Two years ago the projects at Bombardier didn’t fair very well. For the most part, they were over time, over budget and off target. Now, Elio Neri estimates 95 per cent of projects are on track and successful. The difference between now and then is the creation of project management offices at the
aerospace manufacturer.
The company needed to establish a standardized way of approaching projects, says Neri, a senior consultant at the corporate project management office (PMO) at Bombardier in Montréal. It established a PMO in each of its five divisions, as well as a project management network to link them all together.
Bombardier was looking for the same thing most companies are when they turn to PMOs: A standardized set of tools and methodologies with which to tame their unruly projects.
According to the Project Management Institute, a year after a PMO is established, success rates on projects increase by 37 per cent. In two years, that figure jumps to 62 per cent, and by five years, success rates for projects have increased by 65 per cent.
Bombardier made the decision to establish PMOs because of the poor success rate of IT projects, Neri says.
“”They were always late and never delivered what they were supposed to deliver,”” he says.
These failures included two large projects worth about $100 million and $30 million respectively that were over budget by nearly 100 per cent.
The incentive was in place: The company was on the verge of investing $2.5 billion in various projects coming up, in addition to an ERP implementation. The chief information officers at Bombardier were concerned. They decided they needed to create PMOs and establish a standardized set of tools and methodologies that
all of the PMOs would follow. Bombardier was already off to a running start: It had senior management buy-in, which according to project management experts is vital for PMO success.
“”You need executive support,”” says David Barrett, the project management program director at the Schulich School of Business at York University in Toronto. Otherwise, in the first bad quarter a company experiences, the PMO will be cut.
“”It’s not a matter of, ‘If you build it, they will come,'”” says Scott Stennett, vice-president of technology solutions at high network money management firm Richardson Partners Financial Ltd. in Toronto. “”They really have to want it and recognize the value in order for it to deliver.””
For Bombardier, senior management support was there, but convincing others of the importance of establishing PMOs wasn’t so easy. Many initially saw the PMOs as yet more red tape they had to crawl through.
But the company tried to demonstrate the importance of bringing in an overarching body to oversee projects. To make the point, it highlighted the two large project failures.
“”We created a sense of urgency,”” Neri says.
Best-laid Plans
Good project management means taking more time in the planning stage so the execution goes faster. The businesses at Bombardier, however, viewed the elongated planning process as further delays.
After the new project management methods established by the PMOs were applied on two or three projects, most stakeholders were convinced, and offered no further arguments against the PMOs, Neri says.
The project managers also had to be won over. The proponents of the PMOs made it clear to the managers they shouldn’t be afraid of reporting bad results in their monthly meetings with the project office. This required a change of thinking in the project meetings, he says.
“”That was a shock, first of all to project managers because they wouldn’t believe us,”” says Neri. “”And it was a shock also for people in the steering committee — because instead of helping, they used to accuse. And we had to change that.””
Having worked as a project manager at Bombardier prior to the creation of the PMOs, Neri doesn’t know how he survived those years.
“”I was alone in the corner,”” he says. There wasn’t an established procedure through which to approach those higher up on the ladder for the resources he needed to get things done, he adds.
At the project office at the Ontario Lottery and Gaming Corporation (OLGC), there’s a simple mission statement:
“”The project leader will enjoy the success of the project, but if there’s any failure in the project, the project office shares in the responsibility for that,”” says Robert Black, the senior project office consultant at the IT project office at the OLGC in Toronto.
Like Bombardier, the OLGC
established a PMO to improve its performance on projects that fell under its IT umbrella.
To do that, it needed formalized methodologies and a consistent and committed way of dealing with IT projects.
But PMOs entail a lot of change, and it never pays to introduce too much change too quickly, Black says. The OLGC set priorities and began slowly.
It focused on getting project management processes in place as well as providing training for project leaders.
The focus placed on training the core project leaders was key in reinforcing the messages of the PMO, Black says.
Charting the waters
Any project the OLGC takes on begins with a project charter that gets approved by the IT executives and the business leaders.
“”The project charter is a gate keeping mechanism to let new projects in,”” Black says.
With the charter, the PMO also establishes where the project is going to be in terms of priorities, and that it will need access to resources. If the scope, budget or delivery date of a project needs to be changed later on, those changes also need to be approved by everyone through a change request process.
Once a charter is established and agreed to, a project turns to the planning process where a detailed plan is laid out.
Again, like Bombardier, the PMO places great importance on the planning phase, Black says.
“”We focused 60 per cent of our mission on project start up and project planning, because, as the saying goes, ‘Well begun is half done,'”” he says.
The PMO keeps tabs on a project’s status through monthly interviews with the project leader. It tries to remain as objective as possible in measuring how the project is doing. It acts as a sounding board to project leaders as well as a link to executives.
The PMO keeps executives informed so they can take action if and when needed.
“”It empowers senior management to respond,”” says Richardson Partners Financial’s Stennett. “”You can slowly move from reactive to proactive when you’re provided with input.”” The input to senior management comes in the form of reports designed to give managers what they need. Stennett is careful to tailor reports so those looking for a high level of information aren’t inundated with details, and those looking for details aren’t given brief overviews.
“”In the absence of these types of reports, you’re really working in a vacuum,”” he says. “”I mean, it’s really hard to imagine how these firms have done it for so long without.””