The Project Management Office – Accelerating Project Management Maturity
pharmafile | February 3, 2011 | Feature | Sales and Marketing | Kinapse, White paper
Success in the life sciences industry depends on allocation of scarce resource to the right projects at different stages of development. To generate maximum value the invested projects need to be successful. Although success cannot be guaranteed, the way that projects are managed is critical to their outcome. For this reason Project Management is an important contributor towards the performance of and value created by a pharmaceutical company. Despite its importance to the industry, research has shown that the pharmaceutical industry lags other industries in terms of project management capability and maturity – one study showed that the average maturity of project management capability among pharmaceutical companies was only 60% of that among a range of other industries[1].
The ability of a project management organization to contribute to the success of its parent firm depends on a number of factors including the maturity of its project management capabilities. Low maturity project management organizations tend to play a supporting role often focused on process compliance and on reporting, while more mature organizations have the capability to partner other functions to drive value from projects and the portfolio, and to play a much expanded role including strategy formulation, resource allocation and management of outsourcing.
Maturity is more than just experience. It refers to a specific set of capabilities. An organization’s project management maturity may be assessed by considering the quality and development of key attributes such as processes and culture. Kinapse’s portfolio, project and resource management (PPRM) maturity model is a useful framework for assessing capability. The model considers 5 levels of maturity along six parameters:
- Operating strategy – how aligned are projects and the portfolio to a firm’s strategic objectives
- Processes – how appropriate, consistent and comprehensive are the company’s project management processes
- Culture – how well understood is PPRM and what does the organization do to encourage and develop good behaivours
- Information architecture – does the organization have ready access to and make good use of project information for decision making
- Organization architecture – are roles and responsibilities clearly defined
- Performance management – how well does the firm measure value creation and how well does it reward teams and individuals for contribution
A 2008 Kinapse survey of pharmaceutical organizations found that respondents rated themselves as Emerging/Intermediate on culture and performance management and Intermediate on the other 4 parameters.
These results, albeit self scored by the respondents, indicate that there is room for improvement in what should be a core capability for a pharmaceutical organization. Companies have used different approaches to boost project management capability. The Project Management Office (‘PMO’) is a common organizational approach that firms adopt to improve project management maturity. Cross industry surveys estimate that over 70% of firms had implemented a PMO by 2006[2]. However, getting the most from a PMO is not simple. Research has shown that up to 75% of PMOs ceased operating within 5 years of their implementation because they were no longer delivering enough value[3].
Despite being a common part of most large and many smaller organizations people often do not understand what a PMO is. While one, typically early, role of the PMO is to bring order and standardization to the diverse portfolio of projects, the PMO should play an important role in defining the vision and strategy for project management and enhancing project management capability within the organization. To achieve this, the PMO must be a professional body with solid support from senior management and other stakeholders.
One change that we are seeing in successful PMOs is an evolution from a focus on standardization, with a process orientation and emphasis on achieving consistency and control, to one of capability enhancing, with emphasis on results. This maturing of project management capability can be discerned in our survey results where respondents ranked processes as the most mature element of their PPRM capability while performance management and culture were ranked as least mature. For PMOs this means a need to develop capability along all of the parameters if they are to support continued improvement in organization performance.
One organization, on recognizing that it was not delivering projects on time and to budget, implemented a PMO to drive improvement in project management. Over a three year period the company introduced a range of process improvements in R&D that helped to improve performance across a range of metrics including a greater than 40% reduction in time to market across the portfolio. This PMO is now struggling to continue to deliver performance improvement. One problem is that the maturity of the PMO is no longer well matched to that of the organization; the organization has adopted many of the first wave of improvements and now needs support in other, more sophisticated, areas such as resource management. In order to reconnect with its partners this PMO is having to reinvent itself, a somewhat traumatic activity that has seen changes in the leadership of the PMO. The task of reinvention would have been easier if it had been planned into the PMO’s evolution.
A successful PMO is both a long term project that requires strong and continued backing from senior management, and a flexible response to changing short term priorities that needs to evolve with changes in the capabilities of its parent’s organization. Implemented and used appropriately a PMO can be an important contributor to a firm’s project management effectiveness and ultimately to the value derived from the portfolio of projects.
About the author:
Stuart Pavelin is a Vice President at Kinapse. In the last 15 years Stuart has consulted to many of the world’s leading Life Sciences Organisations
About Kinapse
Kinapse provides consulting and outsourcing services to the life sciences industries, globally.
Our mission statement is: ‘Collaborating with our clients to innovate for exceptional results’. Kinapse clients include many of the world’s leading pharmaceutical, biotechnology, medical device and specialty pharmaceutical companies, government organisations and life sciences service providers.
For more information please visit www.kinapse.com or email info@kinapse.com
[1] “The maturity of project management in different industries: An investigation into variations between project management models” by Terence J. Cooke-Daviesa and Andrew Arzymanow published in ‘International Journal of Project Management’ in Nov 2002
[2]The State of the PMO 2007 – 2008 A benchmark of current best practices, PM Solutions Research
[3] How to Leverage Value from your PMO, Ian McDougall, PM World Today
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