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From the Sponsor’s Desk – Creating an Enterprise Portfolio Management Office

We know implementing a major organizational change is difficult. The chance of success is probably less than 50%.

Creating an Enterprise Portfolio Management Office (EPMO) in a large organization is a major change that has its own risks and issues.

Yet, in this case, the project that delivered a new project management practice and transformed the corporate strategic planning exercise in support of the EPMO implementation was a resounding success. How did they do it? Read on to discover the eight factors that shaped the initiative and guided it to a successful conclusion.

The Situation

This organization was a community care provider and operated as a not for profit and charity. It delivered more than 1.3 million hours of care annually with 2,600 staff and has almost 400 volunteers, travelling in excess of 12 million kilometres in a fleet of vehicles.

The organization had engaged consultants to review why their projects were not as successful as they expected. The consultants found that:

  • Cross-divisional projects were often complex but poorly documented
  • Projects were not managed in a consistent way
  • Project activities were not visible to managers and the Executive
  • It was difficult for the Executive to prioritise and schedule projects
  • A previous attempt to set up a ‘Project Support Office’ had failed

The consultants recommended two things:

  • Establish an EPMO for the business
  • Use PRINCE2 as the standard project management methodology

The consultants also drafted an EPMO charter for the executives’ consideration which included the following:

The EPMO is an advisory and reporting body for corporate project activity. The EPMO performs the following functions:

  • Manages the Projects Register
  • Tracks and reports project progress against defined milestones
  • Defines standard processes and template documents
  • Provides project assurance, support, coaching and mentoring
  • Operates as part of the Strategy Division.

Following up on the consultants’ report, the company’s executive hired Graham Colborne on a fixed term contract to implement the consultants’ recommendations. Graham was a seasoned Project Management professional with years of experience and a track record of success managing projects and running and implementing project and programme management offices.

The Goal

To implement an Enterprise Portfolio Management Office (EPMO) and manage its operations to encompass the consultants’ recommendations including the implementation of PRINCE2 as the standard project management practice within the organization

The Project

Graham recognized the assignment’s challenge: he had both project and operational responsibilities. He spent his first few weeks getting to know the lay of the land, talking to his sponsor, key stakeholders and project managers. His sponsor was the CEO. The Project Board was the organization’s Executive Committee, to whom he reported every two weeks.

As a result of his explorations, he found:

  • Around 40 to 50 concurrent corporate projects in operation at any one time.
  • Programmes were not treated any differently to projects.
  • There was a lack of a unified approach.
  • Conflict between business-as-usual and project activities.
  • A “we don’t have time to plan, just get the job done” mindset.
  • Lack of consistent user involvement.
  • No real knowledge of the true cost of projects,

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A very early activity for Graham was to benchmark the organization. This allowed him to identify the pinch points and also to be able to demonstrate progress from this baseline at a future date. He used P3M3 for this purpose. P3M3 (Portfolio, Programme & Project Management Maturity Model) comes from Axelos, the organization that offers best practice suites for IT service management (ITIL), project management (PRINCE2), programme management (MSP), portfolio management (MoP), project offices (P3O), risk management (MoR) and cyber security management.

According to Graham, P3M3 seemed to be the flavour of the day, very easy to use and totally compatible with the other standards. In fact, he only actually surveyed project management as there was no programme or portfolio management activity in place at that time. The maturity levels are: Level 1 – initial process, Level 2 – repeatable process, Level 3 – defined process, Level 4 – managed process and Level 5 – optimized process.

It should be noted that self-assessments are generally recognised to paint a more optimistic picture than reality. Even then, the scoring was mainly at level 1 with some level 2s. The survey was conducted with all Executive staff participating, and a large number of other stakeholders and practitioners.

Graham also decided to use the P3O (Portfolio, Programme and Project Offices) model to build the EPMO. This was a relatively new standard and also came for the same best practices family. P3O was entirely tailorable and could be used from small offices to very large ones.

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With the maturity level baseline in place and P3O to guide the development of the targeted EPMO, Graham developed the following approach for the endeavour.

In terms of implementation Graham wanted to take a low key, quick win approach. This was a huge cultural shift for the organization. He realised that a full implementation of PRINCE2 would most likely fail if attempted as a “big bang” so he prioritized the aspects that needed implementing first. These were as follows:

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  • Every project should have a definition document.
  • Establish a projects register.
  • Commence a PRINCE2 training program.
  •  Segregation of projects into 3 levels:
    •  Board level – reportable to the Board
    • Executive level – reportable to the Executive Body
    • Divisional – managed within a division
  •  Defined approvals mechanisms and defined reporting lines

The project managers were not fans of the definition document initially. It was seen as more work for them. Graham explained that this represented their “contract” with the stakeholders and it was there to protect them as well as the stakeholders by specifically defining what was to be done and what success looked like. The PMs became much more enthusiastic about the idea over time as they realized the value it provided.

Regarding the projects register, there had never been a single list of all the projects being executed at any one time. The register was established as an online system but also as a printed wall chart 1m X 1.4m outside the boardroom. This was extremely popular with the CEO as he could see for himself what was going on before he entered a meeting. Other executives and PMs began to take an interest as well.

The first PRINCE2 course had 9 attendees and was paid for out of Graham’s EPMO funds. Graham picked those initial attendees because of their proven project management track record and willingness to embrace the new practices and promote them to others. They did their jobs superbly. Due to the success of that first course it became a “badge of office” and people were queuing up to get on a course. Two further courses were held resulting in 30 accredited staff.

Graham never wasted an opportunity to promote the EPMO, delivering over twenty presentations to staff gatherings in head office and the regions. He also used the company’s internal publications to report on progress and cover the EPMO’s accomplishments, including the intranet, project charts and project completions.

In spite of the board’s approval of the EPMO initiative, Graham still encountered some significant sceptics. The executive lead of one of the organization’s flagship initiatives admitted that he was sceptical about the whole EPMO concept but was reluctantly willing to give it a try. Following the successful delivery of that project using the EPMO’s processes and practices, the executive became one of its strongest supporters.

With PRINCE2 practices being applied and EPMO services widely utilized, Graham was feeling very positive about the progress being made. And then the Quality programme emerged. The organization was looking to become accredited by the Council on Healthcare Standards. Because of the significance and size of the undertaking, Graham decided he’d run the programme himself. Working with a Business Change
Manager, they identified 26 individual projects with a total of 14 Project Managers.

In order to become accredited an organization has to reach a satisfactory level in all areas measured. Occasionally an organization is awarded an “Outstanding Achievement” (OA) in an area but these are rare. On completion of the Quality programme, the organization was awarded a total of four OAs. The EPMO, not normally a part of the accreditation, got a special mention in the final report due to the way that it liaised effectively with the other departments.

The final part of Graham’s assignment was perhaps the most challenging – changing the way the company’s strategic plan and supporting project portfolio were developed. Fortunately, Graham reported to the head of the Strategy department. She had witnessed Graham’s progress on the EPMO work and was a committed supporter of his strategy process transformation plans.

Instead of starting with “What projects are we going to do next year”, Graham had the senior managers concentrate on what they were trying to achieve as an organization. Graham used the recently released Management of Portfolios (MoP) best practices to guide the work.

As part of that process, the executives agreed on the five core strategies and then considered how best to achieve their goals. From that exercise, they delivered a 5 year strategic plan and defined the required strategic initiatives to achieve that plan. Specific projects were identified to support the strategic initiatives with completed mandates documenting the strategic alignment.

In total, 62 initiatives were identified and 42 were prioritized for the following calendar year. Of those, 25 were considered corporate projects to be managed by the EPMO. The remainder were divisional undertakings to be managed locally.

Graham started this journey as the lone resource. As the project gained speed and generated demands for services and support, he hired his first two project managers, then recruited three more plus an administrative support person. At peak, there were 15 or so PMs embedded in the business units that were managing projects and had a dotted line responsibility to the EPMO.

The Results

Before Graham left, he conducted a final P3M3 review (with the same participants as the first one). The results were quite clear. Now the organization was above 2 in all aspects of the survey with 4 items above level 3. Furthermore, as the participants were now better acquainted with the principles, they were being far more critical in their scoring.

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In addition to the growth in project management maturity, Graham was responsible for putting proven project, programme and portfolio management practices in place and delivering an EPMO that supported and reinforced those practices going forward.

The Management of Portfolios (MoP) standard was being written during Graham’s time on the EPMO programme. Because of that involvement, he was invited to be one of the reviewers and so had early access to the standard. That allowed him to build the EPMO and shape the strategic plan with those principles in mind.

Graham was later personally invited to participate in the worldwide pilot exam for Portfolio, Programme and Project Offices (P3O) Practitioner level and was one of the first people in the world to be accredited as a practitioner for the P3O standard.

Graham was also invited to present at the APMG Best Practice Showcase because of his knowledge of and involvement with the Axelos standards and the sterling results he had achieved in the EPMO programme. He discovered somewhat later that Curtin University were using the model he had presented at the Best Practice Showcase as material in their lectures on project management.

The bottom line: Graham managed to deliver beyond expectations:

  • There was much greater visibility of corporate project activity.
  • There was superior engagement of stakeholders.
  • There was a complete implementation of the PRINCE2 standard, including the product-based planning approach.
  • Projects were managed more effectively, improving the delivery of the right results in the right timeframe at the right cost.
  • Resources, risks and issues were managed across all projects.
  • More consistently managed projects made it easier to understand what was happening across the organization.

You know your cultural change is succeeding when you start hearing PRINCE2 terminology in the corridor conversations!

How a Great Leader Delivered

This change was a massive undertaking for the organization. In addition, Graham faced a multitude of distractions throughout the engagement. How did he manage to survive and thrive? I think the following eight factors helped.

  1. Sponsorship is vital – A change of this size needs sponsorship not just from the project sponsor, the CEO in this case, but from all senior managers. Graham’s move to ensure the former executive sceptic became an outspoken supporter of the EPMO through the effective delivery of his pet project was a masterstroke. His own placement reporting to the head of Strategy helped cement support for the revamped portfolio management efforts.
  2. User engagement is essential – Early use of PRINCE2’s project boards helped change the culture and increase engagement. It sent an early and powerful message that things were changing.
  3. Dialogue is the glue that makes change stick – When the change you’re implementing becomes “conventional wisdom”, there is a much greater chance that the change will stick. Graham’s ongoing dialogue throughout the organization was a force multiplier.
  4. Implement a piece at a time – Changing corporate culture has to be approached slowly and methodically. Focusing on the initial PRINCE2 deliverables helped put the foundation in place for the follow-on effort and substantially increased the chances for early wins.
  5. Target easy and early wins – Graham’s early work with the project managers to accept and embrace the project definition document and PRINCE2 training were important catalysts to the ongoing success.
  6. Recognize and reward supporters and contributors – Momentum needs to be maintained following the “honeymoon period”. The project register, accessible intranet services and the wall chart on the boardroom wall for the CEO and other senior executives continuously reinforced the change message.
  7. Measurement makes dreams into reality – They say a picture is worth a thousand words. A chart or graph presenting a few key measures achieves a similar result. The initial project management maturity chart reinforced the need for change. The final chart communicated the significant results achieved.
  8. Keep your eye on the prize – Graham could have been easily distracted by the project managers’ lack enthusiasm for PRINCE2 deliverables, or by the executive sceptic, or by the introduction of the sizeable Quality project, or by his involvement in P3O and MoP development. Fortunately he wasn’t. He kept focused on his mandate and delivered successfully.

So, when you’re given a massive undertaking to deliver, take a deep breath and consider leveraging each of the eight factors above. They worked for Graham. They should make a big difference for you too. Also remember, use Project Pre-Check’s three building blocks covering the key stakeholder group, the decision management process and the Decision Framework right up front so you don’t overlook these key success factors.

Finally, thanks to everyone who has willingly shared their experiences for presentation in this blog. Everyone benefits. First time contributors get a copy of one of my books. Readers get insights they can apply to their own unique circumstances. So, if you have a project experience, a favorite best practice, or an interesting insight that can make a PM or change manager’s life easier, send me the details and we’ll chat. I’ll write it up and, when you’re happy with the results, Project Times will post it so others can learn from your insights.

Drew Davison

Drew Davison is the owner and principal consultant at Davison Consulting and a former system development executive. He is the developer of Project Pre-Check, an innovative framework for launching projects and guiding successful project delivery, the author of Project Pre-Check - The Stakeholder Practice for Successful Business and Technology Change and Project Pre-Check FastPath - The Project Manager’s Guide to Stakeholder Management. He works with organizations that are undergoing major business and technology change to implement the empowered stakeholder groups critical to project success. Drew can be reached at [email protected].

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