Models and Tailoring (MO)

Key Messages

Page 41

• Each P3O design is unique as it depends on so many factors.
• The design of the P3O model will be influenced by and influence the services provided.
• The P3O best management practice provides guidelines to create a design for your organisation.
• The important thing is to make sure that the ‘critical success factors’ are in place for the design characteristics chosen.
• Make conscious choices on your P3O design so you have a true P3O not just a smattering of PMOs across the organisation.
• Four key design characteristics to consider (based on your organisation) – Reporting Lines, Centralized vs decentralized, Permanent vs temporary and Co-located vs distributed (there will definitely be a question on this in the exam) (Page 43)

Reporting Line (Page 43)

• The reporting line is the key determinant of the breadth of scope of the services the P3O can effectively deliver i.e., within the bounds of authority of the individual to whom the P3O Manager reports. Therefore it follows that an organisation portfolio office needs to report into the top of the organisation – into the main board.
• Conversely, if the reporting line is up to the Head of Delivery, it is likely that the P3O structure will essentially only consist of programme and project offices.
• A centralised P3O will have all the constituent offices reporting into a central office, typically an OPO (organisation portfolio office).
• A decentralised P3O will have a number of local central offices with constituent offices reporting into the ‘local’ central office, typically a Hub Portfolio Office.
• A fully decentralised P3O is a virtual P3O where all the constituent offices are independent. This is not the same as an organisation that just has a random selection of PMOs across the organisation. A fully decentralised P3O is not common – see the critical success factors.
• The example of a centralised office shows the various services that are provided by the central office with individual project and programme offices set up from the central office.(Figure 3.1, Page 44)
• Without these success factors in place, the P3O will struggle to be effective (Table 3.1, Page 46)
• The example of a decentralized office shows a central organisation portfolio office, services that are provided at hub portfolio offices with programme and project offices reporting into the hub portfolio offices. (Figure 3.3, Page 48)
• Again, without the success factors in place, the decentralized office will struggle to be effective. (Table 3.2, Page 48)
• Although this is uncommon, with all the success factors in place, a virtual P3O is possible and can be effective.(Table 3.3, Page 49)

Permanent Vs Temporary (Page 50)

• Project and programme offices, by their very nature, are temporary as they support project and programmes which are themselves temporary.
  • Organisations often create an office called a ‘programme office’ which supports the various projects that sit within its domain eg an IT programme office. In P3O terms, this is actually a hub portfolio office and the programme and project offices are not a physical office, but a concept comprises the PMO individuals who support the programme or project.
• Portfolio offices and hub portfolio offices are permanent as the organisation will always have a portfolio of change (though it’s contents will continuously change).
• Without these success factors in place, a temporary office within a P3O will struggle to be effective.(Table 3.4, Page 50)
• Co-located vs Distributed is in relation to the physical location of the constituent offices/ people who work in the P3O.
• The focus of each office will determine the services that are provided by that office.
• There are three functional areas that an office can focus on:
  • Strategic Planning/ Portfolio Support – typically by organisation portfolio offices and hub portfolio offices
  • Delivery Support – typically programme and project offices
  • Centre of Excellence – sometimes a standalone office, often sitting within a portfolio office
• The services for each function will vary depending on the functional area the constituent office is focussed on.
• Examples are given of the services for risk and stakeholder engagement in the three functional areas. A more extensive list is provided in Appendix F.

Integration of the P3O (Page 53)

• The P3O and constituent offices cannot sit in isolation to the rest of the organisation. The processes and procedures undertaken by the P3O to support the delivery of project, programmes and portfolios, will have to be integrated with processes and procedures that support business as usual.(Page 53)
• P3O services can be provided by people who sit within a constituent office of the P3O, who report directly into the manager of that office. An alternative resourcing strategy is to embed a person from the relevant function (say finance) in the constituent office of the P3O who retain their reporting line to the finance function – thus maintain their understanding of the broader functional requirement to ensure ongoing alignment and integration.
• Along with the alignment of processes and procedures, alignment of governance across P3M and BAU is essential.
• Very often, when establishing the P3O, the existing governance structure is challenged and needs to change to accommodate good P3M governance which doesn’t always go down well and needs the change managing through an appropriate change programme.
  • eg individual managers may no longer be able to initiate projects without formal approval from a central change board.
• A programme or project office cannot provide assurance on its own programme or project.
• Assurance requirements need to be taken into account when determining the structure, services and resourcing of the P3O model and the constituent offices.
• The P3O has a crucial role in providing a cost-effective information service for decision support of all areas of the PPM environment.(Page 55)
  • This is a critical aspect of the role of the P3O.
  • When providing information to any stakeholder, the P3O must ensure all aspects of information assurance have been addressed.
  • CIA is a useful acronym to remember the three elements of information assurance.
• There has been a significant effort over the years to demonstrate that the P3O is more than an administrative function. This has led to calls for P3Os to do NO administration. However, in the real world, P3M administration is still a significant part of junior positions within a P3O.  That said, we need to ensure that organisations don’t just see us purely as an expensive administration function and focus should continue to be on the more value-adding services.  Therefore, when challenged on resources, we need to be able to be clear how much is spent on pure administration (which could be happily allocated to roles outside the P3O).

Sizing a P3O (Page 62)

• In some cases, as already discussed, the P3O is resourced on the back of a ‘willingness to pay’ conversation ie the P3O sponsor decides they are willing for, say, 2 people to work in the PMO (Page 62)
• Where a full business case is being developed to justify the resources required. There are three basic approaches (or a mixture of approaches can be used).
  • Budget – the costs associated with the project/ programme office are calculated as a % of the project/ programme.
  • Size – the number of resources in the project/ programme office are calculated as a % of the resources on the project/ programme
  • Function – the cost and resources in the project/ programme office are calculated from a bottom-up analysis of the services to be provided.

Some Questions to Think About

• What is the design of your P3O?
• What are the design characteristics of the PMO you work in?
• What functions and services does it provide?
• If you don’t have a P3O, what design would you recommend?
• What functions and services would it provide?