Building a Project Management Office

This blog posting discusses the importance of the Project Management Office (PMO) and the chronological steps necessary for developing the PMO.

In today’s complex business environment new projects are constantly being developed as organizations seek new ways to reduce costs, improve processes, increase productivity, and build their bottom line. Managing these diverse projects along with their people, resources, technology, and communication is a difficult endeavor for which the risk of failure is often far too high. An effective solution, created to establish a more centralized management structure for large groups of projects, is the Project Management Office (PMO). The PMO provides organizations with an infrastructure of people, procedures, and tools to achieve effective project management by leveraging project management standards, allocating resources, establishing consistent performance measures, and reducing duplication of efforts.

There are many benefits to establishing an effective PMO. First, the PMO provides a framework for consistently managing projects through a standard methodology while ensuring the projects are aligned with corporate goals and strategies. Project managers have clear lines of responsibility while coordinating people, processes, and tools with one another and by doing so, avoid both gaps and overlaps between projects and reduce or eliminate duplication of effort. Standardization and repeatability afford an organization better communication, reduced project cost, improved resource management, more accountability, improved quality, better forecasting, and less overhead associated with project managers.

Enlist Executive and Management Support

The first step in establishing a PMO is gaining executive and management support. This step relies heavily on organizational change management (OCM) as it requires a potentially significant shift in organizational culture as well as roles and responsibilities. Regardless of the difficulties and resistance to change, this step is the foundation upon which a successful PMO must be built. As with any shift in organizational structure, policy, or procedure, favor must be gained through justification for the changes in terms of cost benefit and return on investment (ROI).

Determine the Structure and Build the Team

The next step in building a PMO is to determine the structure and develop the team. There is no defined template for PMO structure as every organization brings its own variables to consider. Some manage all aspects of the projects assigned under them like scheduling, budgets, resourcing, human capital, oversight, and communication. Others may strictly coordinate these functions with most of the support coming from adjacent departments. The keys to determining the right structure and team members for the PMO are understanding the most effective way they can co-exist within the organization and finding the right balance between the PMO, organizational culture, roles and responsibilities, and management style. Some things to consider in establishing the structure and building the PMO team include: availability of resources; existing project management standards and methodologies; current roles and responsibilities; the politics of the organization; project size and volume; and current project management problems.

Establish Authority for the PMO

Just as a project manager needs to be given authority for a project, authority needs to be given (and recognized) for Project Management Office. How you structure your project management office depends on your organizational structure and size of your organization. Smaller organizations with may choose to have a project manager take lead of the PMO. However, as your organization increases in size and complexity you’ll want to assign a dedicated person to run your PMO and establish authority within the organization. This person would typically be at the Director/Vice President level with the authority within the organization which comes at that level.

Develop and Document Standards

Once the structure and team members have been determined, it is time to develop and document the PMO standards, practices, and methodologies for project management. These standards will allow for consistency across the organization and its portfolio of projects. They will also comprise a large portion of the training that projects managers and staff will receive in the next step. Standardization is also an important part of allowing an organization to compare various projects and allocate resources where and when they are necessary.

Identify Skills and Train the Staff

Once the development of project management standards and methodologies is complete, the PMO must identify the proficiency levels and skill sets of it project managers and staff in order to determine what training is necessary. Some of this information will be evident as a result of reviewing the statuses of current projects. Much of the training content can also be based on the standards, practices, and methodologies that were defined in step #3. The PMO should also establish an ongoing training program. In a PMO it is inevitable that staff members will come and go and organizational standards will change and evolve. A training program will ensure that all new employees receive training on those standards and existing employees remain aware of any changes.

Measure Success and Continuously Improve

Now that the PMO structure is finalized, project management standards are established and communicated, and personnel are trained, the focus of the PMO must shift to assessing and measuring success. This point in time marks the initiation of progress and performance reporting based on standardized tools, templates, and methodologies. However, it also marks the beginning of a continuous process improvement cycle and a transition from PMO deployment to operational sustainment. As the PMO evolves, project team members must maintain an awareness of the metrics by which their projects are measured as well as how process effectiveness is determined. There must be a concerted effort to identify processes which require improvement. Once identified, improvement measures must be developed and implemented.

The establishment of an effective PMO is beneficial to any organization which manages a portfolio of projects. When planning and building a PMO it is imperative that it is done in a manner which compliments the existing structure or the organization. This will allow the company to gain maximum benefit and to do otherwise would be counter-productive. Since every organization is different, the optimal structure for the PMO must be designed based on many considerations and variables. The ability of a PMO to manage projects through consistent and repeatable standards and methodologies brings many benefits. It provides the organization with accountability, continuity, simplified oversight, and the ability to measure project success more effectively. An effective PMO is a catalyst for greater efficiency as it allows an organization to do more quality work with fewer resources and less risk. The result of these benefits is an organization that will significantly improve its project success rate.

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Six Sigma Certification and B2B – Selling Points

Sales force effectiveness is not about simply automating the process – it also involves connecting process to winning over customers.

This is true even in case of B2B sales where winning business customers can bring in huge profits with increased credibility.

Sales Start With Customers

When companies plan for improvement in sales results, they often introduce automation of the process or implement CRM. CRM is useful, but it is not the only solution.

From the customer’s perspective, if salespeople are able to satisfy requirements, it can mean great improvement in sales results. To achieve improvement, the value that is given to the customer should be the value that they see.

For customers, there are items that are a must have, some which may be expected but which the product may not have, and some that are unexpected and thus are delighters.

By using Six Sigma certification tools like VOC to get an understanding of customer needs, companies can provide value that the customer expects, as well as understand and try to provide that which delights them.

Six Sigma Certification DMAIC To Improve Relationships

Six Sigma certification can directly impact sales results if companies are disciplined in focusing what is of value to customers in the buying process.

It is about understanding the needs of the customer when they make that crucial buying decision.

Define: The define phase involves convincing key customers and stakeholders to work on the project.

The involvement of sales staff, sales managers, the sales support team and service personnel is just as important as key customers. It is imperative to define the focus of the project using a scope diagram, which will guide the team to focus on that specific area.

Rather than a huge project, a specific area or product can be taken for consideration.

Measure: The collection of data from customers is more important in understanding the critical to quality (CTQs) areas in this process.

Customer loyalty has a big impact on sales results and needs to be inferred – and factors that affect it should be understood. Keep in mind and collect data from loyal customers, disloyal as well as prospective ones.

A study of prospective customers helps companies to understand the reasons or factors affecting customer decisions if they have not been converted to sales as well as to understand the effectiveness of salespeople.

An insight into customer responses can be achieved by interviewing salespeople.

Analyze: An analysis using different tools of the responses of customers with that of the feedback received from salespeople can be great help.

Cross-referencing helps determine the root causes affecting sales results.

Improve: This stage involves making improvements to the sales process, like changing a pricing strategy that may be a major factor affecting sales.

It could also involve reorganizing sales functions, as well as training the sales force to improve their skills.

Control: In this stage, changes start showing results – and to sustain them, a review of activities has to be undertaken. This may include analyzing the number of proposals, active leads, customer loyalty, revenue, and profitability achieved with a changing price structure.

This is a bit like going back to the basics – but it proves to be very helpful in improving sales results. The outside-in approach helps bring about sustainable growth.

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A Concise Insight into Asset Management and Six Sigma

Asset management can be described as a business and financial process which analyzes the value of specific assets to determine their financial health, viable investment opportunities, and growth potential. It can also be referred to as the management of collective investments. The practice is commonly associated with the industrial and technology sphere where professional analysts help stakeholders manage their investment portfolios to reap the maximum possible gains. Six Sigma Methodology is a quality improvement method used to reduce defects in products and services.

Typically, an in-depth financial analysis is required to create an investment growth plan.  This analysis is deeply rooted in statistics as is the Six Sigma Methodology.  This process is used to help companies create products and services free of errors or defects, and the process can help financial analysts come up with their investment growth plans.

The significance of this practice has steadily grown in the recent past as wealthy individuals seek to play an active role in public assets and technologies. This trend has been encouraged largely by rapid growth in industries such as computers and technology as well as transportation. People now seek to make large investments in these sectors. Asset management comes into play here; professionals help investors calculate the trade-off and growth potential of various portfolios.  The Six Sigma process can very much aid those professionals in calculating risks as well as maximizing portfolios.

Asset management practitioners usually work in teams with the investor in setting financial goals, reviewing the projections, analyzing current and past data.  Individuals with Six Sigma Certifications also work in teams to accomplish their goals. They (the professionals) then make recommendations on the viable portfolio-building strategies available. The processes involved may include in-depth statistical analysis of collected data and calculation of life cycles of the investments; tasks that go hand in hand with knowledge of the Six Sigma Methodology.

It may also be necessary to evaluate different securities such as shares and bonds in addition to physical assets such as computer technology or real estate. The professionals guide the investors in selecting the best stocks, developing financial plans for both short and long term growth. They also monitor all the investments on the behalf of their clients.

The investors and firms involved in this practice enjoy a symbiotic relationship. Both of them benefit from the various procedures. This especially applies here they possess commodities such as stocks, bonds and investments in real estate.  Knowledge of the Six Sigma Methodology only serves to better accomplish their goals.

The managers help their clients in setting clear and specific financial goals. They also conduct a risk analysis of the various strategies applicable and provide a comprehensive assessment to their clients. Professional recommendations on the assets that are likely to provide the highest returns for the clients are also given where necessary.

Asset management services are mostly solicited by wealthy individuals who have a diverse stock portfolio. Because the firms typically charge high fees, the individuals who make use of their services usually have a high net worth and a number of investment accounts. Paying for these expensive services does not necessarily translate into success in financial markets. This is because of erratic fluctuations in the stock and securities exchange markets. Firms cannot therefore guarantee success for the investor, only that they are doing their best and employing all of their accomplishments (including Six Sigma certification) in order to serve their clients.

Contrary to popular belief, asset management does not require adherence to strict formulas. Managers may choose from a number of strategies after conducting an assessment; and the Six Sigma Methodology can only serve to help them further. For instance, it may be necessary to diversify long term investments in order to spread the risk. These services are not mandatory for any individuals or businesses; small firms and people with only a few securities investments typically find them expensive. The practice is also risky; hence managers constantly find themselves at the mercy of fluctuating stock markets.

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Six Sigma and the Pharmaceutical Industry

Within the pharmaceutical industry, there are various IT factors when transitioning from an existing management process to a new one. In this case transitioning to Lean Six Sigma methodologies carry several IT factors.

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Six Sigma and its Use in Finance

Six Sigma within the finance industry helps to reduce costs that are based on strategic decisions. These decisions are often made from statistical data collected from specific sources throughout this quality improvement process.

A finance team analyzes data in order to suggest certain changes and improvements within the organization. These projects are run by Six Sigma professionals, and these individuals are a part of a team, that is compiled of different levels of certified professionals. Taught to use special tools, these individuals are able to use data taken from all aspects of the finance industry and figure ways to change an organization’s day to day practices for the better.

The finance industry often involves auditors and bookkeepers, just to name a few. It is easier for these areas of business to use software specifically created for that purpose to measure specific improvements within the business and further reap their benefits. Data such as this can be used to bring about success within a business. These professionals are an essential aspect of the company, and the Six Sigma Process can greatly assist them in their roles within the business.

At the beginning of a project, a Six Sigma team will have to evaluate the purpose of the project and what it stands to correct or amend. A finance team can also aid in the prioritizing and selecting of these projects, as they will have a greater understanding of which decision will be best for the company financially, as this is what will make the company most successful. A finance team is able to locate those projects which will prove most beneficial to the company’s goals and financial objectives. This is especially important as the industry needs to continuously effect change in order to keep up with the changing market.

A finance team in conjunction with a Six Sigma team (or a finance team trained and certified in the Six Sigma Method) can also be involved in keeping the company’s project pipeline full. When a project is chosen, these individuals can further decide on the benefits after the completion of the project. After implementing the project, team members are able to allocate several control mechanisms which help to ensure promising results.

A trained Six Sigma team with the aid of the finance department will be able to determine the main reason/s behind the lack of performance within the organization. After process ownership has been set it can easily be transferred to others. The finance team will be able to find the KPIs, or key performance indicators, that are needed to improve the business.  There are several benefits when implementing Six Sigma within the finance industry. For instance, it improves the integrity of results (as all decisions are based upon statistical fact), helps to develop a standard calculation, records incorrect benefits, audits results, provides accountability, and lastly, budgets any further spending within the company.

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Six Sigma LIFO – Last In First Out

Typically, LIFO and FIFO are terms used primarily by the financial industry in dealing with invested money and its taxable status based upon the time at which it was invested and the tax legislation enacted after, during, and before the investment period. LIFO stands for Last In, First Out. Conversely, FIFO means First In, First Out. However, with Six Sigma LIFO – Last In, First Out has taken on a different application as it pertains to inventory as opposed to invested funds.

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Types Of Six Sigma Tools

There are many strategies that organizations have come up with in a bid to improve their productivity as well as profits. Six sigma tools have amassed massive popularity among many corporate organizations because of their great economic effects on the bottom line.

Six Sigma Methodologies are used in projects that can help companies improve their overall productivity. Although there are many many techniques used in these projects, this article will discuss three main techniques that encompass other methods implemented in these ventures.

Statistical instruments help in planning ahead for Six Sigma projects and they may include techniques like Critical Path Management (CPM) and Failure Mode Effects and Analysis (FMEA). The CPM helps in coming up with timetables that can guide Six Sigma Professionals in forming dates and a schedule for implementation of various critical events and activities. This technique also helps the implementers to come up with reasonable deadlines and focus on meeting them within their tight schedules.

The FMEA is a technique used in predicting possible challenges that will be faced in implementing the project in question. This helps the teams to work on possible remedies and methods of dealing with such challenges. This way, the project is able to forestall and sidestep any hurdles that may come up. CPM is basically a planning instrument under statistical instrument, while FMEA is majorly an analytical instrument that helps to predict and deal with potential hurdles.

Judgmental instruments include the famed Fishbone Diagram also known as Ishikawa Root Cause Analysis Diagram which helps in determining the major causes of problems within organizations as well as projects. This instrument is also used in determining the methods of data collection that are appropriate in different projects and organizations.

Other methods used in the judgmental instruments include the Affinity Group Tool, Brainstorming, and the Thought Map Regulation Diagram which can be alternated with the Fishbone Diagram. Although all of the above instruments are used in finding out the root causes of failure in organizations and projects, their applications are very different because some can handle linear complications better and others handle non-linear complexities better.

The Fishbone Diagram is more favorable in handling linear complexities and is discouraged when dealing with non-linear complexities. On the other hand, the Thought Map Relations Diagrams are the most suitable instruments when handling non-linear complexities. Even though all the techniques are helpful in determining suitable data collection methods, the Brainstorming technique has been found to be most dependable when analyzing the data in question.

Software instruments are more or less similar to the statistical instruments aforementioned. Besides eliminating errors during the data analysis stage, these instruments are useful in speeding up the entire project. They are commonly found in Spreadsheet Applications such as RapAnalyst, SixNet Intelligence, and MiniTab among other instruments. The calculator for these projects has been found to be highly dependable as a statistical instrument. All of the above six sigma tools are widely available for use in various projects. However, there is a great need to assess carefully whether your organization requires these tools and when, which is what a Six Sigma Professional is trained to determine.

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