Moving to a PMO Managed Service
The decision to move to a PMO Managed Service is not a light one. A PMO Managed Service, also referred to a PMaaS, is a longer-term contracting agreement where pricing is dependent upon on the specific services to be provided, and the volume and complexity of projects within the service. The model offers a client more flexibility in rolling on and off highly specialized resources as they need additional capacity or capability. Rising in popularity mainly driven by efficiencies in procurement, PMO organizations are now looking at how to make the move.
In our previous article we looked at the many reasons for companies to undertake a move to a PMaaS or PMOaaS approach. As the transition to a managed service impacts not only the procurement of said services, but the way project management in general is to be delivered, there is a right way to launch.
Transitioning to a PMO Managed Service
A transition to a managed service model is a large scale organizational change. Thus, it should be treated as any other large program with a plan for the change and consideration into how that change can best be managed going forward. We have worked with many clients to help them capture the benefits of PMaaS including reduced management effort, improvements in PM capability and improvement in delivery quality.
Our approach reflects our core competency in Project Management, of course, and is based on establishing a plan for success. To keep things simple we aligned our approach with the tried and true Identify, Define, Deliver and Close mirrored in most project management approaches; modifying the later phases to support continuing to an operations based service in lieu of a project.
Here are the four steps in moving to a PMO Managed Service:
Step One: Identify
In the first step, you need to determine the current landscape and define the vision, goals and KPIs or key performance indicators by which the service will be governed. One of the key tenants of a successful managed service is the ability to pay for results, not resources. In order to do that, you must identify the key requirements for the service and set appropriate metrics for success.
A Program Diagnostic or assessment can help the organization gauge the availability of standard processes, tools and reporting mechanisms, as well as the variability of delivery across key tasks and projects. Establishing this baseline in performance will allow the team to measure and communicate any increases in performance. Identification of huge variances in delivery will also identify key focus areas for quick wins.
It may be necessary at this point to also get some “light touch” consulting to stabilize your programs or projects to bring them under control and to prevent having to make a lot of change in the future.
Step Two: Define
In the second step, there’s a shadowing or learning period, where the service provider typically performs a portion of the work along side existing resources. These resources could be in house staff as well as external contractors. The point of this phase is to define a book of work or catalog of activities for the service, along with a mobilization plan.
Establishing a catalog and cadence of regular PMO tasks ensures you can appropriately assess the effort required to manage. If you do not already estimate the complexity of projects upon initiation, this is a good practice to put in place. This helps standardize the service across simple, moderately complex and complex projects, which then supports in standardizing the price.
Mobilization is the second key point in the Define phase. Lets look at a specific client in more detail:
A client of ours was looking to move to a Project Management as a Service model. The organization had a high level of maturity in Project Management practices. Project Managers and Coordinators were deployed to the project teams from a centrally managed PMO. As all onboarding and training was the responsibility of the client, turnover resulted in waste time, effort and costs. Moving to a managed service model for them would resolve key bottlenecks in the workload of their management staff, reducing significant investment required to interview, on board and transition each new resource.
In addition, as the quality of contractors varied from project to project, there was inconsistency in project execution and performance; due in part to the differing levels of contractor experience. So not only were they looking for the managed service provider to take over responsibility in onboarding and training any new project management resources, they wanted to transition portions of the existing contract base into the service, gaining efficiencies in procurement.
In order to do that a mobilization plan would need to be defined covering conversion of existing resources, as well as how to lessen any impact changes could have on mid-flight projects.
Step Three: Deploy
The third step is the deployment and adoption of the managed service. By this point, the service delivery has become standardized, the pricing is set, and the provider has been able to get a clear picture of what the client wants and takes it over. In the previous ramp up graphic, the path illustrates moved from a learning phase to a scaling phase. In scaling, the client is continuing to move projects into the portfolio or Book of Work through a managed change control process.
If not already started by this point, during scaling the addition of regular reviews or service performance assessments will aid in ensuring that service satisfaction is maintained as more projects are added into the portfolio. Key performance indicators can include resource fulfillment times, customer satisfaction levels, onboarding progression and service delivery status.
Finally a key success factor for MI-GSO | PCUBED has been the embedding of delivery teams with onsite expert leadership. For organizations with a high ratio of contractors or disparate suppliers – getting them to operate as one team or even to deliver project management services in a uniform way can be difficult. As issues are raised during regular service performance reviews, the addition of an onsite team lead in our approach means you have a single point of accountability who can fast track necessary improvements.
Step Four: Operate
The last step in our approach is operate. The focus during this phase is always on the continuous improvement of the PMO service. Strong PMOs are always looking to improve and assess where they can provide the most value back to the organization. Does the organization need to focus more on driving business intelligence, digital initiatives, AI? Does it make sense for the PMO to include change management services allowing the organization to better capitalize on their digital investments?
And in some cases it may make the most sense for the service to be transferred back to the client. Is this client ready to do this on their own? This happens when internal capabilities have matured to the point where the service is no longer necessary.
While the decision to move to a Managed Service is not a light one, we hope that you agree that by applying a project management approach and following logical steps, it can be a positive one.
If interested in learning more, please read our case study where we recently partnered with a leading Automotive Manufacturer looking to reduce their project management operating costs by transitioning to a near-shored PMaaS (Project Management as a Service) solution.
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