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Jim Owens, PMP: The PMO, Projects, Programs and portfolios

Number of View: 6079
a better mousetrap

a better mousetrap

July 2009

Projects and Strategic planning

Although this may sound a little obvious, projects must have been chosen for a reason, and projects performed in organisations are usually strategic, that means they contribute to the strategic plan of that organisation.

If you are unfamiliar with strategic plans, you can think of them this way:

An organisation should have a Mission Statement and a Vision Statement. The mission statement is a declaration of where the organisation is at the present (or at least, where it was when they drew up the mission statement), and the vision statement is a declaration of where the organisation intends to be at some stated time in the future.

For example, a mission statement for a small software company might include,

“We are a software house that provides Finance and HR software for the leading banks and building societies in Sydney, Australia…”

And the vision statement could include,

“Within three to five years we will be the Finance and HR software provider of choice to 75% of the leading banks and building societies across Australia…”

We could represent this by the following diagram

MissionVision

In order for the organization to move from where it is now (its mission) to where it hopes to be (its vision) the organisation must develop and execute a strategic plan, a coordinated series of steps, to achieve the vision, and each one of those steps will be one or more projects.

MissionVisionStairs

MissionVisionStairs

The everyday operations of an organisation cannot achieve the vision; only projects can do that. Why is that? It is because operations just maintain “business as usual”, i.e. the mission.

And if management authorise projects that are not on the strategic plan, they will not take the organization to where it wants to go (i.e. the vision).

But in order for a project to be placed on the stairway, first it has to be selected, and the areas that they usually arise from are:

1. Market demand (e.g. a survey strongly suggests that the public would like a stronger-smelling cheese)
2. Strategic opportunity/business need (e.g. with stronger-smelling cheese on the market, mice are multiplying, so a company authorizes a project to build a better mousetrap)
3. Customer request (e.g. develop mouse-resistant packaging for their line of strong-smelling cheese),
4. Technological advance (e.g. new photocell chip will be used to develop electronic mousetraps that distinguish between friendly, white pet mice and ferrel brown ones), and
5. Legal requirements (e.g., a pest exterminator company authorizes a project to establish guidelines for the handling the dead mice, which have become toxic after eating the cheese).

collection 1    collection 2

collection 1 collection 2

Programs and Portfolios

There are benefits to be gained by grouping projects (and other related pieces of work) together. For example they can be managed in a coordinated way, resources can be balanced between them, there can be better communication across them, and clearer oversight by senior management and so on.

PMBOK defines a  program as “a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually”.

So we can see from our diagram above that the projects in collection 1 are related, and so could be managed as a program, similarly, the projects in collection 2 are related and so could be managed as a program.

But there are benefits to be gained by grouping together projects that may or may not be related, and such a grouping is referred to as a “Portfolio”, rather than a program. For example if the organisation where to manage collections 1 and 2 together (or any parts thereof) this would be called a portfolio.

The Project Management Office (PMO)

PMBOK tells us that a project management office is “an organizational body or entity assigned various responsibilities related to the centralized and coordinated management of those projects under its domain. The responsibilities of a PMO can range from providing project management support functions to actually being responsible for the direct management of a project.”

In some organisations the PMO mutates into a project management “elite”, who view their role as PM SWAT Police, and they boss the “ordinary” project managers around, audit their Gantt charts, and so on. But getting back to basics, while there may be some elements of the above, the real intended function of a PMO is to support the organisational project efforts of and organisation and their primary role is to support the project managers.

PMBOK tells us that they can support the project managers in a variety of ways which may include, but are not limited to:

* Managing shared resources across all projects administered by the PMO;
* Identifying and developing project management methodology, best practices, and standards;
* Coaching, mentoring, training, and oversight;
* Monitoring compliance with project management standards, policies, procedures, and templates via project audits;
* Developing and managing project policies, procedures, templates, and other shared documentation (organizational process assets); and
* Coordinating communication across projects.

For further information, see PMBOK 1.4.4 “Project Management Office”

Jim Owens PMP

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