Chapter 1

INTRODUCTION TO THE VIRTUAL PROJECT MANAGEMENT OFFICE

Before we delve deeper into our discussion of virtual project management offices, a discussion of project management offices in general is in order. There are many names for, and definitions of, the project management office (Hobbs and Aubry 2008), which can make determining whether to establish a project management office a confusing process. The Project Management Institute (PMI) gives a high-level definition of the term in A Guide to the Project Management Body of Knowledge (PMBOK^® Guide) that may help clarify its meaning. According to PMI, a PMO is:

The project management office can be whatever it is defined to be—but this can be problematic. The PMO needs to offer value to project managers, of course, but it also needs to offer value all the way up the chain of command. The PMO leader must be careful, however, that the new PMO is not everything to everyone. Make sure that the systems in place, such as accounting systems, will support the metrics and activities promised by the new PMO. The quickest way for the PMO to fail is by not delivering on its promises. If the required systems are not in place at the beginning, the PMO will not be able to provide its intended support services and other deliverables.

WHAT PROJECT MANAGEMENT OFFICES DO

PMOs offer a number of benefits to the organization. They:

• Create standards for common processes and offer flexible templates, which saves the organization time and money; project managers do not have to build their own each time they start a project.

• Create and deploy new or revised processes and templates throughout the organization, facilitating organizational learning.

• Offer a data warehouse (manual or automated) of material that can be used by other project managers leading similar projects.

• Provide training to boost project managers’ skills. This training is less expensive than that offered by outside contractors.

• Deliver project management coaching and intervention services to keep projects on track. If projects do fall behind, then the PMO will offer a risk management plan to correct the problems.

• Monitor universal data—standardized terminology, processes, procedures, and other information—on projects and advocate projects to internal and external stakeholders.

• Track project metrics organization-wide to keep everyone in the organization up-to-date.

• Advertise their project management services to individuals inside and outside the organization.

PMO Structures

PMOs can be classified as centralized, decentralized, or hybrid (combining the features of both centralized and decentralized PMOs). Research indicates that project managers do better with a centralized PMO (Curlee 2008). The centralized PMO is structured such that the project managers, project coordinators, and other personnel performing project activities report to an administrative chain of command within the PMO. The project personnel are assigned to projects by the administrative chain of command. The centralized PMO is responsible for PM training, PM organizational processes, and technology used and implemented by project managers. In addition, the PMO is responsible for evaluating project personnel’s performance and compensation (Milosevic, Inman, and Ozbay 2001; Toney 2002).

Decentralized PMOs and hybrid PMOs appear to be more common (Hobbs and Aubry 2008). The decentralized PMO is normally responsible for maintaining PM methods, training, or both, as well as best practices. This type of PMO does not have a central decision-making authority. Authority may be delegated or collaborative (Ormand et al. 2000; Hales 1999; Kerzner 2009).

As noted, from a project manager’s perspective, the centralized PMO provides the most support. From management’s perspective, a decentralized or hybrid PMO is probably more cost-effective. There is no easy way to determine which kind will work best in a given organization. In general, the PMO needs to be planned carefully and must be able to flexibly respond to the organization’s changes and needs.

PMO Types

At the macro level, there are three different types of project management offices: corporate, organizational, and the project/program PMO. Within these three macro levels, there are many variations.

The corporate PMO, sometimes called an enterprise PMO (EPMO), among other titles, normally reports to the executive level of leadership—perhaps the CEO, CIO, COO, or sometimes the CFO. The EPMO may also report to the head of a business unit. Depending on the organization’s project management maturity, there may be several EPMOs, which may work independently of each other or may report to the one in the executive suite.

The EPMO, depending on leadership’s need, will fit one of the PMO structures: centralized, decentralized, or hybrid. The designated PMO leader should create a business case and periodically update it to determine the structure of the PMO and whether the PMO is providing the correct tools, reports, and metrics for leadership and project managers.

The organizational PMO fits all the parameters of the EPMO (e.g., by providing metrics, reports, methodologies), but it is lower in the organization. An organizational PMO does not have the authority to make changes that affect the entire company. Any changes (assuming the PMO is allowed to make changes) would be made at the organizational level. These PMOs may work independently or may report to an EPMO. In a mature project management organization, it is likely that the organizational PMO would report to the EPMO, if it exists.

The last kind of PMO, the project management office that is established with each project, is the most common type and will not be discussed at length in this book. Depending on the size and length of the project, the PMO can be small or very large. It disbands at the end of the project.

Hurt and Thomas’ (2009) study reported that senior management, project managers, and stakeholders found all types of project management offices beneficial and that they helped in the implementation of projects. Because of the benefits they offer, it is incumbent on PMO leaders to make sure that PMOs meet the needs of the organization and do not place undue demands—meaning extra work—on project managers.

VIRTUAL TEAMS

On a virtual project, more than 50 percent of the project team members are not resident in the same physical location, though they are not necessarily dispersed over different time zones. Team members depend on technology to communicate, rarely or never meet face-to-face more than once every two weeks, and are allowed to make decisions about the project (Kelley 2001; Townsend and DeMarie 1998; Maznevski and Chudoba 2000). (This definition is flexible; amend it to conform to your organization’s needs as necessary.) Virtual projects may also be called distributed projects, disbursed projects, remote projects, or telecommuting projects, among other names. A similar nomenclature may be used for virtual project managers or team members.

Duarte and Snyder (2006, p. 5) identified seven types of virtual teams:

• Networked teams

• Parallel teams

• Project or product-development teams

• Work or production teams

• Service teams

• Management teams

• Action teams.

Networked teams and project teams are very similar in nature. Both cross geographic and organizational boundaries and time, and both have a common purpose. A project team maintains cohesiveness for a set period of time and performs non-routine tasks, whereas a networked team has no defined life span, and tasks are normally routine operations.

The virtual PMO deals with networked and project teams consistently. The PMO leader should work to enhance the communication of project teams with networked teams. When project managers understand networked teams’ leaders and how networked teams work, they can help project teams succeed. Network teams are focused on a goal and individuals come and go (Duarte and Snyder 2006), which is remarkably similar to the way project teams work.

Virtual teams juggle more complexities than do traditional teams, including managing technology and crossing time, organizational, and geographical boundaries. Duarte and Snyder’s (2006) studies indicate that the fluidity of the virtual team makes collaboration difficult: workflows may differ, cultures may clash, goals may vary, and technologies may be incompatible. Virtual project teams must be flexible enough to work on the edge of chaos or complexity when necessary.

Seven success factors must be present for these teams to be successful (Duarte and Snyder 2006). Technology is only one, as “virtual teams entail much more than technology and computers” (p. 9). The other six are:

• Human resource policies

• Training and on-the-job education and development

• Standard organizational and team processes

• Organizational culture

• Leadership support of virtual teams

• Team-leader and team-member competencies (pp. 12–13).

Virtual teams must also take legal issues into consideration. Depending on where the virtual project takes place, U.S. and foreign laws may apply. The U.S. laws may include state laws and federal laws such as the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Foreign Corrupt Practices Act (FCPA). The PMO should institute training and understand how U.S. laws interact with applicable foreign laws.

DIFFERENCES BETWEEN VIRTUAL ENVIRONMENTS AND TRADITIONAL OFFICES

Virtual leadership requires a different skill set than does traditional face-to-face leadership. Trust is an integral aspect of virtual teams; without trust, a virtual team is more likely to fail (Cascio 2000; Kezsbom 2000). Executives dealing with virtual projects must ensure that people with the needed skills are in the right area when needed, must disseminate innovative best practices, and must identify talent throughout the organization. Specifically, the virtual PMO must ensure that the correct project managers are assigned to virtual projects.

Communication can present challenges in virtual environments. If English is the language of business, as it generally is, team members from different countries may not be native speakers, may use different words to mean the same thing, and may not understand regional nuances of the language. These concerns are mitigated in a traditional office. Body language clarifies spoken language and can help prevent misunderstandings. If written language is unclear, collocated project team members are able to clear up any misunderstandings almost immediately. In the virtual environment, this is not possible.

Boudreau and colleagues (1998) note that a virtual organization augments its chances of success by using a “federation concept”—in other words, by forming partnerships, joint ventures, consortia, and other creative alliances that change over time and with the needs of the virtual organization. This federation may include alliances with other internal organizations within the company or outside partners. This type of federation was successful for the B-1 Bomber project, which drew together more than 2,000 corporations, which interacted primarily virtually. Other successful corporations that employ the federation concept include Sun Microsystems, Nike, and Reebok.

A federation is unlikely to work in a traditional office that does not allow flexibility, does not have virtual projects, and depends on contractors and subcontractors to do major pieces of work. In a traditional office, management and leadership are always available to make decisions, the chain of command is fully functional, and management frowns if anyone attempts to subvert it. In a virtual environment, this is not true; the federated concept enhances decision-making.

The smooth integration of technology within the organization and among the federation members (Boudreau et al. 1998) allows local projects to have the support of a worldwide virtual organization. The client does not even realize that the product is the result of several companies or organizations working together. A well-run virtual organization should be able to function with very little regard to geographical distance and time barriers. In order to do so, the federated virtual environment must be technologically seamless, be responsive to local needs, and have the centralization necessary for efficiency. The virtual PMO will mediate this federated environment.

Additionally, a federated virtual organization must be flexible and responsive to the needs of the environment (Boudreau et al. 1998). Partnerships and alliances will disband as needed, and new alliances will be established depending on the needs of the project, the organization, or both.

By now, it should be evident that the virtual environment is different from the traditional project environment. Virtual project management offices must ensure that they provide the necessary tools and services to allow virtual project teams to succeed. There are many hidden traps awaiting the virtual project manager (e.g., a lack of standardized processes, tools, and templates), and the virtual PMO can alleviate many of them. When a virtual team does succeed, the organization’s leadership must make a concerted effort to publicize its success throughout the organization (Duarte and Snyder 2006).

THE VPMO’S RESPONSIBILITIES

Virtual PMOs offer new savings to organizations by reducing organizational costs without sacrificing benefits to employees. They can be small or large organizations. Virtual project team members may report directly to the PMO, or the environment may be matrixed.

The VPMO establishes metrics, measures performance, and reports the results to a higher PMO, to the organization/corporation, or both. It must equip virtual teams with needed tools, systems, technology, templates, support, and methodology. The leadership of the VPMO must continually assess the effectiveness of these tools, systems, technology, templates, support, and methodology, as well as the demands being placed on the virtual project managers. VPMOs may provide some support to virtual project managers, preparing them to handle the unexpected.

The VPMO walks a tightrope. The VPMO staff must make sure to provide enough value to the virtual project manager because project managers supply information to the VPMO. If a project manager senses that he or she is not receiving quality service from the VPMO, he or she may start to provide spotty data to the VPMO, which in turn will undermine the credibility of the VPMO with the company’s leadership. Sound complicated? That’s because it is.

The VPMO leadership must adapt with the company’s culture. An astute VPMO leader will understand how the virtual environment is changing and how the organization is accepting the virtual changes. The VPMO’s processes, procedures, methodologies, technology, white papers, lessons learned, and templates should be updated to reflect these changes. At the same time, the VPMO staff should coordinate with other departments in the organization, such as legal and accounting, to update the same documents when relevant new regulations and legislation take effect.