OPM3 - What's In It For Me

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Professional Development Day PMI Honolulu - May
3, 2006
OPM3 - Organizational Project Management
Maturity Model
Walter A. Viali, CSQA, PMP PMO To Go LLC
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What is OPM3

• PMIs Organizational Project Management Maturity
  Model
• Organizational project management is the
  systematic management of projects, programs and
  portfolios in alignment with the achievement of
  strategic goals

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Walter A. Viali

• Over 32 years in Information Technology
• Retired from Texaco Inc. in 1999 after 25 years
• Co-founder and Principal Consultant for PMO To Go
  LLC
• Certified Software Quality Analyst (CSQA)
• Certified Project Management Professional (PMP)
• Certified Project Management Instructor
• Member of the faculty of the Project Management
  Program for the Bauer College Business
  (University of Houston)
• JAD Session Leader with over 4,000 hours of
  planning and project facilitation experience
• SEI CMM and PMI OPM3 knowledge and assessment
  experience
• Implemented several Project Management Office
  (PMO) organizations
• Experience in Strategic Business and IT Planning
• Past President of the Houston Chapter of the
  Society for Software Quality (SSQ) and of the
  Texas Application Process User Group
• Sr. Vice President, External Operations, PMI
  Houston Chapter
• Consulting with major companies on Process
  Improvement, Project Management, PMO
  implementation, Strategic Planning, JAD
  facilitation

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What are Maturity Models?

• Tools for analyzing business and technical
  performance of 3 interrelated components
• People
• Processes
• Technology
• Detailed models that help identify performance
  characteristics of these components at various
  stages of growth
• Frameworks for benchmarking the effectiveness of
  an organization

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The Need for Maturity Models

• Progress and continuous improvement are an
  integral part of our way of life
• Organizations need a well construed approach to
  understand where they are, where they need to be
  and the resulting gap
• Current maturity models offer a well organized
  and linear roadmap for continuous improvement
• Maturity models offer a quick and often precise
  snapshot of an organizations effectiveness and
  reliability

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The Standish Group 1994 Chaos Report

• 17 of projects succeed
• 31 of projects fail
• 52 of projects are challenged
• 78 billion dollars total project waste (against
  250 billion in project spending)

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The Standish Group 2003 Chaos Report

• 34 of projects succeed (100 improvement over
  1994)
• 15 of projects fail (down from 31 in 1994)
• 51 of projects are challenged
• 55 billion dollars total project waste (against
  255 billion in project spending)
• 38 billion in lost dollars for US projects in
  2002
• 17 billion in cost overruns

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Need for Improved Performance with
Could dismal results be a clue?
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Where did it all start?

• The DoD and the problem of software bugs
• The need to identify reliable contractors
• The Software Engineering Institute (SEI) is
  established at Carnegie Mellon University in
  Pittsburgh, PA
• Watts Humphrey, former IBM executive, is placed
  in charge of the SEI
• The SEI collects best practices from large U.S.
  companies

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Proliferation of Maturity Models

• SEI People CMM
• Compensation, Participatory Culture, Monitoring
  and Workforce Innovation
• SEI Software Acquisition CMM
• Requirements, Solicitation, Acquisition, Project
  Management, Risk, Contract
• SEI Systems Engineering CMM
• Engineering, Project and Organization Domains
• SEI Integrated Product Development
• Product lifecycle, design, product built, tested,
  supported and retired
• SEI PSP
• Personal Software Process, the SW CMM for the
  individual
• SEI CMMI
• Integration of SW-CMM, IPD, SE, SA maturity models

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Proliferation of Maturity Models

• Data Management Maturity Model
• Testing Maturity Model
• Security Maturity Model
• Internal Controls Maturity Model
• Project Management Maturity Models
• PMO Maturity Models
• Etc.

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Project Management Maturity Models

• ESI Framework for Project Management
• Dr. William Ibbs PM Maturity Model (Berkeley)
• PM Solutions PM and PMO Maturity Models
• Institute for International Learning PM and PMO
  Maturity Models
• Etc.

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OPM3

• PMIs answer to the plethora of Project
  Management Maturity Models is OPM3
• Organizational Project Management Maturity Model
• Comprised of three general elements
• Knowledge content of the standard
• Assessment method for comparison with the
  standard
• Improvement setting the stage for
  organizational changes

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The OPM3 Standard
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PMIs OPM3

• Organizational Project Management Maturity Model
• Standard developed under the stewardship of PMI
• Provide a way to understand organizational
  project management
• Measure a companys maturity against a
  comprehensive set of project management Best
  Practices
• Improve organizational project management maturity

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Bridging the Gap
Moving to Project Driven Organizational Models
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Links Among the Process Groups in a Project Phase
and in OPM3
Planning Processes
Initiating Processes
Controlling Processes
Executing Processes
Closing Processes
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Organizational Project Management Processes the
Domains
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Organizational Project Management Improving
Performance
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PM Maturity Increases Along a Continuum
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OPM3 Stages of Maturity
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OPM3Portfolio Management Process Models

• Portfolio Initiating Processes (1)
• Portfolio Planning Processes (21)
• Portfolio Executing Processes (7)
• Portfolio Controlling Processes (8)
• Portfolio Closing Processes (2)

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OPM3Program Management Process Models

• Program Initiating Processes (1)
• Program Planning Processes (21)
• Program Executing Processes (7)
• Program Controlling Processes (8)
• Program Closing Processes (2)

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What About Project Management?
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2
7
12
21
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OPM3Portfolio and Program Management Process
Models
Portfolio Scope Initiation
Controls
Outputs
Inputs
Tools Techniques

1. Program and Project Selection Methods
2. Scoring Methods
3. Techniques such as NPV and ROI
4. Expert Judgment

1. Organizational financial expectations or
   constraints
2. Risk Tolerance
3. Business Goals
4. Investment Decisions
5. Executive Oversight

1. Portfolio Charter
2. Portfolio Leader identified and assigned
3. Portfolio Project Mix
4. Constraints
5. Assumptions

1. Organizational Objective function description
2. Strategic Plan
3. Historical Information

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Links Among the Process Groups in a Project Phase
and in OPM3
Planning Processes
Initiating Processes
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Controlling Processes
Executing Processes
Closing Processes
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Portfolio Planning Processes

• Portfolio Plan Development
• Use the output of the other planning processes,
  including strategic planning to create a
  consistent, coherent document that can be used to
  guide both Portfolio execution and Portfolio
  control
• Portfolio Scope Planning
• Progressively determining and defining the scope
  of the Portfolio
• Portfolio Scope Definition
• Further categorization of the types of Projects
  and Products that the organization is expected to
  undertake
• Portfolio Project Activity Definition
• Activities that must be performed to produce the
  various Portfolio products (Portfolio Program and
  Project lists)
• Portfolio Project Dependency Analysis
• Identifying and documenting schedule dependencies
  across Programs and Projects within the Portfolio

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Portfolio Planning Processes

• Portfolio Duration Estimating for Programs and
  Projects
• Estimating the number of work periods needed to
  complete the Programs and Projects in the
  Portfolio
• Portfolio Schedule Development
• Analyzing Program and Project sequences, duration
  and resource requirements to create the Portfolio
  schedule
• Portfolio Resource Planning
• Define resource options and best fit of resources
  to proposed Programs/Projects and initiatives,
  with constraints and tolerances to maximize
  results
• Portfolio Cost Estimating
• Develop an estimate of the costs of the resources
  needed to complete Portfolio activities
• Portfolio Cost Budgeting
• Establish priorities and make preliminary budget
  allocations among existing and proposed
  Programs/Projects

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Portfolio Planning Processes

• Portfolio Quality Planning
• Identify which standards are relevant to the
  Portfolio and determine how to satisfy them
• Portfolio Organizational Planning
• Identify, document and assign Portfolio roles,
  responsibilities and reporting relationships
• Portfolio Staff Acquisition
• Plan for the continued availability of
  appropriate human resources needed to support the
  Portfolio
• Portfolio Communications Planning
• Determine the information and communication needs
  of the Portfolio stakeholders who needs what
  information, when they need it and how it will be
  given to them
• Portfolio Risk Management Planning
• Evaluate and plan risk management activities
  across the Portfolio

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Portfolio Planning Processes

• Portfolio Risk Identification
• Determine which risks might affect the Portfolio
  and document their characteristics
• Portfolio Qualitative Risk Analysis
• Perform a qualitative analysis of risks and
  conditions to prioritize their effects on
  Portfolio objectives
• Portfolio Quantitative Risk Analysis
• Measure the probability and consequences of
  Portfolio risks and estimate their implications
  for Portfolio objectives

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Portfolio Planning Processes

• Portfolio Risk Response Planning
• Develop procedures and techniques to enhance
  opportunities and reduce threats to the
  Portfolios objectives
• Portfolio Procurement Planning
• Determine what to procure and when. Identify
  economic opportunities across the portfolio
• Portfolio Solicitation Planning
• Document organizational requirements and identify
  potential sources to meet procurement need

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The OPM3 Cycle

• Step One Prepare for the Assessment
• Step Two Perform the Assessment
• Step Three Plan for Improvements
• Step Four Implement Improvements
• Step Five Repeat the Process

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The OPM3 Cycle
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OPM3 Structure

• Best Practices (586)
• Capability (two or more) per Best Practice
• Measurable Outcomes per Capability
• Key Performance Indicator for each Outcome
• Paths to each Best Practice
• Applicable to Portfolio, Program and Project
  Management, as well as to the Standardization,
  Measurement, Control and Continuous Improvement
  Maturity Phases

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OPM3 Structure
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Comprehensive Assessment

• Determine which capabilities exist or are absent
  for each Best Practice
• Which outcomes exist and are observable in the
  organization for each capability?
• Gain a more in-depth understanding of the
  organizations maturity in organizational project
  management

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Dependencies Between Best Practices
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OPM3 - What's In It For Me

• Great project management will be of limited
  effect in the absence of organizational project
  management
• In fact, PMP certification can be viewed only as
  the first step in improving internal project
  management practices

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OPM3 - What's In It For Me

• Companies wishing to align internal project
  management practices with PMIs PMBOK Guide and
  future PMI standards, should begin to embrace
  PMIs OPM3, especially if ready to embark on a
  project management improvement journey
• PMOs need the right tools to improve the
  organizations project management practices

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Maturity Models and the PMO
Project Management Office
Project Portfolio Management
Projects
Maturity Models
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OPM3 - What's In It For Me

• PMI will continue to enhance this model and allow
  third-party vendors to develop and market
  products and services based on OPM3
• OPM3 2008 Update Project under way
• DNV (Det Norske Veritas) and the APS program
• Its important to embrace organizational project
  management and make sure we dont lose the boat
  the way IT vendors did with the SEI CMM during
  the past 15 years

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The Future of Maturity Models
DoD
CMMI
OPM3
Common Standard ?
ISO
Baldrige
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In Conclusion

• Maturity Models are a very important component of
  the overall organizational effectiveness picture
• The IT industry has ignored process improvement
  for too long and is now paying the price
• This is analogous to the way American industry
  ignored Deming after WWII, as he was exiled to
  Japan

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In Conclusion

• Instead of taking the easy way out, companies
  need to embrace maturity models as part of
  organizational project management and start the
  long journey towards survival
• Fortunately, some of the largest U.S.
  corporations are embracing organizational project
  management and not all hope is lost
• However, if organizational project management
  continues to be ignored by the majority of
  companies, tomorrows project managers and PMOs
  will go the same way as the programmers and
  other outsourced professionals of today

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You think you have problems.

• The Great Pyramid at Giza.
• Schedule of 10 years
• Built starting around 2,550 b.c.
• 3 years to prepare, 5 years to build, 2 years to
  clean up
• Resources
• 13,200 men (peak of 40,000)
• Artisan village (4,000-5,000 people)
• 2 million blocks
• Labor expended
• 36.7 million days or 131,200 man-years
• Labor costs
• 111 million jugs of beer
• 126 million loaves of bread

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OPM3 - Organizational Project Management
Maturity Model
Professional Development Day PMI Honolulu - May
3, 2006

• Walter A. Viali, CSQA, PMP
• PMO To Go LLC