The PMO in practice

Introduction
Stuart Dixon
APM PMO SIG Chair

Practical PMO
Recognising and Demonstrating
Value
Gary Mitchell

INTRODUCTION
 A bit about me and where my practical experience has been
drawn from
 Structure of this presentation around key themes:
 Maturity of environment
 P3O Focus
 Segmentation of stakeholders

A BIT ABOUT ME
 My practical experience is drawn from a number of PMO
implementations – mainly in the public sector - over 17 years
 BAA
 Government Agencies
 Canon
 Office of National Statistics
 Cabinet Office
 I will be focusing on the first two for this presentation

PMO CONTEXT
 Govt Agency PMO covers portfolio, programme and project and
more!
 Mixture of centralised Management Information/Standards team
and localised hand on support
 Policy, Processes, Tools, Templates, and Capability all established
 PM resource and PMO (outsourced) part of same business unit but
separate
 PMO supports does not manage

PMO CONTEXT
 BAA PMO smaller – 3 PMO teams into one (infrastructure,
software, and networks) - Focused on IT Project level controls
 Mixture of centralised Management Information/Standards team
and localised hand on support
 Policy, Processes, Tools, Templates, not established
 PMs separate (staff, key supplier and contractors)
 PMO supports does not manage

PMO OFTEN HEARD VALUE STATEMENTS
 PMOs do not add value until after a year or so
 But we are more than often pressured to provide value from the
outset
 Return on Investment is a key value measurement
 But what do we class as returns, how should we calculate
investment?

PMO VALUE AND BAA
IT project focus

PMO VALUE AND BAA - IT project focus
Segmented Stakeholders values maturity
 Consistency – More of a PMO
value
 Efficiency/Effectiveness (i.e.
ROI)? Not yet!
BAA Seniors value requirement
 Basic milestone performance – linked to bonus!
 Visibility across projects – resource
management
PMs value requirement
 Reduce paperwork – too many reports
 SUPPORT
Central/Business value requirement
 Reduce paperwork – IT jargon
 Financials

PMO VALUE AND BAA - Keep it Simple
BAA Seniors value requirement
 Basic milestone performance - introduced milestone levels to identify key milestones
worth measuring, tolerance levels to reflect confidence and specific planning mentoring
 Visibility across projects - developed basic project portfolio map showing projects, their
lifecycle status, budget and spend
 Reduce paperwork - conduct business analysis on information flows, rationalise reporting,
standardise controls
 SUPPORT - provide process for PMO support resource requests and train up resources to
standard
Central/Business value requirement
 Reduce paperwork - as above
 Financials - follow the money through dedicated resource and controls and challenge

PMO VALUE AND BAA - Project Portfolio view

PMO VALUE AND BAA - Costs and Reputation
Cost as a ‘hard’ value indicator
 Combining three PMOs reduced headcount and resource cost of PMO
 However, more PSOs requested as reputation grew – increased resource cost of
PMO – Look at different funding models – funding responsibility moved to projects for
specific PSO
 Driving consistency and promoting role developed clear identity – efficiency savings
apparent in reduced duplication, but difficult to quantify
Building positive reputation and clear identity as a ‘soft’ value indicator
 Co create standards (processes, templates ...) with PM community – by engaging and
involving PMs in governance development helped position PMO as active and close to
delivery rather than remote
 Promoting PMO Terms of Reference – Stakeholders have a clear understanding of the
role of the PMO, helps reduce misunderstanding of value!

PMO VALUE AND GOVT AGENCY
BUSINESS FOCUS

PMO VALUE AND GOVT AGENCY - Business focus
Segmented Stakeholders values maturity
 Consistency – relaxed
through maturity – practical
value
 Coherency – key value
alignment with strategy
 Efficiency/Effectiveness (i.e.
ROI)? Rigorous! – Evidence
continually required
Govt Seniors value requirement
 Management Information
 More for less
 External Reputation as best for delivery
 Assurance
 Economies of scale and one size fits all
 Annual reduction in PMO costs
 Reduce bureaucracy
 Practical application of standards
 More SUPPORT

PMO VALUE AND GOVT AGENCY - what do we do?
Service Catalogue and Timesheets – effectiveness agenda
 Clarity on what we do – in order to be able to demonstrate value we had to be clear on
what we did – our services and their KPIs
 Clarity on effort to do it – in order to understand how much investment was being put into
these services we introduced timesheets
 Clarity on its value - and then canvas which of the services were valued the most, this
enabled us to match return on investment and adjust, add, and delete. This was critical for
us to be able to offer a degree of more for less
Tools and workflow – efficiency agenda
 Document review cycle – assess areas where time and effort can be measured against a
process and outputs and look to business analysis to find efficiencies. A workflow tool was
used to radically reduce the time for document reviews and the tool provided the stats
evidence to back up the efficiency claim and help reduce the annual cost of the PMO

PMO VALUE AND GOVT AGENCY - efficiencies
Business Process Automation Business Case
 Headcount - Reduce R&A FTE effort
by 40% (9 FTE’s down to 5.4 FTEs)
 Cash back - Client investment of
£309K to be paid back in 18 months –
by November 2010

PMO VALUE AND GOVT AGENCY - effectiveness
Keeping close to our consumers and customers
 Service Delivery Certificates (SDC) – monthly reviews with Programme staff against an
agreed number of effectiveness criteria – threshold set where management action required
 Satisfaction Surveys – wider review to assess the totality of service and view of
satisfaction trend
 Timesheet data – records of effort to correlate with scores from SDCs. In this way we
have been able to assign resources and effort where it matters the most in order to do
more with less.
e.g. the portfolio of projects requiring support has grown but the number of PMO staff to
support them has reduced. So instead of providing all of our catalogue services per
resource, we only provide what is of most value – typically finance, planning, and risk are
most valued.

PMO VALUE AND GOVT AGENCY - insights
Operating Costs
 PMO - Price per report – track decreasing costs as tools and process become leaner!
 Scale – costs/headcount/output over time – record the number of PMO staff and their
cost against outputs such as number of base lined documents, risk registers, plans
(activities, milestones, dependencies etc)
 PPM - Price per Business Case – comparison costs for value!
 Business - Cost of a programme – insight into how much change can the business really
afford. Good example of PMO analytical insight and provided value in setting benchmark
Continual Improvement (CI)
 Build in CI cycle/plan/list – what is valued today may not be what is valued tomorrow –
 three major redesigns of PMO to reflect changing maturity and business conditions
 more stakeholders required redesigned MI dashboards
 focus on portfolio management
 more delivery areas requiring support
 reduce bureaucracy

PMO VALUE AND GOVT AGENCY - insights
Initially team size
and quantity of
reporting grow
together, once
automation kicks in
productivity should
soar.
The volume of MI
being produced
should start to
decline as reports
come to the end of
their life (the
problem they were
designed to address
has been resolved),
also there should be
consolidation and
removal of (near)
duplication.
The volume of BI
will start to build
more slowly than the
MI as it requires
more sophisticated
data analysis and
better data quality.
The reporting team
should become
more focused on
keeping reports
relevant and
analysing the data
for it's message
rather than just
reflecting the data.

PMO VALUE TAKE AWAY
 Providing insights based on our
unique position placed a value on the
PMO
 By being clear on what we offered
helps us to adjust to maintain
maximum value (timesheets)
 Keeping close to our consumers
through feedback provides evidence
of value
 Showing efficiencies using Business
Case style measurements helped
bring confidence in the PMO as a
business function
 Keeping different stakeholder views of
value and the maturity of the PMO in
mind when tackling value
Balanced Portfolio view

The Journey (So Far!)
Huw James
Head of Programme Management
Network Rail
May 2014

Contents
1. Context - The UK Rail Sector
2. 2010 - At the beginning
3. Project automated Reporting
4. 2013 – the formation of a P3M strategy
5. Where next?
6. Questions

Context – Network Rail
 UK Rail Infrastructure
– £6.4Bn per annum
– 34 000 People
– 22 000 Miles Track
– 40 000 Bridges
– 11 Managed Stations
 24/7 Operations – 50% increase in
number of trains over last 10 years
 The largest investment since the
Victorian Era

Context – Organisation
 Infrastructure Projects
– Enhancements and Renewals
– £4Bn + per annum
– Approximately 4000 live projects
– Business Units - 4 Regions, 2 National
Programmes, Thameslink
– Role of Head of Programme
Management
– A community of 1800 PM’s and Planners

Context – Regulation
 5 year Control Periods
 Transparent open book access
 ORR Introduce and maintain ‘the
challenge’
 ORR and DfT manage the Passenger
and Freight operator franchise's
 Reputation

2010 – At the beginning
 There was no PMO strategy!
 There was
– A clear desire for no surprizes
– A need to reduce costs
– A need to provide accurate information to
the business and our regulator
– A need for governance and an
independent view
 Change Project based on cost and risk
reduction

2010 – At the beginning
 Change Project (Project automated
Reporting) based on a number of
assumptions
– Common systems were in use (OP,
Primavera, ARM etc.)
– Systems contain single point of truth and
are fully updated
– Organisation used the coding standards
and mandated finances and milestones
etc.

Project Automated Reporting (PaR)
 Consistent Reporting Packs (Project and
Portfolio)
 Exception based
 All data extracted from source systems
 Set timeline
 Open Access
 Governance built in to RAG rating
 Tiered structure
 Team set up for Independent Review

 Overall Summary Page
 Earned Value
 Schedule
 Financials
 Risk and Opportunity
 Commercial/Claims
 Safety and Environmental

 Issues
– Original Assumptions!
– Sponsorship
– Acceptance of common format
– Training the Users
– Training the Reviewers
– Visibility

 Benefits
– Project, Portfolio and Organisational view
– Ability to interrogate and make timely
interventions
– Move from ‘Red’ to ‘Green’
– Robust forecasting
– Independent review and Governance
(project and organisational level)
– Accountability still with management teams
– Cost reduction

We had created a PMO without setting out
to do so:
Portfolio covers whole organisation (£9Bn
and 4700 projects)
Consistent approach and measures
Small team to administer and analyse
Provides insights directly to the Managing
Director

The formation of a P3M Strategy
 3+ years to embed Portfolio management (PaR)
into the business
 Professional Development of our PM Community
 APM Accreditation in 2013
 Involvement of the Client and Sponsorship
community - P3M across Network Rail
 Approval of the Business Case
 A need for a common language and
understanding

Investment Portfolio
Business Change Infrastructure & Operational
Change Portfolios
Infrastructure &
Operational Portfolio
Change Programmes
Infrastructure
Programmes
Change Projects Projects
Delivery Portfolio

Investment Portfolio
The Investment Portfolio is the totality of an organisation’s
investment required to achieve its strategic objectives.
Example: Strategic Business Plan
Infrastructure and Operational Portfolio
The Infrastructure and Operational Portfolio is a segment of the
organisation’s investment required to achieve its strategic
commitments that includes Operations, Enhancements,
Renewals and Maintenance.
Examples are the 8 Routes, or Functions (e.g. GBS, Property, etc.)

Delivery Portfolio
A Delivery Portfolio is defined as a grouping of an organisation’s
activities, or projects, likely to be either geographically, and/or work
type, and/or synergistically linked
Examples: Sub-regions (bundles of small projects within the work-bank)
Infrastructure Programme
A programme is a temporary structure which has been created to
coordinate, direct and oversee the implementation of a set of
interdependent projects and activities in order to enable outcomes
and benefits related to the organisation’s commitments.
Examples are: Northern Hub, TLP, EGIP, Crossrail

Project
A project is a unique set of coordinated activities with definite
starting and finishing points, undertaken to meet specific objectives
within defined time, cost and performance parameters.
Projects range from “Simple” (e.g. Bridge Replacement) to “Complex” (e.g.
Kings Cross)

Where next?
 Establishing Portfolio Management
– NR Investment Portfolio
– NR Business Change Portfolio
– Route Portfolios
– Delivery Portfolio
– Business Portfolios (IM etc.)
 Measurement of effectiveness
(P3M3)
 Role of the Community of Practice

UK Submarine Dismantling Programme:
The PMO’s role in Benefits Management
Chris Mills
Managing Consultant
BMT Hi-Q Sigma Ltd

18 submarines held in afloat storage – rising to 27 as current classes are decommissioned
A safe approach for
over 30 years.
UK policy is to
progress nuclear
decommissioning as
soon as is reasonably
practicable.
Costs are rising as
the submarines age
and increase in
number
Management of decommissioned nuclear
submarines in the UK
47

A nuclear waste management problem
48
Diagram courtesy of the MOD

External forces
Challenges to SDP arise from all dimensions:
Political
 UK and Scottish political landscape
Economic
 Affordable value for money in time of austerity
Sociological
 Interactions with local communities
Technical
 Meeting the regulatory requirements
Legal
 Possible challenges to decisions
Environmental
 Responsibility for managing waste liabilities
49

Solution is to move to a programme
management approach
 Use of MSP framework to deal with
uncertainty in the change programme
 Programme boundary to deal with
external environment, stakeholders &
comms
 Projects to focus on output delivery
 Interdependencies managed within
programme environment
 Programme intermediate steps aligned
with MOD approval requirements
 Can differentiate between ‘change’ and
‘steady-state business’
After a successful assessment phase
using a project approach, now have
an increased set of challenges:
 Increased volume and complexity of
integration between workstreams
 Multiple outputs across dispersed team
with increased supplier involvement
 Greater exposure to complex, diverse
and influential stakeholders
 Need for consistent and co-ordinated
communications with stakeholders
 Uncertainty – need to maintain flexibility
and focus
 Long timescales for disposing of all 27
submarines
Why a programme approach?
50

HINT #1
 The PMO can help define a programme
approach with an integrated framework
for managing risks, issues, assumptions,
benefits and requirements.

A PMO-defined framework
52
Strategic
Programme boundaries and approvals
Influenced by/affect other PTs & key external stakeholders
L1
L0
L2
L3
Programme
Overall programme definition and inter-project boundary
management
Project
Focus on delivery of individual project outputs and
support to programme outcomes
Supplier
Specific project work packages
Supplier activities

Defining the change programme
Focus on what is required – bound the change
– The entire scope of the SDP challenge consists of several key elements
– The change programme is the change of state – not the eventual submarine disposal
– Approach provides focus and clarity on the new state
53
Medium-Term
Change Programme
Short-term
intermediate
step-changes in
capability
CURRENT STATE
(afloat storage)
FUTURE STATE
(planned disposal)
Long-Term Submarine Disposal
Steady State Programme
(27 submarines)
Facility
Decommissioning
(dismantling & storage)
ILW DISPOSAL
IN GDF

HINT #2:
 Identify how the PMO will integrate
services with the programme and project
teams

An integrated offering
55
In Service Submarines Team
MOD SDP
Programme
Team
MOD SDP
Project
Teams
SDP PMO
Tech
Support
1
Finance
Cost
Suppliers
Tech
Support
2
PM Strategy,
Plans,
Controls,
Benefits,
Comms
Tech
Support 5
Technical
integration
&
Nuclear
Waste mgt
Tech
Support
4
Safety &
Regulatory
Strategies
and plans
Tech
Support
3
Benefits
Decision
analysis
MOD
Comms,
Finance,
Business,
Quality,
Environmnt

PMO services
SDP - Programme and Projects
Programme Office
Project
1
Project
2
Project
3
Project
4
Project
5
Approvals
Governance, Strategy & Planning
Controls
Requirements
Integration Management
Stakeholder & Communications
Environmental Co-ordination
Benefits Management
Finance & Commercial
Options Analysis
Legal & Regulation
Quality Management

HINT #3:
 The PMO needs a common purpose to
provide a focus for an integrated service.
57

The SDP PMO Mission statement
The SDP Programme Office is a central
resource that underpins both the
Programme and the constituent
Projects.
It supports the Programme Manager
through its work in Governance,
Integration, Controls and Assurance.
It provides a strategic overview as well
as support and advice to Projects,
health checks at Programme and
Project levels, sharing knowledge and
expertise throughout the team and
enabling the governance framework to
operate effectively with robust decision
making.
58

HINT #4:
 An integrated PMO can champion a
benefits-led approach.

Benefits management
Benefits
Management
Strategy
Benefits
Report
Benefits
Profiles
Benefits
Realisation
Plan
Identification,
analysis &
Results
Detailed
definition of
individual
benefits
Tranches,
projects,
outcomes &
intended
transitions
Why we
need to do
BM & how
we set
about it
What we did to
identify the range of
benefits & underpin
the decision making
process and confirm
against the user
requirements
What the
benefits
are in
detail
PMO support
How and when we
intend to achieve the
Benefits. Includes the
Benefits map.

Benefits realisation
Project
execution
Project
outputs
New /modified
capabilities
Programme
outcomes
Benefits
realised
• Assurance that the
integrated system
meets its requirements
• Objective evidence that
the needs of the
stakeholders are met
Integrated verification and
validation:
Integrated Test,
Evaluation and
Acceptance Plan
Benefits
Realisation Plan

PMO-led benefits mapping
Outputs Outcomes
High level
benefits
Key user
requirements
Corporate
Objectives
62

Expected accumulation of benefits
SDP-BEN-5
SDP-BEN-6
SDP-BEN-7
SDP-BEN-8
SDP-BEN-9
SDP-BEN-10
SDP-BEN-11
SDP-BEN-12
SDP-BEN-4
SDP-BEN-3
SDP-BEN-2
SDP-BEN-1
Sustainable, Safe Removal and Storage of ILW
Sustainable, Safe Removal and Disposal of LLW/VLLW
Sustainable, Safe Removal and Disposal of Hazardous Waste
Sustainable, Safe Removal and Disposal of Non-hazardous Waste
Optimise Direct Financial Impact
Optimise Indirect Financial Impact
Optimise Socio-Economic Impact
Improved Public & Stakeholder Confidence
Minimisation of Operational Impact
Maintenance of UK Industrial Capacity
Minimisation of Health and Safety Risk
Optimise Environmental Impact
Operational
Impact
Financial
Impact
Deliverability
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Tranche 1 Tranche 2 Tranche 3 Tranche 4

HINT #5:
 The PMO can track and report benefits
delivery through programme schedule
integration

Key Milestones
Inputs
Outputs
Activities
Example Milestone
Example Input
Example Output
Example Activity 1
Example Milestone
Example Activity 2
Link to external
successor (other
EPM project)
Link to IMS
milestone
summary
Link from
external
predecessor
(other EPM
project) Project schedules are
set up to provide the
links and
interdependencies
necessary for
programme coherence
 Outputs, outcomes and
benefits delivery are
shown in the integrated
master schedule (IMS).
Schedule Integration
65
Link from
other project
output
Link to IMS
milestone
Link to other
project
output

 A Programme approach requires thought and
agreement about the vision, the future state and
benefits to be delivered;
 PMO can play a pivotal role in benefits-led
programmes;
– Provides the clarity needed to understand relationship between
strategic, programme and project management;
– Leads, identifies and tracks benefits as an integrated process;
– Benefits measurement can be difficult and stakeholders may
need to be convinced of its value;
– Defines and agrees the benefits baseline.
Summary

Project Definition
Emma Arnaz-Pemberton
European PMO Manager

Office Depot PMO: An Overview
PortfolioFunction
• Portfolio Build
• Prioritisation
• Planning &
Estimating
• Pg & Pj setup &
closure
• Performance
Monitoring
• Communications
DeliveryFunction
• Monitor, Review,
Report
• Risk & Issue
Management
• Finance Control
• Quality Assurance
• Information
Management
• Transition
Management
CenterofExcellence
• Standards &
Methods
• Internal Consultancy
• Organisational
Learning
• Knowledge
Management
• Training & Coaching
• Change
Management
• Best Practice
Sharing

Office Depot PMO: Real Results
• Full visibility of portfolio
• Independent project spend analysis
• One version of the truth
“We don’t know what
projects are going on”
• Globally subscribed Community of Practice (200+ members)
• SME’s for PMO developments
• Volunteer event facilitators (Champions)
“I don’t get Project
Management or PMO”
• Fully integrated business partner
• Genuine and credible internal consultancy
• Supporting Project Managers to do better
“PMO are the Police”
• Balanced Scorecard measuring circa 60 KPIs
• Development via dedicated career path
• Owners of the financial approval processes
“What’s the point of
PMO?”
• Independent communications
• Launch and promotional events
• Regular touch points with Sr Leadership
“I don’t know what
PMO do”

Project Definition: Most Frequently Asked…
 When is a project a
project, and when
is a project a
project that needs
governance?
 How is it possible
to have one
process to
categorise
projects?

Project Definition: What is it?
The process of defining workload for the
purposes of identifying the level of
governance, structure and expertise required
to successfully deliver the expected outputs
Office Depot

Project Definition: Why Bother?
BaU pieces of work could be delayed by unnecessary process
Scope can become unmanageable
Unable to really prioritise if we don’t know how complex the work is
Incorrect expertise levels can be assigned to the work
Incorrect level of visibility – see too much or too little!
Pitfalls
Identify where structure is required for pieces of work
Support can be provided to Project Managers when the level of work is
known
Supplies the business with clear visibility of its Initiatives
Can provide a direct link to budgeting processes
Appropriate Governance levels and expertise can be applied
Benefits

Project Definition: When is a Project a Project?
Differentiate
• Business as Usual (BaU) from project activity
• Unstructured and structured activity
• Simple from complex work
Governance
• When BaU needs to be structured
• When a project is a PRINCE2TM project
• Provide a choice of methods for management
Categorisation
• Based on size and complexity
• Align to current & proposed budget processes
• Define project characteristics in project type

Project Definition: OD Project Categories
Versatile
- <6 months
- Financial approval
- Structured BaU
Quick & Small
- < 1 month
- No additional money
- Business as Usual
Implausible
- Estimation incomplete
- Blue Sky Thinking
- Feasibility Study
Fast & Reliable
- < 1 year
- Financial Approval
- Standard Project
Big & Dependable
- < 3 years
- Experienced Associates
- Complex Project
Heavy & Inflexible
- >3 years
- Significant Investment
- Programme of Work

Project Definition: Tooling
Stage 1: Identify non-project work
1 2 3
Will this piece of work
produce a specific
deliverable, by a set date
(or in a set timeframe)
Do you require capital
investment, outside of
your functional budget?
Will this activity bring
about a benefit or change
that can be measured?
Stage 2: Initiative Size
4 5 6
Work effort -
Months
How much
investment will be
required?
Benefit Type
C
7 8 9 10 11 12 13 14
FTE # Functions
Current
Capability
Complexity
Deployed
Where
How Impact Who Changing a..

Project Definition: Real Life Benefits
Common Language
Higher Adoption
Enhanced Portfolio
Visibility
One way of working

Project Definition: The Future
• Lean Six Sigma adopted
• Inclusion into existing method
• New tooling
• Approach based on project nature
• Cross-skilled Project Managers
• Resource allocation based on skill & experience
• True blended approach

Project Definition: The Take-Away
 To develop something like this in your
organisation you need to consider the
following:
Innovative
Organisation?
Reinventing
the Wheel?
Adoption
History
Who Needs to
be On-Board?
Do you have
the Skills?

Project Zoo
Interactive Session

Close
Stuart Dixon
APM PMO SIG Chair

How to contact us:
pmosig@apm.org.uk
http://www.apm.org.uk/group/apm-
pmo-specific-interest-group or
http://www.pmosig.co.uk
@pmosiguk
APM PMOSIG group

Events held
 Full Conference
– Assurance and its relationship with the
PMO – March 2014
 Local events:
– World Café – Manchester – February 2014
– World Café – London – October 2013
– The practice of planning and the PMO –
July 2013
– Ahead of the Curve PMO – July 2013

APM activities
 APM Competence Framework
– Attended sessions for Project,
Programme and Portfolio competencies &
PMO involvement
– Reviewed competencies from PMO
perspective
 PMO role profiles
– Developing 5 role profiles for PMO staff
aligned to APM competence framework

Other activities
 Regular newsletters +
 P3O® manual – 2013 refresh
 PMO Manifesto
 PMO conference – June 2014

Summary
 Challenging year
– lots of committee changes
 Successful events delivered
 PMO involvement across APM
 Making a difference for our members

This presentation was delivered
at an APM event
To find out more about
upcoming events please visit our
website www.apm.org.uk/events

The PMO in practice

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