May 7, 2018
5 Secret Killers of Your IT PMO
In a recent webinar, project management experts Naomi Caietti, director and managing editor at Naomi Caietti Consulting, and Nick Scholz, solutions marketing manager at Workfront, shared five secret IT PMO killers and tips for overcoming them.
Naomi Caietti: As leaders, every day you get the opportunity to partner with their customers to find solutions to their business problems is a great day to honor the discipline of project management and PMOs around the globe.
In this webinar you’ll learn how IT teams can buck the trend of high failure rates, discover ways to end the work methodology war and enable your team, understand the effect that status updates and meetings are having on your work, and explore better ways to get visibility, predictability, and efficiency into your workload.
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In the last decade, PMOs have undergone many challenges, have seemed to experience an identify crisis, have not won over stakeholders about the value they offer, or how they fit into their respective cultures.
Today, we’re pleased to share new PMO insights, emerging trends, how PMO failures have shaped new approaches and models, review best in class PMOs, and discuss the five secret killers of PMOs.
I'd like to level set for our audience today. My goal is to share the latest research trends and just-in-time information so you walk away with tips you can immediately put into action.
So my focus for the first half will address four of the top 10 trends in project management that have recently been released for 2017.
The first one will be evolving the PMO; second, making improvements in key processes; three, increasing the value of PMO to the organization; and four, staying in touch with the business.
I’ll only skim the surface on this important topic, so please jot your questions down throughout the presentation as you think of them. We will have poll questions during the first and second half of the webinar, so reflect on your questions and at the end, Ashley will facilitate our Q&A for us.
I'd like to also share, this presentation will offer value to private and public sector project program portfolio managers, project management office directors and executives, chief information officers, and consultants in the public and private sector. So, let’s get started.
As a thought leader, I’m focused on staying in touch with current trends, on change from leading experts in the field, conferences, and social media.
So over the last few years, there have been some emerging ideas from many of these leading experts including PMI and their Pulse of the Profession reports. It’s great to see PMOs be champions and beacons of hope again for many organizations and their business.
And there has never been a better time for PMOs. They can be the conduit for executing projects and strategic initiatives.
So, let’s review how the PMO has evolved in the last decade. Evolving the PMO, this is one of the top 10 challenges for PMOs in 2017 that was identified at PMI’s PMO Symposium 2016. As we look at these models, notice the change in mindset.
So, what did we learn over the last decade? We launched PMOs using the old model, and we failed over and over again. So there was so much to learn from this.
And basically, the chart represents the shift from what I’ll call a fixed mindset to a more open, flexible, and adaptable or growth mindset. As we moved through the current model, we embraced change and adapted to the current model, but still there was more work to be done.
In the emergent model, we leveraged new methodologies like Agile, and pivoted to emerge as a strategic partner with the business to help deliver services to drive innovation, return on investment, and achieve competitive differentiation.
The percentage of organizations with a PMO continues an upward trend from 61 percent in 2007, to 71 percent today in 2017.
Executive leaders, PMO directors, and project teams are charged with meeting the challenges to be more agile, customer-focused, and competitive. Many are looking at the very structured capability and purpose of the PMO for answers, and that’s a good thing.
So, let’s review how the shift has impacted PMO roles. So what is the role of the PMO? Well, I want to share that earlier this year at PMI’s PMO Symposium, Mark Price Perry gave a talk called “The Golden Rule—It’s Not Your PMO.”
Mark basically shared that the PMO doesn’t belong to you. The PMO belongs to the business. And then he set out to say that PMO management is not project management at all; it’s business unit management. This is a whole new ballgame for us, in looking at it from this perspective.
PMOs need to change to evolve, so basically this slide depicts a nice transition from the grey—from traditional roles—reflecting to a more strategic focus in the red with the business in mind, using lean tools to track data for project portfolio prioritization, more focus on resource management, and offering consulting services like coaching, mentoring, and training.
So let’s talk about new models and new approaches. There are many new PMO models that have surfaced. And in this example, this is a depiction of a strategic PMO.
But there are also PMOs like hybrid, Agile, and virtual PMOs out there and the impacts have been seen in IT and business. These models have shifted due to global changes in the marketplace, the Internet of Things, and emerging IT technology.
In fact on the IT side, going by research firm Gartner, bimodal IT describes a way of managing two separate modes of IT delivery projects. One is focused on stability and the other agility.
This particular model that we’re looking at here, I think might be more of what I call enterprise or center of excellence model, and I’m sure you’ve seen those terms used before.
Project portfolios are becoming more and more interdependent, so the long-term trend is going to grow even more in the coming years.
So the interdependencies among your projects and internalization are on the rise, and as a result, the strategic project management office model will gain considerable importance.
So now it’s time for a poll, and I’m going to ask you a question. And let’s see how many get the right answer.
I’m just going to flip over to the next slide so we can see what some of the results are. It looks like many of you are choosing "organizational resistance to change," but I don’t see any of you choosing any of the other options, yet.
Well, certainly if you answered any of the challenges, you are correct; but it’s basically "all of the above." In this particular list there was a top recurring challenge that continues to have the highest percentage from the survey from this report, your PMO to the top.
It is "PMO processes seen as overhead." It’s interesting to see this particular challenge still facing PMOs. When I worked in my PMO it was a challenge to constantly be having to demonstrate and talk about what value we were bringing to the organization.
So it’s still out there, it’s still a challenge, and it’s still one of the top ones. But these are all actually a high percentage, anywhere from 30 to 50 percent.
So let’s briefly talk about failure; looking back and learning lessons and moving forward. If we look at this slide, don’t many of the failures look familiar?
Most of these are unfortunately true, but what about the first bullet? "Fifty percent of project management offices close within three years." So, do you think this is true?
Did you know that there’s fake news in project management, too? So John McIntire also gave a presentation at PMI’s PMO Symposium called “Beyond the Tricky Third Year” to debunk the myth about PMO closures.
He shared: let’s bring it out in the open, that stat of PMOs closing within three years is wrong, and it always has been. The original research paper actually said that PMOs change and evolve into something else.
They are never the same PMO three years down the line as they were when they first started, so there you go.
So it’s really been a tough decade for sure, as many of you are out there working hard, trying to stand up your PMOs, improve your PMOs, or mature your PMOs. And many of these statistics are still only a few years old.
So, it’s finally time for some good news, right?
The recent statistics show that PMOs are now not only on the rise, they’re demonstrating success with new approaches, methods, and partnerships with the business. So let’s take a peek at what PMO success looks like.
My favorite bullet on this slide is the top one: a majority of firms, or 85 percent, have a PMO in place. Successful PMOs feel good from the inside out, and there are so many benefits for the organization and for the staff working in the PMO.
PMO implementation has increased, as I mentioned, 10 percent in the last few years. And as in the previous slide, many orgs are leaning towards a more strategic model. The magic number for experienced PMOs is three to six years.
So it does take some ramp up time to actually begin to improve your processes and work on that maturity at many levels in your PMO, from staffing to your standards, to your processes and project delivery. And PMO alignment enables strategic planning, governance, and portfolio management.
Let’s see what more good news we’ve got out there. So again, here’s some other great news from PMOs that are out there just really doing good work. The takeaway from this slide is finally, value is being demonstrated.
Resource management is being better managed, training is being offered to staff so that they can improve processes, standards, project delivery, and they can focus on those things like governance and strategic planning and resource management.
PMO maturity is on the rise, and maturity and value are mutually exclusive. This looks really good and successful, right? Are you wondering how you get there?
Let’s talk about best in class PMOs. PM Solutions is a service provider, and has completed some recent research on best in class PMOs. Also, PM Solutions has given out PMO awards in the last decade and is now turning them over to PMI.
And I’ve followed PM Solutions probably for this last decade, and they have a really nice archive of winners and runners-up from many industries in an ebook you can download.
The beauty of the information that they’re providing there is you can take a look at your PMO and see what things that you may want to model after. It talks about different PMOs, the runners-up, and the winners who have won from various industries, and it’s a really great resource for you.
A best in class PMO has specific criteria and can be defined as they work on far more projects than less capable PMOs; they have been in place for six years on average, and I mentioned that it takes some time to ramp up, but six years seems to be the magic number for best in class.
And they’re more likely to report to an executive VP or above. So the alignment is there to the C-suite, which is really great to have for your PMO.
More visibility, strong support from the C-suite, you can get more resources, and you can also plug yourself into that strategic planning and have a seat at the table.
They also have a wider variety of roles within the PMO, from schedulers and planners on up to portfolio managers. They engage in tests that impact strategic planning, governance, and portfolio management.
I’m glad to say that the PMO I worked in at the datacenter for the State of California, it was all of these things. It was acting as a best in class PMO. We were striving to provide services and service delivery of projects for our customers.
So there are many strategy services and competencies PMOs can excel in, so this particular slide is just basically showing you these are the top three from the latest State of the Report 2016.
These are the three things that the best in class PMOs are excelling in: strategic focus, sophisticated resource management, and advanced training. It’s all about going from good to great, but again, it’s going to take time.
So let’s talk about agility; and Agile project management is not just a buzzword anymore.
Jesse Fewell also spoke at the PMI PMO Symposium, and he’s a consultant and Agile expert and considers that PMOs excel in three forms of agility: personal agility, project and product agility, and organizational agility. I think it’s good to think of agility from those perspectives.
PMOs are shifting in methods and approach to more lean project management or Agile methods and practices like Scrum, Kanban, and others. They’re lean, business-aligned, and focused on delivery to meet business needs more rapidly.
Many approaches may even use a hybrid of Waterfall and Agile approaches to meet the delivery of the project.
So, if any of you listening today are thinking of implementing a PMO, planning improvement or changes in your PMO, or are dealing with many of the challenges mentioned, you may wish to consider a road map.
Do you have a road map for your PMO success? Did you hope to come here to find out more about how you could create yours?
Consider these steps as you review how you will evolve, improve processes, build partnerships with the business, and move toward the target to increase the value of your project management office.
In The State of the Report 2016, they listed the top five PMO priorities you should focus on for the next 12 months.
The interesting thing about these priorities is that they addressed organizations with and without PMOs—small and large organizations, industry-specific like healthcare or finance, functional like IT or datacenter, internal and external, and low or high performing PMOs.
The top five priorities are governance, resource planning, PM processes, reporting, and portfolio management. None of these are a surprise to me, but again, I read these actually in a priority order, also.
So if you are looking at this and maybe yourselves thinking, "I should go after reporting first," or "I’m going to focus on my processes; they’re suggesting governance."
I’m going to save it for our Q&A at the end. I can share with you more specifically for those areas what they do state and we can discuss that.
Mature PMOs should focus on adding capabilities, and less mature PMOs should do a comparison of their own functions and processes to a mature PMO and this stated PMO report.
And you can basically use it as a model to create your own road map to improve your functionality and performance. And again, each organization is unique, so you want to make sure you focus on creating the road map that fits your organization.
So, let’s wrap up. Today’s PMO challenges can be addressed with proper planning, approaches, and business partnerships—like I’ve discussed today—to continue to evolve.
You’re now ready to put together a plan and define your path forward.
Nick Scholz: As you’re putting together a plan, the reason that we’re talking about these two things together is because putting together a plan for how your PMO is going to move forward means that you need to avoid the things that are going to instantly go in and undermine what you’re trying to achieve.
With that in mind, as we look at the news that Naomi has delivered, both good and bad, we see that there are a lot of challenges that PMOs are facing. We also see that there are a lot of successes out there.
And the clear message that I get is that our PMO professionals know exactly what they’re doing; they’re competent and they’re strong.
But, speaking to her point about why the PMOs are failing, it’s because the process that they have been given was not built for the speed and complexity of today’s work.
One quick example, before we dive in, is that more than $250 billion a year is spent on IT projects. Sixty-two percent of them are delivered late, 49 percent of them are over budget.
That means that there is something broken in the process—if our professionals know what they’re doing—that the process must be part of the weakness. That’s where these five killers come in.
So to begin, we’ll talk about killer number one: constant status inquiries.
I doubt there’s anyone in this audience who doesn’t understand what we’re talking about when we talk about constant status inquiries coming in. It’s a mountain of meetings, it’s drive-by discussions, it’s sticky notes. And just like any killer, it’s got particular weapons in mind.
Ask some of these questions when you’re thinking about whether you’re being stalked by a particular killer of your PMO. Things like, "When your boss asks for a status update on all your projects, how are you finding all the information?"
"Do you have to manually find information from each team member and hunt them down?" "Do you have to log into multiple tools to access status updates?" And, "Are you required to present data in different formats for every stakeholder?"
These kinds of time sucks really add up quickly.
And the losses mount quickly as well. This is just one example. This is for status meetings.
Now, all of our calculations generally are based around a 30-person team. We blended the rate of everybody down to about $70.00 an hour, which is right there in the middle.
This is the average yearly cost of status meetings. That’s a half a million dollars just on status meetings that didn’t need to happen if you were able to keep ahead of what the stakeholders needed.
Killer number two: poor or no visibility into your team’s workload. This is the death by 1,000 sticky notes.
Now, just like the last one, this has particular weapons in mind.
"How do you help team members know what to work on?" "When a new request comes in, how do you know who to assign it to?" "Have you or a team member experienced burnout because of their workload?"
Burnout is a huge deal. And this is just like Naomi was talking about; this is a problem now across the enterprise. This isn’t just a PMO problem, because a PMO is part of everything.
And so if you’re having a problem with burnout, that means your PMO is possibly on a path to where they just can’t find success, because there should be a balance for people.
And then last: "Do you have to log into multiple tools or individually inquire to assess availability from people?" That takes way too much time.
A lack of understanding of a team’s current workload and capacity is reported as the second biggest challenge in the project management process.
This is a survey that Workfront actually did recently. Eighty percent of surveyed companies use spreadsheets to manage their work, and a third of them use a mix of email and spreadsheets, with email being totally siloed away.
So any information that happens in a thread stays in a thread. Eighty-eight percent of spreadsheets are reported to have errors. That’s not too inspiring.
Workers are spending up to two and a half hours per day just in searching for and gathering information for projects and work. That’s just too much time. Here the losses build up, too.
The yearly cost of late projects, you can see there, is $100,000. It’s just too much. And email, this one is a big hitter.
Email can be such a valuable tool for communication, but when it turns into a silo where all the work is conducted and too much time is taken to find any information that you need, especially about your status, our calculations put that cost, just for a 30-person team, at over $2 million.
That is a lot of money and a lot of wasted time, just to be able to get the information that you need to make true, real-time decisions about where your group and your business need to go.
The third killer: multiple disconnected tools. Once again, I doubt anyone in our audience wonders about what we’re talking about here.
The weapons: "How many different tools do you and your team use to manage work and projects?" Probably a lot, and I’ll get into that in a minute.
"Do the tools you use integrate with one another?" "How much time do you spend building reports from data that’s housed across multiple tools?" "Do you struggle with tool adoption from your team?" Most do. "What’s your current process for approvals?"
The average worker is using 13 different tools or methods to manage time and work. Fifty-nine percent of project management middle managers agree that they miss important data every single day because information is so hard to find.
Project managers report their biggest challenge—the number-one—is information spread across too many disconnected tools.
Too many tools means too much time; means project managers who, instead of using their great expertise in bringing their projects to completion, are spending their time digging through who knows how many tools just to find the stuff they need to get status reports, let alone do their jobs.
And the cost stat up here, this is just one component of the too many disconnected tools. Building reports, on average, is costing $134,000 for a PMO organization.
Add that on top of all of the costs that we’ve had before, if you see any of these other killers in your organization, and the costs are really beginning to add up.
Nick Scholz: Now, requests from everywhere.
This picture really spoke to me because I’ve been in many organizations where it felt like the water was not just up to my chin; this was completely over my head, totally overwhelmed. And that’s the request from everywhere, especially for PMO organizations.
You guys are seeing all kinds of requests because you are an effective organization, because of the talents and skills that you have. That means you can quickly become overwhelmed until it’s simply too much to handle.
So, the kind of questions you should ask are things like, "How do work requests come to your department or team today?" You probably know the answer, and speaking statistically the answer is probably a sticky note, an email, or a hallway conversation.
"How are work requests prioritized?" Most organizations are prioritizing by the asker. If the person is important, then that means that it’s an important request because it’s just too difficult to try and do it any other way, without any sort of visibility.
"What common interruptions do you see in your day?" And, "How do you prioritize those big things, those fire drills that are constantly interrupting the day?" The average IT organization is spending between 45 and 55 percent of their time on unplanned or urgent activities.
These are the fire drills that we’re talking about. One in three enterprise workers attribute their work failure to a lack of clear processes and priorities. Without prioritization of what’s coming in, all you have to go on is what the requester has said.
And you want to know what every requester has in common? Their request is the most important thing that could have possibly come across your desk in the past two weeks.
So without a way to really objectively prioritize, these requests are going to continue to overwhelm.
Twenty-eight percent of the average office worker’s day is spent dealing with unnecessary interruptions—things that could be managed but you have to have the right processes, team, structures in place to be able to deal with it.
Now, you guys know the drill. Here is another poll. We’ll give you a little bit more time this time.
I just want to see what your guess is: "How much do ad hoc requests, these unnecessary interruptions or hallway conversations, cost a PMO team of 30?"
Do you have a guess, Naomi, while they’re filling in their answers?
Naomi Caietti: Yes, I just went ahead and put 1.4 but I actually don’t have an idea at all, but I’m sure the number is high.
Nick Scholz: That’s a pretty safe guess. Any particular reason you’re going with 1.4, or is it just going with your gut?
Naomi Caietti: Just going with my gut.
Nick Scholz: Sometimes that’s the best way to go. Okay, we’ll give them another 10 or 15 seconds. It’s too bad we can’t give them more than one answer, because it probably does cost their dignity as well, but we’ll see.
Okay, I’m going to head on over to the next slide. Okay, yes, we’ve got a pretty good spread across the board.
And actually, the correct answer is $1.8 million every year. I’m surprised we don’t have their dignity, but we had a lot of people who had a pretty good feeling.
My guess is most people went with their gut or with an example from their organization. But our 26.5 percent, you guys nailed it. Our $1.4 million, the 35 percent, you were pretty darn close. It’s a huge cost. Let’s dig into it.
Okay, your ad hoc work, this one, just so that you know the methodology here, it’s a teeny bit different. This is based on the average IT team spending 45 to 50 percent, and that’s 18 hours of their time per week, on unplanned, urgent activities.
It is still based on the 30-person team with the blended rate. But when you come down to it, that is $1,814,000 on ad hoc activities.
These are the kinds of things that may be activities that needed to get done at a certain point, but they didn’t necessarily need to get done at that moment. So there’s wasted time built in on things that may have actually been a higher priority. It’s a lot of money.
Now, Naomi spoke to the idea of mixed methodologies.
This is a world where you have to be able to give people a way to work that they want to work in. We have all kinds of methodologies, from your dependencies of Waterfall to the agility of Agile, but there are all kinds of shades in between. We have to find a way to enable workers to do that.
So, what are your weapons? What are the things that are coming at you?
"You manage both Agile and traditional Waterfall, or linear, projects. If you do manage both of those, how are you making them work together?"
"How do you translate the sprints and iterations of your Agile teams into launch dates and milestones that executives and other project managers need?" And, "Does your team create workarounds in order to get Waterfall data to project leaders and executives?"
Thirty-nine percent of project managers report that more than three-fourths of their projects are completed in Waterfall, while 58 percent report that they are working on projects that include Agile methodologies.
There’s our base. From there, and I’m going to throw a lot of numbers at you; sorry about this.
But 33 percent of project managers who are mixing Agile and Waterfall—that’s 33 percent of that 58 percent—33 percent of those who are mixing them are using completely separate tools for each methodology.
That is a lot. That is one-third who are having to use two separate tools just to be able to make sure that their workers can work in the way that they want to.
And then almost 20 percent of those are double entering all of their data.
So they have to go from one tool, enter the data, hop into another tool, enter the data; this is yet again part of that problem of our project management professionals who aren’t able to actually use the knowledge that they have to drive projects to completion, and instead are wasting their time on administrative tasks that are unnecessary if the right structures are in place.
That’s not fair to our project management organization. Because we hold them to such a high standard, we have to find a better way to outmaneuver this killer.
Just like with the others, there are losses. So multiple tools for multiple methodologies, this is a quarter of a million dollars spent on things like double entering your data across tools, and it is based around that statistic we talked about of having 13 different tools for the average worker.
That’s just too much. That’s just too much time, especially when we have the knowledge that we do, but we don’t have the time to be able to tap that knowledge because of all the tools that are in place.
So, we have our five killers. What are a couple of tips to be able to outmaneuver them, to get ahead of them and make sure that you’re not in a bad position and that you can build out that future plan that Naomi was talking about for your PMO organization? You want to win the game.
First, this is a simple one but I do think it is absolutely critical: invite diverse perspective. Diverse organizations perform better than those without diversity. I don't think there would be too many who would be surprised by that.
You’ve got to find ways to allow for other ideas. If everyone discussing a subject looks the same, talks the same, thinks the same, is coming from the same background or the same expertise, you risk introducing blind spots.
Studies are showing that more diverse organizations enjoy improved decision making and innovativeness, increased responsiveness to customers and markets, minimized risks and costs, and superior financial performance.
I know that for Naomi actually, this is one of her areas of expertise. What else would you add as far as inviting diverse perspective to be able to overcome some of these killers and challenges?
Naomi Caietti: I think a big thing for me is executive sponsorship. This is kind of bubbling up out there again. You really need to have your PMO aligned to the C-suite, and I did mention this in regards to best in class PMOs.
You really need to have a champion as your PMO director. You really need to have strong executive support. That’s really going to help your PMO find a place in the organization and acclimate to the culture.
You need to find the right fit and you need to make that shift to focus on the business and go after some low hanging fruit with the business—issues they are facing—and demonstrate you can show value.
Nick Scholz: Very rarely, I’ve seen a few organizations manage to have some level of success without buy-in, but it’s extremely rare. It is so much easier to build an organization that’s going to have success when you have that buy-in and that kind of diverse perspective. Am I right?
Naomi Caietti: Absolutely.
Nick Scholz: Fantastic, thank you. Our second tip, this should come as a no-brainer. I think all of us know this, but few of us actually take action; tackling problems across silos to tear them down.
Siloed information is the enemy—is the opposite—of a good PMO organization, or enterprise organization as a whole. So true collaboration is key to getting your work done effectively; that you know.
If you don’t have the collaboration tools and structures in place to enable the type of in-context collaboration your people want and choose to participate in, now is the time to get that done; set that in place.
Start by speaking with stakeholders, just like Naomi said. Communicate your intentions to keep them in the loop. Choose a particular method, whether it’s a person, an email, a tool, whatever it is, but then the critical step after you’ve done that, is follow through.
Get a tool where updates are connected to the tasks being done.
Just as a tip: studies show that a social media-inspired tool, something that gives you feeds or activity update kinds of things that feel like what you would see on social media, those get people more engaged. When it comes time to choose the right tool, look for something like that.
Speaking of tools, have the right tools for the job.
When you have the right culture, like we just talked about in the last two solutions, having the right tools is when it really makes all the difference.
Without the right culture, structures, processes in place, your tool is destined to just not get used the way that it should, and that’s where a lot of adoption problems come from; when you don’t have the right organization in place. When you have that in place, that’s when they can truly work.
As a tip, there are many tools out there; make sure that the one you choose provides your team a central place for everything. They need to manage and collaborate their work all in one spot.
Look for something that’s going to help you improve visibility and productivity by eliminating those wasted time killers that we talked about, and eliminate those fragmented silo tools and processes that you’ve been dealing with.
These are five different areas that we’ve found a really good project management tool is valued by customers.
So look for proofing software that helps you centralize projects in a single solution, manage any digital work processes you have, automate approval processes and any review that you have to do so that you’re not losing anything, deliver your client-facing services (and these are internal and external clients).
And then last, and a huge deal now and it's just getting bigger: something that helps you govern compliance workflows. Compliance is gigantic and you’re trying to keep track of what you’re doing, especially if you’re in a very compliance-oriented organization or industry.
You have to have something that helps you keep up on those compliance requirements that you have, but doesn’t necessarily take all that extra time to do it. Something automated would be ideal.