A quality leader at a financial institution is deploying an Operational Excellence program across his organization that already has a project management office (PMO) in place. Recently he asked iSixSigma’s Discussion Forum about the pros and cons of using a PMO to manage project selection.
Readers responded with very pro-PMO advice about how these structures can help ensure that projects are aligned with business and strategic goals and provide the necessary tracking of multiple projects. Here are some of their edited comments.
jonathanimpens – I am quality leader at a bank who wants to introduce Operational Excellence [OE] across the organization. They have also recently set up a PMO. In terms of project selection I would like to run a deployment that focuses on putting in place a process architecture with clear process owners assigned to each who need to drive continuous improvements for their responsible processes.
My question as such is this: Out of your own experience, do you have any strong arguments for or against doing project selection through the PMO office? What are the advantages/disadvantages you have encountered?
Steven Clapp – I, too, am in financial services and have lived through what you are experiencing. Quality improvement projects are but one type of project. Others include technology implementation projects and small “just do it” projects. Whatever the type of project, they all follow a similar management process: sponsors/process owners generate ideas, someone develops business cases, someone or a committee approves the ideas, and finally the projects get executed. Having the PMO manage the proposal-to-project approval process and the project tracking process standardizes these efforts across the enterprise and frees up the project executers (including the quality improvement team) to execute.
The quality improvement leaders should have a place on the project approval committee to ensure the organization’s Operational Excellence needs are being met and, depending on the quality improvement team’s charter, to also ensure that projects align to the organization’s strategic objectives. Others on the project approval committee should include leaders from the operations value streams and such support functions as IT, HR, training and marketing, among others. Wide representation helps ensure all proposals receive full analysis of costs and benefits.
Managing the perceived overlap between quality improvement and project management is a constant effort. The partnership between the two teams, though, strengthens the selection and execution of projects.
bsomogyi – Steve, so well said that I can only agree and share my – pretty much same – experience… A PMO organization makes sure that projects are aligned with strategy, [and that] there are selection criteria of projects and then methods for execution, monitoring etc. If you don’t integrate your OE projects to these PMO-organized projects you may build up a view where there are the “important projects” (PMO) and “OE projects on top of our important ones to get some certificate.” Actually, as we have more big functions in EMEA [Europe, Middle East and Africa] and they have their own PMOs, I’m sitting in two boards and it’s my responsibility to share these OE projects with this forum or advise if some of the functional projects needs OE tools or could benefit from OE tools.
Another advantage of putting OE projects under [the] PMO umbrella [is] that, honestly, Green Belt trainings are usually not so strong in project management. Depending on the selection criteria of Green Belts, I think GBs and projects could benefit from the structured project management approach of a PMO.
rdollie – My experience is much like others here in that I’ve worked to integrate a traditional PMO and Operational Excellence at multiple employers over the past 10 years or so. One additional benefit I’ll share with having all projects under the governance of your PMO is benefits tracking. Having a process model with process owners involved in project justification can work wonders to “de-conflict” claimed benefits of multiple projects, and it’s extremely useful to have one group (your PMO in this case) with responsibility for de-conflicting the portfolio of project benefits that comes from just-do-its, technology projects, capital projects and process improvement projects.
Without this structure, I’ve come across organizations where actual customer satisfaction scores would be 140+ percent if you added up all the supposed improvements across the portfolio of project types impacting the same set of processes. I’ve seen similar messes where supposed operational cost savings would exceed the actual cost of the operation when you looked across multiple projects governed by different entities. In cases like this, the issue usually isn’t discovered until the benefits roll up to the executive steering team since they end up as the sole point of integration in the absence of an [organization] like your PMO. This tends to have career-limiting effects on the managers sponsoring the overlapping projects.
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