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How To Avoid The Seven Deadly Sins of Level-2 PMO
How To Avoid The Seven Deadly Sins of Level-2 PMO
Level 2 PMO
Published: 29 December 2016 Analyst(s): Donna Fitzgerald
Summary
With the advent of digital and agile, program and portfolio management leaders who direct PMOs are
finding that it is becoming even more important to avoid the seven deadly sins of a classic Level 2 PMO.
Overview
Key Findings
Level 2 PMOs tend to get trapped in an endless web of entanglements. No matter how hard they
work at establishing initial functional integration and other earmarks of Level 3 maturity, they are
never able break free of Level 2.
In IT, the move toward agile and the desire to improve value are calling into question the very
existence of many PMOs.
Managing a project isn't the same as supporting small IT work efforts. Too many "project managers"
actually aren't able to manage real projects, and very few make successful program managers.
Recommendations
Project management leaders looking to optimize the value contributed by their Level 2 PMOs should:
Eliminate old tools, processes and attitudes that no longer support today's need to become more
agile and flexible in the digital age.
Require measurable objectives as an integral part of all business proposals, and use their unique
positions as neutral third parties to help balance conflicting stakeholder priorities.
Measure project accomplishments at frequent intervals, and deal with problems as they arise. Don't
let projects languish or spin out of control.
Establish firm guidance for the actions to be undertaken when a project is deemed to be troubled,
and enforce key decision points that require selecting one of the four available actions: re-scope,
restructure, reschedule or cancel.
Analysis
Overview
After speaking to many project management office (PMO) managers over the years, we have seen certain
trends begin to emerge. The most common is that PMO managers are most vulnerable when they are at
the latter stages of maturity Level 2. At that point, they've fixed all the things that were easy (establishing
common practices) but find it difficult to make the shift to the more agile and enterprise-focused activities
like Level 3 digital demand. This research offers a quick assessment for Level 2 organizations to help PMO
managers take direct aim at seven of the behaviors and approaches we most often see trap a PMO at
Level 2 (see Figure 1).
Figure 1. Avoid the "Seven Deadly Sins" of a Level 2 PMO
"Prepare three envelopes" refers to an often-told joke about the consequences of failure. After the third
failure, the manager's only alternative left is to "prepare three envelopes" providing advice for the
manager's own replacement. Here's an example of the anecdote.
Source: Gartner (December 2016)
The First Deadly Sin: Failure to Be Agile and Deliver Value
With the changes digital business is bringing to IT, PMOs are not always entirely sure of what they are or
what is expected of them. Our experience, based on many inquiries from PMO leaders, confirms that
PMOs are increasingly being challenged by senior management to become more flexible, more scalable
and more involved in ensuring that projects deliver actual value.
Achieving these traits, however, involves deep, fundamental changes for a PMO. It means tossing out old,
familiar tools, forms, processes, habits and attitudes — many of the very things that made the PMO
successful in the past.
And, if the PMO doesn't do these things, others elsewhere in the organization will — without the umbrella
guidance the PMO could be providing.
This means PMO leaders need to form a new mindset about what is important to the organization and
what produces something of true value. And, immediately following this personal willingness to change
comes a willingness to lead others through change.
While PMO leaders take their direction from the businesses they support, they should be expected to add
value as they carry out their roles in the overall projects or programs:
Ensure clear, measurable objectives beyond ROI. According to PMO leaders, too many project
proposals arrive at the PMO's doorstep seemingly ready to go, with management approval and
funding approval, but without clear and measurable objectives. By insisting that such measurable
objectives be a required part of the business proposal, the PMO leader not only adds value to the
organization, but can also save the PMO grief down the road, when the lack of specificity in results
becomes a sore point.
Function as a neutral third party. Different stakeholders will have different concerns about exactly
what is to be measured and what yardsticks will be used to make those measurements. PMO leaders
are in a unique position to weigh the self-interests of the various stakeholders against each other
and against overall value contribution to the organization as a whole. Despite the common
misconception that there is an absolute yardstick a PMO can use to measure value, like beauty, value
lies in the eye of the beholder. Every PMO leader must listen to the voice of the customer and strive
to deliver the services the organization wants rather than the services the PMO insists the
organization needs.
Identify and facilitate resolution of cross-team dependencies and issues. Today's increased
digitalization fosters the rise of more complex, more tightly coupled projects and systems, so cross-
team dependencies and issues are bound to emerge. If PMO leaders can function as both diplomat
and negotiator — proactively and objectively — they can contribute greatly to helping the PMO gain
the neutral, third-party status discussed above.
The Second Deadly Sin: Ignoring Resource Capacity as a Constraint on
Project Delivery
Level 2 PMOs are inevitably challenged by too many projects, too few people, the wrong skill mix or a
combination of these. The solution to controlling capacity constraint is to avoid starting more projects
than the organization can handle at one time. However, Gartner clients don't always feel at liberty to tell
the business that — because of resource constraints — it isn't possible to do all the projects they would
like. Even if the business has money to pay for the projects, IT's job is to see that the work gets done well,
not just to blindly do what is asked.
Money is the first constraint on the number of projects that can get done. If money is no object, the next
step is to evaluate the portfolio and identify which projects might be outsourced or supplemented, and
which projects must be done with in-house resources.
In any event, the PMO leader needs to ensure that projects launch only if the resources are identified and
in place before the project starts. Failure to ensure this basic project requirement means that — before it
ever starts — the project has almost no possibility of completing on time. We speak with many PMO
leaders who tell us their job is just to execute and they have no control over anything once they are told
to start. We strongly suggest you begin to exercise what is known as the back-pocket veto.
Since most organizations have more than enough "priority 1" projects — all of which are clamoring to
start immediately — we advise that you, as the PMO leader, make a small list of projects you think make
the most sense and begin your initiation phase. The only work you'll ask your project manager to do at
this juncture is to estimate a high-level, resource-loaded schedule. 4 If you don't know enough about a
project to do even that, take it out of consideration (figuratively put it in your back pocket) because it's
not ready to start, despite what the business says.
The secret to making this an effective exercise for change is to begin by instructing your project managers
to prepare a preliminary schedule that shows:
The required resources
The amount of time (both in duration and hours) the resources will be required (You will need to
adjust this number multiple times as you calculate the best fit against the projects you are
attempting to do.)
If the resources aren't available full time, you will need to add extra time to the work estimate to account
for the inefficiency. We suggest adding an hour per day to a unit of work if the resource will be assigned
to more than two activities. Be realistic about the levels of proficiency possessed by team members. A-
level players are often able to complete work faster and with a higher degree of accuracy than C-level
players, but it never makes sense to build an initial schedule around the A level of proficiency. Always
schedule to your average.
The schedule in Table 1 gives you a good overview of what you are working toward producing. The FTEs
Requested column shows how many people are needed to do the project quickly and effectively. The FTEs
Assigned column tells you how many actual full-time equivalents you've been able to assign to the project.
This number will generally be less than it should be. Note the difference between the planned duration
and revised duration columns, which shows the impact of not having enough FTEs assigned to the project.
Table 1. Requested Versus Assigned FTE Project Staffing
FTEs Requested FTEs Assigned Planned Duration Revised Duration End Date Total FTEs
We speak with clients all the time who tell us they don't understand how and can't find a way to show
management what starting too many projects at one time is costing them. We think a simple approach
like the one shown above can help (see " Project Resource Capacity Planning for PMO Leaders: Crawl
Before You Walk " for more details).
The PMO's role is to lead change that helps deliver its core mission of improved project performance.
Resource capacity planning is one area where a PMO leader must sometimes force the issue if the PMO
is to be successful.
The Third Deadly Sin: Mistaking Consistent Process for Reliable Results
When we first identified this as a deadly sin, we focused on the pounds of paperwork that PMOs were
making project managers (PMs) fill out. We've been keeping an unofficial tally sheet on how many
documents PMOs have required PMs complete, and at the moment the highest number we've heard of is
57 (up from the previous total of 54). 5 With the increasing move to "better, faster, more value," most
organizations have begun decreasing this number substantially, but we are now seeing a new issue with
its roots in the belief that consistent process yields results.
As the business is increasing its involvement in what were once considered IT projects, we are now hearing
PPM leaders ask us: "How do we get the business to understand and accept how we do things?" And the
answer is: You don't. Of course, that statement should be read as one that conveys many shades of gray.
Sarbanes-Oxley Act (SOX) compliance, generally accepted accounting principles (GAAP) or International
Financial Reporting Standards (IFRS) may all dictate some non-negotiable activities, but in truth everything
else is up for discussion.
One client, an independent consultant in Australia, shared a story with us. Before digital, he had been
rewarded and praised for his skill at establishing great PMOs and making sure the organizations used a
single, fairly prescriptive process. And then the world changed. Now, as a consultant, he gets hired to tear
out the types of systems he specialized in implementing, and now he starts his client engagements by
asking the business areas: "How do you want to have your projects managed?"
We have another client who has been hired to run an enterprise program management office (EPMO) for
a large educational organization. He initially assumed — based on the direct request of the senior
leadership team — that his first job was to roll out a consistent set of project management standards to
all the various organizations on campus. But, he was told repeatedly by those organizations that they
didn't need any of his process overhead. Many heads of EPMOs find themselves caught between senior
management's desire to have a consistent project/program process in hopes of mitigating risk and the
business units' prevailing belief that consistency is of marginal value. 6 So, it wasn't that the organizations
didn't want any standards. They wanted the standards to be usable and understandable by them.
Consistent reporting standards are vital. Common sense would dictate that every project should have
paperwork to be completed to ensure that everyone is on the same page and working toward the same
desired outcome. However, even reasonable paperwork is at best a negative hygiene factor. 7 On one
hand, if it's not done at all, it's a problem. On the other hand, doing anything more than the minimum
required in each situation provides no extra value. In fact, it can impede the PM from doing what should
be done — actually managing the project (see "How Activist PMOs Streamline Processes, Protect Users,
Raise Stakeholder Value and Improve Governance").
The Fourth Deadly Sin: Failure to Make the "Business Case" (Not the
Project Charter) the Primary Document of Record
The role and usefulness of the business case are concepts that never quite get fully accepted, while at the
same time they never get completely rejected. We've seen 50-plus-page business cases that took a year
to prepare, and we know of one example where a client paid a consulting firm $650,000 to prepare one.
We also know of organizations that take pride in not doing them. Given so many different opinions about
the value of the business case, why would we say the business case is still vitally necessary? And more
important, why would we say the business case should replace the project charter in order to support
better throughput and better agreement that projects really are successful?
The answer: There needs to be stakeholder consensus on what needs to be done, how much is worth
spending to get it done and how value can be measured at the end. Note the italicized word "consensus."
Consensus does not mean multiple signatures on a document, nor does it mean multiple independent
agreements. Consensus means that all the critical individuals who will judge success agree to the terms of
the business case while they are in the same room. If there is no consensus, there is no project. If no one
really knows exactly how the project will achieve the business objective, there is no project. If there is
agreement and the funding is approved, then — and only then — the project can safely and swiftly
proceed forward.
The project charter records "how" the work will get done and the business case records "what" work
needs to get done. Contrary to years of bad practices in waterfall IT shops, the requirements process was
intended to elucidate more about the "how" — it was never meant to define the "what" after a project.
Making the business case the document of record has another advantage: The business case exists
regardless of whether a project is waterfall or agile.
In some agile organizations, the collaborative business case process we recommend has been replaced by
an "envisioning session" designed to capture the same "what are we going to do"-level information. This
technique would also work for organizations that absolutely, positively can't change the business case
process in their institutions. Problems with sponsorship and commitment of subject matter expert time
can all be resolved in this initial session.
The core problem with this deadly sin is it assumes the project team is supposed to deliver something that
might be of some value once they are told to start. But, from the moment the start gun fires, everyone
runs straight ahead never asking: "Is this what we should be doing?" Digital significantly increases the risk
that even well-thought-out plans may turn out to be wrong at a moment's notice. Focusing too heavily on
internally facing documents (like the project charter) to provide guidance rather than externally facing
documents (like the business case) significantly increases the risk the wrong things will be done or some
of the right things will be done in the wrong order — simply because no one really understood why they'd
been asked to deliver them. Making a collaboratively prepared business case (or the output of an
envisioning session) the primary document of record should be enough to finally begin to clarify how a
Level 2 PMO can improve to a Level 3, with formalized PPM leader roles and in-house management of
projects by cross-functional groups.