Organization - ITM Platform | Projects Programs Portfolio

Sometimes we can't start all the projects we would like to. This often happens with internal projects: how many CIOs will undertake all projects that are demanded by the heads of each department? And how many find solid reasons to explain which projects are initiated, in what order and why?

Whenever you have a hard time deciding which projects you should run, you can base your decision on the evaluation of different scenarios. Here's an example.

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An example of using scenarios

Imagine that there are three internal projects that are difficult to compare: the implementation of a new document management system (DMS), the development of a new product and the internal training of the entire sales force. And also, as we said, we do not have enough capacity to finance them all.

Estimation of cost and importance

The first step in setting the scenarios is to assess their cost and importance:

Number	Project	Importance	Cost estimate
1	DMS	17,73%	$15,777.00
2	New product	47,05%	$90,091.00
3	Training	35,22%	$64,144.00

Suppose that the maximum budget that can be allocated to these projects is $150,000, less than the total of 170,000.

How to value a project

With ITM Platform, the value of a project depends on how much it helps to achieve a business objective. This criterion allows you to group very different projects by programs and to develop scenarios more complex than the one of this example.

Test yourself on how to generate scenarios linked to your goals with ITM Platform.

1. Count Scenarios

The next thing is to know what all the alternatives are. In this case, there are 8 scenarios or possible situations considering that we can choose (blue) or discard (red) each of the projects.

123	123	123	123
123	123	123	123

2. Quantify the scenarios

What is the investment required for each of the scenarios?

0.00	$64,144.00 $	$90,091.00 $	$154,235.00
$15,777.00	$79,921.00 $	$105,868.00 $	$170,012.00

As we know that the investment limit is $150,000, we can rule out the two combinations that exceed it.

0.00	$64,144.00	$90,091.00	$154,235.00
$15,777.00	$79,921.00	$105,868.00	$170,012.00

3. Assess the scenarios

What is the value obtained from each of them?

0%	35%	47%	82%
18%	53%	65%	100%

If we did not have limitations, of course, we would choose to launch all the projects. But in applying the financial constraints, we choose the scenario that brings the most value without exceeding budget.

Since two scenarios have been ruled out, it is necessary to choose the combination with the highest value among the remaining ones: 65% of projects 1 and 2.

Is it simple? When you try it on IT Platform you will no longer have doubts when selecting projects.

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Coordination, quantification metrics and business intelligence are three of the main keys for guiding the work of a project management office. Although not all organizations have come this far ...

The PMO and the company: X-ray of the situation

In 2011, Forrester and the Project Management Institute conducted a survey that canvassed 693 PMO leaders.

These experts were asked which is the main task of a PMO. More than 70% of the respondents agreed that the three main functions of a PMO are project management, general management and development of methodologies.

On the other hand, they were asked how they feel the results of a project should be quantified to be considered satisfactory. In this case, some of the results may seem a little surprising. Let us see their answers:

51% of respondents said to measure the degree of achievement of the objectives planned at project outset.
49% said they quantify based on customer satisfaction.
47% measured deadlines met and fulfillment of budget plans.
21% considered that a project has been properly carried out if the use of resources is optimal.
24% of the respondents confessed not to quantify in any way the result of their project management.

That is to say: just five years ago, a quarter of the sample, representing PMO directors in the United States, were not using any quantitative metrics to evaluate the results of their project management office.

Reasons to incorporate a PMO into your company

Optimize resources

Where there is no centralized coordination over project managers, it is difficult to adequately leverage resources in terms of staffing, logistics and distribution, procurement and vendor relationships, and so on. On the contrary adding PMO supervision can ensure that all parties have the necessary information on the mobilized resources.

Minimize investment

In short, PMOs seek to avoid mismatches and inefficiencies, reducing the amount of time and financial resources that need to be deployed to achieve the same result.

Continuous assessment

Without a culture of continuous evaluation, it is difficult to defend the value of a PMO. That’s why the lack of outcome-related metrics identified by the Forrester and PMI report is surprising. To be able to obtain better results in the future, the first step is to know and quantify your baseline position. Subsequently, a thorough and quantitative analysis of the processes must be performed from a critical point of view, which allows the detection of weak points and proposes decisions to act upon them. In this sense, for many organizations where the culture of agile management has been instilled, continuous evaluation by the PMO is closely related to the innovation processes.

Business Intelligence

The quantification of data is not enough. Relevant data should be selected and presented in a simple way that allows proper interpretation, comparison between different projects and guided decision making. This section is especially important in multinational companies, in which it is essential to standardize communication channels to facilitate understanding between them.

Responsibilities of the PMO

A whole series of activities stemming from the evaluation culture can be developed to ensure that the organization's strategies are supported by realistic data on business development.

Quantification of change. Once measures are taken to improve project management and to achieve better results, these should be quantified and also entered into structured reports.
Making predictions. The quantification of the current state of the company and its progression in time will allow to make predictions.
Establishment of frameworks that allow standardization in the execution of projects and their direction. Currently known as agile methodologies in project management.
Ensure proper compliance with regulations. The establishment of working protocols and methodologies ensures compliance with current regulations. To give a practical and simple example, establishing a working protocol for food transport will guarantee the quality of the product that reaches the market or the restaurant.
Financial Transparency. Control of the processes and the cost of each one of them will allow greater financial transparency with tax regulators, managers and clients, avoiding irregularities in any process or level of company administration and improving the confidence of all interested parties.

Juan Delgado

Blogger - ITM Platform

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Project Management Offices (PMOs) organize and economize resources by establishing protocols and documentation that normalize, consolidate and centralize project management.

When implementing a PMO it is necessary to recognize the inadequacies of current project management capabilities, what needs to change and how a PMO can bring about this change. However, there is no one recommendation to effectively manage the change. The goal of a PMO depends greatly on the context of the organization as well as various factors such as the macro economy, the size of the organization and the capacitation of project management staff.

Nevertheless, the most important factor will be how well the PMO responds to system failures. Naturally, every situation will be different, and therefore the solutions will have to be adapted accordingly.

Although it is risky to offer recommendations on such circumstantial cases (and to accept them!) categorizing the different forms of PMO to suit the situation can be beneficial. A classic typology of the different forms of PMO is in William Casey and Wendi Peck’s "Choosing the right PMO setup" article (2001). Casey and Peck begin by recognizing that the PMO is often used as a panacea – but there is no universal medicine.

His typology is based on three metaphors: a PMO can be a "weather station" a "control tower" or a "resource pool".

Type 1: The "weather station" PMO

Sometimes, customers feel that they are poorly informed about the on-goings of the project. Their perception is that they are investing time, money and hope into the project without detailed information.

It’s also common for clients to have ordered several projects simultaneously and then receive differing information about the progress of each project, in different formats, with different styles and types of data. Streamlining decisions based on such heterogeneous information is rough.

The solution to this problem is to implement a PMO whose mission is to provide objective, well-structured, and comparable factual information. By providing templates for reports, information can be presented uniformly and predictably, allowing for the efficient extraction of information.

Example customer concerns that the “weather station” PMO must answer are:

What is the current status of the project? To what degree have the initial objectives been met?
What has been invested or how much has the dedicated capital contributed? Is the planned budget sufficient? How much of the total initial budget has already been spent?
What are the main risks or problems that may occur during project implementation?

However, this type of PMO is merely informative, which means they do not have the authority to coordinate or to make decisions. They serve purely to inform any interested party and the information may assist the Project Managers to make better decisions.

If you think it is necessary to implement a PMO that makes decisions and solves project issues, you should opt for another model.

Type 2: The "control tower" PMO

This type of PMO can be used in combination with the previous model. In fact, both may construct a suitable supplementation in which the first model identifies and monitors problems, whereby the additional functions of the PMO to ensure that the project complies with established standards.

The functions of this type of PMO are:

1. Setting standards for project management. The standards serve as a methodological reference for the project managers. They must adapt as much as possible, whilst also having a certain degree of flexibility to respond to market changes in real time. The establishment of standards also includes the following aspects:

Setting the desired level of risk.
The organization of HR that are responsible for carrying out the project.
The distribution of tasks.
Channels of communication and information that will keep the team, management as well as customers updated.

2. The choice of methodologies for the measurement and analysis of results. It must establish quantitative systems to monitor project progress in real time in order to detect any deficiencies and to take corrective action to minimize the impact on the initial plan.

3. Compliance and rising standards. The constant application of corrective measures can be adjusted in the initial plan in order to meet the established standards. Depending on the maturity of the PMO and the degree of compliance of the organization, it may also be important to review the standards from a new perspective.

Naturally, when the degree of compliance is low, it may be beneficial to review the standards "downward" to bring them to a more realistic level.

Type 3: The "resource" PMO

This third type PMO usually occurs in very large companies where a high degree of specialization is required and where it can mobilize human resources to new projects with relative ease.

For example, a project manager may be assigned to a project, but does not have the desired skill set to manage the project. In this case it is necessary to have a location where all project managers are organized as if they were products in a catalog. When you need a Project Manager who is an expert in a particular field of knowledge, you can easily search for and find specific experts that meet the requirements. This ensures that the project manager has the necessary training and experience to match the desired quality and, therefore, ensures the best managers are on the appropriate projects.

This interpretation of the PMO does not guarantee that the right projects are carried out or that they are carried out in the best way; only that the elected Project Managers are the most suitable for the project. This is a good foundation on which to maintain success, along with other factors such as good communication, and a skilled and motivated workforce, etc.

Once the appropriate project manager is selected, they must be allowed enough freedom to perform their work as they deem appropriate.

So what is the best type of PMO?

As explained previously in this article, each company and each project has different goals and aspirations. The type of PMO that will be best suited for your organization will depend on the maturity of a company, its scope and your needs. You may find different aspects from different types of PMO are what you need, and draw inspiration to tackle change freely.

This is the first of a series of articles of posts on Project Management Offices. The next three articles will focus on each of the PMO models explained above.

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The life cycle of a project comprises the set of phases into which a project is organized from start to finish. A phase is a set of inter-related project activities that generally concludes with delivery of a partial or complete product. Some simple projects only require one phase while other, more complicated projects require a significant number of phases and sub-phases.

ITM Platform allows you to reuse and adapt the most appropriate life cycles with project templates, try it now for free.

The life cycle of each project is defined by the phase model used in each case and this is usually determined by the organization, industry or even technology required for the project. It would be impossible to provide a generic description of the phases for all types of project. However, reference is sometimes made to a generic life cycle structure that consists of the following phases:

• Project Start

• Organization and Preparation

• Completion of Work

• Project Close

This generic life cycle structure should not be confused with the Project Management Process Groups defined in PMBOK. The generic structure of the project life cycle is a generic model relating to the organization of project phases and not the organization of processes established by the PMI. Neither should it be confused with the product life cycle on which the project is based. This is a generic life cycle model that can be used as a benchmark, especially when wishing to communicate project progress to people who are less accustomed to this type of management.

In practice, there is no one perfect way to organize phases for all types of project. Although some standard models exist in certain industries, projects can vary significantly between one another. Some projects will only have one single phase, while others may consist of two, three, four or even more.

Regardless of the number of phases within a project, they all possess similar characteristics:

• Each phase is focused on a specific task.

• Phases are usually aimed at producing a deliverable that must be available at the end of the phase

• The end of a phase closes with a review of the deliverable and sometimes with approval of that deliverable

Organizations and the various methodologies and industries have gradually defined more or less standard project life cycle models. This standardization is accompanied by the necessary adaptation by each team to each project. The life cycle greatly depends on the nature of the specific project and the style adopted by the project team or organization. To correctly manage the established standards and necessary adaptation to the specific needs of each project, organizations use such tools as ITM Platform to allow them to reuse and adapt the most suitable life cycles by using templates or base projects with specific project phase structures as a benchmark.

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Projects are carried out within an organization whose culture, style and structure influence the way in which these projects are carried out. Project managers should be aware of this reality and adapt to the environmental factors of the organization where the project is developed.

Improve the information systems that support your projects with ITM Platform

It’s worth beginning with a caveat: the environmental factors of a project should not be confused with considerations of the environmental impact of an organization's activities, which are especially important in the case of public works or industrial activities that could result in chemical waste or other forms of pollution. While these assessments are limited to certain areas of activity and are highly regulated in most developed countries, environmental factors always exist in each and every project: from a small-scale internal project to a macro-project of hundreds of millions of dollars in budget.

The notion of environmental factors in a project is much more general, referring to all circumstances surrounding the project during its execution. Thus, we can consider environmental factors as all the conditions that are beyond the direct control of the project team and that influence positively or negatively on the project. All these conditions must be considered in project management and vary significantly in type and nature depending on the organization.

As a reference, the main environmental factors that can affect project management can be classified into three categories; organizational, human resources and technological systems.

Environmental factors inherent in the organization

Shared vision, mission, values, beliefs and expectations of the organization
Culture, structure and organizational governance
Availability and geographical distribution of facilities, resources, infrastructure and materials
Industry or government standards that affect the organization
Internal standards, policies, methods and procedures

Human Resource environmental factors

Existing human resources, skills and knowledge
Personnel management, motivation systems and incentives
Perception of leadership, hierarchy and authoritative relationships
Organizational risk tolerance
Project stakeholders and organizational stakeholders

Technological environmental factors

Operational environments and company authorization systems
The formal and informal communication channels established in the organization
Available databases
Project management information systems

In addition, the environmental factors of a project can be classified as internal and external factors. While internal factors will be stable for each organization independent of the project, external factors are more susceptible to change and require superior analytical attention from the project manager. For example, the location of the project in a country where it has never been worked will expose itself to an unknown regulatory environment, generating many risks in terms of legal feasibility, the labor framework, etc.

It is essential that each organization knows which of the internal factors act as limiting conditions and which are the drivers of the projects. It is appropriate that this analysis be shared.

In project management, it is possible to influence those factors that are closer and more directly related to management, such as resources or project management information systems, but it will be more difficult to affect the more general cultural and environmental factors or external to the organization. For example, although it may seem that organizational culture is a flexible factor and can be easily shaped, it is necessary to always consider the inertia produced by resistance to change and how such culture is not an abstract idea, but is part of the daily practices of all members of the organization.

Changing environmental cultural factors that are more detrimental to effective project management can be a much longer and more expensive decision than to just support such management with new information systems. In turn, the adoption of new information systems can serve as a catalyst from which to modify the behavioral aspect of human factors, influencing the corporate culture from its base.

In all cases, the project manager must be aware of these factors and act accordingly, including the project risks to the detrimental environmental factors over which the project manager cannot exercise any control and communicating to all his team the importance of being alert about signals indicating the emergence of the risk or the change in environmental circumstances.