Industry: Logistics company
Interview with Robert Agamirzyan
Interview by Frank Turley
Q1. What was the status of PMO when you joined the organization?
When I joined the company as the Head of PMO, from my point of view the general attitude among the company employees were neutral or negative and taken as a burden. There was no clear structure or PMO methodology that answered the existing challenges or aligned to the company strategy. There was no head of PMO for some period of time. Methodology and forms existed earlier and had been used in the past but were abandoned due to changes in the business environment. The information system was in place but outdated, therefore, it was neither used properly nor supported. Nevertheless, some employees used it as a task tracker, it was Project Server 2010 with some customization (dashboards) and integration with the local financial system.
Some projects were in the delivery phase, some were suspended and some were in the everlasting identification/definition phase as there were no clear goals or funding.
One of the main problems, from my perspective, was that there was no clear distinction of how, when and why the projects should start or not start and who should decide.
In addition to that, the lack of coordination among projects resulted in most of the problems listed below:
- One of the blocking issues amongst others was the outdated ERP system that was based on an old programming language with little or no documentation on some modules. Most of the specialists had already retired, therefore, making any changes to it was a problem.
- Projects were frequently late and/or over budget and missed benefits realization goals and were even abandoned despite huge investments.
- Nobody knew exactly which projects exist and their status (there was no updated list of projects), hence the inherent problems.
- Some senior managers were starting new projects on their own.
- There was no process in place to report project status to the management board or to exchange information about projects among PMs.
Q 2. What were your first steps when you joined as Head of PMO?
First of all (and that was the main reason why I was hired, not because I am so cool at P3M), I started with a thorough and rigorous financial and non-financial audit of past projects and programs. That was a very tricky task because part of the information was in excel spreadsheets, part in corporate ERP, part elsewhere and most of it was mismatching. Moreover, most PMs and sponsors of that program were non-existent in the company.
Anyway, I drafted a list of past projects and the current undergoing projects and initiatives. Based on that, I developed a further strategy of renewing the Project Office like categorization and prioritization methodology, initiation procedures and so on.
Q 3. How open was the senior management to change?
In general, they were open to open discussions in the project committees which existed in the past, so I just re-energized the process. However, one of the obstacles was that there were no dedicated support resources to prepare business cases, project charters and so on.
Q 4. Did you have to do a high-level PMO priority exercise?
As we did not have any investment budget, only the regulatory and optimization projects were allowed to carry on and regulatory projects had higher priority. Priority "wars" were held at IT committees about operational questions and I don't know how they did this.
Q 5. What was the main data used to identify the most valuable projects?
The company that I worked for was part of a big group of companies, therefore, the company rules were partially followed. However, most companies of the group were from the industrial sector of the economy, so their principles did not align well with the Logistics Industry, so I reinvented what I was offered.
We divided all initiatives into 4 groups: optimisation projects, business development project, compliance projects, business continuity projects. Thereafter, we developed the success criteria for each group of projects, i.e. financial criteria like PI, IRR, NPV, ARR, IRR and other applicable; non-financial criteria in case we could count direct financial implications and also unmeasurable criteria.
As the strategy of the company was not properly defined - strict digits were not defined, so we judged all the projects against each other.
Q 6. How many projects were dropped?
As a Head of PMO, I served also as a Secretary of the Projects Committee so I tried to make a yearly plan for project execution. If we had 10-13 initiatives from Head of Departments, 1-2 were accepted with comments, 2-3 were diverted to reworking and others were postponed for better times and these results were mainly expected by managers because of the unannounced economical crisis.
Final decisions were made by the General Director based on the votes of Board of the Directors.
Q 7. What was the role of CFO in this exercise?
CFO did not play any serious role in projects or any other committees because of the “tradition” in the company.
The company had it’s own very complicated financial model. Projects mainly fell into the CAPEX part of the model for several reasons. One reason was lack of resources. Finance departments integrations between Projects Server and ERP financial planning module were not planned, so this was done manually when capital expenditure was agreed for projects.
Q 8. What do you think will happen in the next two years from a PMO point of view?
I worked for about two and half years for the company and since then 8 months have passed. Now they are flourishing, continuing to use the methodology that I developed, hired a new PM, developing integration Project Server with other IT systems in the company.
I think that it may be disbanded. In case they find a strong partner to integrate with will play a significant role. Depends on the business context.
Robert Agamirzyan is an independent PMO Consultant and is serving as a personal coach and trainer in the field of project and investments management to top managers of various local and global companies, represented in Russia and CIS.
LinkedIn Profile: https://www.linkedin.com/in/pmo-robert-agamirzyan/