Posted by: Gilad Lev-Shamur | September 20, 2009

PMO series- part 1: creating the business case

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This is the first post in a series going to be published on the establishment and development of a new PMO, emphasizing the creation of the small PMO which might be responsible, for example, to one department projects.

These PMOs can be developed in an organization which include more blended structure: global organization which set standards (and decide for what level of projects to apply them) and manage the strategic projects. All other projects should be handling in lower level PMOs (PMO : centralized or not?)

Creating the business case

The business case document is an essential part in the creation of the new PMO. It’s the basic document which includes the exists project management processes and future recommendations. Its purpose is to gain the management approval to the next steps suggested, cost needs and resources allocation.

 In the department level PMO, the PMO leader can be chosen before the creation of the business case (can even be part time dedicated for that mission at this stage). The leader can also be chosen later in the process, after the business case was created by specific initiation group.

When developing a business case to centralized PMO, or any other structure / scope (amount of projects, globally or not, etc) which make the PMO establishment more complex, the best thing is to divide the work to two phases (The Program Management Office – Establishment, Managing and Growing the Value of a PMO by Craig J.Letavec, PMP):

  • Base business case: present the current statues, opportunities and future actions.
  • Detailed business case: opportunities, structure, roles and responsibilities, measurements, costs, roadmap and so.

The development of the business case for the smaller PMO can combine the two parts mention above:

  • Why we need it– for my opinion it is important to open the current project management statues review with a simple graph which describe the amount of projects/ budgets in your department. Presenting this graph will help you convince your management that the PMO is needed and that you are not doing so much noise for nothing.
  • Current statues – review how projects approved, managed and closed.  Focus on gaps like: lack of standardization (time management, cost management, etc), difficulties in reassures allocation, poor professionalism and so.
  •  Roles and responsibilities– in the combined business case you should add the areas in which the PMO should focus. For example: Resource integration, training, improves project management methodology and so on (you could also divide it to consulting, knowledge management and standards creation).  
  • Structure– again, when presenting the smaller PMO business case, you can already present the structure you planned: whether it will work in matrix mode of operation or should all the project managers report directly to the PMO leader for example. Best thing is to present it graphically with an Org. flow chart.
  • Benefits – present the benefits arising from the changes you suggested before. For example: resource management, projects approval process according to department objectives, improves reporting, professionalism, etc.
  • Risk and obstacles– describe all the things which might disturb the implementation of the PMO: organization resistance, lack of resources and so.
  • Roadmap – describe your future plans and actions.

During the creation of the business case, do not ignore project management standards already exist in your organization. In most cases you should not invent the wheel from the beginning. You just need to direct it in your way.  

Although the business case for the smaller PMO can combined the base and detailed documents, you need to keep on the right level of details. You should not dive into complex analysis, described your indicators calculation and present the details of your future tools. The target of the business case is to convince your management it is worthy and to give you the ok to go on.  

Presentation is the best way to present it (although it could be followed by more detailed word document). Focus on the gaps and benefits. One of the most problematic obstacles you might face can be solved if you present your business case correctly: the fear from reducing the flexibility.

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Your job is to focus on the benefits, show that you do not ignore the obstacles in the way and to convince that in the end, your department will gain from establishment of the PMO.

 By this I complete this short description of the business case creation. Next posts will focus on the more detailed roadmap, indicators and mode of operation.  

 

Good luck!

 

Gilad.

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Responses

  1. […] series- part 2: Shape your PMO structure In the second part of this series (PMO series- part 1: creating the business case), we talked about the creation of the business case for the new PMO, especially the small PMO […]


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