The PMO From Shock and Awe

to

Winning Hearts and Minds

Eric J. Brown, EVP & CIO

NCI Building Systems

Agenda

• Setting the Stage

• Shock and Awe

• Shift Happens

• Redraw the Battle Plan

• Winning Hearts and Minds

• End Game

Setting the Stage:

NCI Building Systems

Setting the Stage:

NCI Building Systems

• Second largest consumer of steel in the US behind the

Automotive Industry

• Revenue of 2B

• EBITDA of 200M

• 43 Manufacturing Plants in US & Mexico

• Produce over 1M tons of finished goods

• All manufactures in India combined produce 650,000 tons

Shock and Awe:

PMO…The Early Days at NCI

• Industry stats: Only 28% of projects

started ever reach their time / cost / quality

targets*

– 32% - Inadequate project management and

improper use of PM tools

– 20% - Lack of communication

– 17% - Lack of understanding of scope

• Knew from past experience – no PMO

meant NCI would suffer same casualty

rate

• SOX – compliance required PMO

guidance

* Standish Group Chaos Report

Shock and Awe:

Pre-PMO… NCI Fit the Stereotype

Shock and Awe:

PMO…The Early Days

PMI Methodology

PMBOK Processes

Resource Management Scope Control

Requirements Gathering

Shock and Awe:

PMO Competency

Stage One:

Project Office

Independent project

offices and project

managers

Applies project

management

techniques

No program level

authority

Stage Two:

Basic PMO

Provides standard

and repeatable PM

methodology for all

projects

Develops common

tools for all projects

Emphasizes the

foundation of a

viable PM

environment

Stage Three:

Standard PMO

Improved PM

capabilities and

maturity

Introduce project

reporting tools

and collaboration

techniques

Interface between

the business,

executives and

project teams

Full set of PMO

functions in use

Stage Four:

Advanced PMO

Focuses on

integrating

business

objectives into the

PM environment

Applies common

practices to

projects and

business; a

“projectized”

organization

Can be a separate

business unit

State of the art

PM practices and

tools

Advanced staffing

Stage Five:

Center of Excellence

Direction and

influence for

enterprise project

management

Manage continuous

improvement and

cross-department

collaboration to

achieve strategic

business goals

Continues to build

relationships with

stakeholders,

customers and

vendors

Oversight and

control to other

PMO units

Strategic Alignment

Business Maturity

Process Support

Project Oversight

Process Control

* The Complete Project Management Office Handbook

Shock and Awe:

Getting Ahead of Your Supply Line

If you are riding ahead of the herd, take a

look back every now and then to make

sure it’s still there

- Will Rogers

Shift Happens:

Great Depression….. Again?

Shift Happens:

New Orders: Keep the Lights On

• 60% Market drop in Non-Res Construction Starts

• Revenue from 2B to under 1B

• EBITDA from 200M to 16M

• Shutdown 25% of our Manufacturing Plants

• Reduced workforce by 50%

Shift Happens:

Why Do I Need PMO?

• Autonomous decisions being made

• PMO adaptation and flexibility

becomes key

• A new mindset was introduced

– Value proposition

– Strategic alignment

– Value-Driven ROI

– Elimination of low value projects

• Enterprise perspective of the PMO

function is part of the answer

Redraw the Battle Plan:

Think Different

The significant problems we have cannot

be solved at the same level of thinking

with which we created them

– Albert Einstein

Redraw the Battle Plan:

Cut the Rations in Half, Double the Work

• Evaluate financial impact

• View projects from enterprise

perspective

• Assess risk

• Avoid conventional text book

project approach

Redraw the Battle Plan:

Tools & Techniques

PMOLC / SDLC Risk Assessment Model

Project Dashboard Business Value / ROI Project Request Form

Project Life Cycle

Impa

ct

Com

plexity

Risk Level

High High

High Medium

Medium High

High Low

Medium Medium

Low High

Low Low

Low Medium

Medium Low

Tie

r 1

Tie

r 2

Tie

r 3

Tie

r 4

Redraw the Battle Plan:

Project Request Form

• Getting executive management to

the table

• Look at it from their perspective

• Understand what they’re going to

ask

• Find a way to make it work in your

size company

• Use a project dashboard that’s

clear and concise

Redraw the Battle Plan:

Executive Management

Redraw the Battle Plan:

Project Dashboard

Redraw the Battle Plan:

Risk Assessment

• Impact and

complexity drive

the risk level

• Risk level results

in Tier 1 – Tier 4

project

• Project tier drives

level of project

management

• Depth of

deliverables,

amount of testing,

Internal Audit

participation

• Determine if the project is capital

or expense

• Major cost categories:

– Software / hardware

– Consulting services

– Employee labor

– Expenses

• Often overlooked cost categories:

– Training

– SOP 98

– Capital interest

– Sales tax

– Maintenance

Redraw the Battle Plan:

Financials – Cost Estimates

• Use the financial experts in your

company

• NPV, IRR, ROI, Payback period;

what else do you need to know?

• Every project now demands

financial justification

• Benefit categories from the project

request now come into play

Redraw the Battle Plan:

Financials - Justification

• Compare planned to actual costs

• Show project completion statistics

• Build metrics history and use for action

Redraw the Battle Plan:

Benefit Realization & Metrics

Winning Hearts and Minds:

Building Alliances

• Alliances can be the key to continued success

• Working with IT, Accounting, Audit can have its rewards

• Gaining understanding of each other’s objectives can help

move everyone’s projects forward

Winning Hearts and Minds:

FastTrack Model

Request It

Scope It Do It

Deliver It

• Streamlined approach

• Agile response to the business

• Uses the project request process

• Reduces the quantity of deliverables

• Timeline is generally 1-3 months

• Goal: To deliver smaller, quick-win

projects faster

Winning Hearts and Minds:

Focus on Listening

Understand the job your customer is trying

to do. Don’t try and understand your

customer

– Clayton M. Christensen

Winning Hearts and Minds:

Growing the Culture

• Choose quick win projects to

show success

• Educate your peers

• Understand the maverick /

cowboy mentality and how to

help

• Wear multiple hats

• Today’s economy demands

higher performance and results

• Get senior management involved

• Tailor the approach to your

company

• Adopt a methodology…but plan to

be flexible

End Game:

Elevator Speech

Questions

Eric J. Brown

EVP, CIO and Co-Author of:

“The Effective CIO”, Taylor and

Francis, January 2009

ebrown@ncigroup.com