How to Create a Project Management Office and Select Project Management Software

Phil Bertolini, the CIO of Oakland County, Mich., says having clear reasons for establishing a project management office will help IT leaders obtain executive sponsorship and buy-in from resistant IT staffers and business partners.

What's the most important factor in creating a strategic IT department, one that partners successfully with and is respected by the business? For Phil Bertolini, CIO of Oakland County, Mich., it's effective project management.

Project management practices have helped Oakland County's IT department gain the trust of the business. When Bertolini was named director of IT for the county in 2001, IT was viewed as black hole, and the county's elected board of commissioners referred to Bertolini as "Mr. Money" because IT was always asking for funding.

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Since then, the CIO has enhanced the IT department's project management office with staff, training and new tools. The moves have provided much improved visibility into the IT department's work while keeping costs down. And the improved project management has made Bertolini's group more strategic to county government.

The project management software (CA's Clarity) gives Bertolini the information he needs to explain to the board of commissioners why IT needs so much money (Oakland County's IT spend is six percent of the county's $700 million budget), what projects all that money is funding and the status of each of those projects. The CIO is able to show the board of commissioners exactly what everyone in the IT department has been working on each day for the last two years. The software gives him that much detail and visibility.

Now project management is helping the county cope with an economic downturn that has left 8.5 percent of the state unemployed—the highest unemployment rate in the U.S.—and that has resulted in a massive revenue shortfall.

"We've kept the IT budget flat or reduced it over the last seven years. This year we're taking $1.5 million out of operations and $4 million out of our capital plan, yet we're still able to deliver to our customers," says Bertolini. "We can be strategic because we can plan effectively, manage and measure customer expectations and because we use good tools to do that."

Here, Bertolini offers his advice for creating a project management office and for selecting the best project management software for your organization's needs.

Five Tips for Establishing a Project Management Office

1. Know what you're trying to accomplish.

When Oakland County's IT department first put its project management office in place in 1997, it had clear tactical and strategic goals: to better prioritize projects with business partners and to make the business side of government more effective through technology.

Bertolini says it's important to have a clear rationale for creating a project management office for a number of reasons. For one, formal project management offices aren't always necessary—or even right—for organizations. If you just want to track projects, for example, you may be best served by a simple project tracking application. But if you want to improve how projects are done and get more control over the prioritization process, a well-run PMO can help with both.

"If you want to change your culture and the way you do business, put a PMO in place," says Bertolini.

What's more, few people inside and outside of IT are going to like the idea of a central body in charge of approving and rejecting projects, reporting on metrics and cracking the whip on managers to keep projects on track. IT staffers and internal customers will challenge your effort to create a PMO. To get their support, you need a clear justification for setting one up that doesn't include the desire to increase bureaucracy.

Finally, instituting a project management office and associated project management processes often requires a significant time and financial investment. It can take a few years to get things in place. People will tire of the effort. When they question the time and money it's requiring to set up, you need to have a clear answer, says Bertolini, or else you risk seeing your project management effort dismantled when your organization needs to cut costs.

Next: Get executive sponsorship.

2. Get executive sponsorship.

Bertolini was a customer of the IT department working as Oakland County's head tax assessor in 1997 when IT first put in place its project management office. He says he didn't like having to battle and make business cases for IT projects his office needed done. He wanted to simply call up the IT department and "place his order," as he had previously.

"As a customer, I was always trying to find ways to game the system or get my project done," he says. "If I was able to circumvent the process and go to someone else, it would break down."

The reason Bertolini was never successful gaming the system was largely because the executive in charge of the county, L. Brooks Patterson, put his full weight behind it.

"Because the county executive said you will do this and here's why, there was no getting around it," he says.

In addition to getting everyone to follow the new process, Bertolini says executive sponsorship will also ease the change management challenges that come with instituting new project management processes inside and outside of IT.

"It takes a great deal to make this work. You have expense on the hardware and software side. You have to train people internally. You have to change your culture internally. You have to change the culture of the customers or partners you serve. That takes time and effort. If your executive sponsor doesn't see it as worth the time to get there, you won't."

3. Create a reporting relationship for the project management office.

The project management office within Oakland County's IT department reports directly to the CIO. Bertolini says the IT director who was in charge of the IT department before he came on board wanted the PMO to report to him so that groups within IT couldn't influence it. By having the project management office report to the CIO's office, it truly becomes a central place for project management and mentoring. It also ensures that standards and process changes happen at the highest level inside the organization, says Bertolini.

4. Put the PMO in charge of process, not punitive measures.

When you create a project management office, you want to be careful that you don't create a project management police organization that reports to the CIO on everything everyone in IT is doing wrong, says Bertolini.

"The PMO has to be able to mentor people in your organization. They have to be the ones people seek for assistance," says the CIO. "If I'm a project manager and I'm worried the PMO is going to squeal on me and tell the CIO I'm not getting my work done, I'm not going to go to the PMO for help."

Bertolini adds that combating the impression in his IT organization that the PMO is the project management police has been difficult. That's why he's emphasized the PMO's role as the keeper of the process and as a mentor to project managers. Instead of reporting to the CIO on what's wrong, the PMO provides project managers with tools and dashboards they can use to find out what's late, what's on time and what needs work.

Next: Select project management software.

5. Select project management software.

Bertolini's advice for creating a project management office also goes for choosing project management software.

Just as you need to know what you're trying to accomplish by establishing a project management office, you need to have a clear end goal in mind so that you can buy software that will bring you toward your goal. For example, since the IT department in Oakland County wanted its internal business customers to play more of a partner role in making project decisions, Bertolini says the organization needed a tool that would enable the IT organization to communicate better with its customers.

Before you select project management software, Bertolini advises IT leaders to consider the project management process they wish to put in place. You want whatever project management tool you implement to support your process.

"If you're putting in technology for technology's sake, you're doing this wrong," says Bertolini. "If you don't have the process around the technology, it's just a spreadsheet. You just have a list. It really doesn't manage anything."

When you start looking at different applications, make sure the functionality meets your process needs and over-arching goals now and into the future, says Bertolini. Your PMO may start out small, he adds, but you will grow it as you see the benefits it brings to your organization, and you don't want to have to forklift out a solution you bought for a one-person PMO when it grows to six people. "Look to the future when you select software," he says, not just dollars and cents.

Another factor to keep in mind is integration, says Bertolini. "You don't want standalone solutions that you need to integrate. "We look for companies that have multiple tools that integrate together so we can bring in new functionality as we grow and so that we know we'll be able to pass data between them easily," he says.

Finally, choose a vendor that offers a true project management solution, not just software. Bertolini says the previous IT director chose software from ABT (which was acquired by Niku in 2000; CA acquired Niku in 2005) because it emphasized the importance of good project management processes to maximize results.

"If you don't have a good process, you're not going to get good results," he says.

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