Building a PMO - McCormick PCS

1 The PMO Guide Michael McCormick June 2016/Updated July 2020 Building a PMO Michael McCormick June 2016 i TABLE OF CONTENTS Introduction .. 10 The Author .. 11 Copyright, Legal Notice and Disclaimer .. 11 Chapter 1 - The PMO Concept .. 12 Project Management Office (PMO) Snapshot .. 13 Determining Your Organization s Maturity Level .. 13 PMO Stages .. 19 The PMO Selection .. 19 PMO Best Practices .. 19 What is a PMO? .. 21 PMO Architecture .. 21 Tier 1 Projects .. 22 Tier 2 Programs .. 22 Tier 3 Portfolio .. 22 Tier 4 Project Management Office .. 23 Tier 5 Governance .. 27 Tier 6 Executive Management .. 29 Chapter 2 The PMO Purpose .. 30 Why Establish a PMO? .. 31 Developing the PMO Roadmap .. 31 Plan Phase .. 31 Plan Phase Chart .. 32 PMO Purpose and Goals .. 32 Define Scope and Maturity Levels.

2 33 Maturity Levels .. 34 Identify Core Services Goals .. 35 Define PMO Metrics .. 36 Define Business Processes .. 37 Define PMO Team 38 PMO Implementation .. 39 PMO Optimization .. 40 Managing Organizational Change .. 40 Michael McCormick June 2016 ii Organizational Change Management .. 41 Change Readiness Assessment .. 41 Change Management Action Plan .. 41 Change Monitoring & Reinforcement .. 41 Portfolio Management .. 41 What to Do .. 42 Why PMO s Fail .. 42 The PMO Culture .. 43 The Traditional Project Management Office (PMO) .. 43 The Enterprise Project Management Office (ePMO) .. 44 Measuring the Impact of the ePMO .. 45 ePMO Structuring Guidelines .. 45 Summary .. 47 The ePMO has three sources of staff: .. 47 Chapter 3 - PMO Best Practices .. 49 ePMO Best Practices .. 50 Strategy Point .. 50 Key Considerations.

3 50 Development Plan Recommendations .. 52 Bottom Line .. 54 Enterprise Project Management Office Goals: .. 54 Chapter 4 Building the PMO .. 55 Enterprise PMO Advantages .. 56 ePMO IT Staffing Chart .. 57 The ePMO Role .. 57 Formation of an Enterprise Project Office .. 58 Formation of an Enterprise Project Office (ePMO) .. 60 Steps for Enterprise Project Management Office Creation .. 60 Phase 0ne Plan .. 60 Phase Two Implement .. 62 Phase Three Manage .. 64 Alternative Steps for Starting a PMO .. 66 PMO Maturity Levels .. 69 Chapter 5 PMO Methodology .. 70 Michael McCormick June 2016 iii The Project Life Cycle Framework (PLCF) Flow Chart .. 71 Project Life Cycle Framework Process .. 72 Project Management Life Cycle .. 72 Funding Approval Life Cycle .. 73 Acquisition Life 73 System Development Life Cycle.

4 73 PMM & SDLC Guide .. 74 Three SDLC Process Models .. 74 The PLCF Process .. 78 What is a Project? .. 79 What is Project Management? .. 79 Project Roles and Responsibilities .. 80 Project Controls .. 81 Communications .. 81 Documentation .. 82 Duties of the Project Manager .. 82 Duties of the Project Team .. 82 Gate Reviews .. 83 Phase Gate Review Meetings .. 84 During the Initiation Phase .. 85 Identify Alternatives .. 87 Select Projects .. 89 Identify Project Sponsor .. 91 Appoint Project Manager .. 92 Develop Charter and Announce the Project .. 93 Transition to Project Planning Team .. 94 During the Planning Phase .. 95 Gather Project Requirements .. 96 Develop Project Schedule .. 98 WBS 99 Completed WBS Example .. 100 PERT Chart Example .. 101 Schedule Gantt Chart Example .. 101 Steps .. 102 Michael McCormick June 2016 iv Templates.

5 102 Owner of This Step .. 102 Create Risk Management 103 Steps .. 103 Templates .. 103 Owner of This Step .. 103 Develop Project Plan .. 104 Steps .. 106 Templates .. 106 Owner of This Step .. 106 Develop Project Design .. 107 Project Approval Process .. 118 Overview .. 118 Standard Process Details .. 119 BEGIN LEVEL 1 - Step 1: Gate 1 Request / Approval .. 119 BEGIN LEVEL 2 - Step 2: Project Team Selection and Scope Development .. 121 Step 3: Preliminary Cost Estimate .. 121 Step 4: Level 2 Business Case Preparation .. 123 Step 5: Gate 2 Approval .. 123 BEGIN LEVEL 3 - Step 6: Detailed Design .. 125 Step 7: Detailed Schedule .. 127 Step 8: Detailed Cost Estimate .. 127 Step 9: Level 3 Business Case Preparation .. 127 Submit for Approval .. 131 Steps .. 131 Templates .. 131 Owner of This Step .. 131 Transition to Execution.

6 132 Steps .. 132 Templates or Documents needed .. 132 Owner of This Step .. 132 During the Execution Phase .. 136 Objectives .. 136 Inputs .. 137 Michael McCormick June 2016 v Outputs .. 137 Project Plan Overview .. 138 Steps .. 138 Templates .. 138 138 Verify Solution Overview .. 139 Steps .. 139 Templates .. 139 139 Information Distribution Overview .. 140 Steps .. 140 Templates .. 141 141 Change Control Overview .. 142 Steps .. 143 Templates .. 143 Performance Reporting Overview .. 148 Steps .. 148 Templates .. 148 152 Quality Assurance Overview .. 152 Steps .. 152 Templates .. 152 152 User Training Overview .. 153 Steps .. 153 Templates .. 153 153 Acceptance Testing Overview .. 154 Steps .. 154 Templates .. 154 154 Deploy Solution Overview .. 155 Steps .. 155 Michael McCormick June 2016 vi Templates.

7 155 155 Transition to Support Overview .. 156 Steps .. 156 Templates .. 156 156 During the Closeout Phase .. 157 Inputs .. 158 Outputs .. 158 Chapter 6 PMO Operations .. 159 Managing a PMO .. 160 PMO Life 160 PMO Metrics .. 161 PMO Project Status and Metrics .. 162 Consolidated Metrics .. 163 Organizational Metrics .. 163 The PMO Value Proposition .. 164 Methodology Support .. 165 Methodology Enhancement .. 165 PMO Training and Coaching .. 165 Determine Your Training Needs .. 166 Set up Coaching Services .. 166 PMO Audits and Assessments .. 167 Project-Level Audits .. 167 Don't Audit All Projects .. 168 Organization Assessments .. 168 PMO Service Offerings .. 169 PMO Document Repository .. 169 Establishing Best Practices .. 169 PMO Resource Pool .. 169 PMO Document Review Service .. 170 Contractor Project Roles.

8 170 External Benchmarking .. 170 Managing Projects .. 171 Michael McCormick June 2016 vii Status Meetings .. 171 Managing Status Meetings .. 171 Cost Estimating and Plan Development .. 172 Resource Rates .. 172 Activity Duration Estimates .. 172 Historical Information .. 172 Analogous Estimating .. 173 Parametric Modeling .. 173 Bottom-up Estimating .. 173 Computerized Tools .. 173 Incremental Estimating .. 173 Estimating Tools & Techniques .. 174 Cost Estimating Strategy .. 178 Cost Estimating Process .. 179 Cost Plan Development .. 186 Cost Baseline .. 186 Developing the Cost Management Plan .. 186 Cost Management Approach .. 186 Measuring Project Costs .. 187 Reporting Format .. 189 Cost Variance Response Process .. 189 Earned Value Management (EVM) .. 189 Planned Value (PV) .. 190 Actual Cost (AC) .. 190 Earned Value (EV).

9 190 % Completed Planned .. 191 % Completed Actual .. 191 Cost Variance (CV) .. 191 Cost Performance Indicator (CPI) .. 192 To Complete Cost Performance Indicator (TCPI) .. 192 Schedule Variance (SV) .. 193 Schedule Performance Indicator (SPI) .. 194 Budget at Completion (BAC).. 194 Estimate To Complete (ETC) .. 195 Michael McCormick June 2016 viii Estimate at Completion (EAC) .. 195 Variance at Completion (VAC) .. 195 % Completed Planned .. 195 % Completed Actual .. 195 Managing Issues/Action Items .. 198 Best Practice: Resolve issues as quickly as 198 Track Issues (Log) .. 198 Risk Management .. 199 The Basics .. 199 Identify Risks .. 199 Qualify Risks .. 200 Risk Analysis Tools .. 201 Tracking Risks .. 201 Identify Triggers .. 202 Identify Plans .. 202 Monitor and Manage Risks .. 203 Best Practice: Lifecycle Risk Practice.

10 203 Project Schedule Management .. 203 Creating a Project Schedule .. 203 Manage the Project Schedule .. 204 Look for Warning Signs! .. 204 Managing Scope .. 205 PMO Resource Management .. 206 Program Management Operations .. 207 What is Program Management? .. 207 Programs include: .. 208 Program Manager s Role .. 209 Strategy .. 210 Resource Allocation .. 210 Planning .. 210 210 Requirements .. 211 Project Manager vs. Program Manager .. 211 Program Management Success .. 212 Michael McCormick June 2016 ix Program Management & Portfolio Management .. 213 Project Portfolio Management .. 214 PPM Lifecycle Phases .. 215 PPM Objectives .. 216 PPM Critical Success Factors .. 218 Portfolio Decision Analysis (PDA) .. 221 Portfolio Mapping .. 222 Portfolio Planning Matrix .. 223 PPM Software Criteria .. 225 Portfolio Funding Decision Example.