Understanding your portfolio’s performance allows you to effectively govern and thus drive the most value for the business from the resources available. How well do you understand and control your portfolio?
What is effective governance and PMO?
Effective governance could be described as having a structured and accurate mechanism for decision making. It would be based on clear metrics enabling you to manage cost and benefit, drive effectiveness and deploy resources in the most beneficial way.
The Programme Management Office (PMO) is therefore key to this, needing to accurately measure and report on projects and programmes and identify those that are failing or ineffective so that you can intervene and avoid wasting these critical resources. It is essential therefore that the PMO should have backing and authority from the sponsor.
How can Governance and PMO fall short?
All too often a Programme Management Office simply becomes a data processing function. They expend a large amount of time and resource chasing project managers for weekly reports, RAID updates and finance forecasts. But still do not have confidence in the data they are receiving. They may also not be using this data effectively to drive clear metrics that aid the governance process. And so effective governance and decision making is hampered, or at worst misdirected, with decisions coming too late to avoid wasted budget and resource.
When a leadership team doesn’t have the information they need to be effective, the PMO can simply be viewed as an overhead, rather than an enabler to effective governance. Similarly, project managers and stakeholders see no value in the activities they are being asked to complete and so quality suffers.
5 signs a programme management office may fail
Taking one of Project One’s large manufacturing customers as a case study, we observed a number of warning signs.
Taking a closer look, we identified that there were 4 key demands on the project managers for status reporting, in addition to ad-hoc requests.
Project Managers were entering key information into an online reporting tool for PMO but additionally, providing a weekly status summary for their portfolio lead and a further different format status report summarising all aspects with additional information for business partners. The overhead of this meant that project managers were not giving the focus it needed and cutting and pasting poorly across these. So, inevitably there were inconsistencies across the reports and some items got missed. This led to a complete lack of confidence in what was being reported – which was right? How could they trust that what they were being told was the truth.
Furthermore, though observation and mentoring it was identified that many project managers struggled with what they saw as a complicated financial reporting and accruals process.
How did we improve governance?
Essentially, we simplified and automated. Firstly, making simple changes to the online reporting tool to enhance and refine the data captured. Automation was then used to generate the reporting needed by the various stakeholders form this single source, ensuring consistency. For the business partners this resulted in a single report in a consistent format listing all their projects with the key information they needed. This was extremely well received by them and demonstrably improved their relations with their business customers.
Having one single point to update meant project managers could focus more effort ensuring this was accurate. But we also established minimum standards, clearly laying out what was expected of each project manager and the quality to which it should be completed.
We spent time training project managers to explain why and how we were to use the information and why it was important. Critically, financial training was given to improve the quality of forecasting and accruals.
Regular quality checkpoints with project managers were put in place. Which not only allowed us to validate the accuracy of data but provided a further mentoring and training opportunities. Where reporting suggested discrepancies or the checkpoint highlighted concerns we would schedule a “deep dive” with a project manager and perform an in depth review with them.
We used the data to drive intervention by exception and aid decision making. We identified key measures that indicated problems or inaccurate reporting and then acting on this information to intervene early, instigating Project “Deep Dives” to perform an in-depth review with project managers where concerns were identified. For example, a forecast that repeatedly is moved forward to the next month can indicate a stalled project or one that is not accurately forecasting, possibly saving up budget “just in case”. Being able to identify this and challenge could free up funds to be put to a better use in the business.
How did Project One add value?
We were able to bring extensive expertise and lessons learned from a breadth of experience to make the tried and tested changes that we knew would transform the effectiveness of the team through:
By the end of the assignment there was consistent, high-quality reporting across all projects in the portfolio. Finances were understood and under control. The performance of the team was improved through leadership, recruitment and improved teamwork and support. Business stakeholders were beginning to trust the delivery within the programme and improvements were recognised by the business partners. As a result, the number of escalations to IT management reduced significantly leaving more time for effective governance. The IT leadership had an improved understanding of the status and effectiveness of their portfolio.
Project One can similarly assess and strengthen the leadership of your portfolios. If you’d like to learn more please get in touch, we would be pleased discuss how we can help.
To discuss further, please contact our PMO lead, Nick Houlton
Mobile: 07716 075616 | email: firstname.lastname@example.org
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