Organizational Project Management Maturity — The next wave in excellence
Bill Haeck, VP Program Management | One to One Interactive
September 10, 2004
The Backdrop
For 10 years, the Standish Group has been reporting on the overall
success rate of IT projects in their annual CHAOS report. The
results for 2004 were both a mix of good and bad news. The positive
news is that project success rates appear to have increased to 34
percent of all projects. The bad news is that the CHAOS report
found "total U.S. project waste to be $55 billion, made up of $38
billion in lost dollar value and $17 billion in cost overruns.
Total project spending was found to be $255 billion in the 2004
report." As staggering as these totals are, they only represent
findings from the IT industry. There are no reliable figures which
track the total losses and project failures across a wide range of
industries. Even assuming that other industries are 5 times more
effective at managing projects, the losses would still be
astounding.
Why are so many projects failures? In 1997, the Project
Management Institute (PMI) embarked on a journey to try to uncover
the answer from an organization's perspective. Five global studies
were completed and approximately 30,000+ practitioners and
executives were polled to glean what works and what does not appear
to work in their business environment. As a result of this
research, PMI concluded that while their focus on improving project
management and project manager competency was improving, the
success rate of projects (a finding loosely corroborated by the
2004 CHAOS report), there was not enough attention being paid to
the organizational environment in which individual projects
existed. In short, there was a gap between what organizations were
trying to achieve strategically and the likelihood that these
strategies were being effectively and consistently supported by
successful project execution at the tactical level. The result of
this acknowledgment was the birth of PMI's
OPM3 project, a nearly 5 year initiative to develop a
standard focused exclusively on defining and helping companies
improve their
organizational project management maturity. In
December 2003, PMI officially published the
OPM3 standard, and with it, the best hopes yet of seeing a
step function improvement in the number of projects succeeding in
industry. The standard was developed by over 800 volunteers
representing 35 different countries and a host of industries and
company sizes. In the field of project management,
OPM3 has no equal in terms of the breadth and depth of
research and development resources applied. The efforts to develop
PMI's
PMBOK Guide
®, currently generally accepted internationally as
the "bible" of project management, pale in comparison. The purpose
of this article is to provide a brief orientation to this
groundbreaking work and allow individuals to begin to think about
how it might be applicable within their organizations.
Organizational Project Management and OPM3
OPM3 defines organizational project management as "the
application of knowledge, skills, tools and techniques to
organizational and project activities to achieve the aims of an
organization through projects." In essence, organizational project
management expands the field of project management into the
organizational realm and explicitly identifies those processes and
capabilities which exist outside the tactical project realm that
are equally responsible for ensuring the consistent, predictable
success of an organization's projects.
OPM3 is a maturity model developed around this new concept
of organizational project management.
The primary benefit of
OPM3 is that it provides insight into bridging the
longstanding gap between an organization's strategic plans and its
ability to achieve those plans through the execution of projects
(see Figure 1).
Figure 1:
OPM3 bridges the gap between organizational strategies and
projects; Project Management Institute,
Organizational Project Management Maturity Model (OPM3) —
Presentation, Project Management Institute, Inc., 2004.
Copyright and all rights reserved. Material from this publication
has been reproduced with the permission of PMI.
More importantly for companies, OPM3 not only identifies what
a company's state of maturity is with respect to organizational
project management, but also provides a means for assessing
themselves and identifying a logical path towards greater maturity.
Among its other benefits, OPM3 also:
- Provides answers to very important questions related to the
organization's current maturity
- Assesses maturity of different parts of the organization
- Identifies specific areas that need improvement
- Promotes organizational maturity awareness among senior
management
- Helps attribute organizational success directly to project
management
OPM3 — The Components
At its most abstract level, the OPM3 standard has three
interlocking elements (see Figure 2). First, the most basic element
of the standard is the knowledge portion.
Figure 2: Project Management Institute,
Organizational Project Management Maturity Model (OPM3) —
Presentation, Project Management Institute, Inc., 2004.
Copyright and all rights reserved. Material from this publication
has been reproduced with the permission of PMI.
The knowledge element is represented by the
OPM3 Knowledge Foundation, a printed book describing
organizational project management, organizational project
management maturity, relevant Best Practices, and how to apply
OPM3. It also contains various appendices and a glossary
which are a wealth of practical information on the subject. This
essential piece of
OPM3 lays the groundwork underpinnings the user needs to
move on to the Assessment and Improvement elements. These two
remaining elements are presented on the CD-ROM which accompanies
the book. It contains the most basic building blocks and heart and
soul of the standard: the
Best Practices, Capabilities, Outcomes, KPIs, and
associated dependencies.
A Best Practice, the most basic component of
OPM3, is defined as an optimal way, currently recognized
by industry, to deliver projects successfully, consistently, and
predictably to implement organization strategies. At present,
OPM3 consists of approximately 586 Best Practices as
defined by over 800 project management professionals representing
over 35 countries and a variety of industries and company sizes.
Within
OPM3, a Best Practice is achieved by demonstrating mastery
of a series of Capabilities that incrementally indicate the
achievement of progressively higher levels of maturity. The
existence of a
Capability is demonstrated by the existence of its
corresponding Outcome(s) (see Figure 3). At an increasing level of
granularity, an
Outcome is the tangible or intangible result of
demonstrating or applying a Capability, and every Outcome has a
Key Performance Indicator (KPI), which represents
the means to measure an Outcome through a Metric. Taken together,
Best Practices and their commensurate Capabilities, Outcomes, KPIs,
and Metrics represent the basic components of
OPM3.
Figure 3: Best Practices are dependent upon Capabilities and
their associated Outcomes; Project Management Institute,
Organizational Project Management Maturity Model (OPM3)
Knowledge Foundation; page 14, Project Management Institute,
Inc., 2004. Copyright and all rights reserved. Material from this
publication has been reproduced with the permission of PMI.
In addition to defining the Best Practices and their
constituent parts, the
OPM3 standard also lays out the network of dependencies
among the Best Practices. This network of dependencies is designed
to allow companies who are measuring and seeking to improve their
level of maturity in a given Best Practice to understand all of the
Capabilities that may impact the achievement of the Best Practice
of interest. Figure 4 provides an example of how achieving Best
Practice 42 requires you to not only master all of the Capabilities
for Best Practice 42, but also Capability A from Best Practice 51,
which is a predecessor for the Capability B in Best Practice 42.
Figure 4: Dependency can also exist between Best Practices;
Project Management Institute, Organizational Project Management
Maturity Model (OPM3) Knowledge Foundation; page 18, Project
Management Institute, Inc., 2004. Copyright and all rights
reserved. Material from this publication has been reproduced with
the permission of PMI.
As one can see, with 586 Best Practices and 2,109
Capabilities,
OPM3 is extremely robust in defining organizational
project management and the paths to achieving maturity in this
realm. The Assessment element provides a means to navigate these
components and allow companies to compare themselves against the
body of Best Practices contained within
OPM3 in one of two ways. First, contained within the
CD-ROM is a high level assessment tool that allows an organization
to assess its overall maturity in one of three dimensions: domain
(Project Management, Program Management or Portfolio Management —
or PPP), by the stages of process improvement (Standardize,
Measure, Control, or continuously Improve — or SMCI) or by the
PMBOK Guide Process Groups (Initiating, Planning, Executing,
Controlling and Closing — or IPECC). This initial high-level
assessment provides a macro look at an organization's
organizational project management maturity. Correspondingly, the
directories within the CD-ROM are also organized to allow companies
to perform more detailed assessments at a Best Practice by Best
Practice and Capability by Capability approach. Regardless of
whether companies use the initial high-level assessment, it is this
detailed Capability assessment that elegantly uses the network of
dependencies, provides the most value to a company, and allows them
to embark on the third element of the standard, the Improvement
element.
The final element of any standard is the desire to facilitate
improvement through use of the standard. While
OPM3 does not dictate how a company should embark on
improvement following an assessment, the identification of
dependencies between the Capabilities, the use of multiple
categorizations for both Best Practices and Capabilities, and the
provision to conduct both high level and detailed assessments all
provide users with extreme flexibility when analyzing the results
of their assessment and developing a detailed improvement plan.
As a general rule, however, it is expected that most
companies will want to identify the Best Practices to target and
then explore the Capabilities aggregating to those Best Practices
of interest. When the organization identifies the Capabilities
within Best Practices which have not been demonstrated, they can
then begin to develop detailed implementation plans for how to
achieve those Capabilities.
OPM3 — What should it mean for your organization?
The advent of the
OPM3 standard represents a new opportunity for companies
to take a comprehensive look at whether their strategies are
successfully and efficiently being translated into projects to
realize those strategic objectives. Companies that are willing and
able to look at their organization through this new perspective
will share a distinct competitive advantage over companies who are
unable to forge this critical linkage. Now that
OPM3 is available to the public, the time is right for
companies to explore organizational project management and conduct
assessments to determine where they stand from a maturity
perspective and begin to identify areas and plans for potential
improvement.
In addition to applying
OPM3 from within, companies would also be wise to begin
monitoring developments around
OPM3 itself. In the coming months, there will be
increasing discussion on the topic and opportunities to learn from
other early adopters. Organizational project management is the next
wave in understanding how project management concepts can
contribute to the overall success of companies. As more companies
undertake assessments, benchmarking data should become available,
allowing companies to understand how they are faring in their
industry. Also, as with other standards, over the next few months
there will be an increasing number of service providers creating
tools, consulting services, methodologies, etc., to better leverage
the potential of
OPM3. By following these developments, companies will be
better able to identify opportunities to take advantage of these
resources to support their own assessment and improvement efforts.
In conclusion, the
OPM3 standard offers companies a rare opportunity to
introspectively look at the holistic link between their strategies
and how well they can systematically translates those lofty
ambitions into tactical reality. By using the
OPM3 standard to assess their overall organizational
project management maturity, companies can gain new insights into
how successfully their strategies are reflected in the day to day
projects that are supposed to be supporting those objectives.
Companies who begin thinking about and leveraging the concepts of
the
OPM3 standard now will position themselves well to begin
to reap the competitive rewards that
OPM3 offers.
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