Making the Case for a PMO to Help Defense ROI

PMO success is all
in the Roadmap.
Can the defense industrial complex enterprise
develop adaptive and agile processes to improve
capability and ROI?

PMO success is all in the Roadmap.
  
Why a PMO?  1
PMO success is all in
the Roadmap.
Can the defense industrial complex enterprise develop
adaptive and agile processes to improve capability
and ROI?
Why a PMO?
During a program or project, team members ranging all hierarchical
levels of a project are immersed in an ever deepening and
broadening range of project communications. Depending on the
formal and informal roles that members are serving, these
communication mechanisms either reinforce the high-level
program methodologies and closure on business goals or are
pragmatically conceived within organizational culture boundaries
to address gaps and keep the respective team moving forward – at
least from their perspective.
The initial requirements and perceptions of the program that
allowed differentiation from past programs or competitors often
recede in their motivational importance and accuracy as new issues
are adopted and become the focal for defining success. The
processes used to monitor and communicate plans, progress on
metrics, and feedback on use of tools to other teams on the program
are essential in maintaining alignment of teams to the program’s
business strategy as well as establishing the consistency necessary
to allow determination of whether the program can meet objectives
within time and budget (Brian & Monique, 2010).
There are many forms a PMO can take; however, the basic models
are either -light or –heavy. Whether the PMO provides skill
development training and standards promotion or assumes direct
management of internal projects using its staff resources, achieving
organizational goals will require considering overall resource
utilization - PMO’s offer a means to manage needed changes.
Defense ROI?
  
This article on
establishing and
measuring the results of
using an enterprise and
project level Program
Management Office
(PMO) presents an
anecdote in the U.S.
Army’s quest to replace
the Bradley fighting
vehicle inventory with
1,864 new Ground
Combat Vehicles
(GCVs). As former
Defense Secretary
Robert Gates departed
and exclaimed that the
U.S. should never fight
in another protracted
large scale ground war,
how will the Army’s
GCV PMO secure the
program’s integrity,
processes, and value
when the new Army
Secretary questions the
acquisition talking at a
breakfast to the Defense
media during a protest
period for the initial
Technology
Development Phase?

  
PMO Implementation – when and how much?  2
PMO Implementation – when and how much?
Within an enterprise, either an industry defined program or a single corporate entity; there are
different stage-gates in validating the need for a Project Management Office (PMO). Where there are
multiple projects occurring simultaneously, the value of project management disciplines are well
established, or project complexity creates high risk, it is best practice to establish a PMO to act as a
centralized governing body to effect consistent judgment on resource allocation, project relevance to
the business, and project management process policy enforcement (Info-Tech, 2011).
The Sarbanes-Oxley Act—which requires companies to disclose investments, such as large projects,
that may affect a company’s operating performance—is also a driver, since it forces companies to keep
closer watch on project expenses and progress (Santosus, 2011).
In a Harvard Business School review of a Project Management Office (PMO ) established by AtekPC
(McFarlan, Keil, & Huff, 2007), common questions for establishing a centric PMO office were presented
with expected conflicts to present processes:
 How much Project Management (PM) is enough?
 How much PMO support is enough PMO support?
 How does one determine when the PMO structures and processes have achieved success?
 When does PM involvement become administration for its own purposes?
Simply creating a PMO charter, identifying a PMO manager and staff, and informing the organization
of its existence will not achieve a PMO’s purposes. The PMO must dynamically engage over time.
What is a PMO Roadmap?
While there were frustrations for both the PMO implementation team and enterprise staff at AtekPC,
slow implementation and alignment of Project Management (PM) processes with the evolving business
situation became evident with increasing price competition in the market. Using external factors with
relevant and urgent “messages” targeting the initial internal group working with the PMO was
effective in gaining participation.
Across the field of projects, directors started to realize they needed to move more aggressively and
sure-footed through projects and increase the number of projects they were able to take on at any one
time and maintain or improve quality. The PMO and PM team’s at AtekPC often had authoritative
conflicts. One by one, directors of groups recognized the value in consistent PM methodology and
service provided by the PMO. Further, the PMO team recognized that they needed patience in
working with teams to properly identify winning processes and reinforce caution in assignment of
their resources (McFarlan et al, 2007). AtekPC used this strategy in a steady implementation of their

  
PMO Success – it’s about visibility and participation!  3
PMO from IT projects and then more broadly across the enterprise through Sales, Manufacturing, etc.
Performing better on projects at AtekPC resulted in an organization that was more creative, adaptive,
and agile in launching new products. All of this required a results driven bottom-up approach with
incremental increases in support. Having the right leader with sufficient soft-skills to sell and support
the initial PMO effort can make a big difference with the PMO experience.
PMO Success – it’s about visibility and participation!
The common experience for project employees and their managers is often one where a PMO is
established following a series of project failures. Typical of long-term government driven technology
development programs that might have their origins in small business development initiatives, large
program contracts can formulate quickly. These can bring change to the workflow process with added
requirements for communications, milestone definitions and reviews, and earned-value-metric (EVM)
cost reporting. Many of these changes might be initially unobserved or at best considered a wasteful
burden to engineering centric organizations which are focused on their technology identity.
Establishing a PMO requires not just the roles and process training but also a follow-through
methodology in its own charter that will direct measuring the visibility of the PMO to the entire project
membership. The goal here is a complete buy-in that can only come about if even beginning associate
engineers, technicians, and administrative support specialists understand how their work products and
support of program policies produces value for their team, their organization, and the program. For
example, scorecard metrics should go deeper in an organization than tracking EVM reports from the
cost account managers (CAMs). Incentive programs for team participation in established process use
and process evaluation will be effective in raising the value of the PMO as well as encouraging
program content information sharing between teams and groups. Without bottom-up participation
and feedback as oriented from a project’s work products, the scaling of Project Management (PM)
processes and making changes to maintain standards is likely to fall short in providing effective
stewardship over the program.
Emphasize Service Rather than Management
If a PMO becomes seen as an “Ivory Tower,” it has failed to create sufficient visibility for its purposes,
not enacted a measurable training process, or not corrected communication gaps. All these lapses will
lead to a lack of structural adaption that can stall a project or create significant cost increases. In such
cases, the existence of the PMO will not be supported unless there is a distinct and well marketed
change of leadership either at the program level or at the PMO office. Regardless of where changes are
made, a revised PMO charter and process change review with “gap identification” training should be a
matter of urgency to prevent further project losses if operations continue without effective processes
and controls.

  
Evolving Role of the PMO  4
Evolving Role of the PMO
The existence of PMOs is a structure of program management that has appeared more frequently over
the past decade as the complexity of projects has added value to the quest for appropriate program
communication and control models to meet customer and/or sponsor expectations (Brian et al, 2010).
In their work published by the Project Management Institute (PMI), the authors Brian and Monique
discuss two opposing viewpoints: Are PMOs a sign that an organization is innovating, or that it is
disorganized and unstable? The best answer, according to the authors, may be that PMOs are still
evolving.
As highlighted by the AtekPC experience, establishing a PMO requires its own roadmap and the
executive team leading the enterprise must all eventually make a comprehensive commitment over
several program and/or business cycles to select and use an appropriate PMO framework to achieve the
result of improving sustainable resource efficiency. An effective PMO will provide the ability for an
organization to efficiently adapt its processes to its evolving business strategy and provide PM services
more consistently - and potentially with fewer qualified Project Managers. As many experienced
executives at AtekPC would attest (McFarlane et al, 2007), justifying an enterprise step-increase in
qualified project managers and PM processes is much more difficult to sell within an organization than
the need to take on more projects and complete them with higher quality to satisfy the customer .
Defense ROI – what is the Role of the PEO and PMO?
Over the past three years there has been a dramatic change in the defense industry. To the casual
observer this might be attributed to the draw-down of forces in Iraq; however, the superposition of the
congressional budget austerity with a normal down-cycle in defense spending has challenged the
theory of efficiency improvement in resource use that a PMO can bring to an enterprise.
As a U.S. element of the global BAE Systems plc company based in the United Kingdom, BAE Systems,
Inc. is a U.S. company operating under a special security agreement (SSA). Faced with multiple
contract losses in its Land and Armaments business sector to Oshkosh, fewer reset and development
projects for Bradley fighting vehicles, and the cancellation of the Manned Ground Vehicle (MGV) main
element of the Future Combat Systems program, BAE entered into a PMO organization framework
roadmap as a long-term commitment to evolve a competitive organization in the shortest time possible.
They took a PMO-heavy approach with brute-force implementation. This involved a wholesale move
of its primary ground-vehicle technology and business campus from Santa Clara, CA to Sterling
Heights, MI. The shut-down strategy in Santa Clara involved an instant 25% work-force cut, select staff
relocation invitations with perks to Sterling Heights , and rolling-wave layoffs to trigger a classic
starvation shut-down scenario. The establishment of the initial PMO group was disguised as the
“Engineering Authority” and was the enforcement arm of the new PMO standardization processes that

  
Defense ROI – what is the Role of the PEO and PMO?  5
were optimized to win new platform level programs. This deepened the starvation scenario as the
majority of near-term sustaining business was in services and smaller development projects. Teams
would have to depend upon their own intrinsic and unofficial processes to survive. This was natural
and reflected the engineering centric culture’s adversity to heavy management processes as there was
still a majority of its technical staff with prior work experience in the relatively agile United Defense,
L.P. enterprise that was purchased by BAE Systems in 2006. Processes to support business goodwill
were at odds with platform-centric PMO-heavy processes. Using the PMO directed proposal process
would in many cases exceed the profits opportunity on smaller and winnable programs so they were
avoided in many cases.
BAE Systems, along with other competitors in the defense industry, are still struggling to establish their
role and business strategy amidst the austere economic climate and operating under rules put in place
by the Weapon Systems Acquisition Reform Act of 2009 (WSARA). Due to the massive turn-over in
staff on both the private and government sides of the acquisition table, knowledge base and working
relationships have difficulty nucleating.
To keep pace with customer expectations, competition, and economic conditions in the fast-paced
global economy, best practices has demonstrated that a PMO can help organizations do more using
fewer resources (Kendall & Rollins, 2003). However, the Army’s Program Executive Office (PEO) for
Ground Combat Systems has established the PMO for GCV (http://www.peogcs.army.mil/GCV.html)
with a charter that will compete in the design area with contractors who win phase awards for the
program from the U.S. Army’s Tank, Automotive, and Armaments Command (TACOM). There is no
mention on the GCV PMO homepage of goals including resource optimization, continuous
improvement processes, development of a knowledge bank, offers of assistance in planning and
monitoring project work, or an audit process that will measure the Army’s return on investment (ROI)
from the program. All these are well accepted and recognized functions of a PMO.
Considered by the US Combat Systems division of BAE’s Land and Armaments Sector as a “must win,”
after a program restart on the Ground Combat Vehicle (GCV) Program in August 2010 with a new
fixed-price solicitation for the Technology Development (TD) phase, the Army’s GCV PMO hasn’t
demonstrated a change in its charter or any ability to provide tools that can provide a voice and process
for quality assurance from industry to the Army leadership or Congress. The goal of optimizing and
aligning the competitive process that the Army needs to efficiently develop a replacement for the
Bradley Fighting Vehicle for improved survivability against Improved Explosive Devices (IEDs) has
been eclipsed by the debate over the need for a GCV and the political controversy over the pragmatic
alternative of procuring a foreign developed and manufactured vehicle like a Puma or Namer. Until
the Pentagon and Congress either step aside or return the competition back to industry, the role of the
GCV PMO will be near impossible to charter and execute. At present, it is simply another GCV
program marketing channel.

  
Defense ROI – what is the Role of the PEO and PMO?  6
All this has again set the stage to create supplier confusion that existed on the Army’s Future Combat
Systems (FCS) Program that was cancelled in 2009. During the FCS program, the responsibility and
accountability matrix (RAM) was poorly enforced by the Lead System Integrators (LSI) of Boeing and
SAIC. Often, various U.S. Army centers of excellence for research and development , like the Tank
Automotive Research and Development Engineering Center (TARDEC) would present themselves to
technology providers, say a battery company or engine manufacture, that they were responsible for
evaluating the fitment of technologies to the FCS program. The fact is that only a Technology
Assistance Agreement (TAA) existed between TARDEC and the FCS program and all responsibilities
for contract performance rested with private defense contractors like General Dynamics Land Systems,
BAE Systems, etc. Rather than fill gaps and cooperate, the effect of TARDEC was to dilute the effort
with developing systems and spending money on architectures that did not reduce technical risk nor
contribute to the body of knowledge necessary to solve integration challenges.
With the GCV program, not only has the WSARA depleted and slowed development of technical
resources within the defense industrial base, it has chartered TARDEC as the Army’s sole steward for
research and development (R&D) on ground vehicle systems and put defense contractors into fixed-
price technology development contracts with conflicting rhetoric to develop and deliver only mature
technologies. Structurally, the same problems will exist as they did on FCS with TARDEC and
Industry now having switched roles. This conflict is further exacerbated with the controversy coming
from a Pentagon review of alternatives to GCV including the Israeli Namer and German Puma vehicles
(Branner, 2011). Boeing and SAIC led a team on one of three proposals for a GCV Technology
Development (TD) phase contract; however, their bid was not awarded as it was based on the current
production PUMA vehicle which only carries five instead a nine-man infantry squad. They quickly
filed a protest. However, while this $450 million award protest by Boeing and SAIC is in process and
contractors were ordered to not comment on the program, Army Secretary, John McHugh, at a
November 2nd breakfast with defense media, said that his service will still consider buying Germany's
Puma in place of the Ground Combat Vehicle, a $40 billion program to replace the Bradley Fighting
Vehicle. Later, McHugh clarified his statement about the Puma, saying the potential inclusion of it in
an analysis of alternatives does not mean the Army will uphold the protest. All the while the GCV
program has been managed through the media since 2009, the Government Accountability Office
(GAO, 2011) and industry pundits have pointed out how there are no visible oversight processes or
linkage requirements to evaluate the ROI funds assigned to TARDEC and other government
integrators. While the government cited routine organization conflicts of interest (OCI) when
defending the cancellation of the FCS program (GAO, 2011), they have simply increased the level of
OCI with their organization of the GCV program, this time with the government serving as the LSI,
R&D, and Contracting Authority.

  
Can a PMO work outside the free-market?  7
Can a PMO work outside the free-market?
Coming back to the Harvard Business School value propositions for a PMO as experienced by AtekPC,
it appears that the Army could benefit by considering a roadmap for their PMO that matches the
timeline and phases of the GCV program out to its planned 2017 production milestone. The suggestion
here is for them to not publically predict the outcome of the GCV TD phase – much less in front of the
media during the initial procurement award protest action. Perhaps a re-charter by the PEO for
Ground Combat Systems is necessary to include roles for the Army Secretary, Pentagon, TARDEC, and
the media as they are the present stakeholders affecting the acquisition. Stakeholder comments and
elicited participation by program “leaders” in government and industry have eroded the ethical
integrity of the acquisition process, diminished the business case for suppliers attempting to respond to
procurement contracts, and have all but halted investment in the defense industrial base. In a recent
report, the Center for Strategic and Budgetary Assessments (CSBA) stated that, “In light of the fiscal
austerity likely to constrain U.S. spending on national security in the years immediately ahead and the
growing complexities and dangers in the nation’s security environment, a long-term strategy seems
imperative if the vital sectors of the defense industry are to be preserved” (Bennett, 2011). The CSBA
also issued a stark reminder that the defense industrial sector as linked to Congress in neither efficient
nor run on free-market principles. This suggests an incongruent architecture and expected conflict for
an enterprise level PEO and PMO. While intended to govern processes, these entities will be unable to
implement resource optimization and consistent processes where resource assignments have already
been mandated by congressional politics and process visibility is unwelcome competitive interference
and only prolongs or prevents the production of defense products.
References:
Best Practices for Implementing a Project Management Office. InfoTech [online]: 16 Sep 2009. Retrieved
from: http://www.infotech.com/research/best-practices-for-implementing-a-project-management-office
McFarlan, F. , Keil, M. & Huff, J. (2007), The AtekPC Project Management Office. Harvard Business
School: Publication 9-308-049.
Brian, H. & Monique, A. (2010), The Project Management Office (PMO): A Quest for Understanding. Project
Management Institute: Product ID # 00101195201.
Santosus, M. (2011), Why You Need a Project Management Office (PMO). CIO Magazine: 2 Jul 2003.
Kendall, G. & Rollins, S. (2003), Advanced Project Portfolio Management and the PMO: Multiplying ROI at
Warp Speed. J.Ross Publishing.

  
Can a PMO work outside the free-market?  8
Hoffman, M. (2011). U.S. Army Still Eyeing Puma in GCV’s Stead: McHugh. Defense News: 2 Nov 2011.
Retrieved from: http://www.defensenews.com/story.php?i=8130564&c=AME&s=TOP
Weapon System Acquisition Reform Act of 2009. Public Law 111-23, 111th Congress: May 22, 2009.
Retrieved from: http://www.ndia.org/Advocacy/PolicyPublicationsResources/Documents/WSARA-
Public-Law-111-23.pdf
Weapons Acquisition Reform: Actions Needed to Address Systems Engineering and Developmental Testing
Challenges. U.S. Government Accountability Office: September 10, 2011. Publication: GAO-11-806.
Retrieved from: http://www.gao.gov/new.items/d11806.pdf
Branner, K. (2011), U.S. GCV Moves Ahead, But More Studies Ordered. Defense News: 18 Aug 2011.
Retrieved from: http://www.defensenews.com/story.php?i=7422577
Bennett, J. (2011), Study: Preserving defense capacity ‘imperative’ as DOD budgets shrink. The Hill [online]: 9
Sep 2011. Retrieved from: http://thehill.com/news-by-subject/defense-homeland-security/183131-
report-preserving-defense-capacity-imperative-as-dod-budgets-shrink
About the Author:
Gerald McAlwee is a member of the Silicon Valley Chapter of the Project Management Institute and works as a
defense consultant and analyst. He spent over 20 years as a propulsion and power systems engineer working for
various defense contractors including SwRI, AeroVironment, SAIC, and BAE Systems.
11/6/2011

Making the Case for a PMO to Help Defense ROI

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Andere mochten auch

Andere mochten auch (20)

Ähnlich wie Making the Case for a PMO to Help Defense ROI

Ähnlich wie Making the Case for a PMO to Help Defense ROI (20)

Kürzlich hochgeladen

Kürzlich hochgeladen (20)

Making the Case for a PMO to Help Defense ROI