Microsoft CSS Case Study for OPM3

Material from the forthcoming book Using OPM3

ISBN 0071629645 / 9780071629645
http://opmexperts.com

Outline

Introduction ........................................................................................................... 2

Background .......................................................................................................... 2

The Journey.......................................................................................................... 4

Key areas for improvement identified ................................................................... 8

Portfolio success means business success! ....................................................... 10

OPM3 Insights .................................................................................................... 13

How did we do it? ............................................................................................... 14

More Success and Some Lessons Learned ....................................................... 16

Conclusion .......................................................................................................... 17

Disclaimer........................................................................................................... 19

Page 1 -- © 2010 OPM Experts LLC. All rights reserved.

Introduction

How does a large organization at a mature stage of growth preserve the best of

its entrepreneurial spirit in an increasingly complex, volatile, and uncertain business

environment? One way is for strategy to be set at the top but enacted bottom-up. Front-

line teams closest to the external business environment are empowered to collaborate

through lean processes that prevent complexity from degrading into chaos while

maximizing freedom of action. At Microsoft, the Customer Service and Support (CSS)

division has made this link between Strategy Management and customer-facing teams

by transforming its portfolio management capability. This case study will describe

several phases of this transformation, including how this transformation aligns with

OPM3, and how OPM3 is providing guidance for ongoing improvement.

Background

Microsoft’s Customer Service and Support (CSS) division is a global organization

focused on helping customers and partners maximize the use of their technology

investments. Serving millions of customers around the globe, in more than forty

languages and 75 locations, the organization supports all customer segments from

consumer, developer, and IT Pros to partners and the enterprise. Through direct contact

with customers and partners, CSS is a core driver of the Customer Partner Experience

(CPE) at Microsoft, and continuously evolves policies and processes based on

feedback received from customers and partners.

Page 2 -- © 2010 OPM Experts LLC. All rights reserved.

 Figure 1: Customer Service and Support Model

On an ongoing basis, CSS provides service and support for all of Microsoft’s

products, using the model shown in Figure 1. Using this model, CSS is constantly

seeking to improve the overall service and support experience for the customer, by

improving their support delivery or even through driving improvements to the product

itself to avoid the need for support altogether. Because of this challenge, CSS needs to

continuously drive improvements throughout the entire system of support, including

close interaction with the product groups to improve product usability.

As CSS evolved a more holistic view of support their mission and goals were

refined. They coalesce around the three goal areas of Customer Partner Experience

(CPE), fiscal efficiencies, and employee satisfaction, and became more strategic about

improving these.

With these shared goals, CSS has needed to grow into a more global

organization, and internal initiatives have become larger, more complex, and of greater

importance to the organization and Microsoft as a whole. In the spirit of continuous

Page 3 -- © 2010 OPM Experts LLC. All rights reserved.

improvement, CSS has matured the quality and quantity of project and portfolio

management processes to meet this challenge and drive significant business value for

Microsoft.

One important note: The Microsoft culture is entrepreneurial and constantly

changing, which poses unique challenges and opportunities when institutionalizing and

maintaining processes. Any process improvement must serve a direct business goal,

and the need for it must be clear to the business. At the same time, the business can

absorb rapid change, if the business case for it is evident and well-understood. While

averse to adopting processes for the sake of processes, Microsoft pushes accountability

and decision-making to the edges of the organizational structure, which focuses

process capability on empowering individuals and teams to act in the interests of the

company within a flat organization structure. Microsoft has a very strong model of

commitment based performance that carries throughout the organization.

Commitments are set at the organization level and the individual level for

everyone in the organization at annual and midyear reviews, and meeting these

commitments is critical to success. Commitments ensure that the organization moves

forward together, towards larger goals. These cultural norms and organizational

structure were key drivers for the approach that was taken in this project.

The Journey

As described above, CSS set out to improve its ability to execute on business

commitments, and began a journey that transformed the way it performed strategic

Page 4 -- © 2010 OPM Experts LLC. All rights reserved.

planning, portfolio management and project management. Ultimately, this led to an

understanding of the OPM3 framework, and to a better understanding of how this

journey aligned to this framework.

This journey had a number of phases and cycles, shown in Figure 2 below, and

described in greater detail below:

Jul - Jul Jul - Jul

Simple Model Strategic Initiative Management Using PPS

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Pilot Approved OPM3 Assessment

PMO Created May Strategy Management Nov
January Pilot Kick Off Group Created
Sep February
Figure 2: Major Phases and Milestones in CSS OPM3 journey

At the onset of this improvement cycle, CSS created a divisional PMO to support

high impact, strategic projects for the vice president of CSS and business segment

leaders. The PMO undertook four initiatives:

 Centralize and grow a team of senior full-time project manager resources who
could be successful in Microsoft’s decentralized environment;
 Develop standard project management tools and training, in order to
standardize delivery practices and leverage these across CSS including
outside of the PMO;
 Create a project intake and review process with high level criteria to ensure
PMO resources where working on the right projects
 Manage the PMO Project Inventory and Project Statuses

Page 5 -- © 2010 OPM Experts LLC. All rights reserved.

 These improvements in project management were welcomed by the

organization. By the end of the first year a great many projects had been successfully

delivered, project benefits were being realized, and the PMO project manager resources

became almost too popular. There was very high demand for limited resources, and it

became critical to develop a prioritization model to add to the intake and review process

to determine which projects would receive the resources. Without this process, and

given Microsoft’s entrepreneurial culture, people became very creative in securing these

resources. For example, in order to keep a high performing project manager assigned

to their team, a number of managers began to create “extensions” to their projects –

even though the extension actually had nothing to do with the original project! When

this failed, typical organizational politics were tried, with predictable chaotic results and

an inability to ensure that maximum business value could be obtained through the

current allocation of PMO resources.

Initially, in the spirit of lean process and low overhead, a “simple model” was put

into place for managing a portfolio of divisional projects, and making decisions about

projects. High level information was collected about the portfolio and provided to the

governance group. However, the deficiencies in this model quickly became clear:

 Because there were only high level details, with no supporting information,
the data could have been stronger;
 The lack of standards and data definitions meant that many of the categories
used to describe the portfolio were insufficient to support decision-making;

Page 6 -- © 2010 OPM Experts LLC. All rights reserved.

  The executive team found that the portfolio as described didn’t give them the
level of information necessary to help them make the business decisions they
needed to make

This first phase, implementing the “simple model,” served as a foundation and a

learning experience, and led to the approval of a pilot to develop a more effective

approach that addressed these deficiencies, setting the stage for a virtuous cycle of

improvements in project management and portfolio management

To address the shortfalls in the simple model the PMO agreed that they would

need to collect summary level data, but it had to be supported by details. The

initial approach of only collecting summary level data had not been sufficient, and had

created credibility issues. In addition, when more details were needed about a

particular project to make a decision, this created a delay while the data was collected.

They realized that they would need to collect and maintain the details about all

proposals and projects, and then would need the ability to summarize and roll up this

data into relevant summaries and traffic lights.

In order to make this possible, two things were needed:

(1) Standards and processes needed to be defined and enforced for the

collection of the project details, so that data could be collected consistently

across projects.

(2) They would need to develop a technical solution for the capture of the data,

reporting, and to manage these emerging standards and processes

Page 7 -- © 2010 OPM Experts LLC. All rights reserved.

For the Pilot solution, the PMO was able to use a new version of the Microsoft EPM

suite, which included Microsoft Office Project Portfolio Server 2007. This tool was

developed to address these challenges exactly and brought some additional thinking to

the table as the tool’s capabilities were explored. The PMO began to work with groups

across CSS to develop these standards, model it in the pilot, and develop the solution.

In addition, soon after this proof of concept was approved a new Strategy

Management Group was formed and the PMO became part of this group. This created

an opportunity to further extend and improve the pilot, modeling strategic definition and

alignment for the portfolio that now extended across CSS and not just within the PMO.

The following section describes the improvements that were undertaken in the next

phases.

Key areas for improvement identified

The newly formed Strategy Management Group and the CSS Leadership Team

refined the goals and strategies and set commitments for the organization. They

acknowledged that they had to tie the portfolio to business commitments, and

manage those. Given the strong Microsoft culture of managing business commitments,

every project needs to directly support a business commitment, or it will quickly become

abandoned. It was critical to make this business commitment relationship explicit and to

document it in the portfolio details. The CSS PMO did this in a number of ways, but one

outcome was the development of a detailed framework for representing project impacts

Page 8 -- © 2010 OPM Experts LLC. All rights reserved.

on the organizational goals and projected benefits. An example of part of this capture is

shown below:

Figure 3: Example of benefits collected for each project

Next, leadership realized that they would need to manage the portfolio, not just

the projects. While the individual business leaders were responsible for driving

successful delivery of their individual projects, given the number of global projects, the

interdependencies, and the breadth of change management needed for these larger

initiatives, this in itself was no longer sufficient to ensure success across the

organization. Microsoft CSS executives and the PMO realized that they would need to

manage the portfolio collectively, understand the interdependencies, and be able to

Page 9 -- © 2010 OPM Experts LLC. All rights reserved.

confidently predict when benefits would be achieved. This created momentum for the

continued standardization of processes.

Third, the PMO identified that they would need to put governance in place for

the portfolio, at the right level. In order to be meaningful, this portfolio would need to

be reviewed by executive managers regularly and used to make decisions about project

priorities. Managers needed to realize that this was happening and receive feedback

that reinforced this governance. The PMO made sure that there was early

communication to the project leads so that they could update their portfolio data.

However, the best motivator for them and their teams came at the first meeting. As the

portfolio was reviewed by the executive team, many e-mails were sent during the

meeting with additional requests for data, and validation of the data that was there.

Based on this reinforcement, there was a significant effort prior to the following

meetings to ensure that their data was solid.

Portfolio success means business success!

The greatest value of this solution became more apparent over the next year. As

described previously, project benefits were collected with considerable details.

Because these benefits were directly tied to the business commitment for the

management team, they were very interested in ensuring that these benefits were

realized in the projected timeframe. A process was put in place for the managers and

their teams to update the projected benefits for the projects as they completed analysis

and planning. These benefits rolled up into the overall portfolio benefits, which also

Page 10 -- © 2010 OPM Experts LLC. All rights reserved.

translated into a complete picture of the expected business commitments that could be

met. These portfolio benefits were reviewed quarterly in the Executive Team meetings,

and the results became intensely tracked.

At the first meeting after the portfolio was approved, there were a number of

updates to the project benefits, and it was clear that several of the proposed benefits

had been adjusted downward as measurements and processes improved. This trend

continued throughout the next quarterly meeting, as the executives and their teams

strove to ensure that the benefits here were achievable in the projected timeframe. The

downward trend in benefit projections is shown in Figure 4 below, for the first two

reviews (the blue column represents the projected benefits for the portfolio; the yellow

line represents the business targets that had been set). By the middle of the third

quarter it became clear that the business unit was in critical danger of not meeting their

projections (and thus their commitments) for the following year. While this was a major

concern, it was soon enough to adjust to keep their commitments on track – which is

exactly what they did. Working quickly together and with their teams, additional projects

were identified that could provide the value needed, and projects that had become

uncertain were halted. The portfolio was adjusted, and the projected benefits began to

increase. Ultimately, the benefit projections actually exceeded the target, and the

business was kept on track.

Page 11 -- © 2010 OPM Experts LLC. All rights reserved.

 % Benefit Attainment

Forecasted Benefits
Target (Committed) Benefits
Actual Benefits

Q1 Q2 Q3 Q4 Q1
Q2
YearReview
Portfolio 1 Year 2
Schedule

Figure 4: Tracking of projected benefits

The high point for this Executive team came when there was a very senior review with

Steve Ballmer, CEO of Microsoft. He was energized by the approach, and the fact that

they could so confidently predict that that they were on target. His statement at the time

was validating to the entire team:

“CSS is a great example of how our technology can enable an organization to be

customer responsive and efficient.”

Page 12 -- © 2010 OPM Experts LLC. All rights reserved.

OPM3 Insights

As CSS began to share with other groups their success and lessons learned,

they gained even greater insights into their own journey. One insight came by learning

more about OPM3 and seeing how their story aligned to the OPM3 model and

framework. CSS decided to perform an OPM3 assessment to better understand how

their current maturity mapped to this framework, and to gain additional insights into

areas for growth. As of the writing of this case an OPM3 benchmark assessment for

Portfolio Management has been performed (Project Management and Program

Management have not yet been assessed).i This assessment has validated

improvements to date and also identified areas of opportunities for improving some

current processes and adopting the few processes that have not been adopted.

The summary level results from the OPM3 assessment were:

 CSS has begun to perform some but not all Portfolio Management processes
recommended by the PMI OPM3 Standard.

 Opportunities for CSS include formalizing Process Governance to a) determine

whether the remaining Portfolio Management processes recommended by OPM3
should be adopted, b) articulate policies to distinguish which processes are
mandatory and the acceptable exceptions to compliance, and c) formalize the
collection of metrics on these processes to cause the intended behavior and
enable analytics for process improvement.

 In addition to process capabilities, CSS has begun to implement many best

practices pertaining to cultivating the organizational environment and culture for
successful Portfolio Management. These practices are called “Organizational
Enablers” in OPM3.

Page 13 -- © 2010 OPM Experts LLC. All rights reserved.

 In our conclusion we will discuss how this assessment and the overall case study

are being used to set future direction with our leadership team. This completes the

discussion of the journey, and the next section will provide additional analysis of the

overall approach and lessons learned from our study.

How did we do it?

At the onset of the pilot, we realized that this was a serious initiative, and this

became a global project in its own right. We identified three foundational areas that we

would need to address in order to achieve success:

(1) Ensuring we were integrating this solution into the governance of the

organization;

(2) Carrying this governance through development of processes and people; and

(3) having the right tools in place to support this activity.

Figure 5 describes these three building blocks of success, along with the

underlying activities comprising each:

Page 14 -- © 2010 OPM Experts LLC. All rights reserved.

 Figure 5: The Building Blocks of Success

Equally important to the structured approach described above, was an organic

cycle of identifying an area of improvement, aligning it to the business strategy for the

year in order to address it, and using the outcome of that to make the case for the next

wave of improvement. This opportunistic approach resulted in significant improvement

to the overall governance, portfolio management and project management processes

across the organization. Given the Microsoft culture, this approach was much more

successful than attempting to get approval for an enterprise project and portfolio

management initiative. Figure 6 below shows how this cycle of improvement evolved

over time, with improvements to one area providing visibility and momentum for an

improvement in another area in a virtuous cycle.

Page 15 -- © 2010 OPM Experts LLC. All rights reserved.

 Figure 6: “Virtuous” cycle of PPM improvement

More Success and Some Lessons Learned

There were a number of additional wins from bringing in this new process and

solution. One win was achieved when extending this process out to a supporting

organization. The first step was to collect the entire project list for their global group.

Simply by looking at the projects on the list, this Executive team cut the size of the

portfolio by 20%. This organization immediately saw the value of this solution, and

began to reinforce and extend the processes required to maintain this information.

On the other hand, trying to bring more mature portfolio processes (such as

evaluation and selection) to a lower maturity organization backfired. The organization

tried to perform a portfolio review, but the information in the inventory was inaccurate

and incomplete. This created doubt about the process and solution overall, and the

approach was rapidly abandoned. Mature processes were needed to build an inventory

Page 16 -- © 2010 OPM Experts LLC. All rights reserved.

with complete and validated data, and to build confidence in the portfolio. In addition,

this experience reinforced previous lessons learned about the ways that improved

portfolio management may create a demand to improve project management.

Conclusion

CSS began its implementation of portfolio management by focusing on business

needs and then linking to Strategy Management, enabling it to transform a bottom-up

initiative into one that enjoyed sponsorship top-down. In turn this initiated the

transformation of portfolio management processes into a strategic capability. The

actions taken within Strategic, Portfolio and Project Management throughout were a

direct result of business decisions and direction set by the CSS Leadership team, yet

we knew that transformation is a journey, not a destination. CSS had realized significant

benefits by enabling a portfolio management solution to emerge from within the

organization.

CSS is a large organization within a company in a mature stage of growth, yet it

remains dynamic in keeping with its business environment. Changes in leadership

positions have occurred as some leaders involved in the portfolio management

transformation have moved into other positions of leadership in the company. The

dynamic environment combined with the continued need to renew portfolio

management capabilities has underscored the value of standards like OPM3 to support

the continuity of transformation.

Page 17 -- © 2010 OPM Experts LLC. All rights reserved.

Page 18 -- © 2010 OPM Experts LLC. All rights reserved.
 Disclaimer

The information contained in this document represents the current view of Microsoft Corporation on the issues
discussed as of the date of publication. Because Microsoft must respond to changing market conditions, it should
not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any
information presented after the date of publication.

This White Paper is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT.

Complying with all applicable copyright laws is the responsibility of the user.

Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights
covering subject matter in this document. Except as expressly provided in any written license agreement
from Microsoft, the furnishing of this document does not give you any license to these patents, trademarks,
copyrights, or other intellectual property.

© 2010 Microsoft Corporation, © 2010 OPM Experts LLC. All rights reserved.

Microsoft and Project Portfolio Server are trademarks of the Microsoft group of companies.

All other trademarks are property of their respective owners.

i
Microsoft’s OPM3 assessment was led by OPM Experts LLC. See http://opmexperts.com

Page 19 -- © 2010 OPM Experts LLC. All rights reserved.