Proposal for setting up PMO in
Alpha-Net Telecommunication
Company
INTRODUCTION TO THE ORGANIZATION
• A Telecommunication Company, Operating in Pakistan for last 15 Years
• Operating through
• Carrier Business Solutions
• Technical Business Solutions
• Enterprise Business Solution
• Secures Annual Revenue of USD 120 Million
• 2000 Employees all over Pakistan
• Offices at 9 locations covering all major cities
Existing Organization Structure: Chief Executive
Office
Carrier Solutions Enterprise
Technical Solutions
Business Solutions Business
Business
Project Engineering Sales Project
Engineering Sales Project Engineering Sales
Management Management
Management
PreSales Project
PreSales KAM-1 Project KAM-1 KAM-1 KAM-1 PM-1
Engineering Manager-1
Engineering Manager-1
Post Sales Project
Post Sales KAM-2 Project KAM-2 KAM-2 KAM-2 PM-2
Engineering Manager-2
Engineering Manager-2
Support Project
Support KAM-3 Project KAM-3 KAM-3 KAM-3 PM-3
Engineering Manager-3
Engineering Manager-3
Director HR Director
Finance
Manager Manager
Manager
Manager Pay Roles Manager Hiring Accounts Accounts
Treasury
Payable Receivalbes
Asst Manager Asst Manager Asst Manager Asst Manager Asst Manager
PR Hirings Treasury Payables Receivables
Senior Senior
Executive Exec-2 Exec-2 Exec-2
Executive PR
Hirings
Junior Executive Exec-3
Exec-3 Exec-3
PR Junior Executive
Hirings
PROBLEM STATEMENT
10% Revenue Loss because of liquidated damages
Unsatisfactory Customers
30% Employees Turnover
• Poorly defined requirements in Projects. • Stakeholders’ conflicts
• Unrealistic timescale and resources • Lack of user involvement
• Scope Creep • Ineffective Project Management
• Poorly defined Projects’ roles and
• Lack of Empowerment at Mid & Lower level
responsibilities
PROPOSED SOLUTION
As there is a lack of standardization of business processes. Establishment of Project Management Office
(PMO) is required. There will be three stages of PMO Implementation.
1. Supportive Role.
2. Controlling Role.
3. Directive Role.
PMO will achieve the level of “Center of Excellence” by directly managing the projects and implementing
suitable framework and methodologies using standard tools and templates
Proposed Organogram of PMO: Chief Executive
Office
Director Director Director Sales
Engineering PMO
Manager Design Manager Post Manager Carrier Manager Manager Manager Manager Manager
& Planning Sales Projects Solution Projects Enterprise Projects Carrier Sales Solutions Sales Enterprise Sales
PreSales Deployment Project Project Project
Engineer Engineer Manager-1 Manager-1 Manager-1 KAM-1 KAM-1 KAM-1
Transmission Installation Project Project Project
KAM-2 KAM-2 KAM-2
Engineer Engineer Manager-2 Manager-2 Manager-2
Planning Commissioning Project Project Project
KAM-3 KAM-3 KAM-3
Engineer Engineer Manager-3 Manager-3 Manager-3
Director
Director HR
Finance
Manager Manager
Manager
Manager Pay Roles Manager Hirings Accounts Accounts
Treasury
Payable Receivalbes
Asst Manager Asst Manager Asst Manager Asst Manager Asst Manager
PR Hirings Treasury Payables Receivables
Senior Senior
Executive Exec-2 Exec-2 Exec-2
Executive PR
Hirings
Junior Junior Exec-3
Exec-3 Exec-3
Executive PR Executive
Hirings
CONFLICT MANAGEMENT AMONGST PMO AND OTHER
DEPARTMENT
PMO will not interfere in the core functions of the departments.
Core functions will be managed wholly and solely by the respective directors.
Devising the sales strategies and customer engagement strategies will be
taken care by the director sales only.
Same procedure will be adopted for Engineering, HR and Finance
departments.
PMO SETUP STRATEGY
PMO CHARTER
• PMO Purpose and Goals. • PMO Implementation strategies
• PMO Scope and Focus. • Job Descriptions and Hiring.
• Director PMO.
• Service Offering and Metrics.
• Project Manager.
• PMO Processes. • Departmental Managers (Additional
• PMO Organization Structure. Responsibilities).
• Business Improvement Plan of PMO.
• PMO Authority.
• Existing Financial Report.
• Value Addition in Next 5 Years.
PMO Organization Structure:
Chief Executive
Office
Director
PMO
Manager Post Manager Carrier Manager Manager Manager Manager
Sales Projects Solution Projects Enterprise Projects Carrier Sales Solutions Sales
Manager Design Project Project Project Manager
& Planning Manager-1 Manager-1 Manager-1 Enterprise Sales
Project Project Project
Manager-2 Manager-2 Manager-2
Project Project Project
Manager-3 Manager-3 Manager-3
Manager Manager
Manager
Manager Pay Roles Manager Hirings Accounts Accounts
Treasury
Payable Receivalbes
PMO IMPLEMENTATION STRATEGIES:
Following actions will be performed during the implementation stage of PMO.
• Acquisition of Resources and defining KPIs.
• Project Portfolio and Business Analysis.
• Methodology and standard definitions as per Market Standards.
• Skill assessment and development of Resources.
• Enterprise wide Unified Project Reporting Structure.
PMO IMPLEMENTATION STRATEGIES:
• First Quarter
• Develop Templates
• Standardize Processes
• Incorporate Policies in existing Documents
• Second Quarter
• Enterprise wide trainings
• Facilitating the use of Standard Tools & Techniques
• 3rd Quarter
• Compliance
• Rewards & Penalties
• 4th Quarter
• Directly Managing the Projects
• Center of Excellence
EXISTING FINANCIAL REPORT
Annual Revenue of Company $ 120,000,000.00 Total Annual Cash Inflow
Project Related direct cost is 75% of the
Projects Related Cost $ (90,000,000.00)
revenue
Annual HR Cost $ (5,384,615.38) Salaries and Remunerations
Operational & Administrative Electricity, Travelling and other Admin
$ (5,000,000.00)
Expenses Expenses
Annual Training expense $ (500,000.00) Annual Training Budget
Annual loss because of poor project
Liquidated Damages $ (12,000,000.00)
Management and delayed payment cycles
Total Cost $ (112,884,615.38) Total Cost
Profit $ 7,115,384.62
PMO BUSINESS IMPROVEMENT PLAN
Estimated Financial Numbers of Year-1
Annual Revenue of
Company $ 120,000,000.00 Total Annual Cash Inflow
Projects Related Cost $ (90,000,000.00) These Values will remain same in first year as we
do not anticipate HR cost reduction / Project related
Annual HR Cost $ (5,384,615.38) Cost Reduction
PMO Cost $ (1,500,000.00) PMO Installation Cost
Operational &
Administrative 10% savings in Operational & Administrative
Expenses $ (4,500,000.00) Expenses after the implementation of best practices
Annual Training
expense $ (450,000.00) 10% savings after introducing in-house trainings
Liquidated Damages $ (9,600,000.00) 20% savings from liquidated damages
Reduced cost resulting from the overheads
Total Cost $ (111,434,615.38) reduction
Profit $ 8,565,384.62 Gross Profit Value at 1st year
Target Financial Numbers of Year-2
Estimated Annual
Revenue $ 132,000,000.00 10% Gross Impact Because of Best Practices
Projects Related Cost $ (99,000,000.00)
Annual HR Cost $ (5,923,076.92) 10% Raise in HR Cost
PMO Cost $ (1,650,000.00) 10% Incremental Cost for Year-2
Operational &
Administrative 10% Inflation in Operational Expenses comparing
Expenses $ (5,330,769.23) previous year
Annual Training
expense $ (405,000.00) 10% Reduction in Training Expenses from previous year
Liquidated Damages $ (7,680,000.00) 20% Reduction in Training Expenses from previous year
Total Cost $ (119,988,846.15) Estimated Cost for Year-2
Profit $ 12,011,153.85 Gross Profit Value at 2nd year
Target Financial Numbers of Year-5
Estimated Annual
Revenue $ 175,692,000.00 10% Gross Impact Because of Best Practices
Projects Related Cost $ (131,769,000.00) Fixed at 75%
Annual HR Cost $ (7,883,615.38) 10% Raise in HR Cost
PMO Cost $ (2,196,150.00) 10% Incremental Cost for Year-5
Operational &
Administrative
Expenses $ (7,095,253.85) 10% Raise in Operational Expenses from previous year
Annual Training
expense $ (295,245.00) 10% Reduction in Training Expenses from previous year
Liquidated Damages $ (1,612,800.00) 10% Reduction in Training Expenses from previous year
Total Cost $ (150,852,064.23) Estimated Cost at Year-5
Profit $ 24,839,935.77 Gross Profit Value at 5th year
VALUE ADDITION AND GROWTH IN NEXT 5
YEARS
Value Addition & Growth Percentage in Next 5 Years
Year-0 6% $ 7,115,384.62
Year-1 7% $ 8,565,384.62
Year-2 9% $ 12,011,153.85
Year-3 11% $ 16,365,269.23
Year-4 13% $ 20,762,696.15
Year-5 14% $ 24,839,935.77
Value Addition & Growth Percentage in Next 5 Years
CONCLUSION:
PMO do not directly generate business. However, its core responsibility is to ensure the
productivity in ongoing projects and minimize the wastage and add value to the company
with the optimal use of resources.
In our proposal for setting up the PMO, we have first identified the gaps and then
suggested the solution by directly mapping it with Employees Productivity and
Profitability.
Currently without PMO, company is securing only 6% profitability, nevertheless, after
implementing the best practices PMO aims to take it to 14% with 10% annual growth in
the business.
