Setting up PMO function

by
Ashok Kumar
(PMO Consultant)

Oct 2015 Slide 1

By Ashok Kumar
 Setting up PMO function

About the presentation

This ppt presents the outlines of the

route that RASSTools uses for setting
up of PMO function from scratch for
SME businesses.

Oct 2015 Slide 2

By Ashok Kumar
 Setting up PMO function

PMO benefits

Every organization would like to know

the benefits that it will get by setting
up PMO function.
Depending upon the organizational
needs, we’ll identify the tangible and
intangible benefits.

Oct 2015 Slide 3

By Ashok Kumar
 Setting up PMO function

PMO Vision

We’ll talk to stakeholders in the

organization and create a VISION
Statement for PMO role in the
organization.
Example: “PMO playing a significant and critical
role in realising organizations Business Strategy
by managing business initiatives as successful
projects.”

Oct 2015 Slide 4

By Ashok Kumar
 Setting up PMO function
Mission Statement
We’ll define a mission statement to reflect
PMO function’s long term benefits.
Example: PMO will play a critical role in the following
 Improve Project Management maturity level of
organization's business by providing training and
support

 Optimise business value by enabling business units to

complete business initiatives in time, within budget and
quality of deliverables.

 Develop programme / project management systems

using cost-effective practices

Oct 2015 Slide 5

By Ashok Kumar
 Setting up PMO function
Goals
We’ll identify short and long term goals of PMO
Example:
Short term goals
 Provide a suitable Programmes and Projects management
framework (methodology and processes, guidelines etc)
 Set PMO Tools and infrastructure. Provide and training on project
management functions and tools used.
 Monitor projects portfolio

Long term goals

 Improve project management maturity level

 Develop PMO as a centre of excellence in project management

 Become integral part of business initiatives

 Provide Top and middle management with info on realised

benefits v/s expected benefits as per Business case.

Oct 2015 Slide 6

By Ashok Kumar
 Setting up PMO function
Action Plan and Timeline
We’ll develop action plan and timeline.
Example:
Action Plan
 Create guidelines, templates, checklists etc

 Build initial portfolio

 Train selected resources

 Install Project Management tools

 Set up process and project artifacts database

 Build resources skills database

 Manage new important initiatives as programmes

 Initiate new projects

Timeline
 Define PMO Functions by ….

 PMO infrastructure setup by ……

 PMO artefacts development by ….

 Fully functional PMO by ……

Oct 2015 Slide 7

By Ashok Kumar
 Setting up PMO function

Tipical timelines for medium size PMO

However timelines may widely vary from

organization to organization

Example:

Initiate Plan execute Transition

1 months 2 months 4 months 1 month

Oct 2015 Slide 8

By Ashok Kumar
 Setting up PMO function
More on timelines

PMO size Company size No of Projects Setup

Schedule
PMO - - Up to two
Assessment month
Small PMO SMEs Up to 15 Up to Six
months
Medium PMO Medium to Up to 30 Up to One year
large
Large PMO Only Large More than 30 More than one
year

Oct 2015 Slide 9

By Ashok Kumar
 Setting up PMO function
Definitions
We’ll define terms used during training.
Example:
Portfolio
It’s used to describe the total set of programmes and
stand-alone projects undertaken by an organisation.
Programme
A temporary flexible organisation structure created to coordinate,
direct and oversee the implementation of a set of related projects
and activities in order to deliver outcomes and benefits related to
the organisation’s strategic objectives.
Project
A Project is usually of shorter duration (a few months perhaps)
and will be focussed on the creation of a set of deliverables
within agreed cost, time and quality parameters.
…………
Oct 2015 Slide 10
By Ashok Kumar
 Setting up PMO function

PMO Functions
We’ll identify and define PMO functions

PMO functions may vary from organization to

organization depending upon Business
organization, Quality Assurance and IT
infrastructure.

Example: see next slide

Oct 2015 Slide 11

By Ashok Kumar
 Setting up PMO function
Methodology
8 PMO Procedures
Functions Guidelines
Pre-project
Documents Evaluation
Management Prioritization
Risks

EPM Internal
PM Tools
PMO IT
PMO Projects
Outsourcing

Quality Skills
Assurance Resources
Audits Training
Budgets
Portfolio
Reports

Oct 2015 Slide 12

By Ashok Kumar
 Setting up PMO function

PMO Functions
Promote Best Practices
• Methodology, Procedures, Guidelines
• EPM / PM Tools, PMO IT Team
• Skills, Resources, Training

Performance Assurance
• Pre-project, Evaluation, Prioritization, Risks
• Quality Assurance/Audits
• Documents Control / Management
• Budget, Portfolio, Reports
• Internal Projects management, Outsourcing

Oct 2015 Slide 13

By Ashok Kumar
 Setting up PMO function

PMO Department Structure

We’ll develop PMO structure and

identify internal resource to train.

Example: see next slide for an example

Oct 2015 Slide 14

By Ashok Kumar
 Setting up PMO function

Oct 2015 Slide 15

By Ashok Kumar
 Setting up PMO function

Project Management Methodology

We’ll select an appropriate Project

management methodology.
Example:
• Prince2 approach
• PMI approach
• Waterfall approach
• Agile approach
• Hybrid approach

Oct 2015 Slide 16

By Ashok Kumar
 Setting up PMO function

Tailor PM Methodology

We’ll tailor selected Project management

methodology and align it with business
strategy, organization culture and PM Tools
available.

See next slide for an example of PMI’s Light

Weight methodology tailored for SMEs.

Oct 2015 Slide 17

By Ashok Kumar
 PMI’s
Setting up PMO function
Light weight
Project
Management
Methodology
Tailored for
small / Medium
companies

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By Ashok Kumar
 Setting up PMO function

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By Ashok Kumar
 Setting up PMO function

Oct 2015 Slide 20

By Ashok Kumar
 Setting up PMO function

Oct 2015 Slide 21

By Ashok Kumar
 Setting up PMO function

Oct 2015 Slide 22

By Ashok Kumar
 Setting up PMO function

PMO Procedures

We’ll identify and create guidelines,

procedures, forms, templates, ppts etc
Example:
• Guidelines: Authoring, Planning, Reviewing, Reporting …
• Procedures: Initiation, Estimation, Risk Assessment …
• Templates: Business case, Requirements, Project Plan …
• Forms: Initiation, Resource request, procurement request …
• Ppts: Trainings, Meetings, Management presentations …

Oct 2015 Slide 23

By Ashok Kumar
 Setting up PMO function
Process improvement Method
(Normally managed under Project Quality Assurance)

We’ll recommend appropriate process improvement method.

Example:
• CMMI

• Agile

• Lean management

• Six Sigma

Oct 2015 Slide 24

By Ashok Kumar
 Setting up PMO function
Project Artifacts Management
We’ll recommend methods and tools to manage.
 project artefacts

 policies/procedures to manage artefacts

 Define workflows, roles
 Manage documents numbering
 Manage check-in/checkout operations
 Manage archiving of closed projects
 Comply with data retention, disaster recovery
 Provide training to users for using document libraries

Oct 2015 Slide 25

By Ashok Kumar
 Setting up PMO function
Risks and Issues Management
Risks and management can be explained by a task that
needs driving on highways.
• Happening of Accident on highways is called a risk.
• All precaution that one will take to minimize the probability
of happening accident or the severity of injury once the
accident occurs is called risk management.
• Whatever you and others should do after the accident is
Risk Response management
• Problem you and others encounter and resolve after the
accident is issues management

Oct 2015 Slide 26

By Ashok Kumar
 Setting up PMO function
PMO Maturity
We’ll make PMO resources aware of PMO maturity.

Example: see next slide

Oct 2015 Slide 27

By Ashok Kumar
 Understanding PM Maturity
Setting up PMO function
Methods and Tools use Operations
Procedures
Adhoc PM

No common Projects use available Projects are executed in

methodology defined tools and tools used adhoc manner and project
and used. Each project may differ from project controls are not applied
may use its own to project. No training effectively. No lessons learned
methodology and is provided to project captured and mistakes are
procedures. resources. repeated. Project success rate
is poor.
Common methodology Enterprise level tools Projects execution follows
defined and used. But are installed and used. defined procedures and
Established PM

no focus on Resources are trained project controls are applied

Improvements of in tools and process effectively. Lessons learned
processes, guidelines, uses but tools use captured and mistakes are not
standards, forms, review and appraisal repeated. Project success rate
templates, checklists not performed. is good
etc.
Well Perform

Common methodology Enterprise level tools Projects execution follows

defined and used. are installed and used. defined procedures and
Focus on Improvements Resources are trained aligned with business strategy.
of processes,
Oct 2015 in tools andSlide
process
28 Project controls are applied
By Ashok Kumar
 Understanding PMOfunction
Setting up PMO Maturity
Maturity Criteria Low Meduim High Very High Strategic
PMO Functions PMO
operates at
Methods and Processes Not defined Defined Followed Improved High
Quality Assurance Not done Inspection Quantitative Control Procs Maturity
Evaluation, Prioritization, Not done Some cases Most cases Selective Level and It
Risks alignment becomes
part of the
Skills, Resources allocation Adhoc Adhoc Managed Ensured business
Portfolio management Not done Adhoc Managed Ensured strategy.
Therefore,
Budgets and Costs Control Adhoc Most cases Managed Integrated
PMO target
Documents Control Not done Adhoc Well done Tools used all of its
PMO IT Team None None Supported Supported effort to
align with
PM Tools Adhoc Adhoc Planned Integrated execution of
Outsourcing Control Adhoc Adhoc Planned Integrated strategy.
Project Performance
Success Rate <60% <70% <80% >90%
Cost Adhoc Estimated Controlled Controlled
Schedule Adhoc Planned
Slide 29 Managed Controlled By Ashok Kumar
Oct 2015
 Setting up PMO function

PMO reporting

PMO reporting is very critical as means of

communication with management and projects

We’ll -

• Identify and setup PMO reporting tools and processes

• Develop reports / dashboards and support trial runs
• Train resources

Oct 2015 Slide 30

By Ashok Kumar
 Setting up PMO function
PMO reporting

There are three main groups in PMO reporting

• Project Portfolio Status Reports

• Individual Project Level Status Reports
• PMO Performance Reports

We’ll identify all regular and ad hoc reports

Oct 2015 Slide 31

By Ashok Kumar
 Setting up PMO function
PMO reporting
Project Portfolio Status Reports
• Overall RAG – Current/Previous
• Progress in %
• Financial/Costs/Effort / Cost RAG
• Resources/Infrastructure RAGs
• Scope/Schedule/Quality/Risks RAGs
• Benefits realization RAG

Oct 2015 Slide 32

By Ashok Kumar
 Setting up PMO function

Oct 2015 Slide 33

By Ashok Kumar
 Setting up PMO function
PMO reporting
Individual Project Level Status Reports
• Overall RAG
• Progress at milestone level / SPI / CPI
• Financial/Costs/Effort
• Resources/Infrastructure
• Scope changes
• Schedule changes
• Quality measurements
• Risks New/Mitigated / Response taken if occurred
• Benefits realization
• Lessons captured

Oct 2015 Slide 34

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 Setting up PMO function

Oct 2015 Slide 35

By Ashok Kumar
 Setting up PMO function
PMO reporting

PMO Performance Reports

• No of projects started/running/closed
• Change requests / received / accepted
• Budget / actual spend / benefit realized
• Resources allocation requested received/ completed
• Support requests received / resolved/ pending
• Complaints received/resolved / pending
• Trainings conducted / training performance achieved
• Ad hoc work
• Ad hoc reports requested/ generated
• Recruitment support
• Resource appraisal support

Oct 2015 Slide 36

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*** end ****

Oct 2015 Slide 38

By Ashok Kumar