The Lean-Agile PMO
Accelerating Project Delivery with Lean Portfolio Management
Washington, DC
May 03, 2007
www.ccpace.com
The Lean-Agile PMO Page 1
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
Roland Cuellar (“kway-are”)
Director, Lean-Agile Practice
Formerly of IBM, Lockheed, and
DHL
Agile Coach and Certified Scrum
Master
www.ccpace.com
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
The Lean-Agile PMO Page 2
Agenda
PPM and PMO Challenges
(10 Minutes)
Portfolio Management Reality
The Effects of Agile Projects
How Can PMOs Improve Portfolio Performance?
Lean Portfolio Management Principles
(10 Minutes)
Optimize for Throughput
Reduce Project Inventory/WIP
Manage Constraints
Exercise: Lean Production Line
(15 Minutes)
The Lean-Agile PMO
(20 Minutes)
Track Flow and Bottlenecks
Lean Scheduling
Integrated Platform-Based Teams
PMO Organization
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The Lean-Agile PMO Page 3
Portfolio Management Reality
PPM Goal
Conventional PPM Practice
Deliver faster to market
Kick off more and more projects to deliver “concurrently” on
strategic objectives
Meet diverse business
partners’ needs
Get as many projects from as many business centers started
Meet changing business
objectives
Try and anticipate all potential changes at the beginning of
the yearly cycle
Allocate resources
effectively
Make sure people and resources are 100% utilized
Create innovative solutions
Deal with innovation as an afterthought
Track and monitor portfolio
performance
Create estimates at project kickoff, measure spottily or not
at all at project end
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The Lean-Agile PMO Page 4
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 Lean-Agile PMO Page 5
The Effects of Agile Projects
Category
Business Value
Delivery
Potential Positive Effects
Schedule Performance
Budget Performance
Risk Management
Potential Negative Effects
Increased Resource Contention
Misaligned Measurement, Reporting
and Auditing
Flexibility through Options
Early Financial Returns
Business
Customer
Satisfaction
Project Throughput
Flexibility and Control
Reliable Delivery
Need for Regular Tradeoffs
Clearer Accountability for Business
Value Definition
Higher Visibility
Project Team
Satisfaction
Clear Value to the Organization
Participation in High-Performance
Teams
Clearer Accountability
Higher Utilization on Non-Agile
Projects
Culture Shift
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The Lean-Agile PMO Page 6
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
www.ccpace.com
The Lean-Agile PMO Page 7
Lean Portfolio
Management Principles
PART ONE: Lean-Agile Fundamentals
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The Lean-Agile PMO Page 8
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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The Lean-Agile PMO Page 10
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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The Lean-Agile PMO Page 11
Exercise – Lean Production Line
Four volunteers, please!
Round 1 – Push System
Performer
Performer 11
Performer
Performer 22
Performer
Performer 33
Performer
Performer 44
Fold
Fold paper
paper in
in half.
half.
Fold
Fold nose
nose cone.
cone.
Fold
Fold wings,
wings, tail
tail
and
and ailerons.
ailerons.
Test
Test plane
plane (throw
(throw
it
it into
into the
the trash).
trash).
Round 2 – Begin
Pull System
work as soon as your “inbox” is occupied.
Performer
Performer 11
Performer
Performer 22
Performer
Performer 33
Performer
Performer 44
Fold
Fold paper
paper in
in half.
half.
Fold
Fold nose
nose cone.
cone.
Fold
Fold wings,
wings, tail
tail
and
and ailerons.
ailerons.
Test
Test plane
plane (throw
(throw
it
it into
into the
the trash).
trash).
Round 3 – Pull
System
Begin
work with
onlyVersatilist
when yourPerformers
“outbox” is empty.
Performer
Performer 11
Performer
Performer 22
Performer
Performer 33
Performer
Performer 44
Create
Create airplane.
airplane.
Create
Create airplane.
airplane.
Create
Create airplane.
airplane.
Test
Test plane
plane (throw
(throw
it
it into
into the
the trash).
trash).
Pass plane to Performer 4 when you’re done.
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The Lean-Agile PMO Page 12
PART ONE: Lean-Agile Fundamentals
The Lean-Agile PMO
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The Lean-Agile PMO Page 13
Track Flow & Bottlenecks
Track project flow
Manage the On-ramp
Terminate sick projects
Break large projects into small ones
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The Lean-Agile PMO Page 14
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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The Lean-Agile PMO Page 15
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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The Lean-Agile PMO Page 16
Integrated Platform Based Teams (contd)
Traditional Silos:
Product
Owner
Designer
BSA
BA
Integrated Platform-Based Team:
Developer
Tester
Peripheral
Project Team
Release
Manager
Innovation via Integrated Teams
Capacity
Planner
Architect
BA
Core
Project Team
PM
Designer
Risk
Assessor
DBA
Developer
Tester
Developer
Tech
Ops
Production
Product
Owner
Business
Sponsor
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Security
“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
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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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The Lean-Agile PMO Page 18
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
www.ccpace.com
The Lean-Agile PMO Page 19
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
Roland Cuellar
PHONE: 703 / 631.6600
WEB:
http://www.ccpace.com
MAIL:
4100 Monument Corner Dr.,
Suite 400
Director, Lean-Agile Consulting
Fairfax, VA 22030
Roland.Cuellar@ccpace.com
www.ccpace.com
The Lean-Agile PMO Page 20
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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