1. Establishing a Business Focused
Project Management Office in a
Large Organization
Lacey Newbry, MBA, CSSBB, PMP, RDN/RD, LD
Sr. Director of Tools and Standards, Enterprise Project Management Office
Dignity Health
Lauren Krikke, PMP, LSSBB
Project Manager, Enterprise Project Management Office
Dignity Health
WHITE PAPER
May 2016
2. Table of Contents
I. Executive Summary......................................................................................................... 3
II. Mission and Vision......................................................................................................... 3
III. Timeline........................................................................................................................ 4
IV. Organizational Structure............................................................................................... 5
V. Governance .................................................................................................................... 6
VI. Intake Process ............................................................................................................... 7
VII. Models and Methodology............................................................................................ 7
VIII. EPMO Responsibilities.............................................................................................. 8
IX. Project Management Software...................................................................................... 9
X. Results............................................................................................................................ 9
XI. Lessons Learned ......................................................................................................... 10
XII. Conclusion................................................................................................................. 11
3. I.Executive Summary
Dignity Health is made up of more than 60,000 caregivers and staff who deliver excellent
care to diverse communities in 21 states. Headquartered in San Francisco, Dignity Health
is the fifth largest health system in the nation and the largest hospital provider in
California.
For many years, Dignity Health has boasted a strong Information Technology (IT)
Project Management Office (PMO) successfully executing IT projects across the
enterprise. While this team is highly effective implementing IT focused projects, there
was little project management support for high level operational business initiatives.
Dignity Health’s Executive Leadership Team saw a need for enterprise wide project
management support on governance, project portfolio management and standardization of
tools and methodologies.
The decision to create an Enterprise Project Management Office (EPMO), focused on
strategic operational business needs, was made in December of 2014. The impetus for the
decision was due in part to several poorly executed enterprise projects that created
increased costs related to schedule delays, lack of thorough due diligence and weak
coordination of facility and system resources.
Once given the green light, Dignity Health was able to launch a fully functioning
business focused EPMO in less than 3 months. This paper details the timeline,
organizational and governance structure, delivery models, intake process, integration with
the IT PMO and future direction/lessons learned for launching an EPMO in a large
organization.
II.Mission and Vision
Performance Excellence (PE), a group within Dignity Health responsible for process
improvement, was a core partner during the formation of the EPMO. The two groups are
grounded in the core belief that through the contribution and engagement of staff,
physicians, volunteers and patients, the provision of care and operational processes can
be greatly improved.
Together, PE and the EPMO focus on maximizing value-added activities by eliminating
waste, variability and inflexibility through the application of Lean, Six Sigma, Project
Management and Human Centered Design. Realizing the opportunity to create a new
hybrid approach utilizing PE methods in combination with traditional PM methods, the
leadership team for PE and the EPMO came together to craft a joint mission and vision in
strategic alignment with the existing mission and vision of Dignity Health.
EPMO/PE Vision
Impact and deeply empower people to build a better working world.
4. EPMO/PE Mission
Fueled by relentless optimism, we deliver things that matter in strategic alignment with
the mission and vision of Dignity Health, trusting there are different ways to change
together.
III.Timeline
The direction from leadership was to quickly build the EPMO to guide business
operations in defining project vision and scope, initiation/planning and implementation
from the highest level of leadership (see Figure 1).
The core leadership team of the EPMO was in place within a few months of launch. A
project management tool was adopted with a custom build specific to the EPMO and
project managers (PM)s were hired into the newly formed group. The intake process,
tools, standards and templates were all built while new projects came online, giving PMs
the feeling the road was being built behind them as they trail blazed projects into new
areas of Dignity Health. An innovator’s mindset was needed from the onset to
immediately start accepting projects while core standards were built from lessons learned.
There was significant work done to develop the culture of the EPMO, including a
collaboration to establish a vision and mission with PE. New team members were given a
customized gift from the most recent new hire along with assignment of a work buddy on
their first day. Team building activities were part of all meetings, to build trust and
collegiality among the new team members. Many of the new PMs were accustomed to a
highly structured and stable environment, and thus were asked specific questions to
gauge their cultural fit and comfort level in a less structured and more fluid project
environment. PMs uncomfortable with the iterative improvement process and flexible
nature of the EPMO were supported in transitioning to other roles.
The first project in the EPMO started in February of 2015. The formal governance model
and organizational structure was presented to the executive leadership team in May after
project work had commenced.
The EPMO leadership group identified early on to be successful, full support and
collaboration with the IT PMO was crucial. Regular communications were established
coordinating new and existing project efforts. While IT and the EPMO continue to track
projects in separate tools, status reports for both PMOs are routinely communicated with
future plans to integrate high level project data via a business intelligence dashboard.
Figure 1
5. IV.Organizational Structure
The organizational structure was built with the expectation that all members of the team
are able to talk freely and openly with one another regardless of title or specific project
work. This concept was established in the hiring and recruiting stage of the EPMO
formation, it was imperative for members of the EPMO to be empowered to collaborate
with one another free of title or position.
The dual reporting structure for the leader of the EPMO was to the Chief Administrative
Officer and Chief Operating Officer to enable regular communication with Dignity
Health’s executive level leadership. The short chain of command allows for high
visibility and enables the EPMO to become aware of strategic projects as they happen.
The direct line of authority to an Executive Leadership team member allows barrier
removal when PMs are faced with road blocks relating to schedule, cost and resources.
Executive Vice President/
Chief Administrative Officer
SVP Operational Effectiveness
& Performance Excellence
VP Enterprise PMO & Performance Excellence
Executive
Coordinator
Senior
Director,
EPMO
Project
Manager
Project
Manager
Project
Manager
Project
Manager
Senior
Director,
EPMO
Project
Manager
Project
Coordinator
Project
Coordinator
Project
Manager
Executive Vice President/
Chief Operating Officer
EPMO Director
Figure 2
6. V.Governance
The tight timeline to implement required a flexible governance model for success.
Unlike a traditional IT PMO where governance is typically more strict and formalized
due to the nature of the technical standards, the EPMO needed to be nimble,
collaborative, creative and strategic. Many projects and initiatives at this level cross
multiple operational and administrative levels which required a more fluid approach. The
model adopted consists of two major directions:
1) top-down, where individual projects are managed and directed granularly and
2) bottom up so all projects are reported and escalated globally (see Figure 3).
This structure allows for steering committees to direct executive sponsors when setting
requirements and expectations for Project Managers. Project Managers report upward to
the EPMO, where reports are vetted and provided to the executive leadership team for
information and action.
The decision was made to categorize projects by strategic pillars. Each member of the
Executive Leadership Team has ownership over a pillar which allows for reporting by
functional area.
Figure 3
7. VI.Intake Process
As the popularity grew for EPMO services based on successful outcomes of projects, the
intake process was formalized. There were no limits to projects in the embryonic phase
while the EPMO was building good will and trust throughout the organization. Once
operational, the intake process illustrated below was adopted:
Because the EPMO sits at the highest level of the organization, it was integral to the
intake process to limit requests to Vice President (VP) or higher to both maintain the
strategic importance of projects and to limit the overall volume of projects that the EPMO
could successfully execute. The EPMO maintains a level of authority to approve projects
within specific parameters, beyond the defined parameters projects need to be approved
by executive leadership. Projects that do not meet the above criteria convert to the
supported model discussed in the Models and Methodology section below. The goal is to
not leave any project in the organization “stranded” without some level of support.
Traditionally, only projects with an IT component benefitted from formal project
management support.
VII.Models and Methodology
The EPMO introduced two models for meeting the business project management needs of
the organization: managed and supported. The managed model is defined as all projects
actively run and managed by the EPMO PMs. PMs are responsible for the final delivery
and hand off of projects in this model. The EPMO ensures a standard methodology; tools
and templates are maintained for all managed projects.
VP or
higher
request
project
Initial
Assessment
and
Discussion
Build
Business
Case
Review for
Approval
(based on $
and
resources)
Launch
Project
EPMO Intake Process
Figure 4
8. The supported model is a way for the EPMO to extend its reach without running every
project across the enterprise and relies on building project management capabilities
throughout the organization. Individuals outside of the EPMO are given tools, templates
and training for non-project managers to work independently. EPMO PMs provide
mentorship and support as needed. Projects in the supported model are tracked in the
EPMO project management software tool and reported as part of the overall project
dashboard, providing senior leadership insight into the breadth of work across the system.
The methodology used in the EPMO is unique. In addition to utilizing project
management principles, all PMs are trained in Lean/Six Sigma methodology and Human
Centered Design. PMs are given freedom to utilize the tools best suited to their project.
The EPMO has developed templates, tools, processes, decision trees and a custom intake
module that allows flexibility with multiple project types. The eventual goal is to use the
tools, templates and learnings to provide consulting capability to external healthcare
companies or other industries wishing to build a strategic business project management
office. The EPMO, in partnership with PE, have developed a specialized methodology
and common set of tools used on all projects regardless of type, creating a hybrid
approach to traditional project management which includes the principles of Lean/Six
Sigma, process improvement and design thinking.
VIII. EPMO Responsibilities
Like any traditional PMO, the EPMO has responsibilities to lead projects from inception
to completion, assume accountability for project success, communicate effectively with
stakeholders, manage the project team, remove obstacles and provide oversight.
The EPMO PMs provide project management mentoring in the support Model. PMs are
encouraged to spread knowledge and skills to non-project managers working on business
projects. Supported projects are shorter in duration and smaller in scope. Non-project
managers are assigned a PM mentor from the EPMO. The responsibility of the PM on a
support project is to teach, train and provide information about the Project Management
Life Cycle (PMLC) methodology, while helping to support the project from initiation to
completion. The goal of the supported model is to provide the non-project manager with
new skills to be able to better manage projects. The EPMO PM encourages the non-
project manager to share the newly gained skills and knowledge within their own
business units.
One of the exceptional benefits of the EPMO is the team is closely aligned with the
Performance Excellence (PE) department. By creating a partnership with PE, the EPMO
is able to increase service offerings and provide support from various subject matter
experts.
9. IX.Project Management Software
Part of the success of the EPMO to date is the introduction of a project management
software tool. The tool tracks projects allowing executive, sponsor and team reporting.
The EPMO utilized a custom build to tailor the intake process and add custom
workflows, decision trees, tools and templates based on the unique needs of a business-
focused PMO without adding layers of extra work and approvals. The EPMO also
provides the tools and training for non-project managers in the supported model. The
deployment of the Project Management Software tool buffered by the custom
development of tools, templates and methodology provided the basis for standing up an
effective EPMO.
The IT PMO currently uses a different project management solution; the plan is to utilize
business intelligence software bringing all projects together in one dashboard to inform
executive leadership on the extension of resources and the breadth of work being done
across the system. The long term goal is to unify the IT PMO and the EPMO with one
software solution while continuing to maintain separate governance models.
X.Results
Although very new, the EPMO already realized successes in the form of financials, key
partnerships and collaboration with internal and external business units. Early on, the
EPMO was asked to work on a project involving contracting external consultants. The
original contract for outside consultants was $200,000. After reviewing the contract, the
EPMO noted the majority of costs were related to project management fees. The contract
was revised to $30,000 allowing external consultants to provide subject matter guidance
and hand off implementation efforts to the EPMO at a significant cost savings to the
business.
The EPMO partnered on significant enterprise wide projects with internal process
improvement resources. The unique skill sets of process improvement and project
management are highly complementary and yield impressive results. The goal of entering
into a relationship with a third party health provider for an existing geographic market
significantly increasing hospital volumes in the emergency department, obstetrician and
gynecology and surgery service lines proved ready made for the EPMO. The projected
financial impact of the arrangement is $20-50 million in increased revenue. The success
of this project created a tremendous amount of good will and confidence for the EPMO
and highlighted the value of working with the PE group.
The EPMO and IT PMO effectively collaborate as tactical business partners. Although
always evolving, both teams agreed on clearly defined roles and responsibilities. The IT
PMO is best positioned to manage processes such as IT security reviews, contracting and
legal reviews and software implementations. The EPMO forms critical relationships, acts
10. as the voice of the customer, identifies detailed operational business requirements,
process engineering and workflow improvement practices.
The IT PMO and EPMO continue to create value for their collective customers. The
groups are committed to honing the skills and expertise needed to support the overall
business strategy of Dignity Health.
“I have a great working relationship with IT on my projects. I utilize our project
management software to tie our project plans together. They have responded really well
to the tools in place. In a few scenarios, the IT PMO finished tasks significantly faster by
using the EPMO as a resource. The EPMO is very lean and reactive and doesn’t have
the bureaucracy or overhead that the IT PMO has, so some things are very simple and
quick for us. This has worked as an advantage on both sides.” – EPMO PM
“It has been a pleasure working alongside Dignity Health’s IT PMO. The close
partnership that the Enterprise PMO and the IT PMO have created ensures the best for
our internal customers. Together we are able to support both their technology projects
and their business initiatives ensuring success for our organization.”
–Senior Director, Enterprise PMO
The number of projects directly managed by the EPMO increased 153% from the first 6
months of operation to the second 6 months without adding additional resources. The rate
continues to grow as relationships are built with Dignity Health’s highest leadership level
and financial, partnership, and collaborative successes are realized.
XI.Lessons Learned
The creation of the EPMO has been successful in supporting strategic business needs
across the enterprise. With the success comes much learning. The phrase ‘fail fast’ has
been used to describe how failures should not be viewed as mistakes but rather a force
propelling you forward. Yet, who likes to fail? Instead, the culture of the EPMO has
reframed missteps as learning and improving vs. failing fast or failing forward. The
EPMO has learned and improved much in its short lifespan.
The most important lesson learned is there is a need for a standardized approach. While
all people appreciate some degree of structure, project managers tend to prefer a
heightened degree of structure. They need to know they are checking all the boxes and
meeting expectations. Everyone wants to feel like they are doing a good job. However,
there is a difference between rigor in adhering to standards and rigidity. The process
cannot be so rigid that it slows down work, creates additional tollgates or barriers and
impedes progress. During the EPMO formation, because of negative experiences with
overly structured PMOs in other organizations, the EPMO erred on the side of too little
structure. The EPMO adjusted the approach over time to introduce a more clearly defined
structure while affording the PMs flexibility and autonomy to get work done.
Adjustments were made in real time versus waiting for a number of projects to close
11. before making changes. The flexible environment and unique methodology naturally
allowed for the ability to insert and revise processes without major disruption to timelines
and deliverables.
The EPMO did not start out with a quality assurance process, partly because the need to
get things off the ground was paramount and partly because the requirements were
changing quickly in the early phases. Now that the dust has settled and a more robust
process has been created, the rigor of a quality assurance plan is being implemented to
protect the methodology and quality of projects.
The EPMO uses methodology from the Project Management Body of Knowledge, Lean,
Six Sigma and Human Centered Design. Knowing which tools or deliverables to use can
be confusing when faced with hundreds of tools in the toolbox. A 5-S exercise, a
common Lean Six Sigma tool used to organize the workplace, was conducted on the
collective toolbox to determine the minimum required tools/deliverables for all projects.
Outside of the minimum requirements, PMs are given the flexibility to use tools that fit
their project needs. Because PMs are subject matter experts in all three modalities, they
have the knowledge to determine what tools will most benefit their projects outside of the
minimum requirements.
The culture and acceptance of iterative improvement is the key driver of success for the
EPMO. The ability to change quickly and continually try new things and improve is the
reason for the positive results and trust the EPMO has gained across the organization.
The people working in the EPMO create, promulgate and accept continuous improvement
as part of their daily work. The EPMO leadership team provides a safe space that allows
the group to iterate and innovate. It’s the culture which allows the creativity and
individual pride in their work efforts.
Finally, there is a major difference in a traditional PMO and an EPMO at the strategic
level of an organization. Customers of the EPMO are the highest level executives at
Dignity Health. Project managers working within the EPMO have direct interaction with
these C-level leaders on a regular basis. Exposure to high executive leadership mandates
specialized training, coaching, mentoring and hiring for the EPMO to foster meaningful
relationships and gain trust at the executive level. These relationships are critical to the
success and future growth of the EPMO.
XII.Conclusion
The formation of the EPMO was a strategic decision to help the organization move
current and future strategic initiates forward that previously faltered without PM
oversight. The accelerated pace of establishing a fully functioning EPMO in three months
was challenging. Taking time initially to thoughtfully create a mission and vision was
vital to the success of the EPMO and helped guide the development of the organizational
structure, governance and methodology.