Better
Project Management Performance with Six Sigma
Every organization faces the daunting task of executing
projects that meet or exceed the expectations of its customers. That makes
project management a key component of most enterprises, regardless of the
business sector. Yet project management is not always met with
organization-wide satisfaction. One major reason is that many project management
offices (PMOs) are replicated and not designed. Inevitably many PMO processes
are little more than copies of what other companies have implemented. They lack
a root-level connection to the company they support.
PMO Designed to Meet
Customer Needs
When a project is not properly planned, the PMO may be
forced to improve systems never designed to meet the customer's needs, and
subsequently appear to fail to meet those needs. The root cause of this failure
arises from the disconnection between process performance metrics and customer
needs. When this is the case, the PMO is forced to find ways to repair a
problem that never had to exist.
The key to consistently maximizing project performance
metrics is rooted in the proper development of the PMO metrics. To maximize a
project's performance, management needs to build a better project management
process dedicated to meeting the customer's most important needs.
By applying Lean Six Sigma in a multi-generational model, a
strong project management process can be developed. A successful metrics model
can be developed using the Design for Six Sigma's DMEDI (Define, Measure,
Explore, Develop, Implement) roadmap. The application of successive quality
function deployment (QFD) iterations will be a core step in this process.
Subsequent generations of PMO improvements should utilize the DMAIC (Define,
Measure, Analyze, Improve, Control) roadmap.
DMEDI Step 0: PMO
Charter
No project should ever be launched without a well-defined
charter. Regardless of the project leader's skills, if the expectations of the
PMO are not well-conceived, the cycle time, goal attainment and acceptance will
be limited.
The PMO charter should answer all of the following key
questions:
- Sponsor/Champion
- Who
will be where the buck stops? The project Sponsor/Champion must hold
a position high enough in the organization to enforce the plans defined
for the PMO.
- Business impact
- What
are the quantifiable desired gains from the PMO?
- What
stands to be gained when from a successful PMO?
- Opportunity or
problem
- What
is the current quantifiable deficiency that has caused the need for a
PMO?
- What
is the greatest pain the PMO is targeted to heal?
- Goal statement
- What
should the PMO look like and produce?
- What
will the data say to provide a picture of success?
- PMO scope
- What
should the PMO be doing and not be doing?
- Where
should and should not the PMO operate?
- Project plan
- How
long and when will the PMO operate?
- What
are the key milestones in its development and measurement?
- PMO team
- Who
are the players on this project?
- Who
will manage the daily activities?
- Who
will participate in establishing the PMO?
DMEDI Step 1: Define
In order to maximize individual project performance, the
company's senior leadership must first establish and agree upon what the overall
objective is for the PMO. This objective must fall in line with the overall
company's and customer's objectives. Without a corporate standard and objective
for the PMO that is globally accepted, individual projects have little chance
of being viewed in their proper light.
This task is significant and many organizations still
struggle with it. Operational definitions must be clearly defined and
reinforced by C-level management. Without their support, the implementation and
adherence to these operational definitions will cause project performance to be
seen as lacking. Operational definitions which need clear definition include:
- Project must be defined and scoped:
- Who
is authorized to initiate a project?
- What
is required to initiate a project?
- What
is the breadth and scope of the project?
- What
is the project engagement process?
- Customer must be defined and stratified into
clear categories:
- Internal
(finance, sales, service, delivery, etc.)
- External
(new customers, existing customers, vendors)
- Financial benefit must be clearly defined,
according to the following elements:
- Direct
external (i.e., new business, new customers, etc.)
- Direct
internal (i.e., reduction in production costs)
- Indirect
(i.e., losses or costs avoided)
- Benefit
recognition period (i.e., time period benefits are realized for
accounting purposes)
- Currency
(gross or net profit to the organization)
Finally, the chief financial officer (CFO) or chief
operating officer (COO) must regularly assess PMO performance. This timetable
and scope must be defined early on. The CFO/COO should monitor how the quality
of execution has met the strategic vision and overall business needs. Without
this high-level oversight, the PMO may come to serve an internal department as
opposed to the overall business.
DMEDI Step 2: Measure
This step focuses on capturing and understanding the voice
of the customer (VOC). The VOC must be used to appropriately design a PMO to
deliver maximum project performance. Capturing the VOC is no small task. To
accomplish this effectively, the appropriate customer segment must be
identified. In theory, any internal department, external customer, potential
customer or vendor may benefit from the services from the PMO. But specific
organizations will receive greater benefit of the PMO based on the
definitions established in the previous phase. To truly maximize project
performance, the needs expressed by organizations with the greatest overall
benefit must weigh more heavily.
The secret in the definition of metrics is that customers
value services differently. This is where the QFD tool pays off. This tool
quantifiably identifies the priorities of the customer's needs. The QFD tool
helps develop the services a PMO will need to satisfy the customer's needs.
Once the services are identified, metrics can be developed to measure them.
Properly developed metrics will be closely tied to PMO services that are:
- Essential to the customer's core needs: Services and metrics must
address needs important to the customer and not the company.
- Quantifiable: A company cannot show excellence if it cannot
measure what it has done.
- Comprehendible: The PMO services will not be
utilized if customers do not understand them.
Here is a high-level overview of the QFD house of quality
process.
1. Customer needs (VOC)
- For each critical customer segment, capture customer feedback and VOC input
consisting of customer "needs."
- Prioritize each need on a scale from 1 to 9.
2. Critical customer requirements (CCRs)
- The top row of the house contains the CCRs.
- How will meeting customer requirements be measured?
- Translate customer's terms into process or feature terms.
- Identify ways to deliver on customer needs.
3. Interrelationship matrix
- Evaluate relationships between customer needs (whats) and critical customer
requirements (hows).
- Determine relative importance of each critical customer requirement.
4. Customer rating of competitors
- Who
is the competition?
- How do customers perceive the competition's ability to meet the requirements?
- What do competitors do that the company's customers value?
5. Correlation matrix
-
Compare CCRs (hows) to identify conflict, influence or no effect on each other.
6. Process targets
-
Determine minimum and desired performance specifications for each CCR.
7. Analyze and diagnose
-
Evaluate the house of quality process.
The output of the QFD should provide a ranked set of mission
critical deliverables that need to be both implemented into the company PMO and
measured on a continual basis. These key deliverables should become the
company's your key performance metrics.
DMEDI Step 3: Explore
The Explore phase seeks to discover the most efficient and
best way for the PMO to meet or exceed the customer's needs. While still at a
high level, the company can recognize the opportunity for great innovation. The
objective is to identify innovative ways to provide what the customer's need.
Here again, the QFD is used, but in this iteration the tool
is used to conduct a functional analysis. The functional analysis dissects each
service into specific features or tasks that must be accomplished to provide
the service. Once these have been identified, the company has the ground work
to begin developing the model for its PMO.
Remember to ensure that all of the functions in the PMO
model are measurable. Therefore this is the perfect time to build a system to
measure the PMO's services. This system must measure each project key metrics
and aggregate their sums.
DMEDI Step 4: Develop
This step is where the detailed PMO structure is developed.
Keep the core PMO deliverables in focus and make sure the team does not omit
any of the following:
- Human resources and staffing plan
- Who
will work the PMO?
- How
many will work in each role?
- What
will they be paid?
- Facilities plan
- Where
will the PMO be located?
- What
physical resources will be needed?
- Supplies and materials plan
- What
will the PMO need to operate?
- What
will it cost to set the office up?
- What
will it cost for the PMO to operate?
- Technology plan
- What
hardware and software will be needed for the PMO?
- What
IT services will be needed?
- How
will the PMO fit into the company's business continuity/disaster recovery
plans?
One key component that should not be overlooked in the
technology plan is the implementation of an automated monitoring/tracking tool.
This tool should provide the PMO with a single-pane-of-glass view of key
metrics for the entire project portfolio.
DMEDI Step 5:
Implement or Re-launch
When the PMO model has been developed or improved, it
is time to implement a pilot of the new process. Select a reasonably
achievable, moderate-risk project and process it through the new
model. The measurement tools should evaluate how the pilot project met or
missed the service objectives established in the Measure step. Any necessary
changes should be made to ensure future projects will meet the defined customer
requirements. Once any necessary changes are completed, the company should be
ready to formally launch the PMO organization-wide.
Conclusion: DMEDI Is a
Logical Course
The Lean Six Sigma methodology will benefit efforts with its
implementation and process control discipline. Without this initial
investment in the quality of design for the PMO, the company may see the
initiative fall apart after its initial launch.
Ultimately a Design for Lean Six Sigma deployment is the
most logical course for any organization seeking to develop a strong PMO or
resurrect an ailing one. The DMEDI roadmap can guide any company through the
development process and help reduce or eliminate unwanted complexity. Proper
use will infuse the PMO with customer-oriented services that satisfy the
customer's most important needs.
About the Author: Steven H. Jones is a process engineer
who earned his certification as a Lean Six Sigma Black Belt while employed at
Xerox Global Services. His career began with the 3M Corporation, an early
adopter of the Lean Six Sigma methodology, and he has worked in quality
improvement of telecommunications and IT arenas since 1993. Since then, he has
provided quality improvement and process engineering services to customers in
North America and Europe, including Baxter
Healthcare, BP Canada, Convergys and Microsoft. He is currently a senior
process engineer with Siemens Business Services. Mr. Jones can
be reached at steven.jones@sbs.siemens.com.