Proposal Document For PMO Initiative

Running head: PROPOSAL DOCUMENT FOR PMO INITIATIVE 0

PROPOSAL DOCUMENT FOR PMO INITIATIVE

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Table of Contents

PROPOSAL DOCUMENT FOR PMO INITIATIVE .................................................................... 2

Section 1: Executive Summary ................................................................................................... 2

Why Project Management Office?.......................................................................................... 3

Challenges Facing PMO Groups ............................................................................................ 4

How PMOs are Adding value ................................................................................................. 4

Purpose of this Research ......................................................................................................... 5

Section II: Company or Organization Description ..................................................................... 6

Company Overview ................................................................................................................ 6

Company Competitive Position .............................................................................................. 7

Company Needs/Types of Projects ......................................................................................... 9

Section III: PMO Proposal ............................................................................................................ 10

Overview ................................................................................................................................... 10

PMO Processes ......................................................................................................................... 10

PMO Services ........................................................................................................................... 11

References ..................................................................................................................................... 12

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PROPOSAL DOCUMENT FOR PMO INITIATIVE

Section 1: Executive Summary

Project management has many benefits, its overall aim is making the world a better place.

To achieve it, it requires both a clear vision and skills. Hence, the Department of Project

Management Office (PMO) is tasked with the responsibility of improving a project's or company

project performance ("What is PMO in Project Management? - Project Management Guide",

2017). Their main role is supporting a project by ensuring that their results meet the company

standards and needs. In a simple definition, the Project Management Office (PMO) is the company

department that enhances project management by improving efficiency and standardizing

processes ("What is PMO in Project Management? - Project Management Guide", 2017). In an

organization or any project, they are in charge of maintaining and creating all project

documentation and ensuring best track metrics, practices, and offer training. They also update the

project stakeholders and executives on a project's progress, assisting in prioritizing projects, and

ensuring all projects support the organization's overall business objectives and future state.

In recent years Project Management Offices have exploded in popularity. They are more

popular in most of the industry-related discussions. However, this is a new concept and hence, the

questions What do we know about them? What does a PMO do, exactly? And should an

organization have one? These are the questions that guide this presentation. As mentioned earlier

it is a group in any organization that determines and maintains its project management standards.

The department primary focuses on standardizing the execution and repetition of their company’s

projects (Mandayam, 2000). They are the go-to source for guidance, documentation, and metrics

for project implementation. They have established channels of how to update the project

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stakeholders and synchronize them with the enterprise goals. In the case of why we need them,

they are the integral component in the success and health of a company’s project.

Why Project Management Office?

They are implemented to maintain the accepted standards in the face of an ever-changing

industry. Currently, the PMO departments are increasing in popularity than ever. The number and

need of these departments have been progressively growing year over year across various

enterprises of all sizes. In fact, in 2000 – 2012 alone, the number of organizations with PMO has

risen from 47 percent to 80 percent. Subsequently, the current advance of enterprises with PMO

departments, 30 percent of those without one is planning to put one in place in the next budget

year. Additionally, based on revenue, 61 percent of small enterprises, 88 percent of mid-size

companies, and 90 percent of organizations have a PMO department. As the need grows, PMO

departments are increasing based on the company size the department’s role is less popular per

industry (Fitzgerald, 2010). Whether it is healthcare, information technology, finance or

professional services, the department’s acceptance varies based on the business demand.

Based on Wrike’s Blog (Bonnie, 2014), the percentage of companies or industry with PMO

include 93 percent in health care, 93 percent in finance, 85 percent in information technology, 78

percent in manufacturing, and 60 percent in professional services. Training is one of the ways

project management adds values to their enterprise’s overall effectiveness. In keeping up with the

current best practices and standards, PMOs are offering training to their enterprises. It is estimated

nearly 50 percent of PMO departments are offering some kind of training (Fitzgerald, 2010). Their

daily business process is finding new ways of improving their organization by providing extra

added values. Most offer training in various project management practices such as business

alignment, PMP preparations, software & tools, and leadership skills. However, as is with any

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plan, it seems simple at first but as it progresses there are various barriers that need overcoming to

succeed ("Tesla Inc (TSLA.O)", 2017).

Challenges Facing PMO Groups

It is the nature of any plan to experience hurdles and challenges. Some include

encountering unnecessary overhead, resource constraints, and resistance. Some of the PMO of the

challenges facing PMO departments include resistance to change within the organization, the PMO

is perceived as an unnecessary overhead, not enough resources and time for strategic activities,

value added by PMO is challenging to prove, and poor resource management capabilities ("What

is PMO in Project Management? - Project Management Guide", 2017).

How PMOs are Adding value

The aim of a business enterprise in turning a profit and providing value. It is accomplished

by breaking things down into revenue sources. All revenue sources – marketing, operations, or

information technology are executed in enhancing the probability of a long-term success of the

business venture (Bonnie, 2014). This is the primary reason many PMOs are finding residence

across various industries of different sizes. When installed properly they add value across the

various disciplines. On average, successfully established PMOs offer 50 percent more projects

aligned with business objectives, 30 percent increase in the number of projects delivered under

budget, more cost savings per project, decrease in the number of failed projects, improvement in

productivity, and improvement in customer satisfaction (Bonnie, 2014). Their presence in the

organization ensures rigid governance support and processes, specialist and routine support for the

project manager, and a steady approach across the enterprise, and commonality of documentation.

Additionally, they ensure the sharing and development of best practices.

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Purpose of this Research

The aim of this research is to study Project Management Office (PMO), and a real-world

company PMO strategy. Additionally, present how to implement a robust effective PMO strategy

to the organization or improve the already existing PMO principles. It is presented in three

sections, an overview of Project Management Office (PMO), a company with project management

and finally, a proposal for the company to adopt.

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Section II: Company or Organization Description

Company Overview

The company case study for this research is Tesla, Inc. it was formerly known as Tesla

Motors up until 1

July 2003. The company is popular for its engineering aspects. It designs,

develops, researches, manufactures and sells fully electric vehicles ("Program Management",

2017). Their motto, “accelerate the world’s transition to sustainable energy” ("Program

Management", 2017). The company has two main aspects, the energy generation and storage, and

automotive. The automotive section, designs, develops and sells electric vehicles. While the

energy segment, research and innovates energy generates and storage including the design,

manufacture, setting up and sales of solar energy systems and energy storage products to

residential and corporate clients, or sales of solar-generated electricity to clients. On December

2016, they released and sold two fully powered electric vehicles. The Model X sports utility

vehicle (SUV) and Model S sedan. The push to venture fully into electric vehicles is that the

customers should not compromise on driving electric – they argued that electric vehicles can

quicker, better and more fun driving than the traditional petroleum powered vehicles.

Currently, Tesla is into mass production of a wide range of electric powered vehicles and

infinitely ascendable green energy and storage. Tesla envisions that the faster the planet stops their

reliance on fossil fuels and adopt clean energy, the better the planet will evolve. In 2008, the

Roadster launched the Tesla’s cutting-edge powertrain and energy storage battery technology.

Subsequently, Tesla designed the first ever electric powered vehicle the sedan from scratch –

Model S. This model became the first vehicle in its class in all categories. Combining performance,

efficiency, and safety, the Model S has exceeded the world’s expectations of the 21

century with

the widest range of electric powered vehicles, a record 0 – 60 Mph acceleration of Motor Trend

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measured 2.28 seconds ("Program Management", 2017). By 2015, Tesla had expanded its product

line with the Model X, the quickest, most capable and safest sports utility vehicle in its history

with a current 5-star safety rating in all categories according to the National Highway Traffic

Safety Administration (NHTSA).

Company Competitive Position

Tesla introduced a low-priced model, Model 3 in 2016 that was to save its owner $200,000

fuel costs for over a million miles. Other vehicle manufacturers witnessing the trend Tesla in taking

the decision to join the electrically powered vehicle manufacturing industry. Currently, the

company competes with the likes of Toyota, Honda, Ford, Audi, Mercedes, BMW, Nissan,

Daimier, Fiat, Mitsubishi, General Motors (GM), LG Chem, AES Energy Storage, Trinity Solar,

Vivint Solar Inc., Sungevity, Samsung and Sunrun Inc (“6 Success Principles from Elon Musk

(PayPal, SpaceX and Tesla Motors)", 2017). Furthermore, the company designs other system

components. It offers leases and loans for is vehicles in Europe, North America and Asia in

conjunction with various financial institutions. Through its local subsidiaries, the company offers

financial arrangements directly in areas in Germany, United Kingdom, Canada and the United

States.

Recently, Tesla’s stock rate took a hit, the decrease is attributed to the assumption that it

would not deliver and from the increasing competition from other carmakers who are well

established and that they are changing their product line to electric powered. According to the

SingularityHub (Wadhwa, 2017), there is a market still exceeding over 50 billion dollars, it is clear

that Tesla’s prices are still inflated when compared to other luxury vehicle manufacturers such as

Ford and GM – that generate over 20 times more Tesla’s revenue. From this one can understand

what why the Tesla stocks are the most shorted after. However, Tesla has a competitive advantage

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under their sleeve that many do not understand. Many forget it is more than an electric automobile

company, it is a tech company that builds technology platforms.

It has positioned itself as a leading player in the green energy sector and sharing economy.

It brings the same data analysis, elegance and integration to these industries as it does it automobile

industry. Based on its CEO Elon Musk, the Tesla Model S, “is a spaceship that travels on land.’

Tesla motors remain competitive because of the business strategy they sort to take. Compared to

other electric powered automotive manufacturers such as Mercedes’s B-Class, the BMW i3, Chevy

Bolt, and the Nissan Leaf all seem as a clumsy repackaging of old tech ("Program Management",

2017). Compared to Tesla’s products they are cassette players to an iPod. The Tesla company

chose to venture in what people regard as the future, a dream. This means that their product is

unique but out of reach, however, in the advent of the 21

century the planet resources are seen to

be scarce. This motivated the research of green or alternative energy. Tesla saw this opportunity

and decided to venture into green energy solutions.

The other reason is the fossil fuels are ‘endful’. They are a degradation of the environment,

this is because that is how it is viewed. In an effort to change the industry and become the leader

in the electric car market. As presented in figure 1 below, the market is young and full of

opportunities, however, a majority of the market still cannot afford the Tesla automobiles

(Wadhwa, 2017). In 2017, the company launched the Model 3 vehicle. Its plan was to release a

stellar car in the 4

quadrant 4 box. From their PMOs advice, the Tesla Model 3 vehicle is easily

available to a wide range of the market ("6 Success Principles from Elon Musk (PayPal, SpaceX,

and Tesla Motors)", 2017). Their advice from the previous product sales was to create an

alternative to the gas and hybrid powered vehicles that are safer, drive better, a large power reserve,

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cheaper and healthier. Their target was the young vibrant young market who were more permissive

to accepting new ideas and products.

Figure 1. Tesla’s projection of the electric car market. Courtesy (“Wait but Why”, 2015).

Company Needs/Types of Projects

Tesla has a culture where its personnel helps its Program Management Office (PMO) in

identifying and managing the issues, requirements, risks, and solutions involved in the project

regardless of complexity and size ("Program Management", 2017). In this project management

strategy, Tesla brings a wide range of proven methodologies, expertise, and demonstrates an

excellence in all the phases of their project life cycles. They include maintaining the proven project

standards in initializing to planning, executing, monitoring, controlling and closeout. Their value

and effect are witnessed in their ability to seamlessly shift into a new client market. The PMOs

ensure that in each project they adapt effortlessly and take the client’s missions as their own

("Program Management", 2017). This ensures that each project’s objectives are met or exceeds the

expectations utilizing the most cost-effective and efficient methods.

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Section III: PMO Proposal

Overview

The aim of the PMO strategy is to assess the organization’s culture and its Program and

Portfolio Management (PPM) maturity in defining the format of the PMO. The aim is to enhance

Tesla’s project management capabilities while improving its competitive advantage. Additionally,

enable the PMO to provide independent services. The PMO to operate as a separate business unit.

This is a proposal for a PMO plan to improve the company’s production to align all projects with

the company’s objectives and goal, organization, responsibility, preliminary budget, strategy, key

stakeholders, preliminary schedule, critical success factors and project team. The PMO plan is

initiated in six phases. The implementation is in phases because it ensures proper organizational

restructure takes place and business activities proceed with minimal challenges ("What is PMO in

Project Management? - Project Management Guide", 2017). The overall end result is having a new

methodology, structure, and standards for implementing the best practices and adjusting the

business as much as possible while updating the stakeholder's concerns in regard to project

management practices, performance, and standards.

PMO Processes

Create a single project management group that:

 Implements a steadily companywide project planning strategy that allows the organization

operations in scaling rapidly without suffering from organizational and communication

breakdowns.

 Implements a steady companywide quality standard for all Tesla’s technology and engineering

services and products.

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 Implements a growing institutional knowledge base through detailed documentation of all

engineering procedures and products.

 Allowing project managers in representing that interests of their projects and the organization

as a whole rather than their respective department interests.

The role of the Project Management Office will be to:

 Establish the project’s scope.

 Estimate the required resources.

 Create project milestones and schedules.

 Create project documentations and specifications.

 Manage the project resources.

 Budget control and analysis.

 Manage the project risks and prevent cost overruns.

PMO Services

To ensure the PMO comprehends their vision and mission, the support from the key

stakeholders is very crucial. The following are some of the PMO processes for gaining the support

for them to be effective:

 Refining the PMO Charter based on the inputs.

 Circulating a draft PMO charter in obtaining inputs from key stakeholders and ensures that all

relevant sides are updated.

 Getting the approval of the relevant management representatives on the final PMO charter.

 Execute the PMO in phases.

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References

6 Success Principles From Elon Musk (PayPal, SpaceX, and Tesla Motors). (2017). Project

Management Hacks. Retrieved 8 March 2018, from

http://projectmanagementhacks.com/6-success-principles-from-elon-musk-paypal-

spacex-and-tesla-motors/

About Tesla | Tesla. (2017). Tesla.com. Retrieved 8 March 2018, from

https://www.tesla.com/about

Bonnie, E. (2014). What is a PMO? (Infographic). Wrike.com. Retrieved 8 March 2018, from

https://www.wrike.com/blog/what-is-a-pmo-infographic/

Fitzgerald, D. (2010). PMO Key Initiative Overview. Gartner.com. Retrieved 8 March 2018, from

https://www.gartner.com/doc/1272416/pmo-key-initiative-overview

High, P. (2012). Tesla Motors and Qualcomm Identify When IT Standards May Not Be

Necessary. Forbes.com. Retrieved 8 March 2018, from

https://www.forbes.com/sites/peterhigh/2012/10/31/tesla-motors-and-qualcomm-identify-

when-it-standards-may-not-be-necessary/#26c3e2706e04

Mandayam, S. (2000). Developing a proposal for implementing a PMO. Pmi.org. Retrieved 8

March 2018, from https://www.pmi.org/learning/library/process-developing-custom-pmo-

proposal-3133

Program Management. (2017). tesla-labs. Retrieved 8 March 2018, from

https://www.tesla.net/program-management

Tesla Inc (TSLA.O). (2017). Reuters. Retrieved 8 March 2018, from

https://www.reuters.com/finance/stocks/company-profile/TSLA.O

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Urban, T. (2015). How Tesla Will Change The World - Wait But Why. Wait But Why. Retrieved 8

March 2018, from https://waitbutwhy.com/2015/06/how-tesla-will-change-your-life.html

Wadhwa, V. (2017). This Is Tesla’s Greatest Competitive Advantage. Singularity Hub. Retrieved

8 March 2018, from https://singularityhub.com/2017/07/24/this-is-teslas-greatest-

competitive-advantage/

What is PMO in Project Management? - Project Management Guide. (2017). Project Management

Guide. Retrieved 8 March 2018, from https://www.wrike.com/project-management-

guide/faq/what-is-pmo-in-project-management/

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