OPM3 TM

Organizational Project Management Maturity Model

Kevin Chui
Vice President, PMI Hong Kong Chapter

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 Disclaimer

The interpretation and viewpoints on OPM3 expressed in this

document come from the author.
Project Management Institute
(PMI)
• Established in 1969, headquartered in USA
• World’s leading not-for-profit project management
professional association
– More than 154,000 members in over 140 countries and
representing different industries (Jan 2005)
– Over 280 chartered and potential chapters
– Over 30 Specific Interest Groups (SIG)
• PMI Hong Kong Chapter established in 1998
– More than 750 members and 600 PMP
 Industries Deploying Project
Management
• Information technology
• Telecommunications
• Construction & engineering
• Healthcare
• Financial services
• Education and training
• Automobile
• Space & aircraft
• Manufacturing
• Pharmaceutical
• And many more…
 Agenda

1. Overview of Portfolio, Program, and

Project Management
2. OPM3 Concepts
3. OPM3 Cycle
4. A Self-Assessment Example
5. How Do Hong Kong MNC Perform?
Overview of Portfolio, Program
and Project Management
IT Projects: Common Concerns

• Is there visibility regarding IT investment

and projects among different business units
such that:
– There is no redundant investment;
– Projects for different BU can be managed in
such a way that benefit the entire organization;
– Projects are prioritized according to business
objectives?
IT Projects: Common Concerns

• Are projects managed effectively so that

they can be delivered on time, within
budget, and according to specifications?
• Is the business deriving the maximum value
from its investments in IT projects?
 Key Objectives of IT Projects

• Maximize value of IT investments while minimizing risk

• Achieve the company’s business strategic objectives
through IT projects
• Improve communication and alignment between IT and
business leaders
• Encourage business leaders to think about the entire
company, not their own business units, and to take
responsibility for projects
• Allow planners to schedule resources more efficiently
• Reduce the number of redundant projects
 Organization Project
Management and Maturity
• Organization Project Management
– The application of knowledge, skills, tools, and
techniques to organizational and project activities to
achieve the aims of an organization through projects
• The degree to which an organization practices this
type of project management is referred to as
organization project management maturity
• In OPM3, maturity is reflected by the combination
of Best Practices achieved within the Project,
Program, and Portfolio domains
 The Value of
Project Management
• PMI commissioned Professor William Ibbs
and Justin Reginato from the University of
California at Berkeley to research 52 US
corporations on the value of project
management
• The research started in 1997 and the results
were published in 2002
Finding 1: Companies with more mature
project management practices have
better project performance

• Companies with more mature practices

deliver projects on time and on budget
• Less mature companies may miss their
schedule targets by 40 percent and their cost
targets by 20 percent
Finding 2: Project management maturity is
strongly correlated with more predictable
project schedule and cost performance
• More mature companies have a Schedule
Performance Index (SPI) variation of 0.08 and
Cost Performance Index (CPI) variation of 0.11
• Less mature companies can have corresponding
values of 0.16 for both indices
• For a US$10m project, we are talking about
US$1.6m cost variation
Finding 3: Good project management
companies have lower direct costs than
poor project management companies
• High maturity companies have project
management costs in the 6-7 percent range
• Low maturity companies have average 11 percent
• Organizations with low project management
maturity also jeopardize the likelihood of project
success, leading to increased indirect costs (e.g.
late delivery, missed market opportunities, and
dissatisfied customers)
 Spending and PM/ROI
versus PMM
Nascent Emerging Transitional Stable
Project Project Project Project
Management Management Management Management High
High

PM/ROI
PM Spending
Percentage

Low Low

PMM
 The Virtuous Cycle of Project
Management
Project
Management
Cost (%) High Cost, High Cost,
Low Return High Return

Low Cost, Low Cost,

Low Return High Return

PM/ROI
 PMI Standards

• PMBOK – Managing individual projects

• Project management competency development

(PMCD) framework – for the project manager

• OPM3
– Standard for applying project management principles at
the organizational level
– Covering project, program and portfolio management
 Popular Project Management
Maturity Model
Maturity Model Source

Project FRAMEWORKTM ESI

Project Maturity Model (PM2) Interthink, Canada
PRINCE2 Maturity Model (P2MM) CCTA, UK
Project Management Maturity Model (PMMM) PM Solutions, USA
Project Management Maturity Model (PMMM) The Program Management
Group, Wetherby, UK
Project Management Maturity Model (PMMM) APMG, UK
SW-CMM, SE-CMM, P-CMM, CMMI SEI, US
Unified Project Management® Methodology IIL, US
(UPMM)
 Do We Need Another
Maturity Model?
OPM3 ...
• Allows an organization to achieve strategic goals through
project management principles and practices
• Provides the most comprehensive Body of Knowledge
regarding what constitutes Best Practices in organizational
project management
• Enables an organization to perform an assessment of its
current state of organizational project management
maturity
• Helps organizations identify a path for improvement, and
provide guidance on prioritizing and planning
Background
What is OPM3? Projects Linked to Strategy

The challenge is to link organizational strategy to successful,

consistent, predictable project completion.
OPM3 Concepts
 OPM Domains

OPM3 will help Portfolio

organizations utilize
project management
to accomplish their
goals on time, within Portfolio
budget, and most Projects Programs
importantly, to
improve their
overall effectiveness.
 Portfolio, Program and Project
(PPP)
Project
• A temporary endeavor undertaken to create a unique
product, service, or result.
Program
• A group of related projects managed in a coordinated way
to obtain benefits and control not available from managing
them individually.
Portfolio
• A collection of projects and/or programs and other work
that are grouped together to facilitate effective
management to meet strategic business objectives.
 OPM3 Stages (SMCI)
Four sequential stages of process improvement:
Standardize
(Develop/buy/acquire common process & monitor compliance)

Measure
(Measure performance standards & critical characteristics of process)

Control
(Develop, implement & audit system to maintain stable process control)

continuously Improve
(Identify process problems & implement continuous improvements)
 OPM Maturity

Increasing
Portfolio
BEST
Maturity

Program

PRACTICES
Project

Standardize Continuously
Measure Control
Improve
 Dimensions of OPM Maturity

First Dimension Second Dimension

Four progressive Stages of
Process Improvement (SMCI)
Three Domains (PPP)
•Standardization
•Measurement
•Project Management
•Control •Program Management
•continuous Improvement •Portfolio Management

Zeroth Dimension
Within the above two
dimensions is the progression
of incremental Capabilities
leading to each Best
Practice
 A Fourth Dimension –
Project Management Process Groups
(IPECC)

Fourth Dimension
Capabilities are also Initiating Planning
categorized into the Processes Processes
five project
management process
groups (IPECC) Executing
Controlling
•Initiating Processes
Processes
•Planning
•Executing
•Controlling Closing
•Closing Processes
 Multi-dimensional Maturity

Note that there is no overall

system of “levels” of maturity.

OPM3 is designed to be easy to Flexibility in applying the

understand and use. It is also model to the unique needs of
scalable, flexible and customizable to an organization
accommodate the wide range of
needs and objectives of
organizations of varying types and
sizes.
OPM3 Cycle
 The Three Interlocking
Elements of OPM3

Knowledge – OPM3 foundational concepts

Assessment – Self assessment tool kit
Improvement – 600 organizational project
management best practices and their constituent
capabilities
 The OPM3 Cycle
1. Prepare for
the Assessment

5. Repeat the 2. Perform the

process Assessment

4. Implement
improvement 3. Plan for the
improvement
 The OPM3 Cycle
1. Prepare for
the Assessment

5. Repeat the 2. Perform the

process Assessment

4. Implement
improvement 3. Plan for the
improvement
 OPM3 Construct

Continuously
Improve C C C
I E O I E O I E O

Control
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N N N

PRACTICES
PRACTICES &
A T L I A T L I A T L I

&
I I I
T I L N T I L N T I L N
N N N
Measure I
G
N I G I
G
N I G I
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N I G
N G N N G N N G N
G G G G G G

Standardize CAPABILITIES
CAPABILITIES
Project Program Portfolio
Best Practice Basics

Best
Practice
KPI

Capability Outcome KPI

Outcome KPI
Capability
Outcome KPI
 Best Practice, Capabilities,
Outcomes and KPIs
Best Practice
• An optimal way currently recognized by industry to
achieve a stated goal or objective.
Capability
• An incremental step on a way to one or more best
practices.
Outcome
• Tangible or intangible result of applying a capability.
Key Performance Indicator (KPI)
• A metric by which an organization can determine, if an
outcome and to what degree on outcome exists.
BP 3570 Manage Related Projects

Best Practice: Processes, structures and practices allow interactions

between projects to be coordinated

Capability (3570.020): Establish Program Management

The organization plans and manages related projects as a program.
PPP Program SMCI Standardize IPECC Executing

Outcome (3570.020.10): Stakeholder Requirements

The organization considers stakeholder requirements across the
program when assessing project results or changes.

KPI: Program-Level Change Management

 OPM3 Directories
• Best practices directory
– Lists nearly 600 best practices
• Capabilities directory
– Provides data on all the capabilities , organized based
on the best practices
• Each capability is associated with
– Domain
– Process improvement stage
– Process group (PMBOK)
– Key performance indicator (KPI)
• Improvement planning directory
– Shows the dependencies between capabilities
 The OPM3 Cycle
1. Prepare for
the Assessment

5. Repeat the 2. Perform the

process Assessment

4. Implement
improvement 3. Plan for the
improvement
A Self-Assessment Example
How Do Hong Kong MNC
Perform?
 Background

• From Oct 2004 to Jan 2005, PMI HK has

performed assessment for three Hong Kong MNCs
based on the OPM3 self assessment
• Methodology
– Our consultant team walked through the self-assessment
questionnaire with the participating organization’s management
team, comprising program manager, project managers, and other
senior executives.
– A final presentation was arranged regarding the findings, existing
states, target profile, and a roadmap to attain the target profile.
 Result Summary

• Organization A performs well in Project Management (up

to Control level)
• Organization B performs very well in Project Management
(up to Improve level)
• Organization C performs quite good in Project
Management but lacking processes in Closing and Risk
Management
• Organization C also performs well in Program
Management (up to Improve level)
• All three organizations, however, lack processes in
Portfolio Management
 How They Stand in
OPM Maturity

Increasing
Portfolio
BEST
Maturity

Program C
PRACTICES
Project
A B

Standardize Continuously
Measure Control
Improve
 A Few Observations
• Project Management is a well practiced discipline
in our sample organizations.
• Organizations consciously apply different
methodology for managing projects of different
size.
• The concept of Program Management is well
understood but not practiced. In our study, some
organizations manage complex projects as
programs.
• The concept of Portfolio Management is not well
understood and seldom practiced.
 Thank You

• More information is available at:

http://opm3.pmi.org/