1. Implementation of the PMO Proposal
Hugh Shults
St. Edwards University
MGMT 6320 Project and Change Management
June 7, 2011

2. Hugh Shults
3600 West Parmer Lane
Austin, TX 78727
June 6, 2011
Michael Leahy
System Delivery
Federal Signal Technologies
2 Technology Circle
Irvine, CA 92630
Dear Mr. Leahy:
As you probably know by now, I have been actively pursuing the implementation of the Project
Management Office at Federal Signal Technologies (FS Tech). I have done extensive outreach to many
other FS Tech stakeholders and have found that the general consensus is that a PMO shall provide for
the answers to some unresolved kinks in the evolvement of the new company. Now that the organization
is larger and more distributed, it is an ideal time to seriously consider the implementation of a PMO.
I am confident that I can complete this project within the designated time period and close to (or under)
budget. I also believe that my recommended approach will have credibility with the Stakeholders. I am
prepared to deliver a presentation of this project to the Stakeholders and answer any questions you and
they may have about it; I anticipate that there will be many.
If you have questions before the presentation, please give me a call. I can be reached on my cell phone
anytime.
Sincerely,
Hugh Shults
Project Management Professional
Enclosure:
Implementation of the PMO plan
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3. PROJECT SUMMARY
Implementation of the PMO
This proposal is for preparing the organization for the adoption of a Project Management Office (PMO)
and the strategy for implementing the PMO.
The PMO is established to improve Federal Signal Technologies’ (FS Techs’) project management
capability and the organization’s competitive advantage. To enable the PMO to provide independent
services, the PMO shall operate as a separate business unit. This plan outlines the PMO’s goals and
objectives, responsibility, organization, strategy, preliminary budget, preliminary schedule, authority, key
stakeholders, project team, and critical success factors.
Project Management Institute (PMI) defines the PMO as an organizational body or entity assigned various
responsibilities related to centralized and coordinated management of those projects under its domain.
The centralized management of programs such that corporate benefit is realized by sharing of resources,
methodologies, tools, and techniques, and related high-level project management focus. This entity is
also known by names such as Center of Excellence, Project Support Office, Program Management
Office, and Strategic Project Office.
The benefits of the PMO is it’s capacity to provide leadership in support of FS Tech business teams on
internal and external projects, and to position FS Tech to be the benchmark in the industry. The PMO
has become an important unit in today’s businesses, and by adopting and successfully implementing it,
FS Tech shall have a superior reputation for client management and project delivery. The PMO is to the
organization as the Project Manager is to the project. The PMO shall be a consolidation of all Project
Management staff into one cohesive unit using a standard tool set and standard methodologies. Project
Managers’ skills shall be fully developed to efficiently manage projects in any product line or market. .
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4. PROJECT DESCRIPTION
Implementation of the PMO
Introduction
The implementation of the PMO shall occur in phases to ensure that proper organizational restructure
takes place and business activity proceeds with minimal impact. The intent is to introduce the new
structure, methodologies, and standards using best practices and adjust to the business as much as
possible while addressing the stakeholders concerns regarding project management practices, standards
and performance
Background Situation
Upon the companies’ consolidation to form FS Tech, each company runs its project management
activities and businesses to the best of its knowledge, experience, and resource constraints. This causes
many issues for the consolidated company. Some of those issues are:
• The inability to get a good portfolio of company goal alignment and performance.
• Up to seven different project/business reporting mechanisms.
• Up to seven different methodologies for delivery projects and measuring performance.
• Difficult resource allocation and reporting.
• Up to seven different ways of handling stakeholder concerns.
• Unfit collaboration tools and expectations.
PMO goals and objectives
The goal is to establish a PMO that provides portfolio, program, and project leadership.
The objectives to accomplish this goal are as follows:
• Align business and project activities.
• Develop and implement good project management standards and practices in FS Tech.
• Develop project resource skills.
• Develop project resource management processes.
• Facilitate multi-project coordination in FS Tech.
• Develop/Implement a project management information system (PMIS).
• Integrate a shared project management system in FS Tech.
• Improve PMO and project stakeholder communication.
• Develop a set of metrics to measure performance to the organization.
• Establish continuous improvement procedures for the PMO and project delivery.
PMO Responsibilities
The PMO provides the following services:
• Governance of project, program, and portfolio management of the subsidiaries, so that they
operate as the FS Tech organization, as opposed to individual companies.
• Monitoring and controlling of multiple projects
• Maintain a consolidated resource pool across the business unit to more efficiently manage
resource allocation and availability
• Develop and implement a code of ethics for the PMO and its membership
• Standardize FS Tech’s project management methodology, processes and procedures, and tools
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5. • Manage the flow and repository of information and knowledge, to ensure that relevant staff has
the correct level of access.
• Assist with vendor and customer management.
• Monitor, control, support, and continuously improve the project management capability.
• Facilitate effective communication in projects.
Organization
By operating independently, it is expected that the PMO is able to provide an unbiased service to other
departments within the organization. The PMO will operate in a strong matrix organizational structure.
Project managers and functional managers will cooperate, although primary control of everything related
to the project is the Project Manager’s domain, and control of everything else is the Functional Manager’s
realm. In this organization, all Project Managers report to the PMO. Figure 1 is the proposed matrix
organization for FS Tech.
Figure 1
PMO Strategies
To ensure that the PMO understands its mission and vision, the support from key stakeholders and end
users is very important. The following is an outline of the PMO’s strategies to achieve those supports:
• Circulate the draft PMO Charter to obtain inputs from key stakeholders, and ensure that all
relevant parties are consulted.
• Refine the PMO Charter based on those inputs.
• Have the approval of the relevant executive on the final PMO Charter.
• Execute the implementation of the PMO in phases.
Implementing the PMO
Schedule Description
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6. Months 1 to 3 1. Implementation of PM standards for Irvine and Austin offices.
2. An assessment is conducted and a plan developed with the project and
functional Managers to meet Project Management Institute’s (PMI’s)
minimum project standards where applicable.
a. The PMO performs Strengths, Weaknesses, Opportunities, and
Threats (SWOT) analysis to set the baseline for the plans.
b. The PMO determines Specific, Measurable, Achievable,
Realistic, and Timely (SMART) objectives to complete the
plans.
3. Determine existing project, program and portfolio domain maturity
across the business unit.
4. Communicate the expectations in regards to the project management
standards.
5. Establish technical tools to standardize the project management
activities, performance, and deliverables.
Months 3 to 6 6. Implementation of PM standards for other five FS Tech locations.
7. Develop and implement a plan to manage the domains
8. Monitor and control PMIS activity for standard conformity; adjust as
necessary.
Months 6 to 9 9. Monitoring and controlling for all domains in respect to project
management is conducted to measure the success of the ‘restructure’.
10. Design and conduct internal and external stakeholders’ surveys.
11. Plan with Customer Service, Sales, and Finance about project
integration that shall benefit the organization.
Months 9 to 12 12. Monitor and control program and portfolio alignment with business
goals.
13. Implement PM cross-training and internal knowledge sessions.
The Project Team
• Mike Leahy shall provide his expertise on systems delivery and business strategy to this project.
• Hugh Shults shall provide his expertise on business development and project management to this
project.
• Harry Hansen shall provide his expertise on business strategy, start-up assessment, business
plan competitions, and technology evaluation to the project.
• Tony Wong shall bring his years of customer relations and communication experience to manage
the outreach, communications and networking components of the project.
• Ben Bedrossian shall bring his expertise and experience in financial reconciliation and contract
management to the project.
• Jon Ramirez shall bring his expertise and experience in sales and new market penetration to the
project.
• Tenrox Team shall bring their expertise at project management and information systems to this
project.
PMO Steering Committee
The following are the key governing team members within the PMO
• Operations
• Systems Delivery
• Technology
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7. • PMO
• Staff position (TBD)
PMO Escalation Model
When project issues cannot be resolved within the project itself, even with the assistance of the PMO, the
PMO facilitates the escalation of the issue to the higher authorities. The escalation process ensures that
the relevant authorities are informed within a specific time frame to ensure a timely solution. The
escalation path follows the model in Figure 2:
Figure 2
PMO Authority
• The PMO is positioned in the organization to be effective with all the business units, and its
authority is inherent of the position in the organization.
• The PMO has review and acceptance authority on internal and external contracts that are
initiated as a function of a project.
• The PMO has the authority to work with the Finance Division for the vendor or contractor
invoicing and payment management, including oversight of acceptable performance and approval
of deliverables.
• The PMO has the authority to work with the Finance Division for customer invoicing and payment
management including revenue recognition evidences.
• The PMO has the responsibility for commitment and allocation of project funds as well as the
reporting of revenue and cash flow resulting from project work, and the preparation and
management of the business unit budget
• The PMO operates in a strong matrix organization and has the authority to direct the work efforts
of resources allocated to projects.
• The PMO has the authority and responsibility to contribute to the resource’s performance review.
• The PMO has the authority to redirect individuals to additional projects, project–related training,
and follow-on work.
• The PMO has the authority to meet with customers and nurture customer relationships. The
PMO has the responsibility to resolve customer issues as they relate to all aspects of the project.
• The PMO has the authority to work with the Customer Service Division for management of
customer risks and issues.
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8. • The PMO has the authority for the development, implementation, and management of project
management practices within the FS Tech organization.
PMO Key Stakeholders
The PMO regards the following as primary stakeholders:
Organizational Position Role Activities
President PMO Sponsor • Ensures that the PMO has the necessary
resources and funding for optimum
operation.
• Approves PMO initiatives
PMO Steering Committee PMO Executives • Provides PMO direction
• Approves PMO funding
• Reviews project’s alignment with business
goals
• Resolves project issues as necessary
PMO Manager PMO Lead • Resolves project issues
• Provides project directions
• Approves project deliverables
• Approves project funding
• Approves project time frame
• Devises continuous process improvements
• Plans knowledge improvement of business
and project units.
Project Managers Project SMEs • Ensures project compliance with PMO’s
project management standards
• Ensures timely delivery of project goals
• Escalates project issues when they cannot
be resolved within the project
• Ensures flow of communications with the
PMO and clients.
Functional Managers Team Members • Ensures that project resources are allowed
to complete project activities on time.
• Cooperate with the PMO to resolve project
issues in a timely manner
Business Staff End Users • Provides feedback on PMO services
• Is actively involved when required by the
PMO
Communication Plan
Type Schedule Mechanism Stakeholder
PMO Performance Monthly Scorecard(s) prepared • PMO Sponsor
Metrics by the PMO and • PMO Executives
delivered electronically
Project Status Monthly Seven Keys (or similar) • PMO Manager
prepared by the Project • Client
Manager and delivered
electronically
Project Status Weekly In-person or • Client
teleconference • End-User
delivered by the Project
Manager
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9. Critical Success Factor
• The End-Users provide valuable feedback to improve current processes and propose changes that
are beneficial to the PMO.
• Full Support of the PMO is provided by Executive Management.
• Stakeholders are identified accurately and timely.
• Projects and programs are successfully initiated, planned, executed, monitored/controlled, and
closed using the proposed PMO strategies implemented.
• Portfolios are organized and reported-on to Executive Management’s specifications and
satisfaction.
Return on Investment
These are ideas on how we can capture and realize the return on investment of the PMO. However,
each group tracks project metrics in different ways. The standardization of the way projects are created,
tracked, and evaluated will improve the ability to measure ROI. This will likely be a work in progress as of
PMO initiation. The following can be measured in percentages or dollars.
• Improved cost savings
• Improved budget performance
• Improved resource planning and forecasting
• Improved schedule performance
• Decrease failed projects
• Improved customer relations
PMO Metrics of Performance
• Program/Portfolio Cost and Resources
o The PMO tracks Planned Value, Earned Value, and Actual Cost to derive the following:
 Cost Variance
 Project Profitability Projection
 Cost and Revenue Forecast
• Program/Portfolio Schedule and Resources
o The PMO tracks Planned Value and Earned Value to derive the following:
 Schedule Variance
 Schedule Performance
• Internal Metrics
o The PMO (or third-party) performs project audits to validate whether the project teams
are utilizing the appropriate project management processes.
o Stakeholders Satisfaction
 The PMO tracks the following thru survey to derive Stakeholder Satisfaction:
• Access
• Communication
• Competence
• Courtesy
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10. • Credibility
• Reliability
• Responsiveness
• Security
• Tangibles
• Understanding/Knowing the Customer
• Other areas of performance that may be considered for performance are Risk and Quality,
depending on the needs of the Stakeholders.
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11. BUDGET JUSTIFICATION
PMO Funding and Cost Estimates
• Funding
o Project Managers
The funding of the Project Manager position is derived on a level-of-effort plus expenses
basis, and is provided by the project. An estimate of effort would be performed, and the
hourly rate would be charged to the project or subsidiary overhead. Any travel required,
etc. is the same. These costs must be included in estimation of all bid and quotation
projects, or AFE’s for internal projects.
o Project Management Tool
Upon demonstration and review of the candidates1, Tenrox Project Workforce
Management was the team’s first choice based on its intuitive nature for time-reporting,
its ability to initiate and customize workflows, and its compatibility with MS Project and
other tools. This product connects to Salesforce.com using a ‘connector’, instead of
residing on the platform. This is a SaaS solution; therefore it is easily expanded to other
FS Tech locations and is available to Project Management staff at remote locations.
Initial Costs
6 Month Phased Implementation to all locations
• Project Management and Information System $66,717.00
• Training $21,200.00
• Salaries of Implementation Team (1 full-time PM, 2 quarter-time $48,500.00
PMs) $60,000,00
• Travel Expenses of the Implementation Team $5,000.00
o all FS Tech locations for initial assessment
o all FS Tech locations for monitoring, controlling, and
continuous improvement
Total: $201,417.00
Budget Items:
PM’s who are not actively working on a project shall be bench support. They review and document best
practices, support PMO projects, update procedures, attend training and meetings, assist assigned PM’s,
perform internal audits, etc. which would be funded by the PMO department.
• Yearly PMO staff’s salaries (1 quarter-time staff) $30,000.00
• Yearly PMO training (10 PMs * 2 wks) $40,000.00
• Project management software license $41,978.00
Total: 111,978.00
1
Candidates were chosen from the perspective of integrating the Sales, Customer Service, and Financial departments. The
consensus was that there is value to be had from the ability to collaborate using the software.
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12. FACILITIES, EQUIPMENT & OTHER RESOURCES
FACILITIES: No additional facilities shall be required for this implementation.
System Development:
Tenrox Project Workforce Management shall provide the ‘sandbox’ for PMIS development at no additional
charge. The team has access to this environment upon Notice to Proceed.
Clinical:
N/A
Animal:
N/A
Technical:
This is a SaaS solution; therefore it is easily expanded to other FS Tech locations and is available to
Project Management staff at remote locations. The only requirement is access to an Internet connection.
Office:
A separate office shall not be required for the PMO.
Other:
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13. REFERENCES CITED
[1] “Establishing a Successful PMO”. Retrieved from http://www.pmsolutions.com/uploads/file/White
%20Paper_Establishing%20a%20Successful%20PMO.pdf.
[2] Project Management Institute (2011). Project Management Book of Knowledge (PMBoK). Retrieved
from http://www.pmi.org/
[3] NM State University (2008). “Project Management Office (PMO) Charter. Retrieve from
http://ict.nmsu.edu/ict/reports/ICT_PMO_Charter_PMOCHTR_4.0_01-10-2008.pdf
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