Management - ITM Platform | Projects Programs Portfolio

Planning and implementing a PMO has a rhythm of its own. Don’t be tempted to rush. You risk chaos if the process rushes ahead of the organization’s own maturity by trying to tackle all the stages at once.

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So what can businesses and project managers do to ensure essential components of projects are being completed in time and on budget? In this article we develop the 5 main keys of success.

Keys to success

A good plan is only useful if it can be implemented in the field. For that you need adequate resources and a favorable environment. Before creating a PMO:

1. Make sure you have the right skill set

Ensure that your people have the right skill set. If you have neither the team nor the required skill set, it’s a good idea to limit the scope of the PMO so that it can be set up without the risk of failure. Embarking on a PMO without the appropriate know how is like setting sail on a ship without skilled sailors, the enterprise will unravel at the first ill wind.

2. Start with high-visibility, high-impact projects

Like every other business unit, the PMO must prove its worth from the very beginning to win over naysayers. A smart PMO manager will look to deliver early wins on to the scoreboard. This is not always easy because of its cross-functional – and according to detractors – unnecessary nature. Tackle the most widely acknowledged problems first.

3. Identify the needs of the business clearly

The organization and the business have needs that may or may not have been explicitly identified. Meeting these needs should be your starting point. That way you’ll start off on the right foot, giving you enormous leverage when it comes to defending your decisions in the future. Do your research.

For example, as a PMO expert you may consider it vital to set up a document template repository. But maybe what your stakeholders actually need is a way to decide how progress on projects is measured.

4. Have a solid framework

And which is integrated into the business. A PMO that acts as a lone wolf is destined to fail. It is important that there are simple, fluid communication channels to ensure that everyone is working in the right direction. Put these in place from the outset.

5. Draw up clear key performance indicators

Having a lot of indicators does not necessarily mean having lots of information. Make sure that you not only have the right tools but also that the KPIs are relevant to your business.

What to consider for a consistent roadmap

To create a consistent roadmap, you should take into account:

The maturity of the organization.
The goals suggested by the Board of Directors.
The available resources.
Positive and negative environmental factors.

With these parameters, we know our start and end points, the resources available and the pace at which we should go.

An example of a roadmap

Let’s take as an example Booksy360, a mid-sized publishing company. This is their roadmap divided into four stages, starting from a tactical PMO and moving towards a strategic one.

Period 1

Booksy360’s PMO steering group decides to establish a basic communication system, using a common language. In this system planning is based only on timeframes and deliverables. Document templates are created for each project type. Stakeholders will receive reports about the status of their individual projects and Booksy360’s board will be kept up to date via a regular portfolio report.

Period 2

All communication channels are now established. The PMO encourages collaboration between units and projects. Inventory and purchasing are added as extra elements to plan, manage and control. Resource management is now based on professional profiles, such as editors, writers and production engineers.

Period 3

Formal risk management starts, agreed by all departments. Alongside this Booksy360 initiates change and quality management. Even if these were taking place informally before, now they are at the heart of the process.

Period 4

The final stage is when the actual strategic contribution starts. But it is long way down the line so for now Booksy360’s steering committee predicts it will include portfolio planning, benefit realization management and governance

The online PMO & Organization Self-Assessment may help you analyze your organization.

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This article is part of a series on the PMBOK areas of knowledge. You can read the previous articles here:

The last area of knowledge of the PMBOK (Project Management Book of Knowledge) covers the best practices to manage the relationship with stakeholders.

Specifically, this area of knowledge focuses on identifying people, groups or organizations that may affect or may be affected by the project and analyze their expectations and its impact on the plan.

Manage project stakeholders in a collaborative environment

It is essential to keep in mind that clients too are stakeholders, as their satisfaction is crucial to the success of a project. This means that projects could re-start from 0 if the client’ expectations are not taken into account early enough.
This problem was so frequent in software development that led to the development of agile methodologies, which seek a fluid communication with customers.

Advice for Stakeholders Management

1. Identify the parties or public interested in the project

In this phase of project management, it is important to focus on identifying the stakeholder from the very beginning, since this will allow us to obtain an overview of the stakeholders map and the problems that some actors may pose at a later moment.

2. Make sure that all interested parties agree and know their roles or responsibilities

Before starting the development of a project, it is essential that all the actors involved know the rules and assume the commitment and responsibility expected of their functions. From the beginning, we will identify team leaders, work teams, and their roles.
Good pre-planning facilitates a smooth development and helps to avoid conflicts in the future. If everyone agrees with the requirements and objectives, he or she will work to keep pace with the events and avoid delays; delays that only will be translated into extra costs and unwanted results.
On the other hand, rules must also ensure fluid communication with customers, so that they have sufficient information to evaluate the project development and express their point of view. If necessary, the circumstances under which a client’s opinions may involve changes in the project can be agreed upon.

3. Get consensus on the application of changes to the project

Changes in a project are inevitable since contingencies always arise that require the modification of some criteria or change in scope. The more complex a plan is, the more susceptible it is of being changed during its development. Therefore, it is important that all participants agree on how to handle the changes.

4. Favor communication

Establishing communication guidelines at the beginning of the project will improve the flow of the same. The team will be able to determine, since the beginning, the frequency of the communication and its content, that should preferably be concise and focused on the progress or issues that affect the project.

5. Give permanent visibility to the project teams

Transparency is a fundamental virtue in all project communication. It does not make sense for a project manager to have secrets.

It is important to define and communicate the vision of the project early on, as teams become more involved and the risk of losing focus on the project is mitigated. This way you make sure that any decision is coherent with the vision and objectives of the project. This point is very important because it helps reduce risks, errors or loss of focus.

6. Involve interested parties in the entire process

Although we assigned functions and teams from the very beginning, interested parties (stakeholders) should be always involved, so that they can participate in the problem solving or the revision of the requirements.

7. Reach an agreement with what has been done

In order to avoid entering a circle of changes and stagnation that could jeopardize the development of the project, it is important to reach agreements on the work done.
In an organization that manages strategic projects and internal transformation, Stakeholders Management goes beyond the project closure, since its delivery enables capacities that could benefit other levels of the organization. Otherwise, the value delivered is not internalized and won’t become a competitive advantage sustainable over time. This approach has been called Benefits Realization Management (BRM) or Benefit Management.

8. Empathize with the other interested parties

All project participants are stakeholders, but the stakeholder map also includes parties that do not actively participate in the development of the project. You should take them into account and empathize with them as the capacity for empathy is a crucial skill for the success or failure of a project.
The analysis of a project should not be limited to the interests and influence of stakeholders but should include how to identify their objectives, circumstances and the way they perceive the project.
Empathic analysis helps us to discover hidden variables that show us the way to solve problems or overcome obstacles that we may encounter.

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The 9th area of knowledge of the PMBOK Guide (Project Management Body of Knowledge) is focused on the Management of project acquisitions, or in other words, the relationship of an organization with its suppliers.

Good relations with suppliers are essential to gain competitive advantage, considering that good procurement will allow us to improve margins and provide alternative strategies to position the organization in the market.

Manage your suppliers and all the purchases of your project with ITM Platform

The Project Management Director should participate in the procurement process of the plan, which implies an active collaboration with the procurement department for the planning and management of purchases. As we cannot directly manage the activities of suppliers, it is very important to control the terms of the purchases so that the project execution is not delayed.

This area is one of the most sensitive from the ethical point of view, since there may collusion by suppliers or undeclared conflicts of interest between the project director and the service provider.

Phases of Project Procurement Management

1. Specification

The actors involved in this phase are the procurement department and the project manager. This phase consists of developing and approving a list of the products or resources to be acquired for the project execution.

2. Selection

After the specification phase, the procurement department will have to find the best suppliers, according to the specifications agreed with the project manager.

At this point, it is important to establish the key criteria for the selection of suppliers, like delivery terms, quality of service, cost or offered performance.

3. Contracting

Once potential providers are selected, the procurement department will negotiate delivery terms and payment conditions with the collaborating companies. It is very important that the acquired resources or items be delivered in a timely manner to avoid delays that may affect the execution of the plan.

All the agreed conditions must be included in the budget and in the purchase contract.

4. Control and supervision

The supervision of the purchasing process will ensure a smooth development of the project but we must also have in place the necessary measures to guarantee that any purchase made adjusts to the agreed quality.

Regular meeting and fluid communication between the procurement department and the supplier are important to avoid setbacks and confusion, or to make possible changes that are considered appropriate and necessary.

5. Measure the results

The final step of the procurement process refers, precisely, to the use of a system of performance indicators that allow us to evaluate the effectiveness and success of the entire process.

The evaluation should aim to discard those suppliers that have not complied with the agreed conditions, while positively evaluating those that are a guarantee of success. The formalization of the impressions of the purchasing team and other interested parties is an important element of this phase.

The reports will be fundamental for the execution of future projects because it will enable us to learn from errors, obstacles or difficulties that we have encountered in the way.

The project manager will be responsible for establishing a system to measure results while the procurement department will be the responsible for taking the measurement. Special meetings and workshops will be a great help to analyze KPIs, buyers’ performance, adherence to product specifications and communication with suppliers. In the event of a deviation, the procurement team will have to communicate it to the project manager so that he may apply the necessary changes to the acquisition plan.

Project Acquisition Plan

The Project Acquisition Plan guides the entire procurement process. It is a tool that will help organize and manage the activities or tasks related to the process. The purchasing team will prepare the plan and the director will approve it before carrying out any operation with the suppliers.

In the Procurement Plan, we will include documents on the whole process, such as Agreement templates or contracts, estimated deadlines and the inspection of purchases, ways of contracting, financing model, quality standards, and risk management.

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Although working by objectives is the best way for managing staff, organizations’ management requires an organizational level which is only provided by projects.

Management by objectives has set us free from a working culture in which it was more important to be present at our workstation rather than doing a valuable and quality job. But, nowadays, we can say that it is about going to a better place.

OK: I admit that saying that management by objectives is a cadaver could be an exaggeration, but also is saying that we all have been set free of perfect attendance

In fact, just as we all have friends in whose jobs it is more important to be than to work, objectives are a key element to motivate employees and escape from the routine. Let’s not dismiss them yet.

Nevertheless, let’s analyze why they are no longer enough for those who run an organization.

Discover how to manage your organization by projects with ITM’s White Paper

Management by objectives, for what?

Let’s put the example of Alice Smith, the web designer of an e-commerce company

When Alice improves a 25% the views of the star product section on the web, she is meeting one of the goals defined along with her boss. This means beneficial and foreseeable consequences.

When meeting objectives, Alice gets her coordinator and firm's recognition: she has accomplished a beneficial objective for star product sales and thus, benefited the whole business. She has become a recognized professional who has been rewarded for her job.

Consequently, Alice has the well-done job satisfaction and the incentive to keep working by objectives meaning that, when managing her time in the future, she will take decisions oriented to maximize results that will maintain or improve her status and will keep on contributing to general good results.

For their part, the Company’s managers are satisfied as they can delegate hard work and focus on managing which are the goals the company must achieve.

Why management by objectives is not enough

After some years, it is easy to see that management by objectives, despite its advantages of motivation and personal time management, it does not always help taking the right decisions at the right moment. Sometimes, it is not even enough to deliver the expected work.

When each worker works by their own objectives, which is the risk of no one taking care of the efforts coordination between the different initiatives that are being carried out?

Too high

On the following year, Alice did not manage to get her objectives because the TI department was too busy creating a new purchasing management system to support her on the web changes.

What is missing? Employees’ efforts must be coordinated between each other so that no one see himself blocked due to the need of cooperating with colleague who is too busy with another issue.

How can that coordinated cooperation be achieved? Managing internal work by projects, especially the most fragile one.

What is project-based management?

At project-based management, each project is connected to the objectives and business benefits willing to be achieved. Employees work on a coordinated way to obtain the project’s output: cooperation is programmed.

At the same time, the project’s output is an objective of the company or a necessary factor to achieve it. Without that project, the same factor wouldn’t be carried out and would block the work.

When there is a complex objective and it needs many different factors to happen, many projects grouped on the same program can be created. Program’s director will have to coordinate the projects to support each other, favouring synergies and avoiding a project pending work to block another project.

Let’s give an example

Let’s imagine that the company Alice is working for wants to create a new line of domestic products thought for single women between ages 35 and 50.

The goal is to put on the market 10 products of this new range and obtaining 1 million revenues in two years

The new range requires the work of all departments: product design, web, TI, marketing and commercial. Furthermore, all managers are very interested because their final year bonus are linked to initiatives. Particularly, the finance, sales and operational directors know it is about something important.

Instead of assigning objectives by department and by every employee, different projects grouped on the same program are created. The operational director is placed on the top of these projects as they have experience on projects management.

Many of these projects have transverse teams: people from marketing and systems and product design departments are working together. On the other hand, there is a single sales, web and systems project in order to have everything ready to start selling as soon as the products are ready.

With this kind of structure, program director:

Counts on the information about the ongoing process of the project
Can cancel projects that are not essential for the development of the new line
Allocates more human and financial resources to urgent or central projects
Is able to report the advancements on the project to the company’s senior management, anticipating possible problems and foreseeing results.

Why project-based management and management by objectives are compatible

No company in which a management by objectives style has been adopted has to leave the management structure to start running projects.

Management by objectives and project-based management are compatible and interdependent.

Let’s have a look to what ITM Platform’s white paper recommends

“The combination is straightforward: it is enough to link both project and tam to the objectives. This mechanism informs team members about the importance of the project, which is not only in the delivery, but in the external goal.

Keep on reading here:

The Project Success Definition is Broken

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The current competitive context is always more crowded and tougher: there is a boom of very innovative start-ups which are a real headache regarding all kind of markets and which make new technologies a source of competitive advantages: this phenomenon is part of what we call “digital transformation”.

In these markets, companies need to be more flexible to adapt quickly to changes – unless they want to face a competitive advantages loss with potentially terrible effects for all the organization.

For this reason, many companies turn to project management, the only strategy which guarantees enough flexibility and coordination in order to turn the business model into a competition machine.

Discover how to manage your organization by projects with ITM Platform’s White Paper:

What is project management?

Project management is a combination of practices that translate the company’s strategy into specific activities (or, more precisely, into projects), linked with the pursued business objectives and benefits.

Projects are not a tool for developing services anymore, they have become the value creation system for the company

In project management, the output of each project is a company’s goal or a necessary factor to achieve it.

Project-based Organization Management (PBOM) is made up of four pieces:

Project portfolio agile management
Project management office with strategic functions
An extension of the planning of the projects to their consequences and benefits.
Talent able to combine technical skills with business vision

If you want to know more about these points, I recommend you read the white paper: Project-based Organizational Management

Which is project management role within digital transformation?

A company’s digital transformation can easily become a messy and disorganised process, a response to business or operational problems without any leadership or any results. In order to face this risk, there is the need of a control mechanism that allows to manage the change.

A company can benefit from PBOM in several ways when it comes to digital transformation projects:

Aligning business units, departments and information management, avoiding integration difficulties between platforms and applications who are in more advanced stages.
Making technological solutions to be more solid as they are chosen considering not only temporary trends, but current necessities and, mainly, the future ones.
Managing as projects all the necessary means in order to guarantee the integration so that the process is not blocked in certain stages. Special attention must be paid to data processing, including the cleaning of information and its enrichment.

Real examples

It is easy to find examples of companies or whole industries which are redirecting their selves under a competitor with disruptive traits pressure.

Thinking, for example, about the emergence of AirBnB in the tourist market, it is easy to imagine the kind of transformation that many traditional agents must have carried out in order to keep on attracting clients.

Sometimes it is necessary to rethink the entire business model: from sales channels to price strategies, brand identity and technological structure. The only way to do it in an organized way is by managing projects.

This article belongs to a series on the Project-based Organizational Management. You can continue reading here:

10 pieces of advice when presenting to your CEO

Keep on reading here:

White Paper: Project-based Organizational Management (PBOM)