OPM3 A Comprehensive Playbook For PMP

Every Organization Can Implement OPM~@! (A Comprehensive Playbook for Project Management Process Improvement & PMO Governance)

J. Alan Northmp, PMP

TRIPLE CONSTRAINT, INC.

The author and publisher of this book have taken care in the preparation of this book, but make no expressed or implied warranty of any kind and assume no responsibility for errors or omissions. No liability is assumed for incidental or consequential damages in connection with or arising out of the use of the information or programs contained herein. The publisher offers discounts on this book when ordered in quantity for special sales. For more information, please contact:

Triple Constraint 3801 Meadowknolls Marion, Iowa 52302 (31 9). 310-861 8 . jsi [email protected] Visit Triple Constraint on the web: www.tripleconstraint.com

Copyright O 2007 Triple Constraint, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior consent of the publisher. Printed in the United States of America. Published in the United States of America. ISBN 978-1-4243-3073-7 First Printing March 2007 Graphics created by Kome Design www.KomeDesiqn.com

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Contents ACKNOWLEDGEMENTS

vi

ABOUT THE AUTHOR

vii

INTRODUCTION

ix xi

Chapter 1: Introductionto OPM? Chapter 2: Architecture and Components

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SECTION I1 GOVERNING BODIES

Chapter 3: Chapter 4: Chapter 5: Chapter 6:

Process Governance The Executive Branch The Legislative Branch The Judicial Branch

Chapter 7: Process Framework ~ Processes ~ 3 ~ Chapter 8: Standardizing 0 Processes Chapter 9: Measuring OPMP Processes Chapter 10: Controlling OPMY ~ Processes ~ 3 ~ Chapter 11: Improving 0 Chapter 12: Keys to Implementing OPMP SECTION N

- ASSESSING THE ORGANIZATION

Chapter 13: Self Assessment ~ Chapter 14: O P M Productsuite Chapter 15: Where to Go From Here? SECTION V - APPENDICES

Appendix A - Project Risk Management Process Appendix B - Best Practice Breakout Appendix C - Glossary of Terms Index

Acknowledgements To my wife, Sara Northrup, who supported me all throught the writing of this book. To Paul Egli, who inspired most of this book. To Doug Williams and Connie Smith, whose strait forward feedback greatly enhanced the book. To Dr. Ken Moffit, whose knowledge helped me get my head around the concept of governance. To my mother, Deanna Northrup, who has been one of my greatest inspirations. To Steve Wilson , Lisa Livingston, Brad Clark, and Andy Anderson, thanks for the feedback. To Paul Postler, who has been a tremendous mentor and leader to me. To Eric Kome, thank you for staying up all night to complete the graphics for this book. Most of all, I give thanks to Jesus Christ, from whom I owe my next breath!

About The Author Jamie Northrup, PMP is the principal consultant with Triple constraintB, lnc. He is a former US Army Officer and has served as a Sr. Manager, Project Manager, and Program Manager in the Aerospace Engineering, Telecommunications, and Educational Industries. A graduate of the University of Iowa, Jamie holds a degree in Management Science. He is certified as a PMP through the Project Management lnstitute and an original OPM~@ team member and 0 ~ ~ Second Edition Core team member. He is trained in CMMI through the Software Engineering Institute at Camegie Mellon University and has taught technology classes as an adjunct professor with Kirkwood Community College. Triple constraint5 Inc. is a Project Management Improvement company that specializes in helping organizations realize business objectives through the implementation of Organizational Project . is the first standard for organizational project Management Best Practices using O P M ~OPM~@ management published by the Project Management Institute (PMI@). It lists -600project, program, and portfolio Best Practices that organizations may implement in order to increase their project management maturity and capability. Triple ~onstraint@ofTers training and consulting services to give organizations the "pushnthey need to get the ball rolling with 0 ~ ~ 3 ~ . For questions regarding 0 ~ ~ 3 @ athis n dbook, please visit us at:

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Why the Book? This book has been in the making since O P M ~ @ First Edition rolled out in 2003. Having "worked at" and "consulted with" many companies over the last 20 years, it has become apparent that most organizations struggle to develop and sustain good project management processes. Organizations pick up standards like PMl's PMBOK, Program, Portfolio, and others and say, "YES...these are exactly what we need in our organization!" But they then struggle when it comes to implementing the standards.

A disciplined approach to project execution is essential for oraganizational success. Organizations that do not deliver on time, on budget, or on scopefquality do not win future contracts. Triple Constraint, Inc. has worked with fortune 500 clients as well as organizations with only a few projects in the pipeline. This book was written to help those struggling with organizational project management process improvement. It is intended for any project management practicioner or process improvement consultant that has asperations of improving organizational project management maturity. This book provides the tools and confidence needed to radically improve organizational performance.

@ the organization's process framework, or merely augmenting current Whether using O P M ~ as Lean, Six Sigma, and CMMl implementations, this book serves as a guide to realizing world class process. It is our hope that everyone reading this guide can learn from the tools, tips, and secrets that we have gained over the years. They have made us successful with organizations that we serve and we are certain that they will do the same for you.

SECTION I (Overview of OPM3@)

Chapter 1: Introduction to O P M m

Chapter 4: lntrodudion to 0

Every Organization Can Implement OPM3@!

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O P M ~ Overview @ The Organizational Project Management Maturity Model (0PM3@) is arguably the fastest growing and most comprehensive maturity model available for organizational project management. It was initially developed and released on October 2003 by the Project Management Institute (PMI) with the help of over 800 seasoned project management professionals from around the world. The second edition of the model is scheduled to be released in late 2008. OPM~@ is a roadmap for implementing Organizational Project Management Best Practices. These Best Practices are listed in globally recognized standards such as PMBO@ Guide - Third edition, The Standardfor Program Management, The Standard for Porifoiio Management, Practice Standard for Earned Value Management- Second edition, Practice Standard for Estimation, etc. 0PM3@wascreated to provide a proven path for organizations to implement these Best Practices in order to increase organizational project management capability and maturity.

PMI has teamed up with Oslo, Norway based Det Norske Veritas (DNV), a premier provider of certification and process improvement services. Together they have created OPM~@ Productsuite, a comprehensive toolset designed to help organizations im lement the OPM~@ Standard. This book has been developed to supplement the DNV OPM Assessor and consultants 'hit the ground Consultant training. It is a guide to help internal and external OPMP and Implementations. running' with 0~~3@Assessments

8

Why the Book?

Since OPM? was first released in 2003, it has become apparent that organizations have a tendency to get intimidated by the size and complexity of the model. Through the course of seminars, assessments, and implementations, there is tremendous conducting OPMY but little guidance out there to help organizations. excitement and enthusiasm regarding OPM~@, Many organizations purchase the 0PM3@standardand other PMI standards and say, "Yes, these are exactly what we need, but where do we start and how do we implement these in our organization?!?" This book was written to give internal and external consultants "tried and truen tools, tips, and guidance to implement O P M ~ .Any organization that manages work through projects can use this book as a "how ton guide. Undoubtedly there are many ways to get the job done and neither PMI nor the 0 ~ Standard ~ requires 3 ~that organizations implement the framework offered by this book. It is merely our formula for implementation success. We hope everyone enjoys the recipe! O The goal of this book is to help organizations create a contiguous project management process framework. If implemented properly, organizations should realize world class project management execution. Another important point of this book is that or anizations need not have a cadre of process engineering PHDs to successfully implement OPM . Whether an internal practitioner or an outside consultant all that is required is to understand a few simple improvement principles and have the right tools. People reading this guide have resoundingly exclaimed: "Every Organization Can Implement 0PM3@!"

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Chapter 1: Introduction to OPMm

Every Organization Can Implement OPM3@

O P I M ~Standard @ As a globally accepted project management standard, OPMY is not a process flow diagram or performance measurement. It does not require organizations to follow a particular process. It only requires that there be processes in place to address (or encapsulate) industry project management best practices. 0 ~ tells organizations ~ 3 ~ what they should do, not how to do it. A "standard" is something established by an authorit custom, or general consent as a model or example(27. . 1, is established by a consensus body which is open to representatives from all materially affected and interested parties. The standard is publicly reviewed and commented on in draft form. Submitted changes are incorporated in accordance with the consensus body requirement with the availability of an appeal process.

standard can become an organization's process When implemented effectively the OPM~@ framework. Or it may serve to augment an organization's current process framework. Many organizations have realized improved operational performance through methodologies such as CMMI, ISO, Six Sigma, and Lean. However project, program, and portfolio management in any organization can achieve world organizations continue to lag way behind. With OPM~@, class project management performance. 0 ~ can be ~ implemented 3 ~ in any company practicing project management. Because of its non-prescriptive nature, small construction companies as well as global aerospace engineering ws to implement only the parts firms can take advantage of its features. 0 ~ ~ 3 @ a l l o organizations of the standard relevant to their industry. Conceivably, there may be project management Best leaves it to the Practices which are not applicable to a particular industry or organization. OPMY organization to implement only the Best Practices positively impacting the organization.

Maturity Models The term "Maturity Model" has become widely recognized. With the advent of the successful Capability Maturity Model (CMM) for software engineering in the late 801s,many organizations have embarked on journeys to improve their company's process capability and maturity. The use of the word "maturity" implies that capabilities must be grown over time to produce repeatable success. "Maturity" is defined as, "the state or quality of being fully grown or developedn.(3) "Model" implies a progression or series of steps in a process. Therefore a "maturity modelnis the following for the organization:

Tool: An instrument to assess an organization's current process management capabilities. Methodoloqv: A system of methods and principles for educating and training people involved in organizational project and process management. Framework: A structure for institutionalizing process improvement in organizations and increasing project and process management capabilities. When a child is asked to accomplish a task the expected results are unpredictable. Is the task going to be completed on time? Is the task going to be completed as specified? Is the task going to cost more than anticipated? Many organizations execute projects like immature children. They

Chapter f: Introduction to OPMm

Every Organization Can Implement OPM3@!

never know what to expect at project close. By improving project management maturity, organizations improve project performance and predictability. If an organization can consistently capture user intent and operate within the triple constraint of projects (schedule, scope, and cost) it will have an enormous impact on company profitability (and perception by the customer). These organizations have a disciplined conduct of projects. Outcomes of projects are predictable and consistent. Maturing project management capability in an organization helps to achieve Operational Excellence. Operational Excellence is defined as, "conducting business in a manner to improve quality, obtain higher yields, faster throughput, and less wasten(4'. Operational Excellence can only be accomplished by evaluating current and past performance of processes and enhancing them. The following are characteristics most common to Maturity Models:

Levels: They have a number of levels (typically 3-6) and recommend that organizations institutionalizeone level at a time before moving on to implement later levels Process Framework: They have an established process framework in place for all levels Kev Processes: Each level has certain key processes like (e.g. scope management, project planning, quality assurance) that make up the framework Level Descriptor: A descriptor for each level (e.g. level 1, level 2, standardized, measured, controlled, etc.) The following are the typical levels of most maturity models:

5. Improved (highest maturity): Focus on continuous improvement, Focus on defect prevention, Cost 1 Benefit analysis of all new initiatives

4. Control: Measures of process and quality analyzed, Measures used to evaluate processes, Processes operate within limits 3. Measure: Measures of process and quality collected, Measures used to isolate processes, Quality issues isolated 2. Standardize: Basic project management processes, Documented standard activities, Identification and capture of quality issues

1 . Initial (lowest maturity): Ad hoc, Non repeatable, Heroics

Chapier 1: Introduction to OPMXQ

Every Organization Can Implement OPM3@

Process is the Organization's Playbook Mature processes in organizations are like the playbooks of professional sports teams. The playbook is the basis of team execution. An organization can have the most talented people in the industry, but if they do not execute their plays, they will not be successful. The 2000 and 2004 USA Olympic Men's Basketball Teams are a great case study for this. All the talent in the world, but a poor playbook and poor execution. Athletic teams are not mature until they consistently perform under diverse situations and scenarios. Assuming both sides have talented, committed people, the organization's playbook "ISntheir competitive advantage. Organizations become "mature" when the processes they follow are "maturen. And they can execute those processes consistently.

.Without a good playbook, organizations are forced to use talent and heroic efforts alone to accomplish their tasks. Organizations like this suffer from "tribal knowledge syndromen and "brain drainn. Tribal knowledge refers to unwritten knowledge. It is information only known and understood by tribal elders or the tribal chief. The problem with tribal knowledge is that once the chief or elder goes on to better hunting grounds, no one knows all the information that the former tribal member knew. All this knowledge has to be accumulated once again. Good processes help organizations capture this essential knowledge and reuse it on every project. A good process playbook sets mature organizations apart from chaotic regimes where there is much talent but no way marshal it. Team success is based on the concept of synergy. Synergy says teams can accomplish more together than a group of individuals working separately. Processes establish overlapping responsibilities for teams and draw out the lines of demarcation for each play the team executes. They build and support team synergy. Success and maturity are so important to athletic teams that they allocate financial and human resources to update and continually improve the playbook. Similarly, companies must devote resources and time to implementing and updating processes. A good process playbook has plays for all situations; processes for large projects and small projects, extended projects and late projects. An organization's strategy can change quickly and dramatically. Processes must be ~ implementations ~ 3 is ~ to create a project, flexible to handle those changes. The goal of 0 program, and portfolio management playbook; a mature, contiguous, series of processes from initiation to closing to facilitate project success. The goal of this book is to give organizations the tools needed to create a world class "process playbook"!

Every Organization Can Implement OPMW

Chapter 1: Introduction to OPM3B

Shrinking the Stovepipes Since project management is all about marshalling the efforts of the entire team to accomplish a mission, 0 ~ is valuable ~ 3 for breaking ~ down functional stovepipes (or silos) that develop in the organization over time. Stovepipes develop when functional areas focus only on their part of the system and do not look at the system as a whole. Communication breaks down and it becomes ~ processes ~ bring 3 cross ~ functional very difficult to move a project through an organization. 0 teams together to break down stovepipes. O P M ~ is @most effective when it is implemented across a Strategic Business Unit. For instance, some organizations have separate training processes in various parts of the organization (e.g. engineering, operations, HR, Sales, etc.) If implemented flexibly enough, OPMY Best Practices can augment other training and development programs. The rigor of O P M ~ processes @ can greatly enhance the effectiveness of other parts of the organization. Synergies can be gained by a unified strategy. For instance, a standardized training process means the effectiveness of training can be measured at an organizational level to determine if training is hitting the mark and meeting expectations. 0 ~ ensures ~ there 3 are~ standard processes and templates for developing training, soliciting training, training feedback, attendance, future training needs, etc. The diagram to the right is an illustration of what an organization with functional stovepipes looks like and how OPM? ties it together.

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Strategic Business Unit

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Hard o n the process, soft on the people

Project management is one of the critical factors for corporate success. A company's ability to "plan their work, and work their plannis the difference between success and failure. The Standish Group "Chaos Report" states approximately 80% of projects in corporations fail. They are rarely delivered on schedule. They rarely meet the customer's expectation for scope and quality. When they are delivered, in most cases they are significantly over budget. A knee jerk reaction by immature organizations is to replace project leaders. These organizations feel if they get a better project manager for the job, their projects will be more successful. Project management history is replete with fallen project managerlheroeswho are forever posthumously memorialized in the memories of project past. They toiled night and day in immature organizations only to bum out and quit. Project management professionals know their craft. They understand what it takes to accomplish a mission. They have the skills to lead their teams towards project success. However, in companies where processes are immature, they do not have the support necessary to see their projects to success. Their projects are constantly derailed from meeting milestones by having to struggle with fundamental project processes like resource management, scope management, and change management. These consume a project manager's valuable time and make them ineffective.

Chapter 1: Introduction to O P M m

Every Organization Can Implement OPM3@

Mature organizations support their project managers and project teams by implementing a process framework for project success. These organizations develop standardized, measurable, controlled project management processes. They properly charter project teams and give them the tools necessary for project success. Successful Organizations anchor these processes into the company culture to ensure improvement sustainability. Mature organizations develop a culture of project success and quality amidst their ranks. They learn from mistakes of the past by scrutinizing "lessons learned" documents and "after action reviews". Information gleaned from these reviews is then used to update current processes, checklists, and templates with new doses of knowledge and best practice. Mature organizations set up checks and balances in their project management processes making it unlikely for project details to fall through the cracks.

Project Failure The Standish group states 10 main reasons for project fai~ure'~). They are as follows: 1. Inadequately trained andlor inexperienced project managers 2. Failure to set and manage expectations 3. Poor leadership at any and all levels 4. Failure to adequately identify, document and track requirements 5. Poor plans and planning processes 6. Poor effort estimation 7. Cultural and ethical misalignment 8. Misalignment between the project team and the business or other organization it serves 9. lnadequate or misused methods 10. lnadequate communication, including progress tracking and reporting

@not a "silver Most of these reasons for project failure are process related! Once again, O P M ~ is bulletnfor magically solving the above reasons for project failure. However, once implemented, organizations will have a standardized, measured, controlled, improved, and sustainable project management life cycle (or playbook). Organizations can then focus on improving the project life mitigates the above risks in the cycle for future higher quality and cost reduction. O P M ~ @ following ways:

I.Inadequately trained and/or inexperienced proiect manaqers: Setting up a project 3 ~ entering . the management training program is an essential element of 0 ~ ~ Upon organization, project managers and other process users are immediately acquainted with company processes and procedures. They are brought up to speed on the tools and skills necessary to manage projects in the company. In a company with mature project management processes, project managers do not need the level of experience one might need otherwise. Good processes encapsulate decades of organizational project management Best Practices. All project managers are trained on the processes. New project managers will have the processes, checklists, templates, procedures, etc. to execute like seasoned veterans.

2. Failure to set and manage expectations: Organizations with mature processes have the capability for project managers to properly set and manage stakeholder expectations. Through proper use of work packages, schedules, status reports, and status meetings, all stakeholders are informed of what is to come and when to expect it.

Chapter 1 : Introduction to O P M S

Every Organization Can Implement OPM3@

3. Poor leadership at anv and all levels: An important aspect of 0

~ is its~emphasis 3 on~ requires that project leaders have the skills necessary to improving leadership. OPMP successfully lead projects. Additionall , one of the more important components of 0 ~ is the~ internal commitment process. OPM3 secures executive sponsorship and facilitates good leadership at the project manager level to make projects succeed.

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3

4. Failure to adequatelv identify, document and track requirements: 0

~ contains ~ multiple 3 ~ Best Practices for managing project scope. Project scope management, along with the commitment and change management processes alleviate normal requirements problems plaguing most projects. 5. Poor plans and plannina processes: 0 ~ provides ~ industry 3 ~Best Practices for project managers to "Plan their work, and work their plan". From scope management to procurement management 0 ~ provides ~ industry 3 ~Best Practices for all aspects of project management. This insures projects are planned and execute according to plan.

6. Poor effort estimation: OPM? provides industry Best Practices for project task estimation. These estimates then become the basis with which project schedule, effort, and cost are planned. 7. Cultural and ethical misaliqnment: 0 ~ has Best ~ Practices 3 ~ to develop the team not only from a performance perspective, but also from a cultural perspective. It then encourages strong ethics based conduct of project managers. 8. Misaliqnment between the project team and the business or other organization it serves: Business strategic objectives are propagated down through the organization by Best Practices implemented at the portfolio, program, and project domains. This ensures project managers are moving in the same direction as the rest of the organization. 9. Inadequate or misused methods: 0 ~ requires ~ all3methods ~ be tailored to the organization so regardless of project size, proper methods will be used. Encapsulating OPM3B Best Practices into processes will set up methods for success in the organization. These methods become the foundation for project execution in the organization.

10. lnadequate communication, including progress trackinq and report in^: 0 ~ has a~ strong 3 emphasis on project management communication and performance reporting. Through proper use of schedules, status reports, and status meetings, all stakeholders are informed of what is to come and when to expect it.

Focus of this book The OPMY Knowledge Foundation discusses the three interlocking elements essential for implementation success; Knowledge, Assessment, and Improvement. This book addresses all three interlocking elements but most attention is given to "lmprovement". It is the most complicated. It is the most critical for organizational success. lmprovement can be broken out into three main components:

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Chapter 1: lntroduciion to O P M S

Every Organization Can Implement OPM38!

Process Design, Standardization, and Redesign: The creation of the project management processes in the organization. This includes process models, elements, training, etc. (discussed in detail in chapters 8 & 11) Process Measurements and Control: The measuring and controlling of the processes for quantitative analysis and subsequent improvement (discussed in detail in chapters 9 & 10). Process Governance: Creating Governing Bodies to govern processes and systems that have been implemented in an organization. Adequate process governance must be in place to support and sustain process implementation. As in political government, if processes are not enforced, they will not be followed (discussed in detail in chapters 3,4,5, and 6).

Should My Organization Implement OPM~@? If the organization does project management, 0 ~ ~ 3 @ whelp i l l with Initiating, Planning, Executing, Controlling, and Closing projects, programs, and portfolios. One of.the best ways to ~ is to ~ do a strengths, 3 ~ weaknesses, opportunities, determine if the organization is ready for 0 and threats (SWOT) Analysis. What are the "strengthsn, "weaknessesn,"opportunitiesn,and "threats" of the organization when considering an OPM~@ implementation? Additionally, the following questions should be asked: 1. Is the leadership well versed in PMI? Are they familiar with the PMBOK, Program, and Portfolio standards? Do they understand the importance of the project management in the organization? Do they understand the need for certified project managers? If yes, this is a BIG first step.

2. Is the orqanization receptive to process improvement initiatives? Has the organization been open to process improvement initiatives in the past? Have they committed financial and human resources? Or has the organization had little interest in truly supporting process improvement? Organizations supportive of process improvement initiatives are difficult, if not impossible, to get executive sponsorship from. 3. Is executive sponsorship secured? Does leadership, from the top down, support and sponsor the need for disciplined organizational project management? Are they willing to support the process in the initial stages when full organizational support has not been secured? Executives may like process improvement, but they must understand the need for disciplined organizational project management. 4. Are there dedicated resources for implementation? Is the organization willing to commit dedicated resources to the implementation? Without resources, it will be difficult, if not Process Framework. impossible to standardize the OPM~@

5. is the or~anizationopen to assistance from full time consultants? Many times it is necessary to bring in an outside person for major process improvement. The outside person can serve as the "expert" and be a catalyst for improvement.

Chapter 1 : Introduction to OPMW

Every Organization Can Implement OPMW

6. Has the orqanization avoided having conflictins priorities? If there are other major process improvement initiatives going on at the same time this can be a problem. Organizations with improvement initiatives having competing priorities may not be able to successfully implement and institutionalize 0 ~ Best~Practices. 3 ~

7. Are the knowledqe and tools available to implement? Has the organization ever implemented successful process improvement in the past? I.E. has the organization ever achieved a CMMI level or a successful IS0 implementation? Past success can be a good predictor of future success. 8. Will 0 ~ be imolemented ~ 3 alone ~ or alonq side other initiatives? OPMY implementations can be coupled with other improvement initiatives like Six Sigma, Lean, and even CMMI. If 0 ~ has the ~ same 3 commitment ~ and executive sponsorship organizations can have the best of both worlds.

Next Step

If organizations get through these questions and the answer is still, "yesn,then they are ready to move on with OPM?!

REFERENCES (1) Project Management Institute, OrganizationalProject Management Maturity Model (oPM~@), Project Management Institute, Inc. 2003. Copyright and all rights reserved. Material from this publication has been reproduced with the permission of PMI. (2) "standard." Dictionary.com Unabridged (v 1.0.1). Random House, Inc. 18 Dec. 2006. (3) "maturity." 5ictionary.com Unabridged (v I.0.1). Random House, Inc. 18 Dec. 2006. (4) "Operational excellence." Wikipedia, The Free Encyclopedia. 13 Aug 2006, 2242 UTC. Wikimedia Foundation, Inc. 18 Dec 2006

(5) Adapted from figure 1-2, page 6 of the OrganizationalProject Management Maturify Model Knowledge Foundation, 2003 Project Management Institute, Inc. (6) "The Chaos Report", Copyright O 2005, The Standish Group International, Inc

Chapter 1: Introduction to OPMm

Every Organization Can Implement OPM363

Chapter 2: OPM3@Architectureand Components

Every Organization Can Implement OPM3@

Chapter 2: O P M ~ Architecture @ and Components Architecture and Component Overview Now that the organization recognizes its need for a project management playbook, it must ~ before ~ proceeding. 3 ~ The 0 ~ model ~ is made 3 up~of a understand the architecture of 0 number of components, attributes, and dimensions that form its architecture. These various aspects of the model work together to form the building blocks of organization project management. They are as follows:

Domains The first dimension of 0 ~ ~ is3 "Domain". ' The 0 ~ ~ Knowledge 3 ' Foundation defines Domain as one of three distinct disciplines of organization project management (*I. Each Domain contains organizational project management practices specific to the work in that sphere of activity. 0 ~ identifies ~ three 3 domains ~ for organizational project management: Proiect Domain: The project management discipline of organizational project management Proqram Domain: The program management discipline of organizational project management Portfolio Domain: The portfolio management discipline of organizational project management

Project Domain The OPMY Knowledge Foundation describes projects and project management as the following: 'Project - A temporary endeavor to create a unique product, service, or result." 'Project Management - The application of knowledge, skills, tools, and techniques to pmject activities to meet project requirements." The Project Domain concerns the managing of a single project. It is the set of Best Practices specific to managing projects. An example project in the project domain is a defense contractor initiating an endeavor to add a new feature to a flight management system. A project would be initiated to facilitate this change. The project domain contains approximately 200 industry recognized project management Best Practices. In order to implement and maintain project management processes, Best Practices from this domain will be embedded into project domain processes. The following are the major responsibilities a project manager has in the project domain: Manaqinq Stakeholder Expectations at a Proiect Level: Providing required communication to stakeholders regarding project status, making sure stakeholder needs are being addressed on the project, being responsive to stakeholder requests. Manaqing the Proiect's Triple Constraint: Making sure cost, schedule, and scopefquality contractual requirements are being met. Identify Contentions Inter-Proiect Contentions: Making sure all inter-project handoffs are completed successfully and resource contentions between projects are escalated to the program manager. Prioritizing Tasks: Scheduling and executing tasks in the right sequence for project success.

Chapter 2: OPfiJ3@Architectureand Components

Every Or-nization Can Implement O P M W

Ensure Proiect Obiectives Support Program Strateaies: Working with the program manager to assure the project is aligned with program, portfolio, and organization strategies.

Program Domain The OPIW~@ Knowledge Foundation describes a program and program management as the following: "Program - A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. Programs may include elements of related work outside of the scope of the discrete projects in the program." C3) "Program Management- The centralized, coordinated management of a program to achieve the program's strategic objectives and benetits." '4) The Program Domain concerns the function of managing multiple related projects. An example of a program in the program domain is a defense contractor building a new flight management system for military aircraft. All of the projects needed to support this contract (software, hardware, systems integration projects, etc.) would be grouped into a program. The program domain is a higher level than the project domain. Processes in the program domain concern multiple projects, whereas processes in the project domain concern only one project. The program domain contains approximately 200 industry recognized program management Best Practices. To implement and maintain program management processes, Best Practices from this domain will be embedded into program domain processes. The following are the major responsibilities a program manager has in the program domain: Manaqing Stakeholder Expectations at a Proqram Level: Providing required communication to program stakeholders regarding program status, making sure stakeholder needs are being addressed on the program, being responsive to stakeholder requests. Coordinating Activities of Multiple Project Manaqers and Teams: Verifying all interproject handoffs are successful. Managinq Conflicts amonq Proiects to Achieve Orqanizational Goals: Resolving resource contentions among projects (which includes escalating if necessary). Prioritizinq Proiects: Scheduling and executing projects in the right sequence for program success. Ensure Proqrarn Obiectives Support Portfolio Strateqies: Working with the portfolio manager to ensure that programs are aligned with the portfolio and organization strategies.

Portfolio Domain The OPM? Knowledge Foundation describes a portfolio and portfolio management as the following: "Porffolio - A collection of projects and/or programs and other work grouped together to facilitate effective management of that work to meet strategic business objectives. The projects or programs of the portfolio may not necessarily be interdependent or directly related." "Porkfolio Management- The selection and support of projects or program investments. "* These investments in projects and programs are guided by an organization's strategic plan and available resources." The porffolio domain concerns strategic decisions and investment in organizational project management. It is the managing of multiple related or unrelatedprojects and programs; the set of Best Practices specific to managing a porffolio of projects and programs.

Chapter 2: OPM3E)Architecture and Components

Every Organization Can Implement OPM3m

Investments in projects and programs are guided by the organization's strategic plan and available resources. (6) The previous defense contactor example can apply here as well. In a broader scope, the portfolio domain is a defense contractor building new flight management systems for military aircraft. There are many military aircraft and all have various versions of this system so they are grouped into a portfolio. The portfolio domain is a higher level than the program domain. Processes in the portfolio domain concern multiple programs and/or projects, whereas processes in the program domain concern only one program. The portfolio domain contains approximately 200 industry recognized portfolio management Best Practices. To implement and maintain portfolio management processes, Best Practices from this domain will be embedded into portfolio domain processes. The following are the major responsibilities portfolio managers have in the portfolio domain: Translating Orqanizational Strategies into Specific Initiatives or Business Cases that become the Foundation for Proqrams and Proiects (7': Working with senior management to develop business cases for the organization. Improvement of organizational project management processes is an important business objective. ldentifving and Initiating Programs and Projects ('I: Working with senior management to determine which projects and programs will go into the project pipeline. Providing, Allocatinq, and Reallocatinq Resources to Proqrams, Proiects, and Other Activities (:' Securing vital resources for all projects in the project pipeline and resolving resource contentions between projects and programs. Maintaining a Balanced Proiect Portfolio (Io): Working with senior management to determine which mix of programs and projects will offer the most balance to the organization. Supporting the Orqanizational Project Manaqement Environment (I1): Working with senior management to develop a culture of project management support and discipline in the organization. Stages

Stages refer to the stages of process improvement. Process improvement regards making improvements to a process to make it more "capable" and mature than its current state. Improved process capability was spawned by the works of W. Edwards Deming and Walter Shewhart in the 1920s. Their work and the work of others like Joseph Juran, Philip Crosby, Kaoru lshikawa laid the foundation for most of the process improvement methodologies employed today. These men laid out the sequential stage of improvement S, M, C, I: S = Standardize: A process is standardized if the organization uses it across functional boundaries M = Measure: A process is measured if it has been standardized and measurements are taken on the process

C = Control: A process is in control if all measurements are within the upper and lower control limits for the process I= Improved (Continuously Improve): A process is continuously improved if it is controlled and data is used to improve the process

Chapter 2: OPM3@Architectureand Components

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The sequence implies a dependency with each successive stage. To measure a process, it must first have been standardized in the organization. To keep the process in control for consistency and improvement purposes, the process must be measured. To improve a process, it must be in control (or acting predictably within recognized upper and lower control limits). This book devotes an entire chapter for each stage of process improvement in OPM? (chapters 8-1 1). All domain Best Practices are categorized into one of the SMCl process improvement stages. For instance, Best Practice 1170 is defined as: I170 - Project Risk Identification Process Standardization. (I2) This Best Practice is in the "projecr domain and "standardizenstage. It is a process to standardize the identification of risks in the organization. Best Practice 1860 is (13) . . defined as: 1860- Project Risk IdentihicationProcess Measurement is ~nthe project domain in the and the "measure" stage because it involves a process to measure the identifying of r i ~ k s organization. Similar Best Practices exist in the "control" and "continuously" improve stages. Best Practices

PMl defines a Best Practice (BP) as, an optimal way currently recognizedby industiy to achieve a stated goal or objective 'I4'. For organizational project management, this includes the ability to deliver projects successfully, consistently and predictably to implement organizational strategies("'. As stated earlier, BPSare the building blocks of organizational process improvement. BPSare incorporated into processes to mature project management capability in organizations.

~ First~Edition 3 identified ~ BPS in the The project management community that created 0 project domain by decomposing each of the 44 PMBOK processes. The resulting BPSwere then categorized by stage and domain dimensions. In addition to this, the project management community identified BPS to facilitate the previously identified process BPS. This was accomplished by conducting Delphi brainstorming sessions. The results of the brainstorming sessions were categorized best practices (now called Organizational Enablers). All BPS are categorized by Stage and Domain dimensions. The following is a breakout of the number of O P M ~ ~ B PatSeach respective stage and domain. The highest domain is the portfolio domain. The highest stage is the improve stage. Organizations mature as they implement lower stage and domain BPSand then move ahead to higher stage and domain BPS.

Chapter 2: OPM3oArchitecture and Components

Every Organization Can Implement OPM*

In the first release of 0 ~ there~are approximately 3 ~ 586 organizational project management BPS. Each best practice in 0 ~ has a~ numbering 3 ~ scheme like below; 1030 - Project Scope Planning Process Standardization. (I7)

Capabilities

PMI defines a Capability (Cap) as: a specific competency that must exist in an organization in order for it to execute project management processes and deliver project management services A Cap differs from a BP in that it is an element of the BP. Every BP has a and products. number of constituent Caps. It is mandatory that the constituent Caps be implemented to receive credit for implementing each BP. It is not mandatory that the constituent Caps be implemented in any particular order. However it is recommended that they be implemented in the supported sequence (see the recommended sequence below).

(Prerequisite Capability) 1000.010 - Established Standardization Policies (Constituent Capability) 1030.020 - Project Scope Planning Process Development (Constituent Capability) 1030.035 - Project Scope Planning Process Availability 030.030 - Standardized Project ~ also ~has Prerequisite 3 ~ Cap relationships. As shown In addition to Constituent Caps, 0 above; BP 1030 requires Cap 1000.010 be implemented as part of BP 1030. Prerequisite Caps can be implemented as part of their related BP (BP 1030) or they can be implemented as part of their originally attached BP (BP 1000).

Every Organization Can Implement OPM3@

Chapter 2: OPM3fArchitecture and Components

As noted on the previous page, BP 1030- Project Scope Planning Process Standardization (I9) has three constituent Caps and one prerequisite Cap. The following diagram shows Caps 1030.010 and 1030.020 with their domain, stage, and process group dimensions.

process improvement goals

purchases, or otherwise acquires a Project Scope

The following shows the relationship of Outcomes and Key Performance Indicators to Caps and the OPM~@ numbering scheme for Caps and Outcomes:

BP: -

-

BP 1030

1030 - Project Scope Planning Process Standardization

Cap: 1030.020 - Project Scope Planning Process Development

-

Outcome: 1030.020.10 Documented Project Scope Planning Process

Outcome 2 030 020 10

Outcomes

PMI defines an Outcome as: a tangible or intangible result of applying a ~ a ~ a b i l i t y . ' ~In~the ) 0~~3@framework, a Cap may have one or more Outcomes. The degree to which an Outcome is achieved is measured by a Key Performance Indicator (KPI). The difference between a Cap and an Outcome of a Cap is a demonstrated competency in an organization. An Outcome is the result or output of applying a Cap. The following diagram demonstrates the outcome number, name, and description.

Chapter 2: OPM3B Architecture and Components

Every Organization Can Implement O P M m

Key Performance Indicators PMI defines a Key Performance Indicator(KPI) as: a criterion by which an organization can determine, quantitatively or qualitatively, whether the outcome associated with the capabilify exists or the degree to which it exists. A key performance indicator can be a direct measurement or an expert assessment. ('I) The Outcome is the expected result of the Cap. The KPI is the tangible metric by which the Outcome is measured. The following diagram shows the relationship between a KPI and an outcome.

CAP: 1030.020 - Project Scope Planning Process Development Outcome: 1030.020.10 - Documented Project Scope Planning KPI Name: A Documented Project Scope Planning Process

The following diagram shows outcome 1030.020.10 and its' associated KPl(s).

For BP 1030, Cap 1030.020, and Outcome 1030.020.10, in order to demonstrate this competency in the organization, there should be a documented process with a series of steps to plan the scope of the project. All project managers should have access to the process.

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Every Organization Can Implement O P M m

Governing Bodies To implement project management processes (and their BPS, Caps, Outcomes, and KPls) 0 ~ requires ~ Governing 3 ~ Bodies be assembled. Governing Bodies approve, oversee, and execute organizational process improvement. They maintain project management process in the organization and review project team performance and process compliance. They provide the governance necessary to sustain project management in the organization. Governing Bodies are made up of volunteers from throughout the organization who donate a few hours a week to contribute to the governance of the processes. Governing Bodies may be assembled to fulfill roles like; selecting projects for the organization, creating process, auditing process, evaluating process performance, and reviewing proces's feedback from the organization. The following four chapters discuss the different types of Governing Bodies necessary for ~ implementations. ~ 3 ~ successful 0

Policies A Policy is a plan or course of action in business intended to influence and determine actions and decisions'22). It is a course of action or guiding principle. Policies are used to authorize the use of processes in the organization. They clearly state the intention and goals of processes. They inform the organization of how deviations from the process will be handled. In project management terms, this is the "charter" of the process. Every process in the organization should have a corresponding policy authorizing it. When crafted correctly it should contain references to all aspects of the process it represents. It should also state how deviations from the process will be handled.

600 Pound Gorilla As mentioned earlier, the first release of OPM~@ has approximately 600 Organizational Project Management Best Practices and approximately 3000 Capabilities. When implemented, they form the basis of Project Management may initially Maturity in an organization. Implementing OPM~@ seem like stepping into the ring with a 600 pound gorilla! It can be very intimidating to someone looking in from the outside. However, once organizations understand how to build a process framework that supports the Best Practices, the task is not so daunting.

REFERENCES (1-15) Organizational Project Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

(16) Adapted from figure 4-4, page 28 of the OrganizationalProject Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc. (17-21) Organizational Project Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

(22) "policy." The American klerifage@Dictionary of the English Language, Fourth Edition. Houghton Mifflin Company, 2004.25 Feb. 2007

(23) Adapted from figure 3-1, page 33 of the OrganizationalProject Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

SECTION II (Governing Bodies)

Chapter 3: OPM3@Process Governance

Every Organization Can Implement OPM3CO

Chapter 3: O P M ~ Process @ Governance Process Governance Now that the organization understands the architecture of OPM~@, it is essential to understand the governance needed to implement, sustain, and continually improve the process playbook. As 3 ~are. the previous chapter mentioned, Governing Bodies are an essential part of 0 ~ ~ They one of the more powerful features of OPM? that set it apart from other maturity models. They exist to provide governance over processes in an organization. Governance is defined as: "the processes and systems by which an organization or society6perates:"(l) Governance is not to be confused with Corporate Government which is, "the political di~ectionand control exercised over ~ requires ~ that 3 Governing ~ Bodies be established to oversee the an organizationn(2) 0 standardizing, sustaining, and improvement of organizational processes. BPS 1010 - 1390, 3120 - 3500, and 4780 - 5160 specify Governing Bodies be established and be active for a BP to be standardized.

Governance in Most Organizations There tends to be a utopian view of processes in organizations today that says, "If we build the right processes, people will naturally follow themn or, "If people are not following the processes, then the processes must be NO GOOD". While it is possible that organizational processes have been poorly developed, it is not realistic to assume people want to follow processes. People do things in their own best interest. People do things which involve NO PAIN. Organizations have an intuitive sense of the importance of good process. They pull large teams of people together and develop processes essential to business success. Then they attempt to persuade the organization to follow them. The following is a commonly heard dialog between a process engineer and a process user.

Engineer: "We have this great new process we want you to try. You will really like it!" User: "Is anyone else doing it? Engineer: 'No, but if you try it, it will help you and the company. User: "Will I be punished for not doing it? Engineec "No, but we think you will like it and it will help you and the company. User: "Will I be rewarded if I do it? Engineer: "No, but we think you'll really, really, like it! User: 'Ok, well ...I'm pretty busy right now but I'll try it sometime. People are not maliciously opposed to process improvement, but for the same reasons people do not usually have time to read the directions on their DVD players, they probably do not have time to learn organizational processes. Following a new process is not comfortable because it involves change. People tend to do what is comfortable for them and change is not comfortable. Process improvement involves changing behavior. It incorporates measurement, additional steps for quality, control of processes, oversight by management, etc. A good analogy is driving to work in the morning. Many folks have a hefty commute to work. Most "road warriors" have a healthy respect for the 65mph speed limit because of the governance in place to ensure compliance (i.e. the police and the court system). When state troopers cut back on patrolling, there is a natural tendency for the flow of traffic to speed up. Without governance, few people would even attempt to follow the speed limit. Why? Is it because the speed limit is "no good"? Is it because there are not enough speed limit signs? Is it because people don't agree with the law? No, it's because people are busy and, by necessity, need to

Chapter 3: OPM363 Process Governance

Every Organization Can Implement O P M m

complete their tasks quickly. State troopers are a friendly reminder to keep people in compliance. They perform a very important governance function.

Carrot and Stick Governance Studies have shown that people need the right balance of the Carrot (rewards) and Stick (punishment) governance to really be productive. They need to be rewarded for process compliance and have some penalty for not following organizational processes. In an important research article entitled, "The Carrot or the Stick: Rewards, Punishment, and Cooperationn. Professors James Andreoni, William Harbaugh, and Lise Vesterlunde concluded the enemy of cooperation and synergy in an organization is "selfishnessn.(3) Or in other words, "doing what they want to do when they want to do if'.-They tested four different groups and concluded the following things: Do no thin^ Group: Organizations not rewarding compliance or punishing noncompliance are doomed to selfish behavior in employees (people doing only what is comfortable for them) Rewards Only Group: Organizations rewarding compliance "onlyn, do very little to inhibit selfish behavior Punishment Only Group: Organizations punishing poor behavior get better cooperation than organizations rewarding good behavior Rewards and Punishment Group: Combining rewards and punishment, however, is the strongest way to reduce selfish behavior in an organization and to encourage process compliance Some organizations create great processes and then leave them to time and chance, hoping users will adopt them. Other organizations set up elaborate rewards programs to reward those who are process adopters. The truth is, rewards by themselves have little effect on process compliance or organizational cooperation. The study above shows rewards are not a good motivator to move an individual from selfishness to cooperation. Things like "all handsnmeetings, kickoff meetings with cookies, movies, and parking spots have little effect to truly move the organization towards cooperation. Only governance, with a combination of rewards and punishments, can realize cooperation in the organization. The OPM? process framework in this book provides both the carrot and the stick. Projects, Programs, and Portfolios in compliance can be recognized by the organization for their execution success and by having no blemishes on their auditing record. Projects and programs that stray from process requirements can be properly encouraged on their yearly reviews.

Process Entropy Organizations without process governance suffer from a common phenomenon called "process entropy". This is the tendency for processes to evolve toward a state of disorder ("people used to follow the processes, but now no one does!"). In civil law, if laws are not enforced, societies tend to regress to a state of anarchy or chaos. Countries can have the best leadership with the greatest ideas, but without a good system of governance, the leadership will be ineffective because no one will follow the laws. The same is true in industry. Processes are created to have repeated success in company endeavors. But just like the 2" law of thermodynamics (and those people driving their cars on the freeway) process entropy is constant. There is a tendency for processes to be ignored. Strong forces must be in place to maintain standards, usage, and compliance.

Chapter 3: OPM3@Process Governance

Every Organization Can Implement OPM3@

Process entropy is very detrimental to organizations. It is like the old frog in a pot analogy. If a frog is thrown into a boiling pot of water, the frog will jump out immediately. However if the temperature is turned up ever so slowly, the frog will be lulled to sleep and boiled alive. Most organizations would immediately take action if there was a large and immediate breach of processes. However, organizations will tolerate process entropy little by.. little until the organization is in trouble. This is also called "organizational backslidingn.

Many companies embark on large process improvement efforts and successfully roll out processes. Once the project is over, the organization naturally turns their attention to other areas. This is often accompanied by turnover in the organization's leadership. The new management comes in and is not in full support of existing processes. They do not understand them. They do not understand the pain that was experienced prior to the improvement. All they hear are clandestine and sometimes outright complaints against the process when deadlines are tight. Another common occurrence is the tendency of companies to look at parts of the process not being used effectively and think the process does not "add valuen. So they throw this part of the process out. In reality, the process may be very important to the company but there has been a breakdown in process governance. Perhaps training has not been sufficient? Perhaps auditing has not been policing the processes? Whatever the case, process entropy is setting in. O P M ~ Governing @ bodies establish the governance to oversee the processes and systems by which the organization operates. Governance is essential for the organization to maintain its progress and make improvements. Without governance organizational entropy will affect previous gains. Process Entropy occurs in many forms. A few of the main reasons it is accelerated is because of the following:

Regime Change: Executive Branch is replaced and new team does not understand the struggles of the past. Loss of Executive sponsors hi^: Executive Branch is now concerned with other initiatives in the organization Loss of Process Action Teams or Improvement Council: No one is assigned to sustain and improve processes going forward. There is no group to receive feedback on processes. Cutting the Quality Auditinq Group: To save money after successful implementation, some organizations will cut the Quality Auditing Group all together. While some of the group may not be needed after successful process institutionalization, if it is cut back too much the organization is losing the eyes and ears of the Executive Branch. Natural Turnover (includinq manaqement): In the organization, new members come in with no perception of how things were in the old days before the process improvements. Lack of Traininq: New members are not given sufficient training on the processes

Chapter 3: OPM3@Process Governance

Every Organization Can Implement OPM3B

Process Governance Types To avoid process entropy and organizational chaos, intelligent and rational mankind has come up with the concept of governance. Every organization has some form of Governing Body or governance. Otherwise it would quickly be out of business. The very smallest of organizations like the sole proprietorship often have a form of "process tribalism" which may be effective given the small number of people. Mafiy medium size and larger organizations have a form of process feudalism or process monarchy which can also realize some initial success as the company grows. But the most successful organizations will establish what this book affectionately calls, the "process republic*. Below are the types of process governance found in organizations:

Undocumented processes This is the lowest form of process

Different processes for each Fiefdom Little feedback from Serfs for process Process Feudalism is better than Tribalism because processes are documented

Receive little feedback from Serfs (process users) for process tailoring Process Monarchies are better than

Processes consistent among different parts of the organization Significant feedback from process users The Process Republic is the highest form of process governance

.

Process Tribalism Process Tribal organizations are characterized by chieftains who know all there is to know. Knowledge and understanding of the organization is passed on to each successive generation of employee by oral tradition and nothing is written. This organization finds itself in difficult situations when a chieftain passes on to the great happy hunting ground (e.g. gets a job elsewhere). Most medium and larger organizations start out in process tribalism, but quickly

I

Chapter 3: OPM3Q Process Governance

Every Organization Can Implement O P M m

progress to Process Feudalism because they know they cannot survive for long in their current state. As an organization grows it must progress to a more mature state of governance or it will be unable to achieve synergies between the various departments. Morale (confidence of the workforce in the face of difficult conditions) becomes either a force multiplier or a serious detriment to organizational productivity. Morale as a force multiplier can only be realized if the type of governance is matured. There is a common misconception in some organizations that formal documentation is not process improvement. Quality management makes statements like, "Don't worry about formal documentation, just go out and find problems and fix them!" Processes, like laws, need to be documented for compliance and measurement purposes. A process not documented is a process that is not being followed. Thk is little better than Process Tribalism.

Process Feudalism Process Feudal organizations are characterized by written processes. However, the written processes differ for each little Fiefdom. Each part of the organization manages projects in its own unique way. Three primary elements characterized feudalism: Lords (managers), Vassals (workers) and Fiefs (parts of the organization); in history, a Lord was a noble who owned land, a Vassal was a person who was granted land by the lord, and the land was known as a Fief. Vassals worked for the Lords to earn a share of the Fief. This relation between Lord, Vassal, and Fief form the basis of feudalism. In the same way, the project manager works for the functional manager and follows the processes of that part of the organization.

Process Monarchy Process Monarchy organizations are also characterized by written processes. The processes are even consistent among the various parts of the organization. However, the processes were created with very little input or feedback from the vassals (workers) in the organization. Often times the processes are out of touch with the actual work being accomplished and there is no . feedback mechanism in place to update and properly maintain the processes. Process Monarchies are better than process feudalism because they are consistent across the different Fiefdoms and they have executive support from the Monarch. However, because the people have not "bought innto the processes, they will tend to be dissatisfied with them or devalue them. They may even resist and rebel against the processes (e.g. the French Revolution). Because of a lack of process governance, many organizations vacillate between Process Tribalism and Process Monarchy. They will go for a while with no processes. Then, when a major crisis happens, management dictates that everyone follow new processes. This happens for a while until management focus shifts to other issues. The processes then become dormant as the organization reverts back to process Tribalism. This vicious cycle can be stopped with the next form of process governance.

Process Republic Process Republic organizations are characterized by written processes with Governing Bodies and governance. Processes are consistent across the organization and are crafted by constituents of the organization (not just the elite at the top). Governing Bodies have been assembled to assure process compliance. Process users are "bought innto the processes because they have a voice in the crafting of the processes. If they disagree with the process today, they can influence future changes to the process in true Republic fashion. If some users refuse to follow the processes drafted by their peers, the "stick" is available to maintain tranquility.

Every Organization Can Implement O P M m

Chapter 3: OPM3Q Process Governance

Because a Process Republic has true constituent representation with no fear of recourse, a "market of ideasnis fostered in the organization. Improvement ideas are constantly gleaned from the constituency. People are not simply "enrollednin the improvement effort, they are "committednto it. When people are only enrolled in processes, very few improvement ideas are generated. Little useful feedback comes in from the organization and there is no commitment to maintain and update processes. A Process Republic gets people committed to organizational processes because everyone has a voice in their development (excluding the small percentage of the people who will not buy in no matter what). , , 1.

Monarchies, Feudal organizations, and Tribes are inferior to the Process Republic because they do not handle gisis well. The greatest example of this is regime change (or senior management turnover). In Tribes, Feudal Organizations, and Monarchies, improvement comes to a halt as people try to figufe out who the next leader is going to be and what is to be the "new directionn. Pogroms (changes to middle management and staff) are held as the new regime tries to establish itself to find who is for them and who is against them. People follow the "new" processes out of fear and not because they agree with them. A few elite people tel! everyone what to do and there is no real representation from the people. There is no "voice of the' peoplenor feedback mechanism with which new processes can be sustained and improved. In these types of organizations, people will tend to do whatever they can do to avoid following processes. Why? Because they feel they have no voice. "Taxation without representation!" They may pay eye service or lip service. They may actually follow processes halfheartedly, but they are not committed to them. If users are given the choice, they would most often not follow them. Conversely, the Process Republic is most powerful when crises appear. Just like countries that have a Republic form of government, many organizations have regime change every 2- 4 years. The "loyal opposition" may not be happy, but the nation never misses a beat because its governance structure has been set up to operate in the face of change. The Process Republic is able to maintain an organized, harmonious, productive work environment governed by the "rule of processn. Process Republics, when set up correctly, can weather any storm.

Enlightened Organizations "The Enlightenment" occurred in the western world in the 17'~ and 1 8 ' ~ centuries. This paradigm shift in thinking supported the use of reason to establish systems of government, ethics, logic, etc. Enlightenment thinkers helped lead the world out of a period called the Dark Ages which was known for relying on tradition, superstition, and tyranny. Organizations today need to be "enlightenednto realize the value of the republic form of process governance. They need to move away from the old model of tradition, superstition, and tyranny, and move on to rational collaborative efforts to improving organizational performance. They need to understand that it is normal to have people who do not agree with certain parts of the processes. These people may never be completely won over however they will be in compliance if they have a voice in the improvement of the processes. In the political world this is known as the "Loyal Oppositionn. Tribes, Fiefdoms, and Monarchies do not understand loyal opposition, and this is what makes them less effective. Effective organizational processes are "of the people, by the people, and for the peoplen! The people should own the process (through their elected representatives). History has proven that when the people have ownership of the processes, they are much more likely to comply with them.

Chapter 3: OPM38 Process Governance

Every Organization Can Implement OPM3@

Branches of Process Governance Overview 0 ~ helps~ companies 3 ~set up an internal Process Republic. Process Republics require a few important Governing Bodies be established to ensure process governance in the organization. ~ Governing ~ 3Bodies ~ are divided into three branches; Just like in civil government, 0 Executive, Legislative, and Judicial. These branches of governance are not about the "balancing of the power" or even the "separation of power" away from the Executive Branch. Rather they are about the "separation of responsibility" and "checks and accountability" for the sake of process compliance and project management success. The following are the three branches:

.

.

Executive: This branch of process governance has the power to enforce organizational processes (BPS 1450,1700-2080,3590-3970,5690-6070). It is discussed in detail in chapter four. Leqisiative: This branch of process governance has the power to create and update processes (BPS 1010-1390, 3120-3500,4780-5160). It is discussed in detail in chapter five. Judicial (PMO) This branch of process governance has the power to interpret processes and apply corrective action when processes are not followed (BPS2140,2190, 6100, 6130,6140). It is discussed in detail in chapter six. The three branches of process governance can be described as a three legged stool. Without these three branches in an organization, major problems occur in project execution and process improvement. All organizations have some type of Executive Branch established to sponsor and police process improvement efforts. In all but the smallest of companies, if the Executive Branch writes the processes, they are often irrelevant because executives are too far removed from daily operations. Therefore it is necessary to have a Legislative Branch made up of process users from throughout the organization and quality engineering facilitators. The Executive and Legislative Branches are offen too busy to adjudicate process issues (unless there are major contractual problems). Therefore most process breaches to do not get resolved. This necessitates the need for a Judicial Branch. This Branch has the power to interpret processes, provide guidance, and apply corrective action when necessary. All three branches are discussed in detail in the subsequent chapters. How the Branches Interact The Executive Branch authorizes projects and decides which projects will be audited. It empowers the Legislative Branch to write the processes with help from all affected groups and individuals. Just like in the political world, the Executive Branch selects the members of the Judicial Branch which will review processes and adjudicate process issues. The Judicial Branch will keep statistics on organizational project management execution and submit these reports to the Executive Branch. The Judicial Branch will also mentor organizational project and process performance. It will make recommendations to project teams regarding what to do to get their projects back on track.

Chapter 3: OPM3Q Process Govemance

Another way to view the process republic is as a triangle with each side of the triangle representing the Executive, Legislative, and Judicial Braches. The legislators tell the Executive Branch they need to enforce the process. The Judicial Branch tells the Executive Branch who is not in compliance. Legislative Branch tells the Judicial Branch they need to remain true to the processes and uphold them. This healthy tension maintains a productive work environment.

Every Organization Can Implement OPM3@

JUDICIAL

LEGISLATIVE

In the book "Good to great" by Jim Collins, research has shown that sustained great results in an organization depend on a culture of disciplined people.(.r) What keeps people disciplined and helps organizations avoid process entropy? Good processes and good governance!

Governance Facilitators In addition to the three branches of governance, there are four important organizationalfunctions that need to be in place for process governance to be effective in organizations. They are called governance facilitators. Govemance facilitators help promote a "process culturen in the organization. Governance facilitators are as follows:

train in^: This involves educating process users. Process users cannot be expected to comply with processes until they have received proper training Peer Review: This involves groups of peers who review each others project work products. There is no better governance than when accountability has been pushed down to the team level Individual Performance Review: This involves reviewing the performance of individuals in the organization. The organization must have some medium with which individual performance reviews reflect process compliance. Commitment & TraceabiliM When process artifacts are completed, they need to be "signed off" and agreed to by all affected groups and individuals

Training The training process is part of the Program Domain discussed in chapter seven. Training takes a significant amount of time and is critical to process institutionalization. If process users ~ BPS~5200, 35210,~and understand the processes, they will be more likely to follow them. 0 5300 specify the need for a training program and processes. Many organizations fail on training because they do not make it mandatory. For example, before students are allowed to drive a car and follow the processes of the roads, they must attend driver's education. The consequences of young drivers not taking driver's education would be catastrophic. Imagine a whole country full of 16 year-olds driving on our roads with no training?! The results are similar for organizations allowing people to manage multi-million dollar projects with little or no training.

Chapter 3: OPM3@Process Governance

Every Organization Can Implement OPM3@

In addition to process training, it is important to have project managers and project teams understand project management in general. The Project Management Professional Certification (PMP), Program Management Certification (PgMP), and Certified Associate of Project Management (CAPM) designations are extremely important for giving project teams a standard level of understanding regarding project management. PMP(s), PgMPIs), and CAPM(s) become little project management "black belts", to borrow the Six Sigma term, of organizational project management and improvement. Additionally, each class can earn PMP Professional Development Unit (PDU) credit. Training should not consist of lectures about project management. Training should be scenario based, and should focus on PMI knowledge areas and domains. There should be numerous exercises and case studies from the organization's own history prior to improvements. The organization must never forget where it came from! Those who do not learn from history are doomed to repeat it!

Example OPM? Training'Curriculurn The development of training curriculums is both beneficial and essential for organizations. A training database should be kept to know who in the organization has met training requirements. Everyone impacted by the processes should attend the training. Groups like the Quality Auditing Group, Change Control Board, and PMO must be trained in addition to process users in the organization. A training curriculum may look like the following:

Chapter 3: OPM3d Process Governance

Every Organization Can Implement OPM3@

Training strategies

There are a number of training strategies that when implemented correctly can greatly benefit the organization. They are as follows: Startinq with New Hires: Training should start with new hire new hire orientation to acquaint people with the business domain, organizational structure, etc. New hires should also get a quick overview of organizational processes. Too much process stuff too early can cause sensory overload. Process Orientation: Once employees have had a few weeks to understand the organization and their role in the organization, employees should be trained in all applicable project, program, and portfolio management processes. This should include process elements, process governance, and all process related topics. Hands On!: Courses should be hands on and scenario based. dobrses should be tailored based on the specific roles of the project team. Training should address real scenarios process users encounter at work. It should be exercise intensive and not lecture based. If done right, the individuals will fall back on this type of "hands on" training as situations arise in the work place. Onqoinq Training: Training should be ongoing for those who are new to the organization or for those who want a refresher course on the processes. Updates Made Known: When significant updates are made to the process, there should be some medium for announcing the changes to the organization without forcing everyone to retake the class. Pizza lunches are an effective communication medium. B

Traininq Database: Organizations should have a database of all classes and training processes users have received. Mature organizations have new hire orientation which includes a heavy emphasis on training to organizational processes. Operational Definitions: Every organization should have operational definitions for "Project", "Program", and "Portfolio*. Most organizations have slightly different ideas of what a program is. It should be defined in some manner similar to PMl's definition and

Chapter 3: OPM-

Process Governance

Every Organization Can Implement OPM3@

be standardized in the organization. Processes should point to these operational definitions. The organization should train individuals regarding the operational definitions as part of their standard training program. Provide PDUs: All project management related training should provide PDUs for certified project and program managers. This serves to reward and motivate training participants.

Peer Review

The Peer Review process is part of the Program Domain listed in chapter seven. It concerns the establishment of a process for peers to evaluate each other's work products. To Peer Review is to have the project team review many or all of the project artifacts to detect defects and breaches of process compliance. Defects can range from "requirements completeness" to "design incompletenessn. By evaluating work products, teams can detect potential defects and parts of the process that are not being followed. Teams keep each other accountable. Peer Reviews are essential for creating a "process culturenin organizations. -It pushes the need for process compliance to all levels of the organization. Peer Reviews should start early in the life cycle and continue until delivery of the project to the customer. Defects and issues not caught early in the project tend to get more significant as the project progresses. The later in the life cycle they are caught, the more impact they have. When a defect or issue escapes undetected to the next phase of the project, it becomes more difficult to resolve because it gets further away from the point where it was introduced. Individual Performance Reviews

Performance Reviews are a critical piece of the Organization Project Management Puzzle. OPM~@ BPS5200,5210, and 5300 specify the need for Individual Performance Reviews. Tying individual performance to process compliance is critical for process success. Many executives start off a process improvement effort by saying, "everyone will follow the processes or else!" However, nothing happens to those who don't follow the process. A few of the more stubborn opponents may be given poor reviews, but in most organizations the performance review process has never been updated to include process adherence?!? Remember, organizational processes are the company playbook. If project teams don't run the right plays, the team will not win! Commitment and Traceability

The OPM~@ Process Framework generates process artifacts. When these artifacts are completed they should be approved (or "signed o f f on) by all affected groups and individuals. For instance, if the Scope Statement is complete, it should be signed off on by the customer and the project lead before the High Level Requirements are completed. High Level Requirements should also trace back to the Scope Statement. This assures that affected groups and individuals are properly informed and agree to project scope before proceeding to the project activity. OPM~@ helps break down organizational silos by building cross-functional interdependencies between project work products. Teams execute project activities and receive formal commitment from stakeholders. Quality Auditing Group members then audit project work products verifying commitment. The following chart shows Project Domain documents requiring project commitment.

Every Organization Can Implement OPM3@

Chapter 3: OPFA3@Process Governance

Systems lntegration

Functional Requirements Document

High Level Requirements Document

Work Breakdown Structure Document: VBs)

Functional Requirements Document

Technical Design Document

Work Breakdown Structure

II

I

Project Team Engineering Operations Systems lntegration Testing (all functional groups) Project Team Engineering Operations Systems lntegration Testing (all functional groups) Project Team Engineering Operations Systems lntegration Testing , (aH functional groups)

Cost of the Process Republic When talk of process governance surfaces, organizations get concerned about "overhead" costs. Some say, "yet more overhead groups costing money but yielding little return". Smaller organizations are often concerned about incorporating process governance because of limited headcount and funding. While there are a few things that could drive up cost like 100% work product inspections. But if implemented correctly, process governance should have minimal cost impact on the organization. Here are some questions that every organization should ask regarding process improvement: What does it cost for a new process improvement campaign every few years? What does it cost to bring in contractors and consultants to redo unused processes? What does it cost the organization to have "process desensitized" employees who have given up on "improvement fads" (this too shall pass!)? When the numbers are added up it is clear that establishing an effective system of governance in the organization actually saves money! Setting up process governance involves an initial investment in the form of staff working a few hours a week in their governance roles. However this cost pales in comparison to the cost of process noncompliance and project defects.

Chapter 3: OPtd3GD Process Govemance

Every Organization Can Implement OPM3@

Improvement Efforts Without Process Govemance

Visit the quality closets of any company, chances are it will not take long to find documentation, posters, and trinkets from failed quality improvement efforts from the past. Virtually every organization has embarked on quality improvement efforts only to see little if any tangible, sustainable results. The reason for this is lack of process governance. The following are some examples: "Qualitv is our Policv" efforts: This type of initiative starts off with a large "all-hands" meetings and passes out quality binders with fanfare, movies, hoopla, and trinkets. Management wants the organization to start holding quality meetings to brainstorm ideas to improve quality. Almost like a "kaizennevent. It fails because there is no mechanism to ensure that the meetings take place. Those that do go to the meetings often times do not know what to do. They quickly lose interest when they do not see progress. Total Quality Management (TQMY' efforts: This initiative was very popular with companies in the late 80's and early 90's. In this effort the quality group brings the concept of TQM into the organization with its principles of quality management. There are some guidelines and documented processes, but everyone sees it as the quality group doing its "ownnthing. The quality group is solely in control with little executive oversight. It eventually fizzles out because there is no auditing, no process user buy in, and no senior management enforcement. "Phase Review System (PRS) efforts: This is better than most. It has guidelines, processes, and training, but it is mostly principles and not a comprehensive process. The quality group oversees this initiative and there is executive support. However there is little process governance and the community is not "bought innto the processes. There is a phase gate review process accompanied with some well defined processes, but when crisis time rolls around, the processes are thrown to the wind. Proiect Development Life Cvcle (PDLC) Efforts: Many companies at one time or another have engaged in large scale efforts to create a project life cycle. They bring in process experts to work with end users to craft a slew of processes, templates, and forms. There may even be a small group assigned to assist the consultant (acting as the legislators and auditors). There is executive support for a time, however because processes are developed without cross functional representation (formal PAT teams and process council), there is little true "buy-inn from the organization. This is an example of how an initiative will fail without a solid Legislative and Judicial Branches. VOPU Noice of the Process User) Many times organizations try to assemble improvement committees independent of process governance. They come up with snazzy code names for the improvement efforts like, Voice of the Process User" (VOPU). These committees are put into place to receive employee suggestions. People from across the organization make up the team (which is good!). However, none of the people on the team are managers higher than the front line level so no one on the committee has the power to enforce anything. Great suggestions may come in and people tend to agree with the problems and proposed solutions, however VOPU is never able to really implement changes or get authority to enforce the changes. People are not allotted appropriate time to engineer the needed changes so they are expected to make changes "as time allowsn. Because of the time and authority problem, only the simplest and least time consuming improvements are put in place. The only thing getting fixed is the pothole in the parking lot!

Chapter 3: OPM3@Process Governance

Every Organization Can Implement OPM3@

Next Steps Now that the organization understands the need for process governance, it is important to understand the how the implement each branch of governance. The next three chapters explain this in detail! i

REFERENCES ( I ) Governance. (2007, February 17). In Wikipedia, The Free Encyclopedia. Retrieved 05:08, February 26,2007 (2) Corporate governance. (2007, February 24). In Wikpedia, The Free Encyclopedia. Retrieved 05:13, February 26,2007 (3) "The Carrot or the Stick: Rewards, Punishment, and Cooperation". The American Economic Review, Volume 93, Number 3, 1June 2003, pp. 893-902(10), James Andreoni, William Harbaugh, and Lise Vesterlunde (4) "Goodto Great: Why some companies make the leap...and others don't" (2001, October 16). Collins Publishers.

Chapter 4: The Executive Branch of Governance

Every Organization Can Implement O P M S

Chapter 4= The Execut'we Branch of Governance Executive Branch

OPM~@ requires that Governing Bodies be established for the implementation of BPSand processes in the organization. As mentioned in the previous chapter, the Executive Branch is the first group of Governing Bodies that should be implemented in the organization. The Executive Branch of process governance is the most essential to implement because it authorizes all other Governing Bodies, projects, and improvement activities. To standardize processes, it is recommended that two Governing Bodies be set up for the sponsorship of projects, and process auditing/measurement. These Governing Bodies make up the Executive Branch of process governance. As the old management adage states, "the three keys to process improvement success are 1. Sponsorship!, 2. Sponsorship!!, and 3. Sponsorship!!!" If executive sponsorship is not established, any project or improvement effort will fail. Projects need sustained executive support otherwise resources may be pulled off the project to other endeavors. The Executive Branch of process governance has the power to approve and enforce processes. The following are the two recommended Executive Branch Governing Bodies: Phase Gate Review Board (PGRB): The Senior Management group responsible for approving projects and securing resources for the effort. (BPS 6160, 6170, 6180) Qualitv Auditinq Group (QAG): The quality group responsible for policing processes and observing if processes are being followed. (BPS 1450, 1700-2080, 3590-3970, 56906070) The Executive Branch sets the tone of process adherence for the entire organization. It must show "constancy of purposenfor organizational processes and not allow them to diminish under benign neglect and process entropy. At the top of the Executive Branch is the President or General Manager of the company. Like civil government, the Executive Branch is responsible for selecting who will lead the Program Management Office (or Judicial Branch of the organization). In most cases, the PMO leader will report directly to the CEO. The CEO or other executive must hold the Program Management Office Leader and Portfolio managers accountable to process compliance and portfolio execution standards. Otherwise poitfolios and programs will be noncompliant. The executive is, in turn, held accountable by the board of directors and Wall Street for organizational performance and execution.

Chapter 4: The Executive Branch of Governance

Every Organization Can Implement OPM3a

Phase Gate Review Board The Phase Gate Review Board (PGRB), sometimes called the Investment Review Board, is the sponsor and enforcer of all projects and processes in an organization. The Phase Gate Review Board decides which projects and processes will be supported with organizational resources and which ones will not. No project or process improvement effort should get into the project pipeline unless it is first approved by the Phase Gate Review Board. The Phase Gate Review Board must evaluate every project against organizational goals and objectives to determine if they align with organizationalstrategy. When a project is approved through the Phase Gate Review Board, the project charter is signed by a representative of the Phase Gate Review Board granting resources to the effort. Organizations with Phase Gate Review Boards will demand a periodic review of the project status (or Phase Gate Review) to determine if the project is still in alignment with organizational strategy. This is separate from the typical management review taking place on projects to evaluate project performance. Some organizations conduct a Phase Gate review at the end of each phase of a project (i.e. initiation phase, planning phase, etc.) This ensures that the project has not strayed from orgariizational goals and objectives during its life cycle. The Phase Gate Review Board may also review project performance issues that are escalated past normal PMO reviews.

Responsibilitiesof the Phase Gate Review Board The Phase Gate Review Board has a number specific responsibilities in the organization. They are as follows: 0

Proiect Valuation I Aliqnment Review: The Phase Gate Review Board will review all proposed projects to determine if they align with organizational goals and objectives. They will only allow projects into the project pipeline that are beneficial to the organization. Sponsor Process Improvements: The Phase Gate Review Board will sponsor process improvements in an organization or they will not be successful. Phase Gate Review: The Phase Gate Review Board will periodically evaluate the progress of all projects to determine they continue to align with organizational goals and objectives Review and Approve Processes: Processes that are created must be reviewed and approved by the Executive Branch. If Executives have a problem with a process it can be vetoed (or line item vetoed). Once it is approved, it will be enforced. Select PMO (or Judicial Branch) Representation: Senior Management will select the PMO leader.

Dangers to the Phase Gate Review Board The following are several dangers that affect the effectiveness of the Phase Gate Review Board: Lack of "Constancv of Purposen: Starting out with commitment to process improvement and governance, but then "moving on" to other issues. This is the single biggest killer of process improvement efforts. The Executive Branch must remain committed to the "laws

Chapter 4: The Executive Branch of Governance

Every Organization Can Implement O P M W

of the land and support the Judicial and Legislative branches in their work to continuously improve. An example of losing "constancy of purposenis cutting Quality Auditing Group staff after the processes have been implemented. While the organization may not need as many auditors, they should not be cut altogether. No Due Diliqence Given to Proiects in the Proiect ~ipeline:It is crucial for the organization to have some control over what goes into the project pipeline. Without oversight, the project pipeline will quickly fill up with projects not aligned with organizational goals and objectives. Valuable project resources will be consumed by non-beneficial or non-aligned work. Overlv permissive: Not following through on recommendations by the Judicial Branch (PMO). Not holding groups accountable for project and process non-compliance is very detrimental to the organization. Lack of Emotional Fortitude: As management changes and reorganizations occur, organizations tend to forget how bad things used to be. Process users may begin to push back on processes. People's feelings may be hurt by non-compliance citations and the Quality Auditing Group may be viewed as "knit picky". Organizations must have "emotional fortitude" which is the ability for an organization to "stay the course" in the face of opposition. Constancy of Purpose! Moses told the children of Israel to never forget what it was like to be in bondage in Egypt. Those who do not know History are doomed to repeat it. Tvrannv of the Urqent: This is where the Executive Branch allows process governance to be violated because, "projects need to get out the door quicklyn. Organizations taking this approach will hurt for it in the end. Projects will end up back in the door because of quality and performance issues. Organizations without the Phase Gate Review Board As mentioned earlier, all organizations have some form of Executive Branch. However without

sponsorship and commitment, organizational projects will not be successful. Organizations without sponsorship and commitment struggle from the following: Proiect Ex~losion:Too many projects in project pipeline over taxes resources. Many times a large number of projects do not align with organizational goals and objectives. Lack of Accountabilitv: No recourse for projects falling short of project goals and objectives. Project failure becomes part of the organizational culture. Sunk Cost Fallacy: Organizations will tend to stay with projects "to the bitter end" and not pull the plug on projects no longer aligning with organizational objectives and goals. Process disinterest: With no sponsorship and oversight process users feel any improvement ideas they make will not be taken seriously. Implementing the Phase Gate Review Board

Once an organization recognizes its need for sponsorship of projects, half the battle is won. What remains is to establish the Governing Bodies necessary to ensure this sponsorship. The Phase Gate Review Board is comprised of primarily the President, or General Manager, of the organization and any other Senior Management representative they desire to assist them in

Chapter 4: The Executive Branch of Governance

Every Organization Can Implement OPM3@

this role. Many times the PMO Leader may assist with this team. Please see the Phase Gate Review Board Implementation Checklist at the end of this chapter.

Quality Auditing Group The process arm of the Executive Branch is the Quality Auditing Group (QAG). The Quality Auditing Group is the "police force" of the Executive Branch. They are the eyes and ears of the organization. Just like officer friendly who patrols the interstate, they help enforce the processes. If there is an infraction, the Quality Auditing Group sends the infraction to the Program Management Office Project Management Review for interpretation. Some organizations have taken up the mantra, "you cannot audit in compliance!" This is akin to saying, "you cannot police the laws of the road so let's pull all the police cars of the streets!?!" The organization MUST audit if they expect the processes they've created to be followed. The surest way to kill process compliance in an organization is by dismantling the Quality Auditing Group organization. Some organizations get concerned about auditors being "additional headcounr on the payroll not adding value. Considering most companies already have well established Quality Assurance departments, they merely need to extend the role of Quality to include process compliance. This should add no great cost strain to the organization. If an organization considers how much it spends to create effective processes, a couple extra auditing personnel are a drop in the bucket to prevent process entropy.

Responsibilitiesof the Quality Auditing Group The Quality Auditing Group has a number specific responsibilities in the organization. They are as follows: Enforce Process Adherence: Processes that have been approved are policed by the Quality Auditing Group. Teams not in compliance are brought to the PMO (or Judicial Branch) for interpretation of the process and to understand and assign corrective action for the breach of process. Execute Corrective Action: When a process is not adhered to, corrective action is assigned. The corrective action is then enforced by the Executive Branch and verified through the Quality Auditing Group. Gather Process Metrics: The Quality Auditing Group will compile metrics on organizational compliance and submit them to the PMO. The PMO will analyze the data and submit reports back to the Executive Branch. This data will help support new im~rovementideas and efforts.

Dangers to the Quality Auditing Group

The Quality Auditing Group has a number of potential problems that should be avoided when implementing process improvement to the organization. They are as follows: Overlv Riqid When Observinq the processes - If the Quality Auditing Group is too rigid the organization may become upset, start complaining, and push back on management for a looser interpretation of the processes. The Quality Auditing Group needs to have the persona of "officer friendlyn. Example, "I did not want to pull you over ma'am, but you

Chapter 4: The Executive Branch of Governance

Every Organization Can Implement OPM3@

were exceeding the speed limit by 50 MPHn. They should issue the citation (or noncompliance) but they should be sure to give advice on how to be in compliance. Forcinq Process Too Quicklv- If the Quality Auditing Group tries to force mature processes on an organization not ready for them, they may hold a grudge lasting longer than the Executive does. Instead of building a "loyal oppositionnthere is a disloyal opposition that waits until the time is right to "throw off the yoken. It is important for the Executive Branch to "feel the pulsenof the organization and make sure process users are "on boardnwith the new effort. The Executive Branch should stage improvement efforts to give the organization time to digest the last ones. Auditinq the Letter of the Law vs. the Spirit of the Law - The Quality Auditing Group needs to understand the intent of the process rather than just the letter of the process. Project leaders quickly get cynical if their projects are "dingednbecause they did not "dotn their "i's" or cross their Ys". Overlv Permissive - A major problem with the Executive Branch is the tendency for them to be overly permissive. .The, "lets just all get alongntype group. Auditors who don't write citations will take the teeth out of the Judicial Branch of process governance. Otherwise everything they do is just advice. The citation makes the Quality Auditing Group effective. If infractions are not documented, then there is no way to get them resolved. They must be submitted to the Judicial Branch for reviews. Auditors are the police arm of the Executive Branch. Executives Expect the Qualitv Auditina Group to Enforce Compliance - Many times the Executive Branch will leave it to the Auditors to enforce compliance. Auditors do not have the authority or ability to enforce processes. Nor should they. Executives do not Back the Qualitv Auditina Group: In some cases executives may be quick to pardon teams for not adhering to process. This sets a bad precedent for the organization. It will not stop until the Executive Branch gets its act together Auditors not Consistent: In some cases one auditor can be lenient while other auditors strictly enforce the process. Auditors must attempt to be as objective and consistent as possible. Otherwise people will "gamenthe process. Organizations Without a Quality Auditing Group

Once sponsorship and commitment are established, the Quality Auditing Group needs to be implemented. Organizations without a Quality Auditing Group struggle from the following: Process Non-Compliance: Organizations can assemble the greatest processes, but without process oversight through governance, they will fall into disuse. No Consistencv in Processes: Groups throughout the organization will take processes and tailor them in any way they see fit, including not following them at all. Various parts of the organization will have different levels of commitment. No Feedback from Qualitv Auditinq Group: In organizations with process governance, the Quality Auditing Group provides a big share of process improvement feedback. They are the "eyes and ears of the Executive Branchn. Not having this Governing Body is detrimental to process feedback.

Chapter 4: The Executive Branch of Governance

Every Organization Can Implement OPM3@

Implementing the Quality Auditing Group As mentioned earlier, most organizations already have some form of Quality Group or Quality Assurance organization. Some groups feel auditors should make up 3 - 5% of the number of people they are auditing. Example: three full time auditors per 300 people. A good rule of thumb for the number of auditors needed per organization is as follows:

Number of Projects

Auditors

Number of Hours Worked

c 20 projects 20 Projects 40 Projects

1 Auditor 1 Auditor 2 Auditors

Less than 40 hrs Full Time (40 hrs) Full Time (40 hrs)

Process auditors should have some statistical process control background. They should have experience building control charts and plotting data gathered from auditing processes. They should be trained in auditing techniques from methodologies like CMMl and ISO. The best Quality Auditor is the one who is not afraid of being the "bad guyn. Someone who is detail oriented and has a passion for process. Please see the Quality Auditing Group Implementation Checklist.

Phase Gate Review Board ImpIenten&tion Checkkt

J

Steps 1. 2.

3.

4.

5.

6. 7. 8.

9. 10.

Step Descriptioh Train Senior Management regarding Project Management and the need for it in the organization Secure Senior Management time regarding periodic Phase Gate Review Board meetings. Require all projects submit feasibility documentation including the following: Project Goals and Objectives Resources Required Dates Desired Project ROI Designate phases of projects for when they will be evaluated by the Phase Gate Review Board Determine performance criteria for when a pre-approved project is invited to a Phase Gate Review Board Schedule Phase Gate Review Board meetings on a periodic basis Receive project performance information from the PMO (or Judicial Branch) . Make certain all projects in the project pipeline are known by the Phase Gate Review Board Make certain resources assigned to projects in the pipeline are known by the Phase Gate Review Board Make sure inter-project dependencies are understood. -

Chapter 4: The Executive Branch of Governance

Every Organization Can Implement OPM3@

Chapter 4: The Execuiive Branch of Governance

Every Organization Can lmpiernent OPM3@

Chapter 5: The Legislative Branch of Governance

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Every Organization Can Implement OPM3 !

Chapter 5: The Legislative Branch of Governance Legislative Branch

0 ~ ~ requires 3 ' that Governing Bodies be established for the implementation of BPSand processes in the organization. The Legislative Branch is the second group of Governing Bodies that should be implemented in the organization. The Legislative Branch of process governance is essential for developing and implementing processes in organizations.

OPMP BPS (1010-1390,3120-3500,47805160) require that Governing Bodies be assembled for process creation and improvement in the organization. The Legislative Branch should consist of volunteers from throughout the organization who work on process improvement part time. These "representatives" will devote a few of hours a week to crafting and improving processes in the organization (in addition to their normal jobs). Representatives will comprise one of two Governing Bodies necessary for the Legislative Branch of organizational process governance: Process Action Teams (PATs): Governing Body required to develop processes in the organization (BPS 1010-1390,3120-3500,4780-5160) Chanqe Control Board (CCB): Governing Body required to evaluate all proposed changes to organizational processes (BPS 1010-1390, 3120-3500,4780-5160) The PATs and the CCB bring the organization together in cross functional improvement teams to break down functional silos. Disjointed process creation accomplishes little. Processes not crossing internal boundaries do little to move the company away from Fiefdoms. Additionally, there should be a common look and feel for processes. People going from one part of the organization to another should be able to quickly understand and negotiate processes. The Legislative Branch evaluates upstream and downstream impacts of process changes. Individually, process users seldom have this ability. The Legislative Branch works best when highly skilled individuals are selected by their own teams to represent their needs in the improvement effort (just like in civil government). In larger organizations this branch may be augmented by full time quality engineers to assist in improvement efforts. Process legislators write the processes that must be approved by the Executive Branch and Judicial Branch at all three domains.

Chapter 5: The Legislative Branch of Governance

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Every Organization Can Implement OPM3 !

Why Two Groups? There are a couple of important reasons why the Legislative Branch has two Governing Bodies (bicameral) rather than one. It is imperative to get both process user and functional manager participation in improvement efforts. If either of these two groups is missing, a significant interest of the organization is ignored. Additionally, evaluating process issues can be very burdensome and time consuming. It is not fair to PATs to pull representative off process improvement activities to evaluate process issues and change requests. The Legislative Branch works best when PATs can focus on developing processes while the CCB can focus on evaluating change requests. The CCB will, however, routinely work with representatives from the PATs to coordinate change requests. They will also approve or reject updated processes. The Legislative Branch, while mostly comprised of volunteers from throughout the organization, may be facilitated by full time Quality Engineers. These are full time quality people who provide the experience, tools, and talent necessary to assist PATs and the CCB.

Process Action Teams Process Action Teams (PATs) are comprised of process users from throughout the organization. PAT members work a few hours a week to help improve the processes in the company. PATs are analogous to the "House of Commonsn(from a UK perspective) or the "House of Representativesn(from a US perspective). Larger organizations may augment this group with full time quality engineers who can help legislators develop processes. PATs do less change management than the CCB. Their primary role is updating processes based on feedback from the CCB. In medium and large organizations, it is beneficial to have process engineers to assist PATs in process creation.

Responsibilitiesof Process Action Teams Process Action Teams have ownership over the processes and have a number of responsibilities in the organization. They are as follows: Creatinq Process Documentation: PATs create process artifacts. Using process mapping tools and process elements, PAT members create processes that form the basis of the organizational process framework. Maintaining Process Documentation: PATs, along with the CCB are the keepers of process design data fi.e. maps, flows, and procedures). The Legislative Branch manages the configuration of organizational processes. All defining documents of the process must be managed, stored, and kept up to date with proper configuration management. Measurinq I Monitorinq Process Performance: PATs are responsible for monitoring data captured from the Quality Auditing Group and the PMO. Processes are updated when they are not deemed to "hit the markn. ldentifyinq Problems and Opportunities: PATs should be aware of process problems and issues in the organization. When problems or issues arise, they will develop long term solutions using process engineering principles. Launching and Sponsoring Improvement Efforts: When the organization identifies potential projects to improve processes, the PATs lead the effort.

Chapter 5: The Legislative Branch of Governance

Q

Every Organization Can Implement OPM3 !

Dangers to Process Action Teams

There are several dangers PATs should be wary of when implementing processes in the organization. Having Quality Enqineers Create all the Processes: Some organizations just hire a few process engineers to map all of the processes for the company. This is generally not effective, and can even be detrimental to organizational "buy-inn. The organization must have representation from the constituency otherwise process users will not be committed to processes. No Overarchinq Methodologv or Framework: Process maturity models and methodologies are the result of decades of best practice in a particular field. Organizations trying to "go it alonenhave to rely on accidental discovery to develop feasible processes. Maturity Models provide the framework needed prioritize the work and focus the teams. B

Givina Teams Chanqe Control of the Processes: Once processes are developed, there is a tendency for organizations to push process governance down to project teams. Some organizations will put processes on a wiki (web based updatable repository) or some other repository. They also give the public free access to update and change at will. This is akin to giving drivers on the road the ability to change the speed limit at whim with no oversight. Process Republics know not everyone has the time to understand upstream and downstream impacts of processes. They may know their own process areas, but do not necessarily understand the impacts of changing the process. People will "game" the system if they are allowed free access to change the laws. People should own the process, but under the oversight of their chosen representatives on the CCB and PATs. Lack of Time: It is essential for management to allocate time to support the Legislative Branch. Process legislators must be given appropriate time to learn and understand the processes. They should also be given the help of Quality Engineers when available. Overly Detailed Processes: If processes are too detailed, or crafted in free flowing prose, they will not be effective or easy to use. Processes must be written at the right level of understanding to be auditable. Bullet points are best! Processes not Detailed Enough: Sometimes processes can be in outline form and not very useful for execution or auditing. Auditing courses are commonly taught through the American Society for Quality and other groups to help process engineers with this.

Organizations Without Process Action Teams

Organizations without PATs tend to struggle from a number of common project management issues. They are as follows: Over-reliance on Consultants: Process gurus must be brought in to facilitate improvements. Enormous sums of money are given to them without establishing organizational buy-in.

Chapter 5: The Legislative Branch of Governance

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Every Organization Can Implement OPM3 !

Lack of Consistencv: Different terminology and definitions for project management are used across the organization. In one area work is called a project. In another part of the organization the work is called a program. Islands of Process: Each little fiefdom out there has its own unique processes and procedures for doing things. No Overarchinq Process Framework: No communication and commitment between processes. No contiguous end-to-end process keeps project details from falling through the cracks

Implementing Process Action Teams As mentioned earlier, PATs should be composed of process users from throughout the organization. Ideally they are a cross functional representationfrom throughout the organization. When needed, PATs should be augmented by full time process engineering staff to facilitate process development. A good rule of thumb for the number of Process Engineering folks that should augment PATs is as follows:

To implement PATs, please review the PAT Implementation Checklist at the end of this chapter.

Change Control Board The Change Control Board (CCB) is comprised of functional managers from throughout the organization who will work a few hours a week to help improve processes in the company. The CCB is analogous to UK "House of Lordsnor the United States "Senate". The CCB is responsible for managing changes to processes. They work with the PATs to assess and implement changes. No process changes should take place unless approved by the CCB. Just like all process improvements, they should be reviewed by the Judicial and Executive Branches once they are ready for release to the organization. The CCB receives all organizational process feedback. It then filters out all changes not beneficial. This way the system does not oscillate back and forth at the whims of particular users. The CCB should not be comprised of managers at too high a level or it may lack process user experience and not be effective. The CCB plays a much lesser role in creating processes than PATs because they are often busy with administration duties like; receiving process change requests from the organization, assessing process change impacts, deciding which changes are worthy of pursuing, giving PATs the approval to change the processes, and approving processes. In medium and large organizations, it may be beneficial to have process engineers to assist the CCB in change management and configuration management.

Chapter 5: The Legislative Branch of Governance

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Responsibilities of the Change Control Board The CCB evaluate all process feedback. The CCB has a number of responsibilities in the organization. They are as follows: Coordinatina and Communicatina with Other Processes: The CCB must make sure process "hand offsnare defined and analyzed. Changing a process in the initial phases of the project life cycle could have a cascading effect on other processes down stream. Maximizinq the Performance of the Process: All the responsibilities noted thus far lead to this most important objective; the CCB becomes the key driver to achieve Six Sigma levels of quality. Manaqing C h a n ~ eRequests: When the organization provides feedback to the Legislative Branch, there will be many requests to update processes. The CCB must filter through change requests to determine if they are feasible. They then assess, assign, and approve change requests once they are developed by the PATs. r

Confiquration Manaqement: The CCB,along with PATs, are responsible for keeping all versions of documentation up to date. They manage releases, changes to processes, and storage and retrieval of processes.

Dangers to the Change Control Board

There are several dangers CCBs should be wary of: No Orqanizational Feedback: The organization must support feedback from the user community for updated processes. Without feedback from the organization, it will be difficult to determine the effectiveness of improvements. Legislative Complacency: There is common misconception that the groups should come to the process legislators when processes need to be updated or changed. The idea here is the CCB should wait until the organization pulls (or screams) them to fix a process. The CCB must constantly scan the constituency to maintain organizational tranquility (which means: Free from commotion, disruption, anxiety). They should be on top of process issues. No Cross Functional Representation: If the CCB does not have proper cross functional representation, the needs of certain parts of the organization may not be met. I

-

Not Evaluatina Downstream Im~acts:If proper due diligence is not performed, changes can be pushed into a process that is detrimental to other parts of the process. If the CCB does not have enough time to evaluate processes, they may have a tendency to "rubber stampnthem. The CCB must thoroughly understand upstream and downstream impacts of all process changes. Process Huntinq: Systems which include feedback are prone to hunting (processes being changed too often due to positive and negative feedback). If the CCB does not evaluate the downstream and upstream impacts of process changes organizational processes will be updated too often.

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Groupthink: If there is a lack of cross functional representation or free flow of ideas, "groupthink" could occur. A CCB should not rubber stamp everything, but they should evaluate the rationale of all proposed changes for the good of the organization.

Organizations Without a Change Control Board Organizations without a CCB tend to struggle from a number of common issues. They are as follows: No Control of Changes to Processes: Go to various parts of the organization and there will be different processes, templates, and guidelines used for managing projects. Processes are not standardized across the organization. Like islands it is virtually impossible to link all of the different areas together. No Process Feedback from the Orqanization: One part of the organization may discover a very effective project management best practice but other parts of the organization are left to serendipity because there is no medium for sharing knowledge. No "center of excellence" in the organization. e

No Prioritization of Process Improvement Efforts: The project pipeline gets inundated with improvement projects and there is no discernable priority. The implementation may fail if improvement efforts do not meet organizational expectation.

Implementing the Change Control Board The CCB is made up of volunteer managers from throughout the organization. Each manager devotes a few hours a week to meet with the group and evaluate process issues and change requests. The CCB is responsible for making sure the organization can provide feedback regarding organizational processes. As the feedback starts coming in, the CCB will categorize the feedback and evaluate each issue and change request to determine if they are relevant. A good rule of thumb for the number of Process Engineering folks needed to augment the CCB is as follows:

Numbet of Projects

CCB Participants

20 Projects 40 Projects

1 Process Engineer 2 Process Engineers

Number of Hours Worked Couple hours a week Couple hours a week

To implement the CCB in an organization, please review the CCB Implementation Checklist at the end of this chapter.

Organizational Process Feedback Organizational feedback is essential for processes to be institutionalized in organizations. Civil government has built in feedback mechanisms (e-g. emailing a congressman, calling a congressman, lobbying a congressman by providing lunch, etc.). In like manner, Process Republics need feedback from the user community. The voices of the constituency must be heard for processes to be effective.

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Feedback loops are essential for any dynamic system to sustain itself. From the thermostat on a heater, to gauges in a car, feedback loops provide the mechanism for keeping systems functioning properly (or in homeostasis). Systems must receive both positive and negative feedback (bipolar). Without bipolar feedback it is virtually impossible to keep a dynamic system functioning properly. When taking the family on long road trip, the driver (project manager) must continuously scan the feedback gauges (dials, sensors, kids, wife, etc.) for positive and negative feedback. If the driver does not continuously scan the gauges, the vehicle could run out of gas, overheat, or the kids could have an accident in the backseat (spoken from experience

a).

0

~ Feedback ~ 3Loop~

The diagram to the right depicts the process feedback loop in 0 ~ ~Process 9 .governance holds entropy at bay. The feedback loop shows how feedback from process users and process leaders arrives at the CCB. The CCB reviews all feedback and determines whether proposed process changes are beneficial to the organization. If so, the CCB will group all similar feedback and assign priorities to improvements. All process changes will be delegated to the PATs. Organizations must have a formal process feedback loop for their processes to be truly institutionalized. Process Republics have a natural built in feedback loop because of the representative system. Process users can give vital bipolar feedback on processes to their supported PATs. The following are the elements involved in the process feedback loop in organizations: User Communitv Feedback Forms: The PATs and CCB develop a form for process users to give positive and negative feedback. Feedback forms are then taken before the CCB to evaluate the rationale behind change requests. Many times users will be brought in to explain desired changes. Reward System (e.q. Penny for Your Thouqhts): Some companies reward improvement ideas from process users. The users are given incentives to come up with time and money saving ideas. The users are given a percentage of the savings (or additional revenue) it brings to the organization. Organizations not rewarding improvement ideas are developing a culture of non-innovation. An employee of a large U.S tractor manufacturer invented a mechanism to improve tractor assembly job performance. He never shared his innovative tool with other members of the organization because there was no benefit to him. Sharing the device might have actually been a detriment to him (new performance expectations and no reward)! Proiect Lessons Learned: After every project, a project lessons learned document is completed by the project team. This lists all the things that went well with the project (and processes) and all the things that did not go so well.

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PMO Judicial Reviews: PMO reviews can look for trends in process compliance and spot any issues with processes that might exist. They can then make recommendations to the Change Control Board. Qualitv Auditing Group: The Quality Auditing Group has the unique ability to make recommendations based on being in the trenches with the process users. Change recommendations are filtered through the CCB. PATs: PATs working on a particular area of the process will make process update recommendations to the CCB.

4.

4.

5 6. 7. 8 9.

10. 11. 12. -

13.

~

20 Projects (in the organization

1 Process Engineer

Full Time (40 hrs)

40 Projects (in the organization as a whole)

2 Process Engineers

Full Time (40 hrs)

PAT participants need to be trained on all aspects of OPM? and process improvement tools and techniques. Augment PATSwith full time process engineers when needed Schedule weekly PAT meetings Set up phases for process improvement and select the domains and processes to implement in each phase Have the Judicial Branch (PMO) review and approve all process improvements prior to implementation Have the Executive Branch (PRB) review and approve all process improvements prior to implementation Do pilot implementations of all process improvements prior to release to the organization Work with the Quality Auditing Group to determine which parts of the process are most essential to audit Work with the training organization to develop process training on all improvements Make sure process updates are communicated to all members of the organization Implement the processes -.-/

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~ h a h g eCbntiol&4did l @ ~ I ~ & ~ ~ # ~ r i ' ~ ~ f *:, i e' c k i f s ),. . ~ 9

4

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. . - , . Step Description :Steps Train organization on the need for a Change Control Board (CCB) 1. Secure Senior Management commitment for establishing a CCB 2. Select line level managers from throughout the organization to donate a few 3. >

*

c -

,

L

$

hours a week to the CCB. The following guidelines are for the number of part time functional managers needed for the CCB: 10 Projects 20 Projects

4. 5

6. 7. 8

9. 10. 11. 12.

I 1 Functional Manager

1 2 Functional Managers

1 2-4 hours a week 1 2 4 hours a week

CCB participants need to be trained on all aspects of OPM3@,process improvement tools and techniques, and the updated processes. Schedule weekly CCB meetings Set up feedback processes for the organization to voice process complaints and improvement ideas Review all process change requests to determine if they are relevant to the organization Assign priority to process improvement efforts for PATS Approve PAT processes Work with the Quality Auditing Group to determine which parts of the process are most essential to audit Work with the training organization to develop process training on all improvements Make sure process updates are communicated to all members of the organization

Chapter 5: The Legislative Branch of Governance

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Chapter 6: The Judicial Branch of Governance

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Chapter 6: The Judicial Branch of Governance Judicial Branch

0 ~ requires ~ that 3 Governing ~ Bodies be established for the implementation of BPS and processes in the organization. The Judicial Branch is the third group of Governing Bodies that should be implemented in the organization. The Judicial Branch of process governance is essential for interpreting and adjudicating processes in organizations. OPM~@BPS (2140,2190,5420,6100,6130, and 6140) require that a Governing Body be assembled for project management guidance, project performance reviews, and process compliance issues. This Governing Body comprises the Judicial Branch which has the power to interpret processes and apply corrective action when processes are not adhered to. The Judicial Branch consists of a small number of full time staff hired to facilitate project management in the organization. The following is the Judicial Branch Governing Body:

Proiect Manaqement Office (PMO) Governing Body required to review project and process performance in the organization (2140, 2190, 5420, 6100, 6130, and 6140) Some organizations do not like the idea of having a judicial role because it has the connotation of a judge and jury handing out harsh penalties to the accused. The PMO should be viewed more like the juvenile court system where their role is to guide troubled project teams. They oversee and make certain projects are in compliance with processes, yet are compassionate and understanding when it comes to breaches of the process. They are not out to punish teams not in compliance, but rather to help them get back on track (although corrective action may be needed if teams persist in not following the processes of the organization). The PMO evaluates organizational project execution to determine if projects, programs, and portfolios are performing as required. The PMO leader is selected by the CEO or President of the organization and reports to them. PMO staff are selected by the PMO leader. The PMO presides over the different levels of Management Reviews (e.g. project, program, portfolio, enterprise, etc.). It reports performance numbers back to the Executive Branch (e-g. Earned Value, Process Breaches, Issues, Risks, etc.). The PMO also reviews processes to make sure they align with organizationalstrategy prior to executive approval and implementation.

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PMO The PMO is also known as the "Program Management Officenor the "Project Management Center of Excellencen. It is the group that maintains project management standards in an organization. PMOSare built using industry accepted project management standard such as the PMl's O P M ~ @ PMBOK, , Program Management Standard, and Portfolio Management standard. Companies worldwide accomplishing work through projects are realizing the benefits of the PMO. As mentioned in chapter 1, approximately 80% of projects fail. The PMO is a key element for identifying struggling projects early in the project life cycle. The PMO works with the project team to get the project back on track. If the project does fail, it analyzes the reasons for project failure. It then orchestrates updates to processes and procedures to insure project sukess in the future. In larger organizations, the PMO may be comprised of the following: PMO Leader / Executive: Reports to the CEO or GlLl and works with executives to develop the strategic plan. Responsible adjudicating portfolio execution and process issues at the portfolio domain. Reports performance statistics to the Executive Branch and authorizes / facilitates PMO reviews of Portfolios, Programs, and Projects. The PMO Leader often times is a participant in the "Phase Gate Review". Program Review Leader: Reports to the PMO Leader and is responsible for adjudicating program execution and process issues at the program domain. Works with the PMO leader to report PMO statistics to Executive Branch of organization. Facilitates the Program Management Review of programs and escalates when necessary. Some organizations combine program and project reviews. Proiect Review Leader: Reports to the PMO Leader and is responsible adjudicating project execution and process issues in the Project Domain. Works with the PMO Leader in order to report PMO statistics to the Executive Branch of organization. Facilitates Project Management Reviews of projects and escalates when necessary. Process Enqineers: Process engineers are typically assigned to quality organization, however in some cases may report to PMO. Responsible for working with the PATSto develop organizational processes. Trainers: Trainers are assigned to the training organization, however in some cases they may report to PMO. This person is responsible for developing training on all organizational project management processes. In smaller organizations, the Judicial Branch (or PMO) may only be comprised of a PMO Leader and a Process Engineer.

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Roles and Responsibilities of the PMO

There are four primary roles of responsibilityfor the PMO in organizations. Beneath each role are a number of activities that the PMO oversees to assure successful execution of projects in organizations. Consultinq and Mentoring assisting in the initiation, planning, execution, controlling, and closing of projects in the organization. Performance Reviews: periodically review the conduct of projects based on performance criteria. Metrics are captured for all projects, programs, and portfolios. Project proposals are also evaluated to determine if they are worthy to pursue. Process Governance: provide governance of organizational project management processes when conducting projects in the organization. Traininq and Education: facilitating training and education for project teams to make sure project team members have the skills necessary to successfully complete projects. Consulting and Mentoring

One role of the PMO in organizations is project mentor and consultant. The PMO should be staffed by seasoned project management professionals who can assist project teams. In some organizations the PMO manages the resource pool and provides resources for struggling projects. The following are the mentoring and consulting activities the PMO provides to the organization: Proiect Help: The PMO may assemble a ProjectlProgram Start-Up guide to assist project and program managers with initiating and planning a new projectlprogram. It may help with project management tool questions such as, "How do Ifind the critical path in an MS Project schedule?", or "How do I set up a master program schedule to manage multiple projects?" The PMO may also provide guidance on project management process issues frequently arising with project teams. Issue Escalation and Resolution: When risks and issues arise during the execution of a project, the PMO helps project teams resolve them. Most projects have varying levels of issues and risks. The PMO helps escalate risks and issues not dealt with at their current level. For instance, if there is a shortage of operations personnel to complete a project, the project manager may not have the power to negotiate a solution. The program manager, portfolio manager, or even the PMO leader may have to get involved to find a solution with the VP of Operations. Manase Orsanizational Prosram Resource Pool: In many organizations the PMO manages the Resource Pool. Project Resource Pools tell the organization how many projects can be in the project pipeline simultaneously (given the limited resources). The PMO evaluates resource usage to determine the resource needs of all projects and programs in the organization. It can also conduct "what if" analysis of resource needs for potential projects in the future. Resource contentions between projects are also evaluated and monitored as projects progress through the pipeline.

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Proiect Recovew: When projects are showing signs of failure, the PMO may step in to assist in project recovery. The PMO may assign additional personnel to a project. Or they may lay out specific steps needed by the project team to bring the project back on track. The PMO may assist in determining whether the contract must be renegotiated with the customer. Additional corrective action may include sending project team members to additional training, bringing in consulting help, etc. Staff Auqmentation: In addition to managing the resource pool and making sure resources are balanced across projects, the PMO makes use of knowledge management databases to keep track of skill sets and competencies of each staff member. With troubled projects, it may be necessary to have a PMO member fill in until the project is back on track.

Organizational Project Management Performance Reviews Most organizations implement PMOs because of project performance issues. However another crucial role for PMOs is that of performance reviews. Standardized performance reviews should be held at all three domains of organizational project management; project, program, and portfolio. Reviews at the portfolio domain tend to focus more on strategic alignment and cost benefit analysis. Project and program domain reviews are more detailed. They evaluate things like earned value, critical path, and project risks and issues. Reviews at all domains will evaluate process compliance issues. The PMO receives periodic status reports from all project, program, and portfolio teams. The Quality Auditing Group will submit periodic process compliance reports to the PMO for input. This report indicates which teams are not in compliance with processes. These inputs will help the PMO decide which teams should be invited to periodic performance reviews. Based on performance thresholds established by the PMO, a project may be required to attend a performance review (e.g. Schedule Performance lndex is lower than .85,or Cost Performance lndex is below .85,etc.) Performance review meetings should have agendas, minutes, and action items. The following are the performance reporting activities the PMO provides to the organization: Proiect Performance Review: The PMO Project Management representative facilitates a review team to adjudicate performance and process issues at the project domain. A corrective action template should be completed by project managers on troubled projects. The PMO should give advice and corrective action mentoring to help bring troubled projects back on track. Some organizations combine the Project and Program reviews. Pro~ramPerformance Review: At the program level of organizational project management, the PMO Program Management representative facilitates a review team to adjudicate performance and process issues at the program domain. The PMO should give advice and corrective action mentoring to help bring troubled programs back on track. The Project and Program Management Reviews are sometimes combined. Metrics Reportinq to the Orqanization: PMO works with the Quality Auditing Group to aggregate Project, Program, and Portfolio metrics to ascertain overall organizational performance metrics. Metrics are then reported to the organization.

Process Governance The PMO is an essential component of process governance. Without governance over processes in an organization they will be difficult, if not impossible, to sustain. The following are the process governance activities the PMO provides to the organization:

Chapter 6: The Judicial Branch of Governance

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Judicial Review: Reviews all newly developed processes to determine if they align with organizational goals and objectives. Also evaluates each process to determine if it is beneficial to project execution. Adiudicatina Process Issues: In many organizations, the Quality Auditing Group issues periodic reports to the PMO indicating which project and program teams are not in compliance with organizational processes. Teams not in compliance are summonsed to the PMO performance review. The PMO will determine root causes of process issues and offer guidance or prescribe corrective action. Customer Relationship Management: The PMO is also a focal point for fostering relationships with customers. The PMO works with project managers to provide the consistent service to the customer. It verifies that all customers are administered a customer satisfaction survey. Results are used to update and improve customer relationship processes in the future. Training and Education

Since the PMO is intimately involved with every project, PMO staff know what the organization needs in terms of project management training and skills building. The PMO will work with the training organization (or hire training personnel) to assist in training the organization. Additionally, the PMO is responsible for providing training to the Project management community within the company. The PMO should determine who should present the training (Internal staff, external staff, etc.). The following are the types of training the PMO facilitates: Project Management Traininq The PMO must make sure project management personnel have the right technical and people skills for their positions. The PMO should make training opportunities available for project managers to enhance their skill sets. This training should include all areas of organizational project management (project management, program management, risk management, scope management, time management, etc.). There should be different levels of project management training (basic, advanced, project, program, portfolio, etc.) depending on the needs of the individual. Training and professional development should be linked. Project managers should get CCRs or PDUs for everything they are trained on regarding project management. Process Traininq: Project management personnel should be trained on all internal project management processes. They should understand the history of the organization and why processes were developed in the first place. They should also be trained on all process artifacts accompanying processes. Unless the organization is trained on processes, they cannot be expected to follow them. Educational Op~ortunities:The PMO is a project management center of excellence for the organization. It should host monthly Project Management meetings called 'round tablesn(or "brown bag" lunches). It should discuss various topics at these meetings to help the project management community. It may bring in special speakers and have them present their different views of what it takes to successfully execute a project. New trends and techniques in project management should be discussed to further project management in the organization.

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Dangers to the PMO

One of the main problems PMOs face is maintaining executive support after implementation. To establish a sustaining need for the PMO, the organization should be assessed prior to implementation using the O P M m Self Assessment or OPM363 Productsuite Assessment. This will serve as a baseline for improvement. The PMO must have a charter with a clear mission containing goals, objectives, and baselines. PMO progress should be tracked and measured against initial baselines. Example: what percentage of projects is over budget? What percentage of projects missed release date? What percentage of projects have production defects? What is the overall customer satisfaction rating? How many repeat customers do we have? Etc. PMOs need to continually seek feedback from the organization regarding their performance. They may send out surveys. They may solicit anonymous feedback from a feedback page on their website. They may set up a suggestions box. The following are the things to beware of when implementing a PMO: Not Showinq Value: PMO must show value or it will be cut. As listed above, the PMO needs to establish five or so Key Performance Indicators to that are frequently reported to the organization for success. Organizational performance prior to the PMO must be baselined to do this. Overlv Permissive: The Judicial Branch must be consistent with how they adjudicate process and performance issues. They must not give in to the "we are 99%" complete excuse. They should demand process compliance and seek answers when teams are not in compliance. They must also demand corrective action for non-compliance and performance issues. Proiect Bias: The PMO must be objective with all projects, programs, and Portfolios or they will end up alienating other teams. They need to be consistent in their policies. No Consistentlv Scheduled Reviews: It is crucial for the PMO to have regularly scheduled reviews using tools like the RedNellowlGreen report or Earned Value reports for project teams. If reviews are not regularly scheduled they will start to fall by the wayside. No Help or Guidance: The PMO must never be viewed as the "mean judge". They must offer ideas and recommendations to struggling teams. Corrective action for the judicial branch can come in many forms. One form of corrective action might be additional process work (e.g. filling out a corrective action report). Another might be additional training on the processes (e.g. having to attend process training once again). Another might be a report to the team's functional management regarding the project's performance. The most severe form of corrective action might be to replace the project manager of the team.

Organizations without PMOs As project management knowledge and understanding has matured, it has become apparent that Organizations without PMOs tend to struggle from a number of common project management issues. Some of them are as follows:

Chapter 6: The Judicial Branch of Governance

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Lack of Proiect Manaaement Culture: Many organizations make valiant efforts to instill a project management culture in their organizations however they fail to win the hearts and minds of populace. Lack of user participation, training, and education prevent the PMO inculcating an understanding project management in the organization. Different Terminolw\~:Different terminology and definitions for project management are used across the organization. In one area work is called a project. In another part of the organization the work is called a program. No Overarching Proiect Management Process Framework: Go to different parts of the organization and there will be different processes, templates, and guidelines used for managing projects. Processes are not standardized across the organization. Like islands it is virtually impossible to link all of the different areas together. No Forum to Share Proiect Mana~ementBest Practices: One part of the organization may discover a very effective project management best practice but other parts of the organization are left to serendipity because there is no medium for sharing knowledge. No "center of excellence" in the organization. Lack of Governance: If the organization has standardized processes, there is no guiding force to assure they will be adhered to. A company could invest millions in developing a process framework only to see it erode because of benign neglect. Lack of Control of the Proiect Pipeline: Ask most people in the organization if they know what projects are currently in the project pipeline. Then ask them if they know projects are coming in the near future. Not surprisingly, there is little visibility to the project pipeline in organizations. No Help on Proiects: Project managers are left to fend for themselves regarding project issues. Functional managers, though extremely important in the corporate community, are not always the best source for getting project help.

1

No way to Brina New Project Manaqers up to Speed Quickly: Getting "thrown into the deep endnis the best way to describe the initiation of new project managers in most companies without a PMO. No Method for Recovering Failinq Proiects: Since there is little project oversight in companies without PMOs, the organization does not recognize the need for project recovery until it is too late. When it is finally recognized, the organization goes into emergency mode which is disruptive to all other projects. Poor Customer Relationship Manaaement: Because all projects are different, there is no formalized standard for managing customers. There is also no standardized way for projects to get customer feedback. intra-team People Issues on Proiects: There are no people related processes in the organization. PMOs help projects with people issues. People related activities include: conflict management, consensus building, forming, storming, norming, performing, etc. Process related things include: scope, time, cost, etc.

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Different Flavors of PMOSfor Organizations There are many different ways to set up the PMO in an organization. Every organization is unique; some are functional, some are matrix, some are projectized, some are a mix of all three). The following are common structures:

PMO in a Functional Organization

Manager-

F&tional Manager

"Manager

___I

*Member I

Member

Member

[ { T I

' { Y e 7 ltlernber '

Member

In the functional organization, project work and coordination is managed by the functional managers. The PMO is a provider of guidance and assistance to project teams but has little authority to enforce process compliance. The PMO leader may have a small full time staff or a virtual organization of volunteers from throughout the organization.

PMO in a Matrix Organization Executive

{=I

-=

Leader

-

Managers

Managers

Manager ---

Manager

-

Manager

In the matrix organization, project work and project coordination is managed by the portfolio, program, and project managers. Like the functional organization, the PMO is a provider of guidance and assistance to project teams. This PMO has more authority in the matrix than the functional organization because the organization has a project management culture. The PMO leader may have a small full time staff or a virtual organization of volunteers from throughout the

8

Chapter 6: The Judicial Branch of Governance

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organization. This structure is more common because it has proven more flexible for multi-project management.

PMO in a Projectized Organization

--

~7 1 . i Member,,

Member

1 ~ 1 MemGr

In the projectized organization, the PMO has the most authority to enforce process compliance. The PMO has formal authority over all projects and project leaders. All team members report up to their project managers. All project managers report up through their program managers. All portfolio managers report up through the PMO leader. This type of structure is not as common today because staff tend to work on multiple projects simultaneously. Other structures are more flexible for multi-project management. PMO in a Blended Project Functional Matrix Organization

Leader

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In the blended organization, the PMO leaders are functional managers in the organization. The PMO has a strong amount of influence in the organization. The PMO Leader has a portfolio leader, a program leader, and a project leader reporting to them as well as administrative assistants. The PMO Portfolio leader is in charge of all portfolio managers. Portfolio managers have indirect authority over all program and project managers reporting to them. The PMO program leader is in charge of all program managers. Program managers have indirect authority over all project managers reporting to them. It is expected that all PMO Leaders have advanced organizational project management knowledge and skills.

PMO's Relationship with Other Parts of the Organization Other parts of the organization must interface with the PMO to successfully deliver projects in the organization. The PMO must work closely with training to deliver project management training to the organization. It must work with the quality and tools departments to ensure process improvement implementation. It must work with Accounting for vital project management metrics.

J-'(

Training

Dept.

Quality The PMO must often work closely with the Quality Department. The Quality Auditing Group provides personnel to facilitate process auditing as new processes are developed. Process compliance information is sent to the PMO for evaluation. Project teams are invited to PMO reviews based on this information. The following are the quality personnel utilized by the PMO: Qualitv Process Enqineers: These folks are responsible for providing technical guidance to the process improvement teams. Using formal methods, they map processes based on research from the process improvement teams. e

Quality Auditors: These folks are responsible for auditing the newly created processes to verify compliance. They also provide valuable feedback as to the effectiveness of processes.

Training The PMO must often work closely with the Training department. The Training department provides personnel to the PMO to facilitate training for the organization. When improving organizational project management processes, it is the PMO's responsibility to ensure training is developed to orient the organization to the new processes. The following are the Training personnel utilized by the PMO: Traininq Develo~ers:These folks are responsible for assisting the PMO in developing new project management training courses. They may work with the PMO to develop general and advanced project management courses or they may develop specific training courses to orient the organization to the new process.

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Trainers: These folks are responsible for delivering the training to the organization. Some organizations fill this role by having the PMO leaders administer the training. Other organizations bring in outside help from the professionals. Accounting and Finance

One important role of the PMO is to make sure project personnel time burned on projects is entered properly into the project accounting system. All costs on projects need to be allocated correctly! The PMO will work vefy close with the accounting and finance departments in verify this. Financial analysts may be assigned to projects from accounting and finance to assist the PMO is verifying project cost compliance. The PMO will work with accounting and finance to develop accurate estimating models for upcoming projects. The PMO will also work with accounting and finance to set "risk reserve" amounts for each project. Tools Support

The PMO will need to work closely with the Tools Support group to distribute and maintain project management software. Many organizations have internal IT groups to manage tools such as the corporate internet, databases, project management software, issue tracking databases, etc. Project managers throughout the organization will need to have the necessary software to conduct their jobs. They will need organizational support to help them when they have tool issues. The PMO also works with the tools organization to set up an archive for all project materials. It also makes sure all teams use a common repository for storing project information. Other Groups

The PMO may also work with other groups like the proposal group, marketing group, research 8 development group, etc. to help win new projects for the organization. The PMO will many times develop estimating models to put in proposal and marketing material. The PMO also gives technical advice to personnel working on bids for technical projects. Implementing the P M O

When considering a PMO implementation, there are a number of activities required to determine if a PMO is feasible for the organization. There is typically one full time PMO member for each domain and a PMO Leader. PMO staff should have a professional project management background. They should have experience managing projects, programs, and portfolios. They should be trained in project performance review techniques like Earned Value, Critical Path Method, Critical Chain, etc. They should also understand the principles of quality auditing and process compliance. Please see the following PMO Implementation Checklist for steps to implement the PMO.

Chapter 6: The Judicial Branch of Governance

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Every Organization Can Implement OPM3 !

Assemble review boards Implement PMO processes, tools, and training Communicate PMO progress to the organization Work with the Quality Auditing Group Work with Training

SECTION Ill (Implementing OPM3Q)

Chapter 7: OPM3@Process Framework

Every Organization Can Implement OPM3@!

Chapter 7: O P M ~ Process @ Framework Tying all OPMP Components Together The first six chapters of this book are intended to give the reader an understanding of the ~ and the ~ Governing 3 ~ Bodies needed to support it. The next six chapters components of 0 (including this one) are intended to give inteknal and external consultants the tools they need to implement the model. To implement OPM3 In organizations, all of the components must be implemented. An analogy for tying the 0 ~ components ~ 3 together ~ is the construction analogy. ~ are ~ Buildinq Materials: At the lowest level of 0 Caps, Outcomes, and KPls. They are the material that organizational processes are made out of. There are one or more Outcomes and KPls per Cap. And there are three or more Caps for each BP. All of the Constituent Caps of the BP must be fully implemented in order to take credit for the BP. These materials though need to be assembled into a strong foundation. That is what the BPS are for.

3

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Foundation: The building bbcks or foundation of 0 ~ are the ~ BPS. 3 BPS ~consist of Caps, Outcomes, and KPls. It is through implementing BPSthat Organizational Project Management Maturity and Performance are increased. Without BPS, improving organizational project management maturity is like trying to build a house on sand. BPS, however, need forms or a framework to be assembled properly. That is where the process framework fits in. Framework: To build on the foundational BPS, a "process framework" is needed. The 0 ~ Process ~ 3 Framework provided in this book is needed to encapsulate BPSand Caps. It is through assembling these processes that the frame of organizational project management is assembled. Once the process framework is assembled, nothing stands in the way of Operational Excellence(1) in an organization. Implementation: The goal of OPM? is to provide a path for organizations to implement Organizational Project Management BPSto increase perfomlance. When the 0 ~ Process ~ Framework 3 ~ augments or becomes the Organization Quality Management System, it helps organizations deliver projects on schedule, on budget, and rock solid on scope and quality! It also has the governance and Governing Bodies necessary to sustain all improvements.

~

Chapter 7: OPM3@ Process Framework

Every Orsanization Can Implement OPM3@

Framework Processes for each Domain As stated in earlier, the goal of this book is to give Internal and external consultants the tools and tips they need to create a contiguous organizational project management process framework. Processes should address every aspect of organizational project management. Additionally, there should be inter-domain touch points between processes. Processes from one Domain should interact with processes from another domain.

Project Domain Process Framework To successfully implement OPM~@, a framework of processes and sub-processes should be developed in each Domain to encapsulate BPS. The following diagram depicts the framework of processes recommended at the Project Domain. Companies and consultants are encouraged to tailor the framework below or to come up with their own framework. Appendix A contains an example of the Project Risk Management sub-process with encapsulated BPS, Caps, Outcomes, and KPls. Project Domain processes are broken out into two separate categories. Project Management processes and Technical Processes. Within the Project Domain there is one Process and twelve BPS cover Sub-Processes. Sub-processes are called out by Processes. While no OPM~@ technical processes, it is recommended that project management processes be coupled with a product development life cycle for technical projects. Technical processes may consist of CMMI@ processes, Agile, SCRUM, etc. I

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Customers Organization being assessed

Chapter 8: Standardizing OPM363 Processes

Every Organization Can Implement OPM3@

Each step in the SlPOC document is then expanded out:

4

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Action Review the 0

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The assessment team lead works with the organization to be assessed to determine ~ High~Level3Assessment ~ participants.

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2

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ETVX Model ETVX stands for 'Entry Criteria', ' Tasks', ' Verification', and 'Exit Criteria'.(2) Entry criteria define what conditions must be met before the process is performed. Tasks specify the actions within the process. Verification identifies test points within the process and defines the tests and criteria for checking these points. This enables problems to be caught close to their cause, reducing rework and scrap costs, and enabling problem causes to be addressed. Exit criteria define what outputs are required and what quality these must be to meet the needs of customer processes. Exit criteria may be derived from the entry criteria of customer processes.

inputs--

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' made to initiate a project.

customer request

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Exit High Level Scope Statement is approved

Complete Project Documents

Technical Requirements are approved

Submit Project Plan to Customer

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High Level Scope Statement

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Project Issues Log

Chapter 8: Standardizing OPM3@Processes

Every Organization Can Implement OPM3@

Each step in the ETVX document is then expanded out with bullet point activities needing to be accomplished to comply with the step.

The project manager conducts project kickoff meeting(s) with affected groups and individuals to: = Discuss customer request to initiate a project and the high level scope statement. Request high level project estimates as input to the Project Plan Discuss customer requirements. = Determine key dates and key deliverables for the project = Determine the necessity of scheduling follow-up meetings to track issues, action items, etc. Ensure meeting minutes are documented and any project issue is tracked and resolved.

2

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lDEF Model The lntegratea vtfinition (IDEF) model has a number of standards (IDEFO-IDEF14), each of which can be used for modeling specific types of information through graphical representation.(3) From an organizational project management point of view, the IDEF3 standard is most useful for process mapping standards. IDEF3 is a method to model and map business processes.

Program Standard

Chapter 8: Standardizing OPM30 Processes

Every Organization Can Implement OPM3@

Each step in the IDEF document is then expanded out with bullet point activities that must be accomplished to comply with the step.

The Paint Engineer retrieves part off of the conveyor and does the following: verifies liquid paint is at appropriate level in painting machine verifies that all protective gear is properly in place applies paint to part verifies that all areas of part surface painted

CIMOSA Model CIMOSA is a formal process model developed by a consortium of 30 major European vendors (e.g. IBM, HP, DEC, Siemens, Fiat, and Daimler-Benz).(4) CIMOSA is a model-based enterprise engineering method which categorizes manufacturing operations into Generic and Specific functions. CIMOSA maps generic functions which are performed in every enterprise regardless of the type of organization or business area. It also maps specific functions that are dependant upon the individual enterprise. Examples include processes for the design of products, and processes for production activities, processes for the shipment of products, processes for the maintenance of equipment, processes for the processing of orders, etc.

Process Action Teams Processes should always be developed by a cross functional representation of the organization. As discussed in the Process Governance chapters, if process users do not have a voice in creating the processes, there will be no commitment. PATs are the legislators of process governance. They work with the process engineers to create processes for the organization. Once processes are created they are reviewed by the CCB. If processes make it past this group, they then go on to the Executive Branch for approval (or veto). Since PATs are comprised of representatives of the organization, processes receive much better reception by the user community. Additionally, PATs do not tend to suffer from "groupthink" which can be detrimental to the organization. PATs need to make sure everyone has a voice in the development of processes. If users are still not satisfied with processes that have been developed, PATs must solicit user feedback so processes can be updated for better use in the future. With many companies electing to purchase processes rather than build them from scratch, PATs are also extremely important in tailoring the processes to each organization's specific needs.

Chapter 8: Standardizing OPM3B Processes

Every Organization Can Implement OPM3Q

Process Elements The outputs of the Legislative Branch are the OPM~@' Process Elements. Process Elements are the processes, sub-processes, and tools project teams use for each project. They are pages of the process playbook. The process elements are as follows: Policies: A plan or course of action in a business intended to influence and determine actions, decisions, and other matters: A course of action or guiding principle. Processes: A set of common tasks used to creates a product, service, process, or plan to satisfy a customer or group of customers. A sequential series of steps leading to a desired outcome. Sub-Process: the sequence of specific actions or instructions to be followed in solving a problem or accomplishing a task.

Sub-Processes

Templates: A pattern or gauge used as a guide in development or creation of something accurately Guidelines: Document to help process users fill out templates. Serves as a standard way of completing process templates. Checklists: A list of items or tasks for comparison, verification, or other checking purposes. A list of items to be noted, checked, or remembered

Every process must have a policy authorizing it. Processes call out sub-processes and templates. For instance, the Project Integration Management process calls out the Risk Management sub-process which in turn calls out the Risk Management Register template and checklist. Each template has an associated guideline explaining how to complete the template with the correct fields.

Why Process Elements are Necessary? It is important to have all of these elements when developing organizational processes. Without templates, processes are convoluted, unwieldy, and difficult to manage. Without guidelines, templates are difficult to fill out or complete. Checklists are called out by both processes and subprocesses. They provide a mechanism for process users to quickly negotiate a process in expert mode. Transactional processes (or service processes) can be more complicated than manufacturing processes because of the uncontrolled environment. In a manufacturing environment, processes are set up in almost an assembly line fashion which makes process compliance somewhat easier (less choices). In a transactional environment there are many more variables and therefore more difficulty in setting up processes. Project management involves much service oriented or transactional work.

Chapter 8: Standardizing OPM30 Processes

Every Organization Can Implement OPM3@

Policies A Policy is a plan or course of acfion in a business infended to influence and determine actions, decisions, and other mafters. It is a course of action or guiding principle.(s) Policies are used to authorize and empower the creation and use of processes in the organization. They clearly state the intention and goals of organizational processes and inform the organization of how deviations from the process will be handled. In project management terms, this is the "charter" of the process. Every process in the organization should have a corresponding policy authorizing it. When .. crafted correctly, Policy should contain references to all aspects of the process it represents and state how deviations from the process should be handled.

Title

Risk Management Process Oversight and Compliance Policy

Purpose

The purpose of the Risk Management Oversight and Compliance Policy is to ensure oversight, accountability, and compliance to the Risk Management Process.

Scope

This policy applies to all project teams within XYZ organization throughout the project's life cycle.

Goals

The goals of the Risk Management Process Oversight and Compliance is as follows: 8

To ensure: A thorough understanding of the requirements of the Risk Management Process by all project team members. All project team members are accountable and expected to comply with the process as it applies to their applicable roles on the project team

= Oversight by Quality Auditing Group and functional managers to ensure compliance to the Risk Management Process by applicable staff members. Policy

In order to meet these goals, XYZ organization will implement, adhere, and improve the Risk Management Process: 8

Any deviations to the Risk Management Process Oversight and Compliance policy within XYZ organization must be documented in the Project plan and approved by the PMO Project Management Review.

Approvers Signatures General Manager and Staff Company XYZ

Director of Quality Company XYZ

Vice President, Program Management Company XYZ

Chapter 8: Standardizing OPM3G3 Processes

Every Organization Can Implement OPM3@

Processes

A process is a set of general tasks over time that creates a product, service, or plan that will satisfy a customer or group of customers; a sequential series of steps leading to a desired outcome.(s) A process adds value and transforms inputs into more useful outputs. The processes become the playbook or marching orders of the organization. They guide and direct daily activity using documented steps to add value to organizational inputs. Example processes can be seen above in the SIPOC, ETVX, and IDEF diagrams.

A sub-process is the sequence of specific actions or instructions to be followed in solving a problem or accomplishing a task. Sub-processes tend to be more detailed than processes. Some organizations avoid the concept of sub-processes in favor of calling everything processes. This is acceptable and works for many organizations. Sub-processes seem to work best when defining a specific low level process and being called out by a higher level process. The following is an example of the Risk Management Sub-Process. -

---

Title Scope

Risk Management Sub Process This process is used by all XYZ company projects.

Purpose

The purpose of the Identify and Manage Risks process is to identify and document a project's risks.

Usage

Project teams will use this process to: m

Inputs

--

ldentify and document risks during initiation and planning. This process is called from: Process 123: initiate the Project Plan

Following are the inputs to the Identify and Manage Risks process: m

Risk Assessment Checklist Risks from most recent year or version Project WBS work packages

Outputs

The following list describes the outputs of the Identify and Manage Risks process: Risk Assessment Worksheet Assessed and prioritized risks, documented in the Project Plan

Definitions

Contingency: A set of actions that will be taken in the event that a risk trigger is realized. Mitigation: A set of actions that is taken to reduce the probability that a risk will occur. Risk: A calculated possibility of suffering loss. Risk Impact: A measure of the degree of loss that would result if a given risk were realized. Risk Probability:A measure of the likelihood that a given risk will be realized. Risk Score: Overall risk rating for a risk (Risk probability x Risk Impact).

Every Organization Can Implement OPM3@

Chapter 8: Standardizing OPM3@Processes

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Chapter 13: OPM3@Self Assessment

Every Organizztion Can Implement OPM3@

Every Organization Can Implement OPM3m

Chapter 13: OPM3@Self Assessment

elements and artifacts to confirm or reject the results of the OPM? High Level Self Assessment. The comprehensive assessment is most valuable when it is conducted just prior to a Certified ProductSuite Assessment because it gives the organization a truer picture of organization project management maturity. ~ Comprehensive ~ 3 Assessment ~ is verifying The key activity required when conducting an 0 the existence of capabilities, outcomes, and KPls of Best Practices. This is accomplished by examining project work products (e.g. requirements documents, project plans, etc.) and process artifacts (e.g. templates, checklists, processes, etc.). Dangers to the OPM~@ Comprehensive Self Assessment

There are a number of things to beware of when conducting an 0~~3@Comprehensive Self Assessment. They are as follows: Not Providinq Sufficient Traininq: Training on PMI terminology is essential for the assessment to get reasonable results. If everyone in the group has a different definition for what a project and a program are, results will not be reliable. Attributing Responses to Participants: There must be non-attribution when the assessment is being conducted. Participants must not feel like the information they provide can be used against them. Otherwise they will clam up. Orqanization thinkinq OPM? Comprehensive Self Assessment Results are "Official": Even though O P M Comprehensive ~ Self Assessment results are corroborated, the assessment results are still unofficial. The organization must conduct an OPMY ProductSuite Rigorous or Desk Assessment to get official results. Participants Feelinq Like they are Being Audited: If participants feel like they are being audited they may only respond with answers that will not get them in trouble. Recommended Steps to Conducting an 0

~ Comprehensive ~ 3 ~ Self Assessment

There are a number of important activities that should be conducted in order to administer a ~ Comprehensive ~ 3 Self ~ Assessment. These steps are as follows: successful 0 Select Assessment Leader: A qualified candidate should be selected to administer the 0 ~ ~ Comprehensive 3 " assessment. This person should be a Certified Project Management Professional and have some experience conducting assessments. The Assessment Leader should also be able to assemble a quick course on the OPM~@ Comprehensive Assessment. PMI glossary definitions should also be familiar to High Level Self participants. The assessment leader selected for the OPM~@ Assessment is generally the best person for this position. Select Assessment Team: This team should be a subset of the original High Level self assessment team. Like the original team, participants should be selected from a cross functional representation of the organization. Any group affected by projects in the organization (e.g. Operations, Accounting, Marketing, MIS, etc.) should have representation on the assessment team. Educate Assessment Team: Participants on the OPM~@ Comprehensive Assessment team should have a high degree of familiarity with the OPM3 Standard and PMI Terms.

Chapter 13: O P M S Self Assessment

Every Organization Can Implement OPM3@

They should understand all O P M ~ terms @ like Domains, Stages, Best Practices, Capabilities, Outcomes, etc. Select Proiect, Proqram, and Portfolio teams with Cross Functional Representation to be Assessed: A number of teams across the organization should be invited to attend assessment sessions. Each team should bring all process artifacts being used for organizational project management or at least provide access to their artifact repositories. Administer Comprehensive Assessment: The Assessment Leader administers the 0 ~ Comprehensive ~ 3 Self ~ Assessment. All artifacts are reviewed against the Caps of the BPS identified in the 0 ~ High~Level3Self Assessment ~ to determine if they are implemented in the organization. Agqregate Assessment Results: Data from the assessment should be entered into the O P M Comprehensive ~ Self Assessment "Red I Yellow / Greenn Report. This report shows to what degree each of the BPS has been implemented. Each constituent capability of a BP will be scored Red, Yellow, or Green based on whether or not process artifacts confirm the existence of the Cap.

o o o

Red:

The Cap has not been implemented Yellow: The Cap has been partially implemented Green: The Cap has been fully implemented

Deliver OPMY Comprehensive Self Assessment Final Findinqs Report: The results of ~ High~Level3Self Assessment ~ should be delivered to the assessment team and the 0 to senior management to show the perceived level of organizational project management maturity in the organization. What to Look for when Conducting an OPMP Comprehensive Self Assessment When conducting an 0 ~ Comprehensive ~ 3 Self ~ Assessment, assessors should look for a few key items that will corroborate O P M ~ @ High Level Self Assessment Results. The following items are what separate good process from poor process: Process Elements: The organization should have policies in place to support process implementations. Processes and Sub-Processes should be readily available based on the boundaries set in the policies. Templates and supporting Guidelines should be available to support the processes. Checklists should be available to assist with process negotiation. Process Models: Formal process models (e.g. ETVX, IDEF, SIPOC) should be used for mature process implementations. D

0 ~ Process ~ Framework: 3 ~ A contiguous framework of processes should be available that encapsulate Best Practices with constituent Capabilities, Outcomes, and KPls. Process Governance Facilitators: Organizations should have organizational facilitators in place to support process governance. This includes a training program, a peer review process, commitment process, and an individual performance review process tied to process compliance. Process Governance Executive Branch: Some group in the organization should be established to provide executive sponsorship and approval for all processes and projects in the organization (Phase Gate Review Board). There should be some form of Quality

Chapter 13: OPM38 Self Assessment

Every Organization Can Implement OPM3@

Auditing Group set up to audit process adherence. Senior management should enforce process adherence. Process Governance Leqislative Branch: Some group in the organization should be established to create and implement processes. It should have Governing Bodies for the creation of processes and the administering process changes. Process Governance Judicial Branch: Some group in the organization should be established to oversee process implementation and adherence. They receive reports from the Quality Auditing Group and evaluate process and project performance. Red I Yellow I Green Report

The 'Red I Yellow I Green Report" is a great way to present overall final findings of the O P M ~ @ Comprehensive Self Assessment. If process artifacts to confirm the existence of a Cap, the Cap is scored "Greenn. If process artifacts only partially confirm the existence of a Cap, the Cap is scored "Yellow". If no process artifacts confirm the existence of a Cap, the Cap is scored "Redn. On questionable calls, it is up to the Comprehensive Assessment Team to determine what score each Cap gets. The only time a BP gets a Green score is if all of the constituent Caps are confirmed implemented. The Yellow score is when some of the Caps are confirmed and some are not. A Red score is given when no constituent Caps are confirmed.

Chapter 13: OPMm Self Assessment

0

4

Every Organization Can Implement O P M W

~ Comprehensive ~ 3 ~Self Assessment Process

Step 1 m The assessment team lead works with the organization that is to be assessed to determine the projects to be reviewed for the 0 ~ Comprehensive ~ 3 Self ~ Assessment. The assessment team lead conducts an overview training session to introduce participants @ and the O P M ~ Comprehensive @ Self Assessment. to the O P M ~ model m The assessment team lead selects participants to be a part of the 0 - ., . Self Assessment review panel.

~ Comprehensive ~ 3 ~

m The assessment team reviews the O P M ~ Knowledge @ Foundation prior to conducting the Assessment. Guidance It is recommended that a formal training session be administered to the teams being assessed to assure knowledge and understanding of the model. It is recommended that the O P M ~ Comprehensive @ Self Assessment be treated like a project with all project documentation.

Chapter 13: O P M B Self Assessment

Every Organization Can Implement O P M m

m The assessment team lead schedules facilities for the assessment. The assessment team lead with the Comprehensive Self Assessment review board administers the OPM? Comprehensive Self Assessment to participating teams and is available for answering questions. Process artifacts for each project are reviewed by participants of the Comprehensive Self Assessment review board. The assessment team lead compiles the results of the OPM? Comprehensive Self Assessment using feedback from the Comprehensive Self Assessment review board.

3

Interpret Results The assessment team lead and Comprehensive Self Assessment review board compiles the results of the OPMY Comprehensive Assessment and creates a presentation based on the findings. The assessment team lead and Comprehensive Self Assessment review board presents the results to project team participants and then the organization's management team.

Guidance It is recommended that the Comprehensive Self Assessment results presentation be in the form of a Power Point presentation or other using graphs and charts showing results.

REFERENCES (1) Organizational Project Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

(2-15) Reproduced from the OPM3@online web site, Project Management Institute, Inc. http://opm3online.prni.org

Chapter 13: OPU3C3 Setf Assessment

Every Organization Can Implement OPM3m

Chapter 14: O P M S ProductSuite

Every Organization Can Implement OPM3@

Chapter I& 0 ~ Productsuite ~ 3

~

ProductSuite

OPM? ProductSuite is a comprehensive toolset designed to help organizations implement the O P M Standard. ~ The toolset helps users apply the standard globally and consistently. Prior to ~ Standard ~ but 3 there ~ was no guidance for ProductSuite organizations had access to the 0 ~ ~ 3 organizations to consistently administer Assessments and Implementations. 0 ProductSuite is comprised of 3 primary things:

~

Tools: The ProductSuite Assessment tool provides certified 0 ~ ~ 3 ~ A s s e s s with o r sa useful tool to rigorously assess an organization's project management maturity. The Assessment tool provides a quick and flexible user interface to capture assessment data. The Assessment tool can be used in any type of organization, regardless of industry, size, or maturity. The ProductSuite Improvement tool allows 0 ~ Certified ~ 3 ~ Improvement Consultants to evaluate an organization's current project management practices to identify opportunities for improvement. The output of the tool is an actionable improvement plan. This book helps users implement that plan. Training: ProductSuite offers two courses of training. The first training is the 0 ~ Certified Assessor's course. This course is offered to train qualified candidates to be Assessors. The second training offered is the OPM? Certified Certified OPM~@ Consultant's course. This course is offered to train qualified candidates to be certified 0 ~ Consultants. ~ 3 ~

~

Services: ProductSuite lists OPM~@ certified Assessors and Consultants in an online registry. This gives organizations wishing to implement OPM? a list of rospective service providers. The registry is globally accessible through the OPM3 ProductSuite site. It enables interested parties to search for certified assessors and consultants based ~ Assessors ~ 3and ~ on name, region, or industry affiliation criteria. A list of all certified 0 Consultants is available online at (www.OPM3productsuite.com/registry).

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In order to develop ProductSuite, PMI contracted Oslo, Norway Based Det Norske Veritas (DNV) to assist in the development of ProductSuite. DNV is known world wide as a trusted provider of certification services and process improvement. PMl's global leadership in project management standard development coupled with DNV's 100+ years of experience in certification and process improvement has made ProductSuite a powerful tool for business improvement. Why do Organizations Want a Rigorous Assessment?

There are many reasons why organizations want to be formally assessed. They all tend to fall into two categories: Intrinsic: Organizations are self motivated to improve their processes to increase performance. All organizations must have some level of intrinsic motivation in order to have sustained improvement. The most successful organizations develop a culture of improvement and reward individual contributions. Extrinsic: Equally significant is the extrinsic Category of improvement which regards outside forces that drive an organization toward process improvement. Examples of these include market pressure, competition, changes in technology, etc. Many organizations use certification levels or credentials on marketing material. Certifications can be a powerful differentiator between companies competing for the same contracts.

3

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Chapter 14: OPM3@ProductSuite

Every Organization Can Implement OPM3@

ProductSuite Rigorous and Desk assessments are more comprehensive and objective than a Comprehensive Self Assessment. ProductSuite assessments are administered by OPM~@ Certified Assessors who meet stringent qualification standards. If an organization is motivated intrinsically it will receive a formal assessment and recommendation for internal improvement. If an organization is motivated extrinsically it will do the same for external goals. Whether doing it for intrinsic, or extrinsic reasons, the OP& Rigorous Assessment can be very beneficial to the organization.

ProductSuite Certification

0 ~ ProductSuite ~ 3 has~a certification program for prospective Assessors and Consultants. rs organizations and recommend paths for improvement. Certified 0 ~ ~ 3 @ A s s e s s oassess ~ Consultants ~ 3 help~organizstions implement paths of improvement. The Certified 0 ProductSuite Certification progra; ensures that OPM? Certified Assessors and Consultants are adept at all aspects of the OPM3 methodology and the ProductSuite Toolset. All candidates interested in becoming ProductSuite Assessors and or Consultants must go through a rigorous screening process. Qualified candidates are trained by industry experts on various Assessment Techniques, the ProductSuite Toolset, and Best Practices for implementing the OPM? Model, etc. 0 ~ ProductSuite ~ 3 training ~ and tools are valid for any industry regardless of size and complexity. Any organization managing work via projects can benefit from the OPM~@ ProductSuite toolset. In ProductSuite Assessor training, candidates are trained on the Best Maturity Continuum. They Practices for gauging an organization's maturity against the OPM~@ learn the terminology, the standard, the methodology, and the toolset necessary to take ~ ProductSuite ~ 3 participants ~ desiring to be organizations the next level of maturity. 0 Assessors will be trained on all aspects of the model including conducting Rigorous and Desk assessments of organizations. The definitions of the assessments are as follows: Rigorous Assessment: A thorough assessment of applicable functions including interviewing personnel, verifying documents and checking records of evidence prior to awarding credit. The ProductSuite Rigorous assessment is analogous to the SCAMPI "A" assessment for CMMI@. This assessment is conducted by 0 ~ ~ 3 ~ C e r t i f i e d Assessors who interview a cross functional representation of the organization. Desk Assessment: A thorough assessment of applicable functions including interviewing the process owner, verifying documents, and checking records of evidence prior to ~ ~ awarding credit. This ProductSuite Desk assessment is conducted by an 0 Certified Assessor interviewing the process owners of the organization. ProductSuite Consultant's training, candidates are trained on Best Practices for In OPM~@ creating organizational improvement plans. They are then trained to use the plans to help guide the organization to implementation success. They understand the terminology, the standard, the methodology, and the toolset necessary to take organizations to the next level of maturity. Participants need not take the Consultant training if they want to become an Assessor; however Assessor training is a prerequisite to the Consultant training and certification.

OPMP ProductSuite training teaches candidate consultants to align the project, program, and portfolio domains to the strategic and tactical goals of the organization. It is also flexible enough to not prescribe a single path for organizations to implement. They are able to implement the parts of the model having the greatest ROI and making the most sense for the organization.

3

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Every Organization Can Implement OPM3CY

Chapter 14: OPM3B ProductSuite

OPMP ProductSuite Online Once 0 ~ ~ 3 @ A s s e s s oand r s Consultants have gone throu h training and have acquired the certification credential, they are given access to the OPM ProductSuite Online site ~http://OPM3productsuite.dnv.com).

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Once logged in to the site, there are immediately four options available for the user. Assessment Tool: This tool assists certified assessors in performing assessments on organizations. Or~anizations:This option allows certified assessors and consultants to set up organizational profiles on the system for the Assessment and lmprovement Tools. User Profile: This option allows certified assessors and consultants to update their own organizational profiles on the system for the Assessment and lmprovement Tools. User Administration: This option allows certified assessors and consultants to add and configure new users on the system for the Assessment and Improvement Tools.

Chapter 14: OPM3@ProduciSuite

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Every Organization Can Implement OPM3@

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Every Organization Can Implement OPM34

ProductSuite

Once assessment information has been added to the system they must be "scoped". Scoping an assessment is determining its extent. Assessments can be scoped by domains and stages, or by business results. Business Results are defined as, "a series of BPSthat have been identified as a relevant subset of the BP pool that can be used to address specific business results or organizational pain pointsn(4). Assessments not scoped by domain, can be scoped by a specific business result.

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Chapter 14: OPM3Q Productsuite

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Chapter 14: OPbA3@Productsuite

Every Organization Can Implement OPM3@

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Every Organization Can Implement OPMW

Chapter 14: OPM30 Productsuite

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OPLVD'~ Productsuite Assessment Report

Chapter 14: OPM33 ProductSuite

Every Organization Can Implement OPM3@

What to look for when Conducting a ProductSuite Rigorous or Desk Assessment When conducting an 0 ~ ProductSuite ~ 3 Rigorous ~ or Desk Assessment, it is essential to be able to differentiate between good processes and poor processes? The following things need to be looked for: Process Elements: The organization should have policies in place to support process implementations. Processes and Sub-Processes should be readily available based on the boundaries set in the policies. Templates and supporting Guidelines should be available to support the processes. Checklists should be available to assist with process negotiation. Process Models: Formal process models (e.g. ETVX, IDEF, SIPOC) should be used for mature process implementations.

0 ~ Process ~ Framework: 3 ~ A contiguous framework of processes should be available that encapsulate Best Practices with constituent Capabilities, Outcomes, and KPls. Process Governance Facilitators: Organizations should have organizational facilitators in place to support process governance. This includes a training program, a peer review process, commitment process, and an individual performance review process tied to process compliance. Process Governance Executive Branch: Some group in the organization should be established to provide executive sponsorship and approval for all processes and projects in the organization (Phase Gate Review Board). There should be some form of Quality Auditing Group set up to audit process adherence. Senior management should enforce process adherence. Process Governance Leqislative Branch: Some group in the organization should be established to create and implement processes. It should have Governing Bodies for the creation of processes and the administering process changes. Process Governance Judicial Branch: Some group in the organization should be established to oversee process implementation and adherence. They receive reports from the Quality Auditing Group and evaluate process and project performance.

Assessing the Organization There must be non-attribution when the assessment is being conducted. The assessment participant must not feel like the information they provide can be used against them. Otherwise they will clam up. Organizational leadership should not be present in the meeting with assessment participants. Responses could be used against them, or be perceived to be used against them. Assessment participants may only answer in such a way to not get themselves in trouble. Assessments must have trust or they will not give the information. There is a difference between an audit and an assessment.

REFERENCES (4) O P M ~ @ ~roduct~uite@~ssessment Training Guide, 2006 Project Management Institute, Inc. (1-3, 5-17) Reproduced from the OPM3@online web site, Project Management Institute, Inc. http:llopm3productsuite.dnv.com

Every Organization Can Implement OPM3@

Chapter 15: Where to Go From Here?

Chapter lk Where to Go From Here? External Consultant For the external consultants that want to implement OPM? in organizations, the following steps should be taken: Purchase the 0

~ Knowledge ~ 3Foundation ~ and become acquainted with it

Attend the DNV Certified Assessors course and the DNV Certified Consultants course Use the tools in this book and other process improvement books to assess and implement the model in organizations 1

Develop presentations showcasing your talent Offer 0PM3@trainingsessions to the communities you serve Make It Happen!

Internal Consultant For individuals in organizations that want to implement OPM? internally, the following steps should be taken: Have the organization purchase the 0 acquainted with it

~ Knowledge ~ 3Foundation ~ and become

Baseline the current project management problems the organization is experiencing ~ ' s to resolve them Develop a presentation highlighting the problems and 0 ~ ~ 3features 1

Have a representative(s) attend the DNV Certified Assessors course and the DNV Certified Consultants course Use the tools in this book and other process improvement books to assess and ~ in the~ organization 3 ~ implement 0 Develop presentations showcasing how the organization was able to improve

1

Use the improvement data to convince the organization to approve more change Make It Happen!

Chapter 15: Where to Go From Here?

Every Organization Can Implement OPM3@

SECTION V (Appendices)

Every Organization Can Implement O P M W

Appendix A

Appendix A - Project Risk Management Process Project Risk Management Process Elements

The following Project Risk Management Pro~e~ss is provided to show how BPS are embedded in a process model to effectively implement OPM3 . The Project Risk Management Process includes all process elements necessary to support the following BPS (1120, 1170, 1180, 1190, 1200, 1370,1610,181 0,1860,1870,1880,1890,2060,2200,2350,2400,2410,2420,2430,2600, 2470,2790,2800,2810,2990) Project Risk Management Policy

To ensure: A thorough understanding by all project team members of the requirements of the Project Risk Management Process. All project team members are accountable and expected to comply with the process as it applies to their applicable roles on the project team Oversight by the Quality Auditing Group and functional managers to ensure compliance to the Project Risk Management Process by applicable staff members. Policy

In order to meet these goals, XYZ organization will implement and adhere to the Project Risk Management Process. Any deviations to the Project Risk Management Process Oversight and Compliance policy within XYZ organization must be documented in the Project Plan and approved by the PMO.

Approvers Signatures General Manager and Staff Company XYZ Director of Quality Company XYZ Vice President, Program Management Company XYZ

Every Organization Can Implement OPM3@

Appendix A

Project Risk Management Sub-Process The Project Risk Management Sub-Process has a title sheet and then the process steps. This process is typically called out by the Project Integration Management Process.

The purpose of the Project Risk Management Sub-Process is to identify, document, and manage project risks.

Purpose I

Usage

Project managers will use this process to: D

m

Inputs

Determine and document risks during initiation and planning. For this usage, this process is called from: Process XXXX: Initiate and Plan the Project Plan Update risks during planning or managing. For this usage, this process is called from: Process XXXX: Manage the Project Plan

Following are the inputs to the

Risk Assessment Checklist If a previously completed project or next version: Risks from most recent year or version

D

.

Outputs

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Definitions

-----

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The following list describes the outputs of the Project Risk Management Sub-Processf-

Risk Assessment Worksheet Assessed and prioritized risks, documented in the Project Plan

Contingency: An action or set of actions that will be taken in the event that a risk is realized. Mitigation:An action or set of actions that is taken to reduce the probability that a risk will occur. Risk: A calculated possibility of suffering loss. Risk Impact: A measure of the degree of loss that would result if a given risk were realized. Risk Probability: A measure of the likelihood that a given risk will be realized. Risk Score: Overall risk rating for a risk (Risk probability x Risk Impact).

1

Every Organization Can Implement O P M m

Appendix A

The project team, with input from affected groups and individuals, identifies and documents all risks that apply to the project, using the Risk Assessment Checklist and the Risk Assessment Worksheet. This activity must take place in a meeting. The project manager, on the RiskAssessment Worksheet, must list the names of all indiiiduais invited to attend this meeting and the names of all individuals who did attend. Involvement in performing this process step is required as follows: -

R

All identified members of the project team must be invited to participate. It is strongly recommended that all idenuied members of the project team be present in order for this meeting to take place. If a risk is related to or affects a group or individual, the group or individual must be invited to participate. It is recommendedthat these groupslindividuals be present in order for this meeting to take place.

The Risk Assessment Checklist and Risk Assessment Worksheet are used as follows: All items on the Risk Assessment Checklist must be considered. A project's identified risks may also include risks that are not listed on the Risk Assessment Checklist. Each identified project risk must be documented in the Risk Description Table portion of the Risk Assessment Worksheet. The fields of the Risk Description Table are completed as follows:

- the sequential number by which the risk will always be identified

Risk # Risk Description Risk Probability

-

Risk impact

-

Current Risk Score Original Risk Score Checklist Item #

-

and original probability are listed the percentage effect on the project if the risk occurs. Both current and original are listed. most recent overall amount of risk to the project

-

the initial amount of risk to the project

Risk Realized (Date)

a brief description of the identified risk

- the percentage of likelihood that the risk will occur. Both current

the number with which this risk is labeled on the Risk Assessment Checklist - the date on which a risk becomes realized (not used when first performing this process, only used for subsequent updates) -

Guidance It is strongly recommended that risks be initially documented on a flip chart or a marker board for all participants to view. It is recommended that the Risk Assessment Checklist and the Risk Assessment Worksheet be distributed to all project team members at least one week prior to this meeting. This meeting may be incorporated into a regularly scheduled project team meeting. It is recommended that the project team designate a facilitator and a recorder for this meeting.

Every Organization Can Implement O P M W

Appendix A

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The project team analyzes all risks to determine their probability and impact. The project team must strive for consensus in the Risk Description portion of the Risk Assessment Worksheet. If consensus can not be reached, then the lack of consensus must be documented in the Project Issues Log and escalated accordingly.

w

The probability and impact are used to determine a risk rating of High, Medium, or Low.

For each risk, Determine and record probabilitv on the risk matrix: = Typical Probability Values (.I, .3, .5, -7,.9)

m

For each risk, Determine and record impact on the risk matrix (i.e., What is the consequence or loss if the risk occurs? For example, schedule, cost, and leqal impacts.): = Typjcal Impact Values (-1, .3, .5, .7,.9)

w

3

Prioritize and Map Risks w

The project manager prioritizes risks based on risk score. Risk score is calculated by multiplying the risk probability by the risk impact. All risks will be listed in the Risk Assessment Worksheet and prioritized based on risk score.

= = 4

For each risk that is deemed a "high" risk on the risk impact table, a mitigation and contingency strategy will be developed. For each risk that is deemed a "high" risk on the risk impact table, a triggering event (or triggers) will be identified.

Resolve Risks w

The project manager develops mitigafions and contingencies for each risk that is identified as High in the Risk Description portion of the Risk Assessment Worksheet.

= =

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Each mitigation must document any actions that have been taken or will be taken to reduce the probability that the risk will occur andlor lessen the impact if the identified High risk is realized. Each contingency must include an explanation of the contingency actions that will be taken if the identified risk triggering event occurs.

Risk mitigations and contingency strategies will require additions to the project schedule, however they should not affect the project baseline. Scheduled contingency activities must be clearly identified in the schedule so that they are easily distinguished from the initially scheduled activities.

Every Organization Can Implement O P M m

Appendix A

I

5

I Monitor Risks At a minimum, the project manager will conduct risk planning meeting once a month. The project manager will update the project plan to reflect monthly changes to risks and additions I deletions of risks

I

At a minimum, the following information must be updated monthly:

..Risk Description section of the Risk Assessment Worksheet Mitigations and Contingencies for all risks that are identified as High-in the Risk Description portion from the Risk Assessment Worksheet. This constitutes a commitment to carry out the planned mitigation activities. It also constitutes a commitment to carrying out the planned contingency activities if a triggering risk event occurs. Project P/an ~ o n t h l ~ ' ~ r o jStatus e c t Report The completed Risk Assessment Checklist(s) and the Risk Assessment Worksheet(s) must be retained and stored in the project's Central File.

Project Risk Assessment Checklist This checklist is typically called out by the Project Risk Management Sub-Process.

I

Appendix A

Every Organization Can Implement OPM3@

Project Risk Management Worksheet Template The following Risk Management Worksheet Template lists each project risk and its related information:

1 Attendees I

I

Appendix A

Every Organization Can Implement OPM3@

The following tables document the Mitigation and Contingency Plans for all of the applicable High risks:

Every Organization Can Implement OPM3@

Appendix A

Project Risk Management Worksheet Guideline The following Project Risk Management Worksheet Guideline has been developed to help process users complete the Project Risk Management Worksheet Template. Risk #

This is the sequential number or computer generated number of the risk.

Risk Description

This is a textual description of the Risk. A risk statement should always start off with, "The risk is that ... because ...". The description should also highlight what condition the risk is expected to result in (should be quantitative if possible and affect one of the triple constraints; Cost, Quality, Schedule).

r Mitigation

Contingency

Trigger Probability

tScore

The Actions taken to reduce probability of risk or actions taken to lessen impact of risk. Reducing the probability and/or impact of a risk to below an acceptable threshold. A risk mitigation statement starts off with, "The risk is mitigated by ... in order to ...". The mitigation should include the activity that will be performed in order reduce the likelihood of the risk occurring. What condition the risk mitigation is expected to result in. Alternative strategy used to ensure project success if specified risk event triggers occur. Actions taken in the event a risk trigger is realized so project objectives may still be met. A risk contingency statement starts off with, "The contingency for the risk is ... in order to ..." It should specify what condition the contingency is expected to result in given project cost, quality, and schedule objectives. An indication that a risk is about to occur. A risk symptom or warning sign, that if Ioccurs, has a negative effect on the program. IThe probability index is the measure of the likelihood that a given risk will occur. A risk's probability of occurrence falls between 0.0 (no probability) and 1.0 (has occurred). Using the Risk Probability Table, the probability index is determined. The Impact Index is a value that relates the relative net affect on the business. An impact index of 0.0 has relatively no impact to the business, an impact index of 1.0 has a very high impact to the business (where sustaining the line of business may be very difficult). The risk score is categorized by the product of the probability index and the impact index.

I

A risk with a risk score greater than .35 is considered to be High risk, and requires risk response strategies (identify risk owners, mitigating activities and contingency plans). A risk with a risk score between -18 and -35is considered to be a Medium risk and requires a risk mitigation only. A risk lower than .I8 is considered to be a low risk and requires no response planning. The grouping o f the risk as defined in the risk management checklist. Risk category is very helpful for tracking of types of risk in the organization. A deliverable at the lowest level of the WBS that is typically between 8 - 80 hrs and can be confidently estimated. A work package cannot logically be subdivided

r Work Package

further.

l ~ i s Realized k Date Additional Comments

Risk occurrence date, that is, the date that the risk event actually happens.

Appropriate comments as needed.

Every Organization Can Implement OPM3@

Appendix A

Project Risk Management Plan Template

In many cases the Project Rjsk Management Plan will be part of the overall Project Plan, however for larger projects this plan may be pulled out into a separate plan for better management of project risks. This template is annotated. That is, guidelines for filling it out are built into the template therefore a separate Guideline is not needed.

.. Prepared by: Date (MMIDDmw):

-

What are the inputs to the risk planning process (example: historical database, commercial database, WBS)? What date is the initial risk planning meeting scheduled? Have the recurring risk management meetings been scheduled?

-

Where will the risks be stored?

Risk Management Planning:

Risk Identification: =

Qualitative and Quantitative Risk Analysis: =

= =

Risk Response Planning: =

= =

What are the risk probabilities, impacts, and risk scores? What are the priorities?

Are risk mitigations and contingencies devebped for all relevant risks? Has the schedule been updated?

Risk Wlonitoring and Control:

=

-

=

How often will risk planning meetings be conducted? Where will the risk planning meeting minutes be stored? Are relevant risks being kept in the risk repository? Is the risk identification checklist being updated?

Every Organization Can Implement OPM3@

Appendix A

Risk Score is defined as Impact Scare x Probability and is shown in the following chart. Priority is based on Risk Score.

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d as risk. risk item where they deem it necessary.

Every Organization Can Implement OPN13CU

Appendix B

-

APrrendix B Best Practice Breakout

Appendix B

Every Organization Can Implement OPM3@

Appendix C

Every Or~anizationCan Implement O P M M

Appendix C - Glossary of Terms Attribute Measurement

Qualitative measurements that are the most basic form of measurement.

Best Practice*

An optimal way currently recognized by industry to achieve a stated goal or objective.

Capability*

A specific competency that must exist in an organization jn order for it to execute project management processes and deliver project management services and products

Checklist

A list of items or tasks for comparison, verification, or other checking purposes. A list of items to be noted, checked, or remembered

Citation

A reminder that a process step has not been completed

Control Chart

A statistical tool intended to assess variation in a process

Control Limit

Acceptable bounds of process variability (typically 3 sigma)

Executive Branch

Branch of process governance that has the power to enforce organizational processes

Framework

A structure for institutionalizingprocess improvement in organizations and increasing project and process management capabilities

Governance

Creating Governing Bodies to govern processes and systems that have been implemented in an organization

Governance Facilitators

Functions that need to be in place for process governance to be effective in organizations

Governing Bodies

Governing Bodies approve, oversee, and execute organizational process improvement. They provide the governance necessary to sustain project management in the organization

Guideline

Document to help process users fill out templates. Serves as a standard way of completing process templates.

Judicial Branch

Branch of process governance that has the power to interpret processes and apply corrective action when processes are not followed

Key Performance IndicatoP

A criterion by which an organization can determine, quantitatively or qualitatively, whether the outcome associated with the capability exists or the degree to which it exists.

Legislative Branch

Branch of process governance that has the power to create and update processes

Maturity

The state or quality of being fully grown or developed

Methodology

A system of methods and principles for educating and training people involved in organizational project and process management

Every Organization Can Implement OPM3@

Appendix C

Outcome*

A tangible or intangible result of applying a Capability

Policy

A plan or course of action in business intended to influence and determine aac@nsand decisions

Process

A set of common tasks used to creates a product, service, process, or plan to satisfy a customer or group of customers. A sequential series of steps leading to a desired outcome

Process Elements

The processes, sub-processes, and tools project teams use for each project Tendency for processes to evolve toward a state of disorder

Process Entropy Process Republic

,.I

Type of organization with written processes with Governing Bodies and governance. Processes are consistent across the organization and are crafted by constituents of the organization

.!

A group of related projects managed in a coordinated way to

Program*

- obtain benefits and control not available from managing them

individually A temporary endeavor to create a unique product, service, or result." "Project Management - The application of knowledge, skills, tools, and techniques to project activities to meet project requirements

Project*

-.*.

A collection of projects andlor programs and other work grouped together to facilitate effective management of that work to meet strategic business objectives

Portfolio*

.

,> , ... .

.

Standard*

I

Document established by an authority, custom, or general consent as a model or example. It is established by a consensus body which is open to representatives from all materially affected and interested parties The sequence of specific actions or instructions to be followed in solving a'problem or accomplishing a task

Template

A pattern or gauge used as a guide in development or creation of , something accurately

Variable Measurement

Quantitative measurements ;hat are more complex than attribute 1,. measurement.

(*) Organizational Project Management Maturity Model Knowledge Foundation, 2003 Project Management Institute, Inc.

Index

@

Every Organization Can Implement OPM3 !

A Aggregation 143, 147 Artifacts 31, 118, 148, 149 Assessment 1, 7, 84, 128, 134-138, 143, 145-149, 152, 154, 155,157-163 Assessment Checklist 170 Assessment Report 138 Assessment, rigorous 125, 128, 154, 155 Assessment Techniques 155 Assessment tool 154, 156 Assessors, certified OPM3@ 154 Attribute 11, 99, 101, 109 Attribute Control Charts 109, 110 Auditing 23, 33, 39, 40, 45, 62, 118 Audits 38, 50, 51, 95, 98,99, 101, 163 B Baseline 58, 122, 130, 164 Bell curve 81, 106, 107 Best Practices 1, 2, 6, 7, 11-15, 18, 45, 48, 59, 70, 115, 129, 130, 134, 140-146, 155, 159 Branches 24, 27, 43 Business results 158

C Capabilities vii, 2, 6, 15-18, 110, 115, 134, 142, 146, 148, 150, 151, 159, 180 Caps, constituent 15, 16, 150 Certified OPM3@ Assessors 154, 155 Certified Productsuite Assessment 148 Change Control Board 29, 43,46-48, 50, 51, 76-78, 82, 116, 117 Change vision 124-126 Checklists 6, 70, 77, 87, 92, 96, 100, 118, 127, 148, 149, 163, 172, 180 Citation 38, 39, 101, 102, 180 Commitment 7, 9, 26, 31, 36, 37, 39, 46, 72, 74, 75, 86, 121, 123, 125, 127, 172 Compliance 22, 25, 26, 28, 38, 39, 41, 53, 56-58, 62, 77,82, 88,95, 101, 102, 109, 168 Comprehensive Assessment 83, 128, 134, 148, 149 Configuration management 44,46,47, 69, 73, 99-101, 117, 127 Constituent Capability 15, 149 Contingency plans 92, 174, 175 Control charts 101,106,108, 109 limits 106, 109, 111, 118 Cost of Quality 122 Critical path 29, 55, 56, 94, 100 D DMAIC 116 Domains 11-14, 16, 29, 43, 50, 56,63, 68, 79, 95, 99, 128, 129, 139-141, 145, 146, 158 E Emotional fortitude 37, 95 ErTVX 84,89, 115, 116, 149,163 Exceptional variation 106, 108-111, 118 Executive Branch 23, 27, 28, 35-39, 46, 50, 53, 54, 82, 86, 94,98, 114, 117, 123, 126, 127 F Feedback loops 49, 116 Formal Process Models 83, 86

index

@

Every Organization Can Implement OPM3 !

Formal Training 94 Framework processes 68, 74, 82, 125 G Governance iii, vi, 18, 21-25, 28, 32, 34-64, 67, 124, 126, 180 branches of 27, 28, 33 facilitators 28 Governing Bodies v, 16, 18, 19, 21, 24, 25, 35, 37, 39, 43, 44, 53, 67, 82, 124, 129, 150

H High Level Assessment 134, 145, 146

I IDEF 85, 149, 163 Impact Score 177 Implementing OPM30 v, 18, 65, 121-131 Improvement initiatives 9, 121, 123, 124, 130 Improvement Tools 156 Individual Performance Reviews 28, 31, 72, 74, 75, 126 ~nitiation phase 36, 100, 101 J

Judicial Branch v, 27, 28, 33, 35-41, 50, 53, 54, 58, 82, 114, 117, 127

K Key Performance Indicators 16, 17, 58 L Legislative Branch 27, 28, 41, 43-45, 47, 87, 106, 113, 127

M Mapping processes 93 Methodologies 2, 40, 45, 113, 125, 155, 180 Metrics 17, 38, 55, 56, 103, 116 Metrics Dashboard 103 N Nonconformity 109 0 Operational Excellence 3, 67 OPM~@ Cycle 134 0 ~ Framework ~ 3 Processes ~ 129 OPM~@ High Level Self Assessment 128, 134, 145-149 OPM~@ Knowledge Foundation 7, 11, 12, 135, 136, 147, 164 0 ~ Online ~ site3 135, ~ 142 0 ~ Process ~ Framework 3 ~ 8, 31, 67-80, 125, 149, 163 OPM~@ Process Governance 21-34 OPM~@ Produdsuite v, 154, 155 Opposition, loyal 26, 39, 123 Organizational Enablers 14 Organizational Feedback 47 Organizational pain points 158

P PATS 43-47,49-51, 54, 76-78,82, 86, 93-95, 114, 116, 117, 125, 127 Peer Review 28, 31, 72, 73, 75, 118 Performance reviews 31, 55, 56, 69

@

Index

Every Organization Can Implement OPM3 !

Phase Gate Review Board 35-37,40, 76-78, 124, 149,163 Piloting 95 Playbook 4, 6, 89 PMBOK 8,54,83,85, 146, 151 PMI vii, 1,8, 14-17, 135, 154 PMO 27, 29, 36-38, 40, 41, 44, 50, 53-64, 76-78, 93,98, 101, 102, 114, 117, 123, 124, 127 PMO Leader 37, 54, 60-64, 77 Policies 18, 33, 58,64, 87,88, 96, 127, 149, 163, 168 Probability 89-92, 169-171, 173, 175, 177 Process capability 2, 109, 113, 118 elements 30, 44, 87, 127, 149, 163, 168 entropy 22-24, 28, 35, 38, 116, 124 Process Adion Teams 23, 43-45, 50, 76-78, 82, 86, 117 Process artifacts 28, 31, 44, 57, 74, 111, 127, 148-150, 152 Process Asset Library 127 Process Governance Facilitators 126, 128, 149, 163 Process models 8, 82, 83, 114-116, 149, 163, 168 Productsuite 128, 154, 155 Program domain 11-13, 28, 31, 54, 56, 72 Program Kickoff 100 Project communications 29, 69 Project Issues Log 84, 99, 101, 171 Project pipeline 13, 30, 36, 37,40, 48, 55, 59, 76, 77 Project Predictability 81, 105 Project Verification and Validation 68, 70, 7 1

Q Quality Auditing Group 31, 35, 37-41,44, 50, 51, 56, 62, 64, 76, 77, 93, 97-101, 103, 117 R Rework 122 Risk Assessment Checklist 89,90, 92, 169, 170, 172 S SIPOC 83,89, 115, 116, 149, 163 SMCI 140, 141 Stakeholders 6, 7, 11, 12, 17, 31, 69, 71, 73, 82 Standard deviations 106-108 Standardize 3, 8, 13, 14, 140, 178 Sub-Processes 68, 87, 89, 149, 163 SWOT 8, 121, 122 T Templates 5, 6, 33,48, 59, 70, 87, 91, 96, 127, 148, 149, 163, 176, 180 Traceability 31, 72, 74 Training, developing 5, 54 Triple constraint iii, iv, vii, ix, 3, 81, 91, 100, 114, 121, 175

v Value Stream Maps 93 Variable data 101, 110 Variable Measurement 100, 101 Variation 81, 97, 98, 105, 107, 108, 111, 113, 180 routine 108, 109, 118 unpredictable 108

W WBS

29, 32, 173, 175, 176