Building the case for improving your project management maturity (P3M3) - PMI Queensland

Building the case for improving your project
management maturity

PMI Queensland
project management conference
12th July 2012
Philip Reid

Introduction

Overview

Using key findings from recent maturity assessments the presentation will outline the frameworks for examining
the maturity of an organizations’ Portfolio, Program and Project Management capability.

It will describe how the maturity of an organisation is assessed, the key components of the maturity levels and
the actions that organisations have taken to improve their maturity level.

The presentation will help you understand:

1. How much project governance does your organisation have and how does that reflect on the level of project
management capability in the organisation?

2. What level of capability in Portfolio, Program and Project Management is right for your organisation?

3. What can you implement in the next 90 days to see a rapid improvement in your maturity level?

MSP® is a registered trade mark of the Cabinet Office
P3M3® is a registered trade mark of the Cabinet Office
The Swirl logo™ is a trade mark of the Cabinet Office 2
© Wired Consulting (Australia) pty ltd 2012

Assessing the level of Project Management Capability in an
organisation

Finding the right level of Portfolio, Program and Project
Management for your organisation

90 day implementation plan to see a rapid improvement in your
maturity level?


organisation


maturity level?


Setting the Scene – Maturity Models

There are a number of maturity models available. This
presentation will discuss P3M3® which is based on CMMI


Business Strategy, Portfolio, Programmes and Projects

Business
Strategies



Strengths & Weaknesses

Business
Strategies

Internal capabilities



Strengths & Weaknesses Opportunities & Threats

Business
Strategies

External market forces




Business
Strategies

Portfolio: the totality of an
organisations investment in the
changes required to achieve its
strategic objectives.




Business
Strategies

Portfolio: the totality of an Programme: a temporary, flexible
organisations investment in the organisation created to co-ordinate, direct
changes required to achieve its Programmes and oversee the implementation of a set of
strategic objectives. related projects and activities in order to
deliver outcomes and benefits related to
the organisation's strategic objectives




Business
Strategies

Portfolio: the totality of an Programme: a temporary, flexible
organisations investment in the organisation created to co-ordinate, direct
changes required to achieve its Programmes and oversee the implementation of a set of
strategic objectives. related projects and activities in order to
deliver outcomes and benefits related to
the organisation's strategic objectives

Project: a unique set of co-
ordinated activities, with Operations: the day-to-day
definite starting and finishing processes and procedures
Projects Operations which enable the
points, undertaken by an
individual or team to meet organisation to operate
specific objectives within efficiently and effectively.
defined time, cost and
performance parameters as
specified in the business case


Overview of P3M3®
(Portfolio, Programme and Project Management Maturity Model)

P3M3® is an overarching model containing
three sub-models
• Portfolio Management Maturity Model (PfM3)
• Programme Management Maturity Model
(PgM3)
• Project Management Maturity Model (PjM3)
P3M3® uses a five-level maturity
framework
• The maturity of each sub-model is
independent of the other sub-models
Maturity is focused on seven process
perspectives which exist in all three
sub-models P3M3
TM

• Maturity can be determined at the process
perspective level
Each perspective at each level has specific
attributes which describe the
requirements to achieve that level
There are generic attributes which are
common to all process perspectives at
a given maturity level
The latest copy of the P3M3® model is
available at:
• www.P3M3-officialsite.com

Overview of P3M3®

three sub-models
(PgM3)
Organisational
P3M3® uses a five-level maturity Governance

framework
sub-models P3M3 TM

perspective level
available at:

Overview of P3M3®

three sub-models
(PgM3)
Organisational

framework
sub-models P3M3 TM

perspective level
available at:

P3M3® Assessment Levels
Level 1 Level 2 Level 3 Level 4 Level 5
Initial Process Repeatable Process Defined Process Managed Process Optimised Process
The organisation’s The organisation ensures The organisation have its The organisation obtains The organisation runs
Executive Board recognise that each programme own centrally controlled and retains specific continuous process
programmes and projects and/or project in its programme and project management metrics on improvement with
Portfolio

and run an informal list of its portfolio is run with its own processes and can its whole portfolio of proactive problem and
investments in programmes processes and procedures individual programmes and programmes and projects technology management
and projects to a minimum specified projects flex within these as a means of predicting for the portfolio in order to
(There may be no formal standard. processes to suit the future performance. improve its ability to depict
tracking and reporting (There may be limited particular programmes The organisation assesses performance over time and
process.) consistency or co- and/or project. its capacity to manage optimise performance.
ordination.) The organisation has its programmes and projects
own portfolio management and prioritises them
process accordingly

The organisation The organisation ensures The organisation has its The organisation obtains The organisation runs
Programme

recognises programmes that each programme is own centrally controlled and retains specific continuous process
and run them differently to run with its own processes programme processes and measurements on its improvement with
projects. and procedures to a can individual programmes programme management proactive problem and
(Programmes may be run minimum specified flex within these processes performance and runs a technology management
informally with no standard standard. to suit the particular quality management for programmes in order to
process or tracking system.) (There may be limited programme. organisation to better improve its ability to depict
consistency or co- predict future programme performance over time and
ordination between outcomes. optimise processes.
programmes.)

The organisation The organisation ensures The organisation has its The organisation obtains The organisation runs
recognises projects and that each project is run own centrally controlled and retains specific continuous process
runs them differently from with its own processes and project processes and can measurements on its improvement with
Project

its on-going business. procedures to a minimum individual projects flex project management proactive problem and
(Projects may be run specified standard. within these processes to performance and run a technology management
informally with no standard (There may be limited suit the particular project. quality management for projects in order to
process or tracking system.) consistency or co- organisation to better improve its ability to depict
ordination between predict future performance. performance over time and
projects.) optimise processes.


P3M3® - 7 Process Perspectives

Organizational Governance Risk Management
• Alignment to strategic • Identification, mitigation and
objectives management
• Organizational standards and • Review, supporting processes
controls and structures
Management Control Financial Management
• Objectives, scope and output • Business case and financial
or outcomes appraisal
• Internal controls throughout • Management of costs
the lifecycle • Provision of funds
• Review and decision making Stakeholder Management
Benefits Management • Identification, analysis and
• Business change, outcomes engagement
and transition • Communications
• Ownership, realisation and Resource Management
management • Acquisition and supply chain
• Measurement and tracking • Capacity
planning, prioritisation and
performance management


Undertaking a P3M3® Assessment

A P3M3® capability assessment is like any other project and needs to be planned and
managed. Key principles that contribute to project success need to be adhered to
including:

• Continued business justification (inc. clear objectives, scope and the
business case)
• Learning from previous experiences
• Defined and agreed roles and responsibilities (executive sponsorship
and commitment)
• Planning, monitoring and control on a stage-by-stage basis
• Defined tolerances and limits of delegated authority
• Strong stakeholder engagement, ownership and commitment

A P3M3® assessment can be self-assessed (download at www.P3M3-officialsite.com)
or undertaken with the use of an external P3M3 accredited consultancy.


A P3M3® facilitated assessment checks 3 areas:

What processes /
capabilities are in place

Proof (artifacts) its being
done that way

Understanding of the
processes and capabilities


Typical results from a P3M3 assessment

*FMA levels from A Critical Assessment of P3M3 in
Australian Federal Government Agencies – Oct 11
University of Canberra


organisation


maturity level?


Governance requirements for maturity levels

Governance
Lo Med Hi


Governance
Lo Med Hi


Level 1 – Awareness

Little structured
approach to dealing with
Projects

Level 1

Governance
Lo Med Hi


Level 1

Level 2 – Repeatable

Areas that are beginning to
Level 2
use standard approaches to
projects but there is no
consistency of approach
across the organisation.

Governance
Lo Med Hi


Level 3 – Defined

A consistent set of
standards being used by all
projects

Level 3

Level 2

Governance
Lo Med Hi


Level 3

Level 4 - Managed
Level 4 The organisation monitors
and measures its process
efficiency, with active
interventions to improve

Governance
Lo Med Hi


Level 4
Level 5
Level 5 – Optimised

The organisation will be focusing on optimisation of its
processes to take into account changing business needs and
external factors.

Governance
Lo Med Hi


Level 3 – Defined
Level 1 – Awareness
A consistent set of
standards being used by all
Little structured
projects
approach to dealing with
Projects

Level 1 Level 3

Level 2 – Repeatable Level 4 - Managed
Level 2 Level 4
Areas that are beginning to
use standard approaches to Level 5 The organisation monitors
and measures its process
projects but there is no efficiency, with active
Level 5 – Optimised
consistency of approach interventions to improve
across the organisation.
The organisation will be focusing on optimisation of its
processes to take into account changing business needs and
external factors.

Governance
Lo Med Hi

On average less than 1/3 of projects undertaken are
deemed a success

Since 2000 the Standish Group has been measuring the success rates of projects. The
2009 report shows that project success rates have decreased over the previous survey
period. On average only 32% of projects succeed (delivered on time, on budget, with
required features and functions); 44% will be challenged (late, over budget, and/or with
less than the required features and functions); and 24% of projects failed (cancelled
prior to completion or delivered and never used).

Organisations are relatively successful at project delivery
but only at a defined level of complexity

90

Performance %
Its often assumed that the level of
80 performance is proportional to the
complexity of a project however…
70

60
50

40

30

20
3 3.5 4 4.5 5 5.5 6 6.5 7
Complexity Score



90

Performance %
80

70

60
50

40

30

20
3 3.5 4 4.5 5 5.5 6 6.5 7
Complexity Score

In reality once complexity increases beyond their capability
level, project performance decreases significantly.

This has been called the “complexity cliff” (* Helmsman Institute)



90

Performance %
80

70

60 + Maturity

50
- Maturity
40

30

20
3 3.5 4 4.5 5 5.5 6 6.5 7
Complexity Score

Increases and decreases in relative project management maturity
correspond to a corresponding ability to undertake more/less
complex projects.



90

Performance %
80

70

60 + Maturity

50
- Maturity
40

30

20
3 3.5 4 4.5 5 5.5 6 6.5 7
Complexity Score

But once complexity increases beyond their capability level, project
performance decreases significantly.

This has been called the “complexity cliff” (* Helmsman Institute)


Delivery of projects beyond existing capability requires
investment to meet increased maturity levels

90

Performance %
80

70

60 Existing
project
50 delivery
capability
40

30

20
3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8
Complexity Score

e.g. the capability of an organisation may only manage projects of
certain complexity.



90

Performance %
80

70

60 Existing Potential
project project
50 delivery delivery
capability capability
40

30

20
3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8
Complexity Score

The organisation may have the ability to increase their capability in
the short term.



90

Performance %
80

70

60 Existing Potential Consider
project project external
50 delivery delivery project
capability capability delivery
40 capability

30

20
3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8
Complexity Score

However, complex projects beyond the near term capabilities of the
organisation may require external project delivery support to
increase performance.


organisation


maturity level?


Building competency takes time!

Knowlege Experience Competence




Learning a new skill e.g. driving a car,
takes time – both knowledge and
experience


Incompetence Competence

Level 3

Conscious

Level 2

Level 5

Unconscious

Level 4
Level 1

• Unconscious incompetence – You don’t know what
you don’t know (ignorance is bliss)
• Conscious incompetence – You are aware of how
much you have to learn. You realize you need more
skills, time or practice in order to move forward.
• Conscious competence – You’ve started to master the
new skill, but you still have to actively think about
whether you are doing it right.
• Unconscious competence – You don’t even have to
think about it any more – the new skill comes naturally
and/or finishing the goal becomes completely do-able. “In
the zone.”
• Reflective competence - Conscious of own
unconscious competence / looking at own unconscious
competence from the outside

3 dimensions of improvement

Adapting the method to the Adoption of the method.
environment. Tailoring Focus on:
Focus on: • Process responsibilities
• Adapting the strategies and controls • Scaling rules/guidance (e.g. score
• Incorporating specific terms/language card)
• Revising the standard templates for the • Standards (templates, definitions)
environment • Training and development
• Clarifying the role descriptions for • Integration with business processes
• Adjusting the processes to match the • Tools
above. • Process assurance.

Embedding

Augmenting the method.

Focus on:
Enhancing • Additional skills
• Specific roles e.g. Scheduler
• Supplemental techniques e.g. EVA
• Process improvements. LEAN 6s
• Integrated controls e.g risk
• Enhanced toolsets


Business case metrics

• Organisations that increase their maturity
levels do so by achieving greater
efficiency and staff deployment
effectiveness across multiple process
disciplines.

• Enforcing repeatable processes provides
time/costs savings where the amount of
time taken to do a task reduces by a
fixed amount every time the number of
times a task has been done doubles

• Return on investment for can be 3:1 and
more.


The numbers are compelling

Assuming a 20% decrease in project governance costs for each
movement in levels. Moving from level 1 to level 3 (4) will provide:

• 12% (17%) increase in number of projects that can be undertaken
with same staff and budget
• 18% (36%) increase in the total number of projects undertaken with
same resources during improvement period
• 10% (15%) Reduction in headcount required to manage same number
of projects
• 300% return on investment for each movement in Levels


Benefits of increasing P3M3® Level

Some examples of benefits of improving P3M maturity levels are :

• NZ Treasury in 2011 stated that between 3-6% of all project
costs ($189 – 378M) are being saved by improving P3 maturity
levels and an additional saving of $1.5 - 3bn per annum is being
made in the reduction of benefits-leakage.

• London Underground’s CFO in May 2011 attributed a $700M
(£422M) saving over 3.5 years rising to $1.5bn (£866M) over 5
years to using the P3M3 maturity assessment process. They
initially assessed their Portfolio, Programme and Project
Maturity in 2007 and developed an improvement plan. The
sequence was repeated in 2009 and 2011 by when $700m of
benefits had been achieved.


Quick wins to improve maturity Levels

Towards Level 2 Towards level 3 Towards level 4 Towards level 5 Level 5

1 2 3 4

 Maintain steady state
• Project delivery • Enforce standard  Define key process • Continual
lifecycle framework approach metrics and how to improvement  Continual
• Common templates • Implement gates measure these. • What part of cycle is improvement of
• Reporting structure • Tailoring of templates in “steady state” processes
 Implement feedback
• Governance to match project size loops for • Use process
• Roles and • Project assurance Stakeholder, etc. improvement
responsibilities • Quality assurance techniques to identify
 Systems to enforce
• Financial justification • Reduce variability bottlenecks and
and measure
and tracking Benefits • PMO structure devise more efficient
processes
(in business case) • Define strategies for ways.
• Schedules each perspective
• Resource Plans

Awareness Repeatable Defined Managed Optimized


90 Day Plan

• Understand your current P3M3® level

• Decide what level of competence is required for your organisation

• Initiate a capability improvement project .

• Understand key characteristics for target level of maturity and gaps

• Identify and implement quick wins first

• Monitor improvements throughout the project stages

• Once project has been closed re-assess capability using P3M3®
capability assessment


Final remarks

P3M3® is a diagnostic tool – it defines what level organisation is
currently operating at.

The optimum P3M3® level for an organisation is a factor of the
complexity of the initiatives that are undertaken.

Strive for continuous improvement and be on the look out for quick
wins e.g. can your processes be streamlined so documentation
content is only ever entered once?

If you want/need to operate at higher levels strong controls will
need to be in place which will require integrated systems.

Consider ways in which to record metrics at all levels.


For further information contact:

Wired Consulting

Wired Consulting (Wired) is an Accredited Consultancy Organisation (ACO) specialising in
Portfolio, Programme and Project Management with Registered Consultants who are authorised to
undertake consultancy assignments based on the P3M3TM Model.

Philip Reid(MBA, GAICD, PMP, PRINCE2, PPM RC, MSP, P3M3,ITIL)
Philip has over 20 years experience working in Finance, IT and
Government in the UK, US, Asia and Australia. Having held senior
management roles at a number of organisations, his Programme and
Project management skills have been utilised to
establish, develop, improve and manage diverse business outcomes. He
has an MBA from Cranfield Business School and is a PMP®, PRINCE2®
Practitioner, MSP® Advanced Practitioner, a PPM Registered Consultant
and is qualified to undertake P3M3® and OPM3® assessments.

1300 00 2000 /philip@wiredconsulting.com


Building the case for improving your project management maturity (P3M3) - PMI Queensland

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