project Management:

Deploy a project and portfolio management tool that will automate project

management, reporting cycle, decision making, stage gate clearance, real-time

snapshots of ongoing projects, automatically-managed interdependencies, decreasing

the percentage of errors due to manual interventions.


Gianluca Costanzi

Managing the Expectations of Executives (Stakeholders) Towards the PMO Role

With the endorsement of the senior management and the PMO objectives set, the next

step to take is to inform the organization about the purpose, vision and objectives of the

PMO.

Respecting the existing hierarchy, a dialogue with the Department Heads and Business

Units was necessary.

This dialogue process generated some interesting findings.

While the Department Heads were all in agreement on the need of a PMO, opinions

were diverse on the objectives and purpose of the PMO itself.

The IT department, for instance, was in need of a third-party entity that would assess

and validate the demand side (Business) while checking the supply side (Support

functions like IT, Training, Procurement and Operations). IT needed a capacity planning

tool able to consider “what we want to do” versus “what we are capable to do”. IT also

needed a process able to evaluate the gaps along with the Steering Committees; a

process also able to support decision making in terms of financials, resources, impact,

strategy and prioritizations. The IT department was completely focused on the portfolio

management side of the PMO through a funnel process of idea evaluation. On the

contrary, project management objectives were secondary since IT could cope with its

own project management skills. Thus, for the IT Department, it was more important “to

do the right thing” rather than “do it in the right way, in the right order or with the right

people.”

The Procurement Department, however, was focused on “be aware at the right time.”

According to their point of view, they needed to know ahead of time when things were

happening. Often, they would find out at the last minute their involvement on a project

and had to meet impossible schedules while they could have planned in advance. So,

their PMO expectations were a communication channel for sharing lists of projects. In

other words, they wanted the PMO to inform them regularly of the project status and of

any new projects, initiatives or ideas. The other PMO objectives were important, but out

of their control, so they were not a priority.

The HR and the Product Development Department were in need of project managers.

Their expectations from the PMO were to take charge of their projects with the right

expertise. They wanted a PMO that could deliver their project effectively, once

approved.

The Operations Department was the department which was most actively supporting

the entire set of PMO objectives. They already had a divisional PMO to oversee and


Gianluca Costanzi

manage all the Operations projects. They could see the advantage of standardizing tools,

process and templates. Having a unique entry for projects would make their life easier.

A complete alignment was possible if all the PMO objectives were supported.

The Finance Department was obviously more interested in the financial side of projects

if the PMO could bring value-added. This could happen through a process of investment

validation, company budget allocated for projects, cost tracking and capitalization of

project costs.

Other departments were more neutral about the PMO role. Marketing, for example,

considered that reporting to the PMO was something they had to do but could not see

the immediate benefit. In the long term, a structured approach around projects would

pay off but that would come with the short-term burden of a painful reporting cycle.

Conclusions: The PMO Role

In general, today’s PMOs are under pressure to be business process change agents that demonstrate value without generating revenue. PMOs can be a key differentiator, and the next generation PMO accomplishes this by creating a flexible framework that fosters the investment process, managing multiple types of work, adopting lean techniques, and providing tools and support that adapt well to increasingly more agile environments. In today’s business world, a PMO must think pragmatically to respond to the needs of the organization. As consensus of the PMO role within the organization is not yet unanimous, the PMO must be flexible enough to address the expectation of each functions to ease the cross functional interaction and break the silos that can be found in any company. Therefore, relationship management is the primary requirement for a PMO to be successful. PMO leaders must stay away from their comfortable office chairs and engage durable relationships with the heads of other departments to tailor the PMO support to the business needs. As well, PMO managers and PMO teams must be in constant touch with the project teams and the internal project management community where “real” things happen. This approach can align the organization in parallel from the bottom up to the top down, with the PMO being the key holder of such a relationship and build the necessary consensus. [20]


Gianluca Costanzi

Chapter 4

Tailoring a PMO for Regus and its Departments Needs: a Collaborative

Approach

In this section, we will explore what kind of PMO Regus decided to enable to respond to

its organizational needs and manage the expectations of senior management, as well as

the internal project management community.

Difficulties, Risks and Barriers to Overcome: the PMO Critical Success Factors

It is a duty of the organization to decide on the role and responsibilities of the PMO.

Both the PMO and the organization will restructure and evolve over time, redefining the

success factors for the PMO, as well as its objectives

The PMO functions must take into account the current conditions of the economic

climate, delayed projects, or lack of credible resources of skilled and qualified Project

Managers. A well-designed PMO allows the delivery of cost control through efficient

budgeting, better control of scope, and the increase of overall project quality, and

training for Project Managers. Through these initiations, the PMO positions itself for

generating value and success for its customers and stakeholders.

The accomplishment of projects usually depends on the following features: the synergy created between customers and the project team, along with overall goals and plans, constant management of the project’s scope to avoid scope creeps, and finally a tool for gaining visibility into project status with health checks at all levels throughout the life cycle of the project. Switching from a single project perspective to a more holistic angle, the following Critical Success Factors (CFSs) will be fundamental to the realization of the PMO. Andersen, Henriksen, and Aarseth, in ” Benchmarking of Project Management Office

Establishment: Extracting Best Practices” give this list of CSFs: [11]

Design the PMO (centralized, decentralized, and distributed) according to the

objectives;

Cover the true requirements of the organization, as identified by the PMO

stakeholders;

Guarantee executive support;

PMO Support should be not chargeable to the projects;

Do not develop the PMO into a control unit of bureaucracy;

Resource the PMO with qualified Project Managers with broad knowledge;

Focus on enhanced project management practices.


Gianluca Costanzi

Desouza and Evaristo, in their study “Project Management Offices: A Case of Knowledge-

Based Archetypes” provide similar CSFs for PMOs: [21]

The PMO should fit in the organization’s culture. If there is a corporate structure,

the PMO should be designed from the top down. If it is a distributed one, a

bottom-up approach with the intentional collaboration of Project Managers

would be most suitable. Executive support for the PMO is in all cases needed;

Focus on expectations of PMO stakeholders;

Divide Project Managers in two categories: Business oriented PMs for strategic,

large projects; and Technical oriented PMs for technology specific projects;

Clear reporting lines;

PMO charter and correlated documents;

Metrics to evaluate PMO. Compare past performance and also compare with

external benchmarks.

At Regus, if the PMO is to be successful, there are several key issues that must be addressed. These are outlined below:

Executive Support; Effective PMO Steering Committee; Agreement of Requirements and Scope; User Involvement and Collaboration; Resource Alignment Reflective of Current Need; Management of Expectations; Strong Project Management Infrastructure:

o Minimal Scope Creep; o Strong Change Control Process; o Standardized Project Management Methodology;

Ability to Measure and Report on Project Performance; Do not turn the PMO into merely a report unit that assigns color codes

(green, yellow and red) to projects.

In addition to the items listed above, the following barriers have been identified as opportunities to address when considering the implementation of a PMO, as they often lead to difficulty and resistance in acceptance:

Unclear purpose: not well defined or communicated; No or limited executive buy-in; PMO is seen as an overhead or marketing function; Unrealistic expectations that the PMO is a ‘silver bullet’ giving a quick fix to core

business-level problems; PMO is seen as too authoritative, or perceived as a threat; Politics and power struggles; It is hard to prove value.


Gianluca Costanzi

Critical Success Factors and barriers implicitly generate risks and difficulties to

overcome. These should always be taken into account by the host organization where

the PMO settles. The PMO should at all times refer to the agreed-upon lists of Critical

Success Factors and Barriers to Success in order to keep focusing on the right moves.

These lists should trigger a risk analysis for the PMO and generate risk mitigation plans

to prevent PMO scope creeps, credibility loss, thereby being seen as just another

overhead.

Keeping all of the above in mind will allow the PMO to progress at the right speed,

starting at core needs and only then moving to Governance and Portfolio Management.

This should happen only when the organization is ready to accept them as the PMO

grows and senior management can fully recognize the contribution of the PMO.

A Workgroup Based Approach

As we have seen in the Stakeholders’ interviews in the section “Managing the

Expectations of Executives (Stakeholders) Towards the PMO Role,” the consensus about

the role of the PMO was unanimous. So, the question remained of how the PMO could

address the needs of each department of the organization.

The nascent PMO team wanted to set up the PMO tools, processes and templates in a

collaborative way.

Rather than impose these new tools, forms and processes to the rest of the organization,

the PMO team asked the organization itself to build these tools together. A group

representing the project management community of each department would

collaborate during a given time frame over workshops, meetings, and conference calls

to decide which tools should be implemented. Thus, the Workgroup based approach

was born.

The idea was endorsed by the PMO Sponsor, who then discussed this with his peers. The

PMO received the green light on the principle at the executive level.

Then, the PMO team started individually reaching out to the Department Heads,

requesting resources to join this collaborative initiative.

Workgroup Scope and Objective

Actively Design, Review and Adapt PMO methodology to the Regus organization;

Execute the PMO Plan (generated by PMO Team) and adapt it for Workgroup

activities;


Gianluca Costanzi

Report on PMO progress to their Department Head, as well to colleagues within

the department;

Build up PMO Governance and Framework;

Initiate a Strong Communication Plan to reach the capillarity of the organization.

The intention behind these objectives was to promote broad visibility about the PMO

establishment with a strong communication plan. Also, it was to involve all the relevant

parties working on projects at Regus, so that the PMO could have a faster buying in,

smoother adoption and faster value generation.

The other benefit of the Workgroup was to take advantage of project managers’ skills

and sponsors already present in Regus. This Workgroup approach would thus initiate

an appreciation of the human capital value of the Regus project management

community.

Workgroup structure

Timeframe: The Workgroup will have three months from the initial

meeting. Workgroup members are required to dedicate a specified

amount of their monthly hours to this project. A kick-off meeting of one

half day and then a two-hour conference call each week. A closure

meeting will be performed at the end to consolidate all the results and

provide final reports. Members will also be required to execute some

offline tasks of review, assessment and new skill acquisition for the new

processes. The offline time engagement will be minimal, but is key for

efficient online meetings.

Members: Each department was asked to provide one or more resources

to participate in the Workgroup.

List of Members:

• 1 Resource from Product Development;

• 2 Resources from IT (1 from Applications Development and

Infrastructure Management);

• 1 Resource from Operations Americas Region;

• 1 Resource from Business Development/ New Center Openings;

• 1 Resource from the Sales Department;

• 1 Resource from the Global Operation Team.

List of Optional Members (people that could potentially act as reviewers):

• 1 Resource from Marketing;

• 1 Resource from Procurement;


Gianluca Costanzi

• 1 Resource from HR and Training.

Workgroup coordinator:

The PMO team (3 Members) will coordinate activities and will represent the

Finance Department which is the Executive Sponsor of the PMO.

Member Profile sought:

Experience in Project Management;

Hold a Project Manager role;

Knowledge of Project Management Methodologies (PMI, PRINCE2, Agile,

PDCA and others);

Knowledge of Program Management and Methodologies (MSP, PgMP);

Experience in PMO structures.

Findings

The structured approach to each meeting and conference call allowed for effective time

management. Agendas, minutes, and time-slot management per topic gave credibility

and professionalism to the initiative. Members could keep focus and feedback was easily

assessed.

The constant dialogue among the community strengthened relationships and made it

easier to work together outside of the Workgroup.

Projects and interdependencies among projects were discovered thanks to the

proactive discussion during the Workgroup sessions.

The Workgroup also decided that the timeframe should be extended and that these

meetings should take place on a permanent basis. The proposal was to modify the

purpose of the Workgroup from building the PMO towards running the PMO in a

federated model.

The benefits of the Workgroup will be further analyzed in Chapter 5. The initial

Workgroup goal was met in that all the PMO tools, processes, project methodologies and

templates were designed in a collaborative way

However, some difficulties were encountered. The busy schedule of all the attendees

was one of the major issues. It was impossible to have all the resources available at each

session. The risk was already present before the start, but the overall commitment was

still good with 80% of the resources consistently available.

Another interesting assessment is that among a homogenous group of people, according

to their profile, each had a different personality approach during the sessions. While

some people were very proactive, talkative and engaging, others were more silent,


Gianluca Costanzi

listening and reactive only on direct questions. To the same extent, the talkative part of

the group was communicating everything orally and assuming the notes and feedbacks

would be taken by the coordinators. On the other hand, the silent ones were great in

offline reviews, sending written feedbacks about the meeting and conference calls.

The communication plan did not work as expected, perhaps due to the busy schedule of

attendees, or that the objective was not necessarily reinforced by the coordinators

during the sessions. The visibility of the PMO work and Workgroup did not reach every

division of the organization. This generated a heterogeneous, and therefore not aligned,

understanding about the PMO implementation.

Member Feedbacks

Workgroup members were asked to provide feedbacks online and offline. All topics

were open for feedback, including the organization and structure of the PMO.

The overall feedback was very positive.

Some members recognized the serious approach and importance given by the PMO

team to the Workgroup initiative, where they felt that their opinion was fully

appreciated.

Others members acknowledged the successful attempt of breaking department silos,

allowing people to talk in a productive, cross-functional way.

The Global Operation Representative was fairly new to the company, but had broad

knowledge of PMOs in large and international organizations such as Siemens. He had

worked in various parts of the world, from America to Europe, South Asia to the Middle

East. He acknowledged that in twenty years experience in PMOs and Project

Management, this was the first time that he had seen a large company like Regus taking

a collaborative step towards PMO building.

A Customized but Standard Project Management Methodology to Suit the

Regus Environment.

The PMO Workgroup was also asked to design a framework for project management; a

methodology that could be implemented easily throughout the organization in the most

efficient way. The senior management had always insisted that any tools implemented

must be simple and easy to learn for all members without interminable training

sessions. This was due to the lack of familiarity the organization had towards project

management.


Gianluca Costanzi

Within this scope, the PMO workgroup reviewed different methodologies such as

PMBOK, Prince2, and PDCA. All methodologies are good per se, but the question is how

they could fit in with the context to which they were applied. Any standard framework,

as the above mentioned, would be too complicated for Regus since the company was

still unfamiliar with a structured process regarding project management. The

Workgroup agreed that an easy custom framework would respond to Regus’ current

needs. It would also satisfy the request of the senior management and could be

implemented quickly.

The framework (Fig. 22) proposed is a mixture of various methodologies aiming to

simplify complex concepts:


Roles and Responsibilities

Roles and Responsibilities were a weak point in the project audit that was performed in

Chapter 3. The Workgroup also focused its attention on this side of project

management. This point is actually a key one for the overall project success. Roles and

Responsibilities are decided in the first two stages (initiate and plan) of the project life

cycle we have seen in Fig. 22. The Workgroup highlighted the responsibilities in a easy


Gianluca Costanzi

framework for the main project roles and put together a glossary (Annex No. 2) for

project terms so everyone could be comfortable with the terminology employed.


Furthermore, a tool to assign roles was needed. The RACI model seemed to respond

exactly to the Regus requirements.

The RACI model (matrix) is known also as a Responsibility Assignment Matrix, or a

Linear Responsibility Chart. [22] It illustrates the involvement of different roles in

completing tasks or deliverables for a project or program. It is especially useful in

clarifying roles and responsibilities in cross-functional and inter-departmental projects.

[23]

RACI is an acronym derived from the four key responsibilities most typically used:

Responsible, Accountable, Consulted, and Informed.

Key Responsibility Roles

Responsible: Those who do the work to achieve the task. There is typically one role

with a participation type of responsible, although others can be delegated to assist in

the work required (see also RASCI below for separately identifying those who

participate in a supporting role).


Gianluca Costanzi

Accountable (also approver or final approving authority): The one ultimately

answerable for the correct and thorough completion of the deliverable or task, and the

one from whom the responsible is delegated the work. [24] In other words, an

accountable must sign off (approve) on work that the responsible provides. There must

be only one accountable specified for each task or deliverable.

Consulted (sometimes counsel): Those whose opinions are sought, typically subject

matter experts; and with whom there is two-way communication. [24]

Informed: Those who are kept up-to-date on progress, often only on completion of the

task or deliverable; and with whom there is just one-way communication.[24]

RACI matrix example


Communication Plan

Communication is a key element in any organization or department, but for a nascent

PMO, it is a fundamental factor of growth and survival.

Both the Gartner article, “PMO Best Practices - Focus on People at Early Maturity Levels,”

[30] and the Forrester article “Next Generation PMO” [20] indicate that communication is

vital for the PMO to communicate its message. In Chapter 2, we saw that PMO is still a

young function and although the trend is growing, many people are not aware of its role.

Even established PMOs are challenged on their effective value, perhaps seen only as a

color-coding department or the internal police that reports to senior management.

Academic resources, online communities, as well as the Regus case study feedback, all

agree that the focus needs to be on relationship management.

But the PMO also needs to find the most effective way to communicate since

organizations are already overloaded by all kinds of daily information, such as


Gianluca Costanzi

thousands of emails and advertising. Also, the schedules of managers, whether

executive or middle-senior, are already full with appointments, meetings and

conferences.

In this scenario, the PMO has to fill the smallest gaps available with relevant and precise

information that will strike the managers’ eyes.

Forrester’s “Next Generation PMO” article suggests that PMO leaders should stay outside

their offices and engage in relationships with the other executives, project managers

and relevant members of the organization in order to establish a level of trust which

will be the basis of win-win relationships.

In our case, the collaborative approach mentioned with the Workgroup was already an

integrated strategy of the communication plan. It was mainly addressing managers at

middle-senior level but with approval of senior management. The senior management

did have visibility on PMO activities, but this was not enough to showcase the PMO’s

value-added at the highest level.

In order to have more consensuses, awareness and demonstrate value-added, an

adapted strategy was engaged to address, as much as possible, the expectations of the

senior management. The PMO engaged in constant dialogues with executives so as to

focus on the topic of interest of each department.

The Chief Information Officer (CIO) was interested in the portfolio management angle of

the PMO in order to prioritize high demands of projects towards IT from other

departments. Although, in the maturity level schema, portfolio management is reached

by mature PMOs, the Regus PMO started working alongside the CIO on this topic. The

following chapter will address these points.

However, the Chief Procurement Officer (CPO) was focusing on “be aware at the right

time” in order to anticipate workload and resources availability. His focus was the

sharing, in a fluent manner, of the project lists, and flagging new projects at the right

time, thereby making the PMO a strategic partner for the Procurement Department.

During these interviews, we have seen that the HR and the Product Development

Department were in need of project managers. Their expectations from the PMO were

to take charge of their projects with the right expertise. The Regus PMO didn’t have the

resources to address this point and was also out of scope at this stage. But project

support was a fair response to their needs. Helping project managers with their issues

and constantly engaging sponsors about risk mitigation and impact evaluation

generated a level of trust and value-added by the PMO.

The Chief Operations Officer (COO) was supportive of the whole set of PMO objectives.

Also, the COO had set already a divisional PMO to oversee and manage all the

Operations projects. It was probably the easiest relationship to establish for the PMO;


Gianluca Costanzi

converging on the same set of tools, templates and methodology strengthened the

cooperation.

The Chief Finance Officer (CFO) was obviously more interested in how the PMO could

bring value-added to the financial side of projects. The PMO, therefore, focused on the

budgeting and cost side of projects with finance controllers. While budgeting was more

on the portfolio management angle and therefore will be addressed later, the cost

tracking is possible to achieve by educating project managers to add financial figures on

their reports.

The PMO also introduced monthly reports, but only very short, and at a high level

including diagrams and charts, in order to increase visual impact. Focusing on

interdependencies and overall projects’ timelines gave a tangible sense of what was

happening throughout the company. These reports have generated positive feedback

and more people at every level of the company have asked to be part of the distribution

list. This underlines the high level of interest in the PMO’s work.

Standard Templates for Projects

Templates for PMO and projects can be found in many sources. Online websites offer

them for free; complete toolkits can be downloaded using Prince2 or PMI

methodologies. Others are available in custom formats issued by consultant companies.

PMO templates are unanimated tools that need to fit the purpose and the environment

in which they will settle. It is important to have a set of standard tools so that the

community can speak the same language. But, as any language must be appropriate to

the conversation and the topic, it also has to be relevant to the parties. Otherwise,

understandings and participation will never get off the ground. For instance, the

language used in a business meeting is not the same of a talk show or a family reunion.

The topic is even more important because it could make people uncomfortable, bored or

even walk away.

Therefore, although templates seem to be a low-priority element for the PMO, it is the

thread that links everything together.

Approaching templates in a collaborative way, as we have seen earlier in this chapter,

was a smart move to model unanimated objects by the people using them.

Some of these templates are showed as annex No. 3.

Metrics and Key Performance Indicators (KPIs)

Metrics employed to track the PMO value should consider who is accountable and

responsible for the specific areas. This brings us back to the importance of roles and

responsibilities.


Gianluca Costanzi

PMOs have been seen to have bipolar distributions with either very little or very

significant decision-making authority. PMOs can also have either no responsibility on

Project Managers, or have all Project Managers reporting to them. [8]

The expected benefit from each type of PMO has to be different. For instance, in

“Supervise,” PMOs with low decision making authority and where Project Managers

report to Functional Managers, most accountability and responsibility for project

performance resides in the Functional Managers rather than the PMO. Political or

ownership tensions may arise on different views of project status. The contribution of

the PMO to the organization should be clear, with defined functions and metrics

according to its level of responsibility.

The article by Parviz F. “Is Your Organization a Candidate for Project Management Office

(PMO)?” provides a clear window on this issue. Part of the PMO’s value-added is that it

can control the cost of supporting “slipping” projects. If the projects that are not within

budget, or late, or facing scope creeps, are costing (in any measure of currency, human

resources, customer or market shares) more than what the organization is willing to

tolerate, then there is a case for wanting a PMO to help improve project management

competencies. [25]

The Gartner article “PMO Metrics: It Is All About the Change They Measure” tells us a very

similar story. Metrics and KPIs cannot be empiric or detached from the PMO purpose.

Actually, they are the link to measure the value and effectiveness of the PMO in the

organization. The PMO should be able to quantify the results of its achievements and

show them regularly to the stakeholders. [26]

As is often the case with the objectives and goals, they shift along the journey. It is

important that the metrics and KPIs are updated to fit the evolving environment.

Project metrics are normally established before the projects kicks off. They can be

standard ones like cost, time and scope or go further, like benefits realization, team

performances and impact measurement.

Sometimes, it is hard for new PMOs to measure their value in the short term, but as time

goes by and knowledge is gathered through benchmark activities and baseline work, it

becomes possible due to the ground created. Therefore, it becomes possible to justify

their existence to the stakeholders, thereby triggering survival instinct.

Our case follows the same ground rules: Metrics and KPIs should measure those aspects of PMO performance that are directly related to its Goals and support its Vision and Purpose. On that basis, the following areas of focus can be used to assess PMO value to the organization.


Gianluca Costanzi

The Regus PMO has established, in the PMO statement of work, (Annex No. 1) the following criteria for Internal Review and Assessment purposes. The PMO staff will develop or acquire the appropriate tools with which to measure PMO effectiveness. The PMO Executive Sponsor has the role to approve such tools before they are implemented:

1. Attributes used to assess PMO effectiveness will include improvements in project successes over time that can be measured through:

a. Decreases in schedule and budget overruns; b. Delivery of all projects to planned scope; c. Customer/project participant responses.

2. The effectiveness of the Project Management approach can be measured by: a. Quality and timeliness of project planning documents; b. Accuracy of time and cost estimates; c. Effectiveness at mentoring and coaching project teams.

3. The PMO will periodically perform project health checks with the Project Manager (and, if appropriate, the Project Sponsor). Health checks will include a more detailed review of key project attributes (scope, timeline, budget, etc.) and will be used to ensure that projects do not continue for an extended period of time without communication between the PMO and the Project Manager. Candidates and frequency of health checks will be evaluated based on results as reflected on the Dashboard, or otherwise as directed by the Executive Sponsor or Global Steering Committee.

The PMO, with input from customers, will be responsible for the gathering of performance metrics.


Gianluca Costanzi

Going forward, other potential metrics were identified from the statement of work that could integrate with the previous ones and give more value to the PMO work.

Activity Potential metric Identify projects at risk and provide recommendations to address.

# recommendations implemented

Assist project teams in all phases of their projects from project initiation to project closure

published and updated document

Train organizational Project Managers in a full range of Project Management topics if necessary or requested # of training sessions by topic

Report to PMO Executive Sponsor and Global Steering Committee on Projects (monthly)

report content and timely completion

Report to PMO Executive Sponsor and Global Steering Committee Metrics that measure PMO effectiveness – (annually or quarterly)

quality of project information; qualitative feedback from steering committees, stakeholders

Report to PMO Executive Sponsor and Global Steering Committee Issues and opportunities (as they arise)

# raised vs. timely and successful resolution

Maintain and publish a “Lessons Learned” archive # lessons captured, shared, and incorporated

Maintain the PMO Portal (web visibility from a web based Project Management Tool)

% of projects whose managers use the tool

Set the Project Management standard % projects not using standards

Project Phases are described and detailed in an annexed document

published and updated document

Standards are posted on the PMO Portal # standards

Provide Project Management tools for organization-wide use

# Tools standardized across project teams


Gianluca Costanzi

Conclusions

In a distributed organization like Regus, the collaborative Workgroup based approach

was the way to go. In the future, its nature should shift from temporary to a structure of

permanent entity that is synced with the whole project management community,

finding cross-functional synergies. Structuring Roles and Responsibilities is also a good

start, but this requires time and effort to make it effective since it implies a cultural

change.

Communication in general seems to still be the largest obstacle since information never

completely reached all the members of the organization. Concerning the PMO activities

in this section, the PMO Workgroup would have probably gathered more visibility and

momentum if all the parties that had engaged in it would have distributed the

information as per the communication plan agreed upon.

The way forward it is to pick the right metrics and measure the results accordingly.

Metrics, as objectives and goals, must bring a value-added to the business and therefore

eliminating self-accountability. As the business environment evolves, so do the PMO

metrics.


Gianluca Costanzi

Chapter 5

A Global View of Projects: How to Manage the Project Portfolio

Projects are enablers of change, innovation and optimization. Through Projects, Regus

will be able to pursue its targets and objectives, shaping the organization for the future.

But is this enough? Running projects on time, within budget and scope: will this be

sufficient? Will “doing things in the right way” ensure that Regus can meet its goals?

The answer is no, for the simple reason that a well-executed project might not produce

the benefits promised. Or, a similar project could already have addressed that need. Or,

perhaps the ecosystem has changed in the meantime, and those needs are no longer

necessary.

During the project audit, we have seen that projects were sometimes duplicated or in

conflict. For instance, if a cost reduction project takes place in the same area where

another project is trying to increase market shares, there is probably a conflict on the

objectives of that business area. From another angle, if two projects are pursuing similar

objectives in two different areas, perhaps they should join efforts, forming one larger

project.

All these considerations bring us to the conclusion that in environments of economic

uncertainty and rapid changes, it is important for organizations to have complete

control over their project portfolio. The question “Are we doing the right things?” is as

important as “How we do things” because it can enhance or endanger the company

itself. It is in this context that a global approach of the project portfolio is necessary.

Workgroup Input and Stakeholders’ Expectation Input

Input regarding the project portfolio management was provided by the Workgroup

members, middle-senior managers involved in projects and stakeholders, and

executives/department heads who often sponsored projects.

While there were different expectations, a common list of the portfolio management’s

needs could be established:

Projects in conflict, duplicated or unnecessary;

New projects spontaneously approved;

Projects impacted the organization without full awareness;


Gianluca Costanzi

Demands were too high considering the capacity of delivery of the

organization;

Interdependencies among projects were not taken into account;

Activities and tasks (“business as usual”) were run as projects with no

prioritization.

These few points could already build a solid business case for portfolio management.

Portfolio Management vs. Project Management

In Fig. 1 of Chapter 2, we already saw the relationship among project, program and

portfolio management. The first section of this chapter already addressed some key

elements of the differences between portfolio management vs. project management.

Literature on the subject often tends to separate the two topics. Portfolio management

is associated with strategic goals and the natural evolution of mature PMOs. Project

management is more treated as a tactical move and associated with entry-level PMOs.

Although maturity models like in Fig. 4 and Fig. 5 are a great reference for positioning

PMOs and evaluating potential evolutions, in real-life scenarios, the distinction is not

always so clear. An effective PMO needs to find the right balance between project and

portfolio management. It is pragmatic to address the strategic and tactical requirements

in order to manage the expectations of customers and stakeholders.

We intentionally kept this paragraph short and avoided going into details about

program management. Throughout this document, we have been approaching portfolio,

program and projects from different angles. But as a reminder of the overall situation

we want to reemphasize the definition given earlier: [27]

Project = Do things in the right way

Program = Do things in the right order

Portfolio = Do the right things


Gianluca Costanzi

Strategic Alignment

Research shows that cyclists expend significantly less energy when properly positioned

to draft off one another. Similarly, geese can travel 70% farther when aligned in “V”

formation. Businesses, too, achieve similar benefits when they are well aligned. [28]

Let us analyze this concept further. A business definition of strategic alignment from

Advance Business Consulting (www.advancebusinessconsulting.com) is:

“Whatever key business purpose and business strategy your company emphasizes: customer intimacy, technology optimization, cost optimization or disruptive innovation, workplace practices must reflect and actively drive behaviors to deliver on that purpose and strategy and your corresponding market positioning.”

More pragmatically, strategic alignment is the link between the business strategy and the organizational structure, processes and projects. Given the strategic objectives that must be reached, the following questions are relevant:

Do we have the right competencies? Do we have the right infrastructure? Do we have the right processes? Are we doing the right projects?

Techniques like the “Balance Scorecard”, as theorized by Kaplan and Norton, are techniques in which the strategy is declined toward the base of the organization. The “Balance Scorecard” can help reach strategic alignment since they can visually and tangibly establish which components are missing and which ones must be improved to reach the business objectives. [29] The example in Fig. 25 shows the declination of the strategy at a high level:


http://www.advancebusinessconsulting.com/


Gianluca Costanzi

For Regus, it would be difficult to establish such a structured approach, at least initially.

The next paragraph will explain a more pragmatic tool that could have a broader

consensus across the organization.

Project Selection Process – From an Initiative to Delivering a Product

The main objectives behind this section are to identify an effective decision making tool

that will allow businesses to take informed decisions when considering new project

requests, the current project portfolio and the business strategy objectives. The

evaluation process should also consider feasibility, impact, costs and benefits, and the

capacity to deliver in terms of human resources.

The following diagram shows how Regus could assess initiatives from the initial idea to

benefits realization. The whole cycle has been integrated with the project management

methodology. Vertically, there is the strategic side, where the decision is taken. It is

where the company decides why one initiative should go ahead, taking into account the

current scenario. The tactical side is shown horizontally, which shows how to realize

the initiative which is being considered. Decision points, or stage gates, are also present

on the tactical side for the post-planning phase. For instance, the PMO Steering

committee (which Regus calls the Global Steering Committee) knowing all the elements

on the project (business case, cost and benefits, impact, risks and resources), can decide

if the initiative should go ahead or be parked. If it is parked, it could be re-considered in

future sessions or stopped if it is not responding to the business objectives it was

approved for during the initial phase.


Gianluca Costanzi


Below are the thirteen detailed steps of the initiative life cycle workflow that come into

play regarding a decision:

1. Requestor submits the initiative to the PMO (using Initiative Form which is in

Annex No .4)

2. PMO will work with departments to put together high-level capacity plan;

3. PMO submits validated and completed Initiative Form and high-level capacity

plan to all departments and Global Steering Committee;

4. Initiative is assessed against Regus’ strategic objectives;

5. If the Initiative fails to pass the first “screening,” it might either be cancelled or

parked with the option of being resubmitted in a future session;

6. If the initiative passes, the Global Steering Committee will evaluate which

initiatives should be undertaken based on other criteria, including cost and

benefits, risks, time of benefits realization;


Gianluca Costanzi

7. Project portfolio constraints, such as high-level resource capacity, will be

applied;

8. The initiatives which pass this second “screening” will be given a go-ahead to

proceed to the Planning stage. (Initiatives like proof of concept or vendor

evaluation go through the life cycle with initiative form information. Then, they

come back with findings to the Global Steering Committee with the purpose to be

converted into a full project);

9. As part of the Planning stage, a PM will be assigned and will complete a Project

Brief, including the Initiative’s resource plan, along with further analysis and

validation of the items in the Initiative Form;

10. The PM submits the Project Brief to the PMO;

11. The PMO submits validated and completed Project Brief to Global Steering

Committee;

12. Any attributes that have changed since the second “screening” will be re-

evaluated by the Global Steering Committee, who may table it for discussion

among senior management meetings when all the head of departments are

present;

13. The Global Steering Committee decides whether to execute the initiative,

considering project portfolio constraints, such as timeline and capacity plan. If

finally approved, the PMO will add it to the master project schedule and will

monitor it along the project life cycle.


Gianluca Costanzi

Another possible representation of the life cycle would be a funnel:


The funnel could allow for the selection of the right initiatives, control them during

planning and execution, making sure that the change delivered will impact the

organization smoothly and benefits can be assessed properly.

Initiative Selection: How the Decision Making Tool Works

For Regus, this was the first time that such a process would take place. Therefore, a tool

that was simple, easy to implement, and eye-catching was necessary. A balance

scorecard approach could be too complex at first, but as maturity increases, it could be a

tool that will allow further tuning. To the same extent, however, a mapping of the

strategic objectives and initiatives/projects, either new or ongoing, was definitely

needed. In addition, Regus wanted to select initiatives in terms of business value

(benefit/cost), risks and time for benefit realization.

Two “screenings” were employed to decide the most effective tool in the short term:


Gianluca Costanzi

Fig. 28 shows the 1st Screening: a two dimensional matrix, mapping business objectives

and initiatives/projects:


This simple tool uses an “X” where an initiative or project meets a strategic objective. In

the example, we can see that the project is not meeting any of the strategic objectives

and therefore will be questioned if it is necessary or not. We can also see that the

objective is poorly addressed by the project portfolio. Visually, Regus has a snapshot of

the current situation. Regus can see if the right projects are underway or at the starting

block, knowing whether to support the strategic trajectory designed by the business

objectives.

As with any portfolio, balance is very important. For instance, taking an example from

another field, the diversification of a financial portfolio is very important in order to

mitigate the risk of investing in an unstable market. Therefore, balancing the portfolio

among stocks, bonds, mutual funds, investment partnerships, real estate, cash

equivalents and private equity is key in order to lessen the given risk, while still gaining


Gianluca Costanzi

profits from the capital assets. The theory of the modern portfolio was first created by

Harry Markovitz, eventually earning him the Nobel Prize.

A project portfolio is not that different from a financial one since projects are

investments that the company is making for its future. As mentioned previously, Regus

will shape its future through projects.

Once the initiatives have passed the first screening, they are all assessed in a chart with

three main criteria:

Vertically: the business value (benefit/cost);

Horizontally: the time for benefit realization;

Color code (green, yellow and red) for risk assessment.

Fig. 29 shows the 2nd Screening: Three-dimensional chart evaluating business value

(benefit/cost), risks and time for benefit realization.


Once all the new initiatives are on the chart, the PMO steering committee is ready to

make the selection. The PMO itself will bring to the discussion the current project


Gianluca Costanzi

portfolio, which we will see as a Gantt chart extract in Fig. 34, and a high-level capacity

plan which will be treated in the next paragraph. In addition, the PMO will outline a

project scorecard rating the new initiative, therefore functioning as an advisor to the

Global Steering Committee.

With all these elements, we generated three examples of decisions that could be taken.

The next three figures will represent such decisions.

Fig. 30 Shows a decision made on projects with the quickest payback. (Source: Internally

created, Regus, Gianluca Costanzi)


Gianluca Costanzi

Fig. 31 Shows a choice made on a high value as first criteria and compromising on quick

payback. (Source: Internally created, Regus, Gianluca Costanzi)


Gianluca Costanzi

Fig. 32 Shows a selection made combining the first 2 options. (Source: Internally created,

Regus, Gianluca Costanzi)

As we can see, the selection process considers many attributes. It can even become

more complex by adding the size of the initiative or the impact into the organization.

Project portfolios, as mentioned earlier in the example of the stock portfolio, must be

balanced and diverse in order to mitigate the risks. In these troubled and uncertain

economic times, organizations should keep an eye on those projects with low business

value and high risk with a specific allocation of budget and resources. If, as we have seen

several times in the past decade, there is a crisis or the market shifts in another

direction, those projects that seemed worthless might become the golden ticket. Many

companies in past have fallen apart because they were not structured to adapt to new

economic scenarios. The project portfolio is the key for such adaptability.

In the project management community, we often hear the expression “How to steer a

camel” or “The elephant in the hallway” which are figurative ways to express how

complex it can be to make the right decisions in corporations as large as Regus.


Gianluca Costanzi

Project Scorecard: PMO Acting as Business Advisor

A role of the PMO is advising the business on projects, whether reporting on them or

helping in their selection. A project scorecard is a structured tool that can give a

coefficient rating to new projects in a mathematical way. A scorecard must establish a

scale of values and then attributes that can be measured. Our example shows 15

attributes on a 1 to 5 value scale. The highest score has the backing of the PMO.


The PMO would use the score of each initiative under selection to help the PMO Steering

committee to make an informed decision.

Project Portfolio Extract – Ongoing Visibility Through a Gantt Chart

The ongoing visibility chart, showing the project portfolio timeline for key projects gives

an idea in one page on the status of the projects underway.

The chart not only gives visibility to senior management, project managers and

sponsors about the overall portfolio, but allows them to understand when changes are


Gianluca Costanzi

happening in the organizations, allowing them the opportunity to take necessary action.

For instance, if several projects are implemented at the same time, this could generate

disruption to the business and therefore further analysis might be demanded. Or,

different projects could touch upon the same business process; so those projects must

coordinate in order to deliver the expected benefits. In the project interdependency

paragraph, we will see more in greater detail how the projects relate to each other.


Project Portfolio Snapshot – Scope, Time and Cost for the Executives

This section of the project portfolio has several purposes:

Report on the project status for Scope, Time and Cost with color coding;

Place the project by priority as high business value projects are on the top

and low value ones are on the bottom. Also it gives a chance for senior

management to re-asses the priorities if needed;

Link the project methodology with the ongoing projects making clear in

which phase each project is residing.


Gianluca Costanzi



Gianluca Costanzi

Project Life Cycle Integrated with the Portfolio

In Fig. 36, we can see how the project methodology is fully integrated with the

management of the project portfolio. Clearly stating which inputs and outputs are

supposed to be produced at each stage will avoid misunderstandings. The process is

also supported by simple questions that will help to identify needs at each stage.


Project Interdependencies

Project interdependencies seem to be more important at the project level as a tactical

move, rather than a strategic one. Executives are less responsive on this subject while

project managers are very concerned. Interdependencies are very important because

not only can they compromise two dependent projects, but they can put at risk the

whole portfolio, generating a domino effect.


Gianluca Costanzi

In Fig. 37, we tried to give a one-page visual representation of the dependency and its

critical path. Separately, the PMO would engage individual project managers to make

sure they understand and can control the nature of that dependency. The dependencies

encountered so far were:

System/process: two or more projects touch on the same System/process;

Timeline: two or more projects are depending on each other for delivery;

People: same people are working in two or more projects


Human Resources Management (Capacity Planning and the Human Value)

The PMO surveys in Chapter 2 showed that PMOs are still struggling with resource

management. Demands are often too generic and the supply side it is also very complex

to understand.


Gianluca Costanzi

New initiatives do not have a clear vision of what is needed in terms of resources

(demand side). Also, new initiatives do not know when and for how long those

resources are needed.

On the other hand, departments that need to support those initiatives are facing similar

problems, struggling to understand how many resources (supply side) they have

available and when those are available.

Often, supply and demand are not aligned. One reason why this is a happening is that

organizations are focusing too much on small operational changes and mid-size

projects. Fig. 38 represents the capacity to deliver of an organization (cylinder) and its

on-going activities (bubbles). Small changes, the green bubbles, are easy to implement

but also absorb many resources. The same goes for mid-size projects that are often

tactical in nature to fix punctual business needs. But, as one can see, there is almost no

capacity left to support the strategic programs.


The role of the PMO in this case is to have a clear picture regarding resources. A good

method to look at this capacity pipe is to put it upside down. Focus first on the strategic

Small

initiative

Middle size

Project

Big Projects or

Programs


Gianluca Costanzi

programs and then check if the mid-size or small initiatives can be addressed or

included into a larger project. This will optimize the resources and make them focus

strategic objectives while still addressing operational needs, but in a different way.

Fig. 39 shows how this can be reached:


Some small and mid-size initiatives have been incorporated into larger programs.

In parallel, the PMO would work on the demand side with the initiative sponsor. In Fig.

26, in the initiation phase of the project portfolio workflow diagram, the PMO evaluates

the feasibility of the initiative and works on the resource requirement.

At the same time, the PMO would work on the supply side capturing the resource

availability for each support department such as IT, Operations and Procurement. Fig.

40 is an example of a capacity tracking template for the IT department that would, in a

monthly cycle, picture the availability by profile.

Small

initiative

Middle size

Project

Big Projects or

Programs


Gianluca Costanzi



Gianluca Costanzi

Conclusions

In this chapter, we explained a pragmatic approach to project portfolio management for

a non-mature PMO. The “leapfrogging” is a concept often used for technology evolution

where an underdeveloped environment pragmatically jumps directly to state-of-the-art

technology solutions. Examples of this can be seen in the evolution of the

telecommunications markets in Brazil or China.

The Regus approach to portfolio management can be considered in the same light: not

rigidly following a maturity model, but responding to the organizational needs. Maturity

models, however, cannot be ignored, and they must be used as a reference to plan

evolutions. In this preliminary approach to portfolio management, we have not yet

mentioned areas such as business risks management, cost/benefit analysis or “if”

planning. Only a mature portfolio management office will have the capabilities to take

these areas into account efficiently.

A more mature PMO will probably introduce software PPM tools to automate the whole

cycle of projects. As we can see, all the tools and templates so far introduced are

manually handled, increasing the percentage of human error and administrative tasks.

PPM software would be more accurate and punctual for project selection and planning,

change management, resource management, communication and reporting.


Gianluca Costanzi

Chapter 6

Final Considerations and General Conclusions

Practical Considerations

The PMO cannot be considered as a standalone body. There are powerful links between

PMO objectives and other management structures outside the PMO. The success of the

PMO is the success of its customers. In addition, the organizational structure,

environment, culture, roles, people skills and available tools are a composite mixture

that can be managed and predicted with certainty.

Potential Resistance and New Tensions

A typical risk when implementing a PMO or moving from a Functional, or Operations,

based model to a Project Oriented organization, is the potential resistance of managers

who control part of the responsibility now assigned to the PMO. As in all cultural

changes, the perception may be that there are those who loose and those who win.

Functional Managers in charge of budgets, employees and their own management styles

may be cautious of ceding responsibilities to Project Managers and/or the PMO. When

developing the relationship between the PMO and Functional structures, timing and

communication are key elements to avoid conflicts. Timelines should come from

Executive management and should support the PMO during the transition. Similarly,

Functional Managers should be reassured in their responsibilities and perimeter of

cooperation with the PMO. Whatever the preferred model of PMO that is chosen, each

department within the organization needs to perceive the benefit of the PMO. The final

goal of the PMO is to improve project results and realize businesses growth through

them.

Cost and Value

The investment in terms of costs and efforts of enabling a PMO, or transforming

towards a Project Oriented organization will be high, so in real-life scenarios, the focus

must be in demonstrating real return of that investment. Parviz F. in “Is Your

Organization a Candidate for Project Management Office (PMO)?” presents a strong,

concrete case by comparing enabling the PMO to the cost of supporting delayed

projects. For a low project management maturity organization like Regus, the cost of the


Gianluca Costanzi

gap in delivering projects according to the expectations can justify such an investment,

but in reality there might be a lack of this kind of data.

The PMO focus for the future should be about maximizing the value of the PMO and the

effectiveness of project management. However, how to reach such goals depends on

many variables within the organization itself. Certainly, we may have to change the

original path along the way based on what we learn, or based on the constrains or

impositions encountered. We normally walk to the future backwards, as we face the

unknown with the knowledge we have from past experience. That is what the American

Pioneers did when exploring the West, during the Gold Rush. They did not know how to

live beyond the known frontier. But they learned how to survive day-by-day, adapting

to the new environment. The same can be applicable to the creation of a PMO in a

company: learning how to work synergistically as a team towards the common goal of

success.

The PMO should act as an agent for change for the real needs of the organization. This

should be done through collaborative steering committee meetings, and meetings with

Project Managers; a possible example is from the Workgroup exercise analyzed in the

Regus case.

First Implementation Feedback about Enabling a PMO

What Worked Well:

Both the Executive Vice-President (EVP) of Operations and the Group CFO

communicated the role and importance of the PMO to those leading projects

within Regus early on;

Through discussions with sponsors, stakeholders and other PMOs, many

projects were at least identified, and information gathered, even if some

projects were already “in flight;”

Some of the Workgroup members have been, or are currently serving, in a

similar PMO capacity within their own functional organizations, and thus

appreciate what the PMO is trying to accomplish;

Good relationships have been established with some of the Vice-Presidents

who recognized the value of the work provided by PMO.

Even Better If…

…the Global Steering Committee had met more regularly and communicated

the importance, progress and success of the PMO to all departments to

ensure that the organization continues to see the PMO and its standards as a

priority;


Gianluca Costanzi

…Workgroup members, and the Department Heads receiving Group CFO's

email had followed up with the communication cascaded to the Project

Managers and stakeholders in their areas;

…more dedicated resources had been assigned to design, build, and run the

PMO (as well as projects, where appropriate);

…there had been more focus on relationship management by PMO Lead and

Sponsor, to enable the PMO to become a strategic partner of the Board

Members.

Comparing Regus’ PMO Setup with Other Companies

Genevieve Guerin’s Feedback Experience in Setting Up a PMO in her Former Company

Genevieve had enabled a PMO in her former company to cover the role of PMO director.

The PMO was hierarchically attached to Finance, but was overseeing all the projects

across the organization. The PMO had four dedicated project managers, PMI certified,

that would perform project control, help project sponsors on business cases and

educate the organization on project management methodology. Another role the PMO

team had was to assign some of its members to projects with a short timeline, usually of

three months; essentially, a part-time project manager handled the project in a specific

timeframe of short duration. The PMO was also “holding the purse,” meaning the PMO

was in charge of the company’s total project budget allocation. Any project, before

starting, had to retrieve the validation and money from the PMO itself. This structure

allowed the PMO to perform its two primary objectives. Through this, the PMO was able

to efficiently control the projects’ budget. In parallel, the PMO was able to help the

project sponsors by providing project managers and helping on business cases. As well,

the internal project community saw the benefit of such a PMO that could help directly

on projects.

Comparing this setup with the Regus PMO setup brought many interesting topics

forward:

Regus did not have the culture of project management and therefore a PMO

established from the top struggled to reach out to a flat organization;

The Regus PMO Statement of Work had ambitious expectations, perhaps too

high, for such a young PMO;

PMO resources were limited, and focusing mainly on reporting could be seen as

an extra burden from the project teams without bringing an added value to the

running projects;


Gianluca Costanzi

In the current Regus finance system, it does not allow project budget control and

the PMO was not directly responsible for project costs. Due to this, the PMO

encountered difficulty to carry out an efficient project cost control.

Feedback from the Consulting Company that Worked with Regus on the PMO Setup

When looking across global organizations, one finds that PMOs have varied objectives,

and thus different models are used in structuring the teams and executing the workload.

Some PMOs are established to enforce standardization of tools, processes, reports and

communications across all projects under their jurisdiction. Activities of such a PMO

might include developing standardized project management tools, leading meetings

with structured and consistent agendas, and consolidating reporting and information

flow to a small and focused stakeholder group on behalf of all of the underlying projects.

Other PMOs are more supportive in nature, focusing on coaching and guiding both

project managers and sponsors, and facilitating knowledge transfer and best practice

sharing across projects and programs. This type of PMO might facilitate a team’s lessons

learned session at the end of a project, deliver training in project management

techniques, or engage PMs from different projects in discussing and sharing successes

and key learning.

Still others resemble aspects of each of these extremes. For example, these PMOs might

blend a tight governance structure with well-defined roles and responsibilities for its

members, with more of a flexible approach in how and when the PMO intervenes in

specific projects that are off track, all the while supporting the organization’s need for

clear and consistent project status reporting.

The Global PMO at Regus was established to perform several functions, which share

characteristics of a number of the PMO examples above, although its roles and

responsibilities evolved over time. At the outset, it began with a dual focus of providing

senior management with project visibility on a consolidated basis, and standardizing

tools and practices used in managing projects. These roles enabled the company to view

the performance of projects through a common lens, and also gave the PMO a platform

in which it was seen as the organization’s authority on good project management

capabilities.

As the organization became more accustomed to the tools and processes, however, the

PMO realized that it had an opportunity to add further value. It thus leveraged its

familiarity with the company’s change initiatives, relationships with its PMs and

sponsors, and its visibility with senior management to extend its focus to include

project ideas at the concept stage and help establish a mechanism by which new project


Gianluca Costanzi

ideas could be evaluated, prioritized, and eventually funded as part of the company’s

change agenda.

Sanjay Patel, Former Siemens PMO Manager, Currently Regus Operations Program

Manager: Feedback on Regus PMO Setup

One size fits all. A project organization is a project organization.

These are all fallacies in the modern project-led organizations. The market, culture and

of course organizational maturity all lead down to different paths as far as the set up,

governance and running the PMO as 'BAU'. A further driver would be the organizational

appetite. For example at Siemens, 80% of all revenues were attribute to projects, as this

was within the outsourced IT industry, there was greater need to deliver within the

time, cost and quality element due to components such as a very competitive tendering

process, deliver of solution within business critical timeframes and also the 'fear factor'

of being penalized in the contract.

With such tight margins and timeframes, it was imperative to start, manage and receive

customer sign off as soon as possible.

Therefore the setting up of the PMO at Regus had to provide a balance between

flexibility, rigid structure, communications plan and fluid decision making capabilities;

even with a senior project steering committee in place. The details around the Terms of

Reference and decision-making powers were all aligned to the nature of a fast moving

and dynamic project culture.

In striking the balance to be fluid and responsive, there was a need to sometimes over

engineer the PMO at Siemens. To elucidate, the project management methodology

started with the Bid Management phase (at the initial tender phase) which provided

those within the organization (who would have to deliver if the bid was successful),

could be in a 'readiness stage'. Further, the development and creation of templates

provided more information, than sometimes would be warranted. The ethos within

Siemens would be to capture and be in receipt of as much information as possible, as

this would drive dynamic decision making during the whole project phase.

Indeed, the handbook accompanying many of the project templates would be detailed

and the whole of the Siemens Project Management community would be trained and

certified.

Due to Regus having far different business drivers, a relatively immature project

management culture and no real competition, their key factor in projects would


Gianluca Costanzi

encompass getting the business case and scope detailed and correctly defined. Together

with an owner CEO, most projects emanate unilaterally. Therefore, there is a faster

project start up time and an ethos of focusing too much on reaching the destination

rather than the project journey. Therefore, as stated in the opening paragraph, each

PMO is different.

However, what should be seen as an objective, irrespective of being a mature project

organization, is to focus on risk and having as many subject matter experts on the

Project Steering committee. Backed up by key financial metrics in terms of ROI, the

setting up and operation of a PMO should be a well-oiled mechanism, akin to a shepherd

herding sheep into the pen.

That is to gently steer the project owners into the goals set out in the business case,

project brief and Project Initiation Document (PID).


Gianluca Costanzi

Next Steps and Maturity Model Perspective

Going forward, taking into account the Workgroup exercise, the Operational and

Divisional level alignment with the Global PMO could be reached through a Federated

PMO Model (Fig. 41).



Gianluca Costanzi

For the PMO Organization itself, a team of four people (Fig. 42) could be the right way

forward. Fig. 42 also explains main roles and responsibilities of each member:


Considering the maturity model we had analyzed previously (extract reported in Fig.

43), we can place the Regus PMO in an early Level 2, aiming to reach Level 3 as next

step:

Level 0 Level 1 Level 2 Level 3 Level 4 Level 5

Nonexistent - ad hoc

Initial - reactive

Developing – emerging discipline

Defined - initial Integration

Managed- Increasing efficiency

Optimized- enterprise orientation

Definition – Typology

Community of Practice

Project Support Office

Project Management Office

Portfolio Office, Centers of

Excellence, Best-Practice Councils

Federated PMO Program

Offices

Enterprise Program Management

Office

Fig. 43 (Source: Gartner - PMOs: One Size Does Not Fit All)


Gianluca Costanzi

Final Conclusions

We began this document with three main statements:

One size does not fit all

The success of the PMO is the success of its customers PMO is about people

These three threads provided the foundation of our analysis of PMOs and the PMO

enablement at Regus. Thanks to these three threads, our understanding of PMO

evolution and an appreciation of current practices has come full circle.

Comparing academic research, the market status, the Regus case study and other PMOs,

we can clearly state that the PMO is not a silver bullet to solve all problems. It must

adapt to the environment and culture of its host. A PMO must be in the shadow of its

customer’s success. A PMO must focus on people at every level, from the top down and

bottom up, advising executives and project managers. Relationship management is a

key element of success in today’s business environment. PMOs must be able to talk

technical and business language, while simultaneously taking the emotional

temperature of their audience. PMOs must strive to become strategic partners of the

organization, adapting goals and objectives to the evolving business scenario. Co-

evolution is another key element that will help PMOs to be business driven.

We said that PMO establishment is like a journey that in the case of Regus has just

begun. Considering the lessons learned and comparing PMO with other cases, the PMO

path for Regus can be tuned and refined to respond more efficiently to real needs. There

is a long way ahead to have a more mature PMO but the base has been established and

the rest of the house can be built on strong foundations. The collaborative approach,

breaking the traditional silos of the organization, is the way forward to foster strong

relationships among departments for a common goal. The PMO must always balance its

maturity with the objectives of the organization and be pragmatic while handling the

project portfolio, programs and projects.


Gianluca Costanzi

Bibliography

[1] the State of the PMO 2010 - A PM SOLUTIONS RESEARCH REPORT

[2] History of Project management Part one Farrokh Alemi, Ph.D. Lee Baliton Chris Smith

[3] PMI Guide to Project Management Body of Knowledge PMBOK v4

[4] OGC Prince2 - Managing Successful Projects with PRINCE2 Manual

[5] Strategic Project Portfolio Management: Enabling a Productive Organization (Microsoft

Executive Leadership Series) Moore, Simon January 11, 2012

[6] PRINCE2 definition – ML (for the website: Ref:

http://www.ogc.gov.uk/programmes___projects_introduction_to_programmes.asp)

[7] http://en.wikipedia.org/wiki/Project_management_office

[8]Hobbs, B. (2007). The Multi-Project PMO: A Global Analysis of the Current State of

Practice. A White Paper Prepared for Project Management Institute(PMI)

[9]Gartner Group PMOs: One Size Does Not Fit All 29 February 2008 Donna Fitzgerald [10] Dai, C.X. and Wells, W.G (2004) An exploration of project management office features

and their relationship to project performance, International Journal of Project Management

Volume 22, Issue 7, October 2004,

[11]Andersen, B., Henriksen, B. and Aarseth, W. (2007) Benchmarking of Project

Management Office Establishment: Extracting Best Practices. Journal of Management in

Engineering, Vol. 23

[12]Hobbs, B. and Aubry, M. (2007) A multi-phase research program investigating project

management offices (PMOS): The results of phase 1. Project Management Journal, Vol. 38

[13] Assessing Project Management Maturity Comparing Process Definition and Process Practice - Amir Hossein Rouhi, Shahram shadrokh Sharif University of Technology, M.S in Industrial Engineering Sharif University of Technology, Department of Industrial Engineering [14]Grands programmes transformation - Organiser le succès – Ineum Consulting [15]Gartner Group. Light, M., Hotle, M., Stang, D.B. and Heine, J. (2005) The Project

Management Office: The IT Control Tower.


Gianluca Costanzi

[16] “Leading Successful PMOs” Peter Taylor

[17] Forrester - The State of the PMO in 2011 by Margo Visitacion August 3, 2011 [18] Kezner, H. (2003) Strategic planning for a project office. Project Management Journal, Jun2003, Vol. 34 Issue 2, p13, 13p [19] THE BUSINESS CASE FOR PROJECT PORTFOLIO MANAGEMENT- Innotas – 2010 [20] Forrester October 16, 2009 Making The Case For The Next-Generation PMO [21] Desouza, K.C. and Evaristo, J.R. (2006) Project management offices: A case of knowledge-based archetypes, International Journal of Information Management Volume 26, Issue 5, Pages 414-423. [22] Jacka, Mike; Keller, Paulette (2009). Business Process Mapping: Improving Customer Satisfaction [23] Cleland, David; Ireland, Lewis (2006). Project management: strategic design and implementation [24] Smith, Michael (2005). [[1] Role & Responsibility Charting (RACI)]. Project Management Forum. p. 5. [25] Parviz [Ref. Parviz, F. (2001) Is Your Organization a Candidate for Project Management

Office (PMO)? AACE International Transactions, 2001]

[26] Gartner - PMO Metrics: It Is All About the Change They Measure 28 June 2011 Lars Mieritz [27] “The Lazy Project Manger: How to be Twice as Productive and Still Leave the Office

Early” Peter Taylor

[28] Connecting the Dots: Aligning Projects With Objectives in Unpredictable Times by

Cathleen Benko and F. Warren McFarlan (Hardcover - Mar 1, 2003)

[29] The Balanced Scorecard: Translating Strategy into Action by Robert S. Kaplan and David

P. Norton (Hardcover - Sep 1, 1996)

[30] GARTNER - PMO Best Practices: Focus on People at Early Maturity Levels, 25 August 2008 Donna FITZGERALD

Structuration de projets Emmanuel Delerm HEC MSIT Executive 10 & 11 mai 2011


Gianluca Costanzi

FORRESTER - Project Audits And The PMO, May 19, 2004 Margo VISITACION GARTNER - Clearly Define Your Goals Before Creating a PMO, 13 October 2009 Daniel B. STANG, GARTNER - Key Issues for Program and Portfolio Management, 2010, 30 March 2010 Lars MIERITZ, Business Source Complet - PMO SURVIVAL GUIDE, November 2010 - Sarah FISTER GALE, Business Source Complet, Secrets of the PMO success, October 2008 Meridith LEVINSON,

Identifying forces driving PMO changes. By: Aubry, Monique; Hobbs, Brian; Müller, Ralf; Blomquist, Tomas. Project Management Journal, Sep2010, Vol. 41 Issue 4, p30-45, 16p Measuring Portfolio Strategic Performance Using KPIs Project Management Journal Hynuk Sanchez, École Polytechnique de Montréal, Montréal, Canada. Benoît Robert, Centre Risque & Performance, Montréal, Canada

Blog and Online Sources

A Marriage Made in Heaven: Agile and Project Portfolio Management

http://blogs.collab.net/agile/2011/11/01/a-marriage-made-in-heaven-agile-and-

project-portfolio-management/

PMO Focus http://www.aboutprojectmanagement.com/2012/04/pmo-focus.html

Association Francophone de Management de Projet http://www.afitep.org/

Agile Journal http://www.agilejournal.com/whitepapers/1487-an-agile-approach-to-

project-management-improve-pmo-effectiveness

Applying Portfolio Management as a Business Map

http://blogs.pmi.org/blog/voices_on_project_management/2011/12/applying-

portfolio-management.html

Data Gathering Mistakes Your PMO Might Be Making http://www.duration-

driven.com/2012/03/data-gathering-mistakes-your-pmo-might-be-making/

http://www.projectcompanion.com/eng/index.asp

http://www.elg.net/articles/choosing-right-pmo-setup/

http://www.brunocollet.com/2011/12/do-program-and-project-portfolio.html

http://blogs.collab.net/agile/2011/11/01/a-marriage-made-in-heaven-agile-and-project-portfolio-management/

http://blogs.collab.net/agile/2011/11/01/a-marriage-made-in-heaven-agile-and-project-portfolio-management/

http://www.aboutprojectmanagement.com/2012/04/pmo-focus.html

http://www.afitep.org/

http://www.agilejournal.com/whitepapers/1487-an-agile-approach-to-project-management-improve-pmo-effectiveness

http://www.agilejournal.com/whitepapers/1487-an-agile-approach-to-project-management-improve-pmo-effectiveness

http://blogs.pmi.org/blog/voices_on_project_management/2011/12/applying-portfolio-management.html

http://blogs.pmi.org/blog/voices_on_project_management/2011/12/applying-portfolio-management.html

http://www.duration-driven.com/2012/03/data-gathering-mistakes-your-pmo-might-be-making/

http://www.duration-driven.com/2012/03/data-gathering-mistakes-your-pmo-might-be-making/

http://www.projectcompanion.com/eng/index.asp

http://www.elg.net/articles/choosing-right-pmo-setup/

http://www.brunocollet.com/2011/12/do-program-and-project-portfolio.html


Gianluca Costanzi

https://www.oppmi.com/

http://www.bradegeland.com/

Tech Republic Blog http://www.techrepublic.com/blog/project-

management/incorporate-the-achievement-pyramid-in-your-project-

decisions/4236?tag=nl.e053

How to Manage a Camel http://www.arraspeople.co.uk/camel-blog/

PMO - Project Management Office LinkedIn

http://www.linkedin.com/groups?home=&gid=80342&trk=anet_ug_hm

Observatoire des Projets Stratégiques

http://www.observatoireprojets.org/SiteSondage/

https://www.oppmi.com/

http://www.bradegeland.com/

http://www.techrepublic.com/blog/project-management/incorporate-the-achievement-pyramid-in-your-project-decisions/4236?tag=nl.e053



http://www.arraspeople.co.uk/camel-blog/

http://www.linkedin.com/groups?home=&gid=80342&trk=anet_ug_hm

http://www.observatoireprojets.org/SiteSondage/


Gianluca Costanzi

Annexes

Annex No. 1

Project Management Office (PMO) Statement of Work Point of Contact

Lead Contact Gianluca Costanzi Phone Number +33 (0) 6 65 34 01 65 Email [email protected]

Revision History Revision Revised By Date Revised

Version 1.2 (original) Gianluca Costanzi 07 August, 2011

Version 1.3 Gianluca Costanzi,

24 January, 2012

mailto:[email protected]


Gianluca Costanzi

Table of Contents Project Management Office (PMO) Statement of work.......................................................1 Executive Summary .......................................................................................................................3 1.0 Introduction...............................................................................................................................4 2.0 Justification ................................................................................................................................4 3.0 Vision............................................................................................................................................5 3.1 Definition of Successful Projects...........................................................................................................5 4.0 Scope.............................................................................................................................................5 5.0 Goals..............................................................................................................................................5

5.1 Support delivering successful Projects........................................................................................6 5.2 Build Project Management maturity at the organizational level......................................6 5.3 Keep Management and Project Community informed .........................................................6 5.4 Serve as the organization’s authority on Project Management Practice...................................................................................................................................... .......................6

6.0 Proposed Strategy....................................................................................................................7 7.0 Key Success Factors ................................................................................................................7

7.1 Barriers to Success...............................................................................................................................7 8.0 Organizational Structure.......................................................................................................8

8.1 PMO Organizational Chart ................................................................................................................8 9.0 Customers ..................................................................................................................................8 9.1 Key Stakeholders ..................................................................................................................................8 9.2 Other Customers ....................................................................................................................................9 10.0 Global Steering Committee ................................................................................................9 11.0 Services......................................................................................................................................9 12.0 PMO Process Workflow........................................................................................................9 13.0 PMO Setup Plan....................................................................................................................10 14.0 Project Portfolio (Executive Dashboard) ..................................................................10 15.0 Templates...............................................................................................................................10 16.0 Repository .............................................................................................................................11 17.0 Metrics and KPIs .................................................................................................................11

17.1 Internal Review & Assessment...................................................................................................11 17.2 Reporting.............................................................................................................................................12

18.0 Change Control Process ....................................................................................................12 19.0 Escalation Model..................................................................................................................12 20.0 Approvals...............................................................................................................................13 THIS IS A LIVING DOCUMENT AND WILL BE SUBJECT TO CHANGES AS DEVELOPMENT AND PROCESS CHANGES ARISE. PROCESSES AND/OR POLICY ISSUES REFLECTED IN THIS DOCUMENT ARE A REFLECTION OF THE CURRENT STATE AND MAY HAVE CHANGED SINCE THE DISTRIBUTION OF THIS DOCUMENT.


Gianluca Costanzi

Executive Summary Purpose The Project Management Office (PMO) has been created to serve as a cross-functional team reporting directly to the Regus Group CFO. The specific purpose of the PMO is three-fold: 1. Provide project visibility to senior management of projects at all stages of the project lifecycle, through a project portfolio dashboard with all relevant project indicators. This will enable senior management to verify project alignment with the business strategy, decide upon priorities, evaluate projects‟ status, as well as to provide interventions where needed to ensure project success.. 2. Deliver project support to the Organization and its customers by providing guidance in project management processes and methodologies in a manner that is efficient, consistent, and standardized across the company. 3. Provide mentoring and coaching to project managers, leads, and sponsors in an effort to raise the project management maturity level of the organization. By providing the necessary tools and support, the PMO will look to deliver successful projects – every time. The PMO will operate under the following guiding principle: The success of the PMO is derived exclusively from the success of its customers Goals & Objectives In support of its purpose, the PMO has the following primary goals and objectives: 1. Enable the delivery of successful projects 2. Build Project Management maturity across the Regus organization 3. Keep management and the project community informed 4. Serve as the organization‟s authority on Project Management practices The primary goals and objectives of the PMO do not include the following: 1. Select Project Sponsors nor serve directly as sponsors of projects 2. Provide or act as Technical Project Managers for a project unless charged or authorized by the PMO Executive Sponsor 3. Provide or act as Functional Project Managers for a project unless charged or authorized by the PMO Executive Sponsor

Customers The customers of the PMO include the following groups:

1. PMO Key stakeholders 2. Functional PMOs (including IT, Operations, New Product Development,

Sales, Marketing) 3. Project Managers and Sponsors 4. Other stakeholders of Regus projects and programmes

Measuring Success Metrics will measure those aspects of PMO performance that are directly related to its Goals and support its Vision and Purpose. Assessments will include: 1. Improvements in project successes over time can be measured through:


Gianluca Costanzi

a. Decreases in schedule and budget overruns b. Delivery of all projects to planned scope c. Customer / project participant responses

2. The Project Management approach can be measured by: a. Quality and timeliness of project planning documents b. Accuracy of time and cost estimates c. Effectiveness at mentoring and coaching project teams

Executive Sponsorship The Executive Sponsor is the person that is ultimately responsible for overseeing and certifying the accuracy, viability, and defensibility of the PMO at the Organizational Level. The Executive Sponsor has the following roles and responsibilities: 1. Endorse the PMO within the Regus organization 2. Provide high-level oversight, direction, and support to the head of the Global PMO and team 3. Support escalation process as needed 4. Ensure that the PMO meets its goals and objectives 5. Approve major scope changes affecting the role of the PMO 6. Provide and fund resources, if applicable 7. Approve PMO Statement of Work The Group CFO is the Executive Sponsor.

1.0 Introduction The purpose of this document is to establish agreement on key aspects of the PMO in advance of its implementation. This Statement of Work is, in effect, the Organizational mandate for the PMO to exist. This document defines the purpose, vision, and functions of the PMO. It states who the PMO‟s sponsors and primary stakeholders are, the services that it offers and the staffing and support structures required to deliver those services. The PMO will reside within the Group Finance Department and provide project support for all Enterprise projects and its Customers across the organisation, Business Units and Departments. This document is not the project plan for implementing the PMO, but instead a statement of the PMO‟s function. It is also not to be interpreted as a Service Level Agreement for services and support functions provided.

2.0 Justification With the current business scenario and organisation changes, there is a need to re-evaluate the process in which Enterprise Projects are planned, prioritized, and delivered. Currently, projects engaged by the organization are handled separately by the support group for that functional area – this means that projects are currently run in „silos‟. However, the organization is now operating in an environment that is cross-functional in nature; where projects will have outcomes that affect one or more


Gianluca Costanzi

functional areas across the company. Thus, there is a business need to standardize the way projects are planned, prioritized, and delivered. In order to support a successful business strategy, projects need to be completed on time and under budget while increasing the quality of product implemented, end-user satisfaction and increasing the frequency of completed projects. The need can be fulfilled with the practice of Project Management and the creation of a Project Management Office.

3.0 Vision Reach a continual series of successful projects.

3.1 Definition of Successful Projects Based on input from Executive management, the PMO considers a project to be a complete success when (all of?) the following are true: 1. Pre-defined Business Objectives and Project Goals were achieved (i.e., the project satisfied the need that created it) 2. A high-quality product is fully implemented and utilized 3. Project delivery met or beat schedule and budget targets 4. There are multiple winners:

a. Project participants have pride of ownership b. The customer is happy c. Management has met its goals

5. Project results added value to the business 6. Methods are in place for continual monitoring and evaluation

4.0 Scope The Project Management Office strives to enhance customer satisfaction, increase communication and standardize processes while providing valuable project support. The PMO will operate under this guiding principle: The success of the PMO is derived exclusively from the success of its customers.

5.0 Goals Following are the primary goals of the PMO: 1. Support delivering successful Projects 2. Build Project Management maturity at the organizational level. PMO value represented in the figure below.


Gianluca Costanzi

3. Keep Management and Project Community informed 4. Serve as the organization‟s authority on Project Management practices Listed below is the specific work that the PMO will perform in order to meet its Goals.

5.1 Deliver successful projects The PMO collaborates with Operations, IT and stakeholders / customers to manage the Projects portfolio: 1. Work with Global Steering Committee to make the project-selection process successful 2. Maintain and publish a master projects schedule (On-Going Visibility) 3. Assist Organization and Customers with project resource management 4. Identify projects at risk and provide recommendations to address.

5.2 Build Project Management maturity at the organizational level 1. Mentor project teams 2. Assist project teams in all phases of their projects from project initiation to project closure 3. Train organizational Project Managers in a full range of Project Management topics if necessary or requested 4. Serve as honest broker on all issues brought forward to the PMO by Project Managers

5.3 Keep Management and Project Community informed 1. Report to Global Operation and Global Steering Committee on:

a. Projects – monthly b. Metrics that measure PMO effectiveness – annually (maybe quarterly) c. Issues and opportunities – as they arise

2. Maintain and publish a “Lessons Learned” archive 3. Maintain the PMO Portal (web visibility from a web based Project Management Tool)


Gianluca Costanzi

5.4 Serve as the organization’s authority on Project Management Practices 1. Set the Project Management standard

a. Project Phases are described and detailed in an annexed document b. PMO works with an advisory group of Project Managers to update and maintain this standard c. Standards are posted on the PMO Portal

2. Be the resident advocate for good Project Management practices in the Organization. 3. Provide Project Management tools for organization-wide use 4. Serve as the official source of project templates and other project aids

6.0 Proposed Strategy 1. Gain agreement on the PMO Statement of Work from the PMO executive Sponsor and additional stakeholders from other departments 2. Gain PMO executive Sponsor approval for the PMO Business Case consisting of:

a. PMO Requirements (high level) b. Implementation Strategies and Schedule c. Project Plan d. PMO Handbook and Templates

3. Create Project Management Maturity Model: a. Perform a Project Management Maturity Assessment b. Take necessary steps to build an achievable PMO Maturity Model

4. Establish PMO review process and performance metrics 5. Refine and agree upon PMO performance targets

7.0 Key Success Factors If the PMO is to be successful, there are several key issues that must be addressed. The success of projects, in general, all rely on the following factors being implemented: the integration of customer and implementer goals/plans, constant management of the project‟s scope, and finally a method for gaining visibility into project health at all levels throughout the life of the project. Moving from a single project perspective to a more holistic perspective, the following factors will be critical to the success of the PMO.

1. Executive Support 2. Effective Global Steering Committee 3. Agreement to Requirements and Scope 4. User Involvement & Collaboration 5. Resource Alignment Reflective of Current Need 6. Management of Expectations 7. Strong Project Management Infrastructure


Gianluca Costanzi

a. Minimal Scope Creep b. Strong Change Control Process c. Standardized Project Management Methodology

8. Ability to Measure and Report on Project Performance

7.1 Barriers to Success In addition to the items listed above, the following barriers have been identified as opportunities to address when considering the implementation of a PMO, as they often lead to difficulty and resistance in acceptance. 1. Unclear purpose - not well defined or communicated 2. No or limited executive buy-in 3. PMO is seen as an overhead or marketing function 4. Unrealistic expectations that the PMO is a „silver bullet‟; giving a quick fix to core business-level problems 5. PMO is seen as too authoritative, or perceived as a threat 6. Politics and power struggles 7. It is hard to prove value

8.0 Organizational Structure The PMO reports to the Group CFO. Through the alignment with this office, the PMO gains the following: 1. The Authority it needs to promote departmental organizational change effectively 2. Independence that can sustain objectivity 3. Oversight that can keep its work aligned to all the departments and company business strategy 4. Legitimacy as it fosters an effective, enterprise approach

8.1 PMO Organizational Chart Name Role Responsibilities

Executive Sponsor

Provide executive oversight and support for the PMO, champion the PMO within Regus organization

Gianluca Costanzi PMO Manager Lead the PMO

PMO Team Member

Contribute to setup and execution of PMO responsibilities

PMO Team Member

Contribute to setup and execution of PMO responsibilities


Gianluca Costanzi

9.0 Customers

9.1 Key Stakeholders Key stakeholders include the regional CEOs and the functional department heads within Regus. Some of them are members of the Global Steering Committee, while others have a different responsibility and relationship with the PMO, as shown below.

Name Title Relationship with PMO Expectations of PMO

Group CFO Executive Sponsor, Steering Committee member

Sponsor provides the PMO with guidance on

PMO objectives and supports the PMO’s

efforts to achieve them. EVP Sales Look to the PMO as a

source of expertise and support.

Visibility on the Project Portfolio

CMO

Business Transformation Director

Steering Committee member

EVP Global Operations Look to the PMO as a source of expertise and

support. Visibility on the Project

Portfolio CIO Collaborative Partner,

Steering Committee member Look to the PMO as a

source of expertise and support in all matters

related to management and the successful

delivery of IT projects EVP Business

Development

Look to the PMO as a source of expertise and


Portfolio

HR US (group) and Training

Dir Product Development

Legal Director

COO

CPO

Group Finance Controller

Customer and Collaborative Partner, Steering Committee member

Expect that the PMO provides all the

financials related to company projects. Will work with PMO to build


Gianluca Costanzi

an efficient financial project model

Group CEO Executive reviewer, Steering Committee Chair

Look at the PMO Project Portfolio and

validate, prioritize and evaluate the projects

according to the business strategy

CEO EMEA Look to the PMO as a source of expertise and


Portfolio

CEO APAC

CEO Americas

9.2 Other Customers Other customers of the PMO include Project Managers and Sponsors, Functional PMOs, and other stakeholders of Regus projects and programmes.

Name Title Relationship with PMO Expectations of PMO

various Project Manager Apply standardized tools, templates and process in

planning, managing and executing

projects within Regus

various Project Sponsor Ensure that projects in their

areas follow standards

promoted by the PMO; notify PMO of

new initiatives Global Online

Technical Project Manager

Marketing PMO liaison

New Product Development PMO liaison, Work group member

Collaboratively share information on projects with

Global PMO, promote Global PMO standards

within area, contribute to and help Global PMO refine processes,

tools and practices

Global Ops Program Manager

Operations PMO liaison, Work group member

IT Project Director IT PMO liaison, Work group member

VP Operations Work group member Contribute to and help Global PMO refine processes,

tools and practices


Gianluca Costanzi

Operations Director Work group member Contribute to and help Global PMO refine processes,

tools and practices Program Manager Work group member Contribute to and

help Global PMO refine processes,

tools and practices Head of Global Sales

Process & Strategy Work group member Contribute to and

help Global PMO refine processes,

tools and practices

10.0 Global Steering Committee The Global Steering Committee is the entitled group that will review, prioritise, and approve the project portfolio submitted by the PMO. The Global steering committee will analyze the project status on a monthly basis. The committee is formed by CEO, Executive PMO Sponsor, Group Financial Controller and CIO. Please refer to the Global Steering Committee Charter for more details.

11.0 Services The PMO will assist with Projects and enforce Project Management standards. 1. If, on request, the PMO is charged with managing a project:

a. Project Sponsors make their requests to the PMO. b. PMO and Global Operations collaborate to decide where PMO resources should be allocated

i. PMO provides Project Management services for the project ii. PMO is accountable for successful project delivery iii. PMO deals directly with the Project Sponsor iv. PMO enforces its Project Management standards in these projects v. PMO will directly manage resources assigned or attached to project

2. If, on request, the PMO is asked to assist and provide project support:

a. Project Sponsors make their requests to the PMO. b. PMO and Global Operations collaborate to decide where PMO resources should be allocated

i. Department provides the Project Manager for the project ii. PMO provides guidance to the Project Manager but under normal circumstances would not provide direct Project Management services iii. PMO oversees successful project delivery iv. PMO deals directly with the Project Sponsor and Project Manager v. PMO enforces its Project Management standards in these projects

In addition, the PMO: 1. Provides Business Analysis services on request.


Gianluca Costanzi

2. Performs risk audits on request

12.0 PMO Process Workflow PMO process workflow is an annexed document that shows the life cycle of a project from the initiating phase to the closure phase. It also outlines the approval stages that a project will face when under review by the PMO and global steering committee approval check points. This document has been published on the Regus BlueWorks Live space.

13.0 PMO Setup Plan The PMO Setup Plan was developed to cover Phase 1 of the PMO establishment (November 1, 2011, through January 31, 2012). It covers the major activities and deliverables based on the scope and objectives outlined in this document. At the end of this period, a Closure Document will be issued to the Executive Sponsor, and a new plan will be developed to support Phase 2 of the PMO. The detailed PMO Setup Plan (in MS Project format) is available on the PMO shared drive.

14.0 Project Portfolio (Executive Dashboard) The Executive Dashboard is a document that PMO provides to the global steering committee with all the necessary project indicators so the committee can make an informed decision regarding a project, set of projects, or a program. The Executive Dashboard is an annexed document to this Statement of Work.

15.0 Templates The PMO will make available the following templates in order to efficiently manage the projects

Template name Purpose Format Location Version

Project Brief New project request or ongoing project to be introduced to the management

Excel v2.1

Project Updates and Timeline

Provide stakeholders with summary of recent and planned accomplishments and approaching milestones (used for early-stage projects)

Power Point

v1

Risk and Issue log Track risks / issues, mitigation / resolution, and accountability

Excel Project Toolkit on shared drive

v3


Gianluca Costanzi

Template name Purpose Format Location Version

Dependency Tracker Identify interdependencies between pairs of milestones across projects

Excel

Project Charters Capture project attributes at the initiation of a project; critical in supporting approval of project

Power Point

Change Request and Log

Identify impact of a potential project change on scope, timeline, resources, cost, benefit

Word, Excel

Project Toolkit on shared drive

v2, v1

Project Stakeholder Reporting Deck

Provide stakeholders with summary of recent and planned accomplishments and approaching milestones (used for projects in delivery mode)

Power Point


v1

Standard Closure Deck

Formally close out project to stakeholders; document actual vs. planned project attributes, and assess overall project effort

Power Point


v1

Lesson Learnt Capture the lessons learned by the project team so that they can be shared with future teams

Excel

Sign Off Record stakeholder approvals at key milestones or decision points

Excel Project Toolkit on shared drive

v1

16.0 Repository The Global PMO shared site, which houses all of the Global PMO reports, documents, plans, tools and templates, can be found at the following location: \\reg10vnas10\Finance Transformation Program\Global PMO

17.0 Metrics and KPIs Metrics and KPIs should measure those aspects of PMO performance that are directly related to its Goals and support its Vision and Purpose. On that basis, the following areas of focus can be used to assess PMO value to the organization.

17.1 Internal Review & Assessment The PMO staff will develop or acquire the appropriate tools in which to measure PMO effectiveness. The PMO Executive Sponsor will approve such tools before they are used. :

1. Attributes used to assess PMO effectiveness will include Improvements in project successes over time that can be measured through:

a. Decreases in schedule and budget overruns


Gianluca Costanzi

b. Delivery of all projects to planned scope c. Customer / project participant responses

2. The effectiveness of the Project Management approach can be measured by:

a. Quality and timeliness of project planning documents b. Accuracy of time and cost estimates c. Effectiveness at mentoring and coaching project teams

3. The PMO will periodically perform project health checks with the Project Manager (and, if appropriate, the Project Sponsor). Health checks will include a more detailed review of key project attributes (scope, timeline, budget, etc.) and will be used to ensure that projects do not continue for an extended period of time without communication between the PMO and the Project Manager. Candidates and frequency for health checks will be evaluated based on results as reflected on the Dashboard, or otherwise as directed by the Executive Sponsor or Global Steering Committee.

The PMO, with input from Customers, will be responsible for the gathering of performance metrics.

17.2 Reporting The PMO will provide the following regular reports: Name

Report Type Recipient Name Frequency

Project Portfolio Dashboard Global Steering Committee Monthly

PMO Update report Global Steering Committee Monthly

Project Lessons Learned Archive / Portal As Received from Projects

Project Scorecard Global Steering Committee During Initiative Evaluation

18.0 Change Control Process Any change to the Global PMO vision, purpose, scope, team structure, or organizational placement within Regus organization must be approved by the Executive Sponsor, with notification of the Global Steering Committee

19.0 Escalation Model The PMO will implement an escalation model that will allow project issues to be raised to higher authorities for timely resolutions. An escalation process ensures that the next level of management is informed (within a specific amount of time) if an


Gianluca Costanzi

issue cannot be resolved at a lower level. In this function, the PMO will act as a third party by facilitating the escalation of issues based on the following criteria: 1. PMO Standards are not being enforced (Project Management Methodologies) 2. Request for escalation by a Project Manager or Sponsor 3. The PMO identifies an adverse risk to a project As a third party, the PMO will attempt to arbitrate issues prior to escalating to the next level in the chain. If a remedy is not possible, the issue will be escalated and documented by the PMO. The escalation path is as follows:

20.0 Approvals The signature(s) below indicate acceptance of the Project Management Office‟s Statement of Work and agreement to all articles included within.

Executive Sponsor (signature required) Name: Title: Date: Signature:


Gianluca Costanzi

Annex No .2

PMO Glossary

Project Elements

1. Benefits – The estimated impact of the achieving the project objectives by the successful

completion of project activities.

2. Budget – The estimate of all costs to perform the project or any component of the work

breakdown structure.

3. Change Control Board (CCB) – A formally constituted group of stakeholders responsible

for reviewing, evaluating, approving, delaying or rejecting changes to a project, with all

decisions and recommendations being recorded

4. Change Control Process – Identifying, documenting, approving or rejecting changes to

the project baselines

5. Change Request – Requests to expand or reduce the project scope; modify policies,

processes, plans, or procedures; modify costs or budgets, or revise schedules

6. Input – Any item, whether internal or external to the project, that is required by a

process before that process proceeds. May be an output from a predecessor process.

7. Interdependency – An impact from or to another process, project, individual or group of

people

8. Issue – A point or matter in question or in dispute, or a point or matter that is not settled

and is under discussion or over which there are opposing views or disagreements

9. Milestone – A significant point or event in the project, such as the completion of a major

deliverable

10. Objective – Something toward which work is to be directed, a strategic position to be

attained, a purpose to be achieved, a result to be obtained, a product to be produced, or

a service to be performed

11. Output – A product, result or service generated by a process. May be an input to a

successor process.

12. Portfolio – A group of projects and programs managed in a coordinated way to meet

strategic business objectives, although they may not necessarily be interdependent

13. 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 the scope of the discrete projects in the program

14. Project – a temporary work effort with a discrete beginning and end undertaken to meet

a unique set of goals and objectives. A project is staffed by a temporary team, and its

output is measured by specific deliverables.

15. Project Charter – A document issued by the project initiator or sponsor that formally

authorizes the existence of the project, and provides the project manager with the

authority to apply organizational resources to project activities.


Gianluca Costanzi

16. Project Phase – A collection of logically related project activities, usually culminating in

the completion of a major deliverable. Project phases are mainly completed

sequentially,but can overlap in some project situations.

Examples:

For systems development / upgrade projects, the Systems Development Lifecycle (SDLC)

will be used. Under the SDLC, projects will progress through the following sequence:

1. Analysis

2. Design

3. Construction

4. Testing

5. Training

6. Rollout / Deployment

7. Support and Maintenance

For non-systems projects, other phasing can be used, but will likely resemble the following

sequence:

1. Analysis

2. Design

3. Implementation

4. Continuous Improvement

17. Risk – An uncertain event or condition that, if it occurs, has a positive or negative effect

on a project’s objectives.

18. Scope – The sum of the products, services, and results to be provided as a project.

19. Touch point – a point at which the process interacts with or impacts another entity,

process or work activity. Touch points include Inputs and Outputs.

20. Work Breakdown Structure (WBS) – A deliverable-oriented, hierarchical decomposition

of the work to be executed by the project team to accomplish the project objectives and

create the required deliverables. It organizes and defines the total scope of the project.

Roles and Responsibilities

1. Customers / Users – the persons or organizations that will use the project’s product,

service, or result. They may be internal or external to the performing organization.

2. Project Manager – The person assigned by the performing organization to achieve the

project objectives. As the person responsible for the success of the project, a project

manager is in charge of all aspects of the project including:

a. Managing the delivery of the approved project scope

b. Developing the project management plan and all related component plans

c. Keeping the project on track in terms of schedule and budget

d. Identifying, monitoring and responding to risk, and


Gianluca Costanzi

e. Providing accurate and timely reporting of project metrics

The project manager is the lead person responsible for communicating with all

stakeholders, particularly the project sponsor, the project team, and other key

stakeholders.

3. Project Sponsor – typically, the individual or group who owns the problem addressed by

the project and will own the benefit derived from the project’s successful outcome.

When the project is first conceived, the sponsor champions the project. The sponsor

also leads the project through the engagement / selection process until formally

authorized.

4. Project Steering Committee – a decision-making body within the project governance

structure that usually consists of top management and decision makers who provide,

review and monitor the strategic direction and policy guidance to the project team and

other stakeholders. The steering committee also provides recommendations on project

approaches and participates in discussions of general strategies and opportunities for

project planning and implementation

5. Project Team Members – those persons who carry out the project work under the

direction of the project manager, and who may in some cases be involved with the

management of parts of the project.

6. Subject-Matter Experts – individuals who contribute their specialized content

knowledge, training and/or experience to the project effort. These individuals may be

team members or may sit outside of the formal team structure

7. Vendors / Partners – suppliers, contractors or other external companies that enter into

a contractual agreement to provide components or services necessary for the project

8. Stakeholders - individuals or organizations who are actively involved or whose interests

may be positively or negatively affected by the performance or completion of the

project. They have an interest or a gain upon a successful completion of a project.


Gianluca Costanzi

Annex No .3

Change Request Form

The Requestor should fill in the first sections below

Project Name: Request Date:

Project Number: Requestor:

Project Manager: Requestor’s Phone #:

Change Request name: Priority: High Med. Low

The below sections to be filled in by the Project Manager or the designated impact analyst

Ramifications of Change: Scope Schedule Staffing Budget Other (explain ramifications below)

Impact on Scope

Impact on Project Schedule / Timeline:

Impact on Staffing / Resources:

Impact on Budget:

Other ramifications of the change:

Description of Change Requested:

Justification for Change:

Risks associated with implementing the change:

Dependencies impacted by the change:

Documentation needed to be changed as result of Change Request (include new version numbers, as appropriate):

Project Charter / Brief Budget

Scope Analysis Communications Documents

Organization charts Dependency Tracker

Resource Plan Risk / Issues Register

Project plan Other (please specify):


Gianluca Costanzi

Response to Change Request

Please identify all necessary approvers (minimum required are xxxx, xxxx, and Program Manager):

Approved Rejected Cancelled Approved Rejected Cancelled

Approval Name (and title): Approval Name (and title):

Approval Signature: Approval Signature:

Approved Date: Approved Date:

Approved Rejected Cancelled Approved Rejected Cancelled

Approval Name (and title): Approval Name (and title):

Approval Signature: Approval Signature:

Approved Date: Approved Date:

Other Stakeholders Impacted

Others requiring notification of the Change Request:

Name (and title): Name (and title):

Project Charter


Gianluca Costanzi

Project Update Report


Gianluca Costanzi

Annex No .4

Thesis MSIT 2011-12 PMO Gianluca Costanzi v2.3

Documents

Transcript of Thesis MSIT 2011-12 PMO Gianluca Costanzi v2.3