The Lean-Agile PMO

Accelerating Project Delivery with Lean Portfolio Management

Washington, DC
May 03, 2007

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About Us
Sanjiv Augustine
Managing Director, Lean-Agile Practice Co-founder and Board Member, Agile Project Leadership Network (APLN) Author of Managing Agile Projects, Prentice Hall 2005

CC Pace
Business and technology services consulting firm for over 25 years Lean-Agile Practice delivers full range of Lean and Agile offerings to clients worldwide Office located in Fairfax, VA within Washington DC Metro Area Some of our clients: Capital One Freddie Mac Genworth Financial HSBC Northrop Grumman The Carlyle Group T. Rowe Price

Roland Cuellar (kway-are)

Director, Lean-Agile Practice Formerly of IBM, Lockheed, and DHL Agile Coach and Certified Scrum Master

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Agenda
PPM and PMO Challenges
Portfolio Management Reality The Effects of Agile Projects How Can PMOs Improve Portfolio Performance?

(10 Minutes)

Lean Portfolio Management Principles

Optimize for Throughput Reduce Project Inventory/WIP Manage Constraints

(10 Minutes)

Exercise: Lean Production Line The Lean-Agile PMO

Track Flow and Bottlenecks Lean Scheduling Integrated Platform-Based Teams PMO Organization

(15 Minutes) (20 Minutes)

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Portfolio Management Reality

PPM Goal
Deliver faster to market

Conventional PPM Practice

Kick off more and more projects to deliver concurrently on strategic objectives Get as many projects from as many business centers started

Meet diverse business partners needs Meet changing business objectives Allocate resources effectively Create innovative solutions Track and monitor portfolio performance

Try and anticipate all potential changes at the beginning of the yearly cycle Make sure people and resources are 100% utilized Deal with innovation as an afterthought Create estimates at project kickoff, measure spottily or not at all at project end

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Portfolio Management Reality (contd)

PPM Goal
Deliver faster to market

Resulting Challenges
Many incomplete projects in the project portfolio. 30% of small/mid-sized projects are late, nearly 100% of large projects are late

Meet diverse business partners needs

Functional executives regularly push their pet projects Competition for resources and projects exists within and across business units Projects are not prioritized in alignment with business strategy

Meet changing business objectives

Business customer satisfaction is low Customer demand invariably changes mid-cycle More projects mean more people and resources Difficulty predicting demand to appropriately allocate people and resources.

Allocate resources effectively

Project team members are working on 3 to 7 projects simultaneously. Highly-skilled team members are stretched the most Project team morale is especially low on ailing projects.

Create innovative solutions

External customers are not clearly identified resulting in questionable solutions There is no room or budget for innovation

Track and monitor portfolio performance

There is no accurate measurement of the true capacity of the organization Reporting to executive management is poor

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The Effects of Agile Projects

Category
Business Value Delivery

Potential Positive Effects

Schedule Performance Budget Performance Risk Management Flexibility through Options Early Financial Returns

Potential Negative Effects

Increased Resource Contention Misaligned Measurement, Reporting and Auditing

Business Customer Satisfaction Project Team Satisfaction

Project Throughput Flexibility and Control Reliable Delivery Clear Value to the Organization Participation in High-Performance Teams Culture Shift

Need for Regular Tradeoffs Clearer Accountability for Business Value Definition Higher Visibility Clearer Accountability Higher Utilization on Non-Agile Projects

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How Can PMOs Improve Portfolio Performance?

Lean-Agile PMOs can greatly impact project portfolio performance

PMO manages project portfolio delivery Run PMO as agile project team

Employ Agile project delivery

Integrated platform-based teams Deliver small releases more frequently

Apply Lean Thinking to optimize the whole project portfolio

Optimize for throughput Reduce project inventory/WIP Manage constraints

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PART ONE: Lean-Agile Fundamentals

Lean Portfolio Management Principles

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Lean-Agile Principles - Optimize for Throughput Optimal utilization yields sub-optimal throughput There is no free lunch Delay has a cost

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Lean-Agile Principles - Reduce Project Inventory/WIP You have an inventory of projects Big inventories are bad: They cost a lot They hide a lot of problems They are slow

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Lean-Agile Principles - Manage Constraints

If we want faster flow, where should concentrate our improvement efforts? You can only deliver as fast as the slowest part of your process. How many grains of sand can go through the constraint at once? Do you know where the constraints are in your organization?

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Exercise Lean Production Line

Four volunteers, please!
Round 1 Push System
Performer 1 Performer 1 Fold paper in half. Fold paper in half. Performer 2 Performer 2 Fold nose cone. Fold nose cone. Performer 3 Performer 3 Fold wings, tail Fold wings, tail and ailerons. and ailerons. Performer 4 Performer 4 Test plane (throw Test plane (throw it into the trash). it into the trash).

Round 2 Begin work as soon as your inbox is occupied. Pull System

Performer 1 Performer 1 Fold paper in half. Fold paper in half. Performer 2 Performer 2 Fold nose cone. Fold nose cone. Performer 3 Performer 3 Fold wings, tail Fold wings, tail and ailerons. and ailerons. Performer 4 Performer 4 Test plane (throw Test plane (throw it into the trash). it into the trash).

Round 3 Pull System with Versatilist Performers is empty. Begin work only when your outbox
Performer 1 Performer 1 Create airplane. Create airplane. Performer 2 Performer 2 Create airplane. Create airplane. Performer 3 Performer 3 Create airplane. Create airplane. Performer 4 Performer 4 Test plane (throw Test plane (throw it into the trash). it into the trash).

Pass plane to Performer 4 when youre done.

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PART ONE: Lean-Agile Fundamentals

The Lean-Agile PMO

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Track Flow & Bottlenecks

Track project flow Manage the On-ramp Terminate sick projects Break large projects into small ones

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Lean Scheduling
Avoid too many simultaneous projects Exercise leadership: prioritize your projects and focus your teams Delay commitment; delay expenditure Deliver continuously in small batches versus delivering infrequently in huge batches

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Integrated Platform Based Teams Multiple teams each focused on single projects Dedicated to platforms or lines of business Platform owner prioritizes next project Result:
Support multiple lines of business simultaneously Focused effort results in quick delivery for individual projects Clear accountability

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Integrated Platform Based Teams (contd)

Traditional Silos:
Product Owner BA BSA Designer Developer Tester

Integrated Platform-Based Team:

Release Manager Architect Core Project Team BA Designer PM

Peripheral Project Team

Innovation via Integrated Teams

Capacity Planner Each time BMW begins developing a car, the project team's members -- some 200 to 300 staffers from engineering, design, production, marketing, purchasing, and finance -- are relocated from their scattered locations to the auto maker's Research and Innovation Center, called FIZ, for up to three years. Such proximity helps speed up communications (and therefore car development) and encourages face-to-face meetings that prevent late-stage conflicts between, say, marketing and engineering. -- The World's Most Innovative Companies, Business Week, April 24, 2006

Risk Assessor

Developer

DBA

Production

Developer Tech Ops Product Owner

Tester Security

Business Sponsor

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PMO Organization
Encourage face-to-face dialogue across levels Overlapping management with linking pins PMO run as an Agile project team

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In Summary
Employ Agile project delivery
Integrated platform-based teams Deliver small releases more frequently

Apply Lean Thinking to optimize the whole project portfolio

Optimize for throughput Reduce project inventory/WIP Manage constraints

Lean-Agile PMOs can greatly impact project portfolio performance

PMO manages project portfolio delivery PMO is run as agile project team

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More Information
The Lean-Agile PMO: Using Lean Thinking to Accelerate Agile Project Delivery, Cutter Consortium Executive Report, Vol. 7, No. 10

Sanjiv Augustine
Managing Director, Lean-Agile Consulting
Sanjiv.Augustine@ccpace.com

PHONE: 703 / 631.6600 WEB: MAIL: http://www.ccpace.com 4100 Monument Corner Dr., Suite 400 Fairfax, VA 22030

Roland Cuellar
Director, Lean-Agile Consulting
Roland.Cuellar@ccpace.com

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Agile at a Glance
Agile practices include:
Release Planning
(creates Product backlog)

Iteration Planning

(creates Iteration backlog)

Daily Standup Fixed-length iterations Feature Review

Identify the top-priority items and deliver them early and often.

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