Introducing P3O® – New portfolio, programme and project office guidance from OGC

The Office of Government Commerce, which is already known for its PRINCE2® and ITIL® project management methodologies, has developed a new reference – P3O. Nick Saalfeld finds out what it adds to the developing profession of project management, and how Microsoft’s Enterprise Project Management or EPM can support it.

Even if you’re not a programme or project management specialist, you might have heard of PRINCE2®. It’s a set of best-practice processes, reference and guidance to help managers deliver complex projects effectively. IT managers might well have bumped into ITIL®, too. ITIL is a similar library, designed specifically to encourage the optimal delivery of IT services.

Both are widely used by private sector corporations, considered benchmarks in their own right, and respected for the contribution they make to business. Yet both are owned by OGC: the Office of Government Commerce. In late 2008, OGC added another work of reference, P3O, to its project management corpus, and it’s already being well received by several NHS organisations.

Sue Vowler, lead author of the P3O core guidance book says: “P3O has already been taken up across many healthcare organisations which acted as pilot sites, including The Department of Health, the NHS National Programme Office and NHS South Central.”
 

The role of the portfolio office

It’s called P3O (that’s an ‘oh’ not a zero) because it deals with the effective establishment of portfolio, programme and project offices. In other words, P3O concerns itself not with the implementation of programmes and projects themselves, but with the management environment in which multiple programmes and projects can be planned, resourced and executed whilst minimising the impact on day-to-day activities.

David Dunning is consulting director at project management specialists CPS; and has worked with several Department of Health organisations on large deployments. He says: “We often hear the term ‘programme support office’, and we think it fails to recognise that the project management function should be doing much more than support.

“I believe that there’s a profession around projects and programme management beyond execution itself. I think there’s a profession in helping a business decide on its portfolio, a profession in helping the business deliver its projects correctly, and a profession in being a thought leader in how a business should deliver those projects and programmes.

“Those are the key components of P3O: management of delivery, the creation of a centre of excellence – a repository of best practice applied to the operation - and the portfolio function. P3O helps public sector organisations to structure the project management function so that they can make a greater contribution.”

The value to the public sector in particular is that strong project management offices, using P3O guidance, can bridge the gap between strategic staff (policymakers and board-level stakeholders) and the many levels of delivery staff required for any major change management programme.

Dunning continues: “The challenge for public sector organisations is scale. Several organisations I work with in the public sector are very large, and it’s impossible to have a command and control structure or implement commonality and consistency across such a vast organisation.

“That makes it very difficult to raise the perception of a need for change or to start to raise a body of support for change – it takes time. P3O puts project managers at the heart of departments as well as programmes, and gives them a structure by which they can connect with management at all levels on the one side, and execution on the other.”

A P3O primer

Dunning says that P3O clarifies the roles of project management offices. “The phrase ‘project management office’ has been used widely to describe something that’s rich, sophisticated and mature, through to something which is a simple administration office. 

“P3O breaks the term down into its constituent pieces: portfolio office, delivery support, centre of excellence and governance.  We think it provides a new language: for us, it gives us a way to describe all the services that support functions need to fulfil.”
 

Under the P3O model, project offices are largely temporary. They only exist to cater to the specific needs of individual projects (planning, reporting, and risk management, for example). A classic failing is to involve qualified project managers at only this level, whilst ignoring the need for protect management expertise at higher levels.

Under P3O, permanent hub programme/portfolio offices may exist to provide full-time local or departmental support through further reporting and planning, but also scrutiny, standard setting, compliance and resource management.

Finally, reporting into the board is a portfolio office. This should be a permanent arbiter of ’the right thing to do’, aware of top-level priorities (and how they rapidly change). It should constantly seek better value from investments, improved decisions and offer the wisdom of foresight.

The portfolio office’s functions include top level management and prioritisation and decision-making support. Delivering support functions, like those typically provided in traditional PMOs, it should offer HR, legal and resourcing services for example; but also a centre of excellence where best-practice is evolved, training offered, and lessons from experience proactively evangelised.

Dunning again: “It’s nice to hear that there’s focus on the learning organisation and getting people to take on skills. I don’t think there was much focus on that in the past in many organisations, but with a centre of excellence function within the P3O model, it really helps organisations to get better at managing their projects and programmes.”

Vowler adds, “The mistake that is often made is to staff portfolio offices or centres of excellence with junior people, whereas they should involve people with years of experience at the top of their career, who have been successful business planners, strategists or senior programme or project managers.”

Dunning agrees: “The biggest issue I’ve found with some organisations is that they don’t know how to prioritise. They don’t know their business objectives, or how relatively important those business objectives are; so they haven’t worked out what to score their projects against.

"Step one is to understand objectives and to rate projects against those drivers on an ongoing basis. In a public sector organisation dealing with major infrastructure budgets, that is the sort of work that demands the most experienced managers.”

EPM: helping P3O project management to break even

All project management teams should be used to justifying the value of the project management function: effective project management should more than pay for itself in reduced risk, reduced delays and eagle-eyed prioritisation.
Yet, how can an additional layer of project management expertise be justified? Dunning denies that P3O requires dramatically more resourcing. “I would say that P3O doesn’t represent a new administrative layer; rather it’s a reapportionment of a layer.  Each role doesn’t have to be a person – we can take a virtual approach. What matters is that somebody has, as part of their role, a concentration on the centre of excellence, for example. If we do things properly, the overhead would actually diminish.”

This is where Enterprise Project Management, or EPM, can play a role. It’s worth re-stating that P3O is not a formula: as a strategic philosophy there are unlimited ways of deploying P3O for any one organisation. It does however define the roles and responsibilities of project offices, and the information paths between them. EPM can ensure that those data flows remain well oiled. For example, it can:

• Ensure “one single version of the truth” is propagated and kept available in real-time;
• Support decision-making through better knowledge availability;
• Offer easy progress reporting, with versioning and executive summaries applicable to all users;
• Provide relevant and clear dashboards at each management level.

P3O undoubtedly deserves to follow PRINCE2 and ITIL into common deployment across the public sector; particularly as private and public sector organisations increasingly collaborate and economic pressures highlight the importance of effective delivery.

Find out more about P3O and add portfolio office skills to your project management armoury.

P3O® is a Registered Trade Mark of the Office of Government Commerce.
PRINCE2® is a Registered Trade Mark of the Office of Government Commerce in the United Kingdom and other countries.
ITIL® is a Registered Trade Mark and a Registered Community Trade Mark of the Office of Government Commerce, and is Registered in the U.S. Patent and Trademark Office.