Global Project Management Toolkit 2001

A Comprehensive Guide to Establishing and Developing a Global Project Management Office and Embedding Learnings into the Wider Organisation

New York, 12th April 2001

Table of contents

Executive Summary Overview of the Global Project Management Methodology

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Step 2: Development of the Global Project Management Office Step 3: Embedding Learnings and Best Practice and Developing them into Organisational Competencies

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Step 1: Establishment of the Global Project Management Office

Executive Summary

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Rationale for Developing a Global Project Management Toolkit

As the number of truly global projects increase, rapid establishment and effective ongoing project management is critical. Regardless of key project success factors such as pioneering thought leadership, new content methodology or strong client support of the project, effective project management remains the cornerstone of ensuring project success in the consulting world. The purpose of this toolkit is threefold: 1. To ensure that as one of the leading global consultancy companies, A. T. Kearney joins its competitors in having a definitive world class approach to project management By disseminating best practice throughout the global organisation, we can ensure powerful contributions to the client focus on solving client issues and not duplicating or resolving efforts Providing know how and capability to global teams, regardless of the projects they are working on, a proven comprehensive project management methodology and toolkit, thus allowing them to hit the ground running

2.

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Some of the most quoted reasons for project failure by clients and consultants alike revolve around the lack of a concise and practical approach to project management: Objectives of the project are not clearly understood and communicated to all stakeholders Key stakeholder management strategy is not developed Workstreams are not fully identified or fully resourced Targets for each workstream are not clearly defined Methodologies and processes are not in place to efficiently track the progress (successes, failures, and key issues) of each workstream

The toolkit focuses on providing project managers insight and templates to develop a wide range of fundamental materials, for example, how to develop a PMO terms of reference, an intranet strategy, a global savings methodology and competency centre, to name but a few.

In summary, our recent experience demonstrates that a wellestablished PMO offers more than an efficient management of a large-scale project. A PMO with effective coordinating, tracking, and communicating mechanisms is well positioned to identify new opportunities to harness, develop and embed internal best practices. This ability may lead to strengthened client relationships and further work. Therefore, it is essential that the PMO is not just developed as a central administrative body but one of the most visible symbols of effective working, a key enabler of results and the engine to drive tangible growth opportunities.
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The lack of a globally recognized and applied best practice A. T. Kearney approach has often led to duplication of effort in establishing and managing project offices or even worse - many large-scale projects (and consultants) experiencing unnecessary organisation and mobilisation conflicts, hindering teams abilities to meet client expectations and reducing the impact of value-added work and future relationships.

3.

Overview of the Global Project Management Methodology

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Definitions of a Project Management Office (PMO)

Regardless of the various ways the PMO function may be defined, one core element remains it is fundamentally a central organism that drives action and results impacting the wider organisation Ambassadors for the Project Spearheads the Initiative Wider Organisation Direction Setters Is the driving force to ensure the right actions are driven by the right people at the right time The Generalsthe people who can see the bigger picture and therefore see what needs to happen where Central administration Responsible for tracking and measuring deliverables Key communicators of the Project
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The Project & Programme

Symbol of how well the Project is doing The PMO

Represents A. T. Kearneys ability to make things happen

Policemen Coordinators for training and learning

Source of definitions: Quotes from clients, and consultants, April 2001

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Three steps are required to effectively establish a Project Management Office and develop sustainable competencies in the wider organisation to meet strategic objectives

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Establishment of the Global Project Management Office

Development of the Global Project Management Office

Embedding Learnings and Best Practice and Developing into Organisational Competencies

Achievement of Strategic Objectives

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Step 1

Step 2

Step 3

Each step has a specific set of activities and deliverables

Steps Required to Establish a Project Management Office (PMO) and Transition Learnings into the Wider Organisation Step 1 Step 2 Develop Methodologies & Develop Communication and Intranet Strategy Step 3

Determine Objectives and PMO Functions

Identify Roles and Responsibilities

Build the PMO Infrastructure

Capture learnings and best practice

Processes
Post Project Kickoff
Identify project Set up War Room information with 3 main sections: requirements (in terms a) Project Tracking (see of processes and dial templates) methodologies) b) Transformation Develop project war Progress (according room, Bible, eRoom to other and Workplan strategic/organisation Examine external al objectives) examples of working c) Project Reference processes and (methodologies, methodologies terms of reference) Determine the Develop principles for each measurement and process quality checking Develop required systems processes and Continuously methodologies perform quality audits War Room Framework Bible Document eRoom Directory Workplan

Develop and implement Competencies

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Time:

Pre-Project/Diagnostics

Key Activities:

Map project objectives and Estimate the number deliverables to PMO terms of and level of required reference: resources Objectives Develop and agree on Scope (workstreams) the RACI Resources (Responsible, Milestones Accountable, Develop key stakeholder map Consulted, and Informed) Process Develop Governance structure: Establish linking mechanisms to the rest of the organization (champion sponsor, key stakeholders, business) Initiate contact with key stakeholders Develop job descriptions for each work stream Identify resources and complete staffing

Determine communication objectives for each stakeholder group Develop value proposition per stakeholder and create tailored communication processes Review the existing communication vehicles/media and brainstorm on the potential communication procedures Develop, implement, and monitor the communications plan/strategy

Develop best practice learning collection plan through utilisation of existing vehicles: Filter information and store in the War Room

Identify critical enablers for the strategic objectives (no more than 5) Map out the infrastructure required to develop and sustain the Competencies (see template)

Disseminate as appropriate to the teams through Map out the resources and development of packs and workstreams required to education tools (through the build the Competencies teams themselves to ensure Identify the approach ownership) required to develop the Competency

Prioritise development and implementation of the Competencies

Develop monitoring and tracking system of Competency Development

Methodology to capture learnings

Deliverables

PMO Terms of Reference Governance Structure Quality Process Plan Roles & Responsibilities Overview (RACI) Stakeholder map

Per Step:

Process to develop learnings and best practice

Framework of a competency development centre Training Plan to transition core competencies into the wider organisation
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Set of methodologies & processes

Communication and Intranet Strategy and Plan

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Step 1: Establishment of the Global Project Management Office

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Step 1 addresses the establishment of the Global Project Management Office

Steps Required to Establish a Project Management Office (PMO) and Transition Learnings

Step 1

Step 2

Step 3

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Determine Objectives and PMO Functions

Identify Roles and Responsibilities

Build the PMO Infrastructure

Develop Methodologies & Processes

Develop Communication and Intranet Strategy

Capture learnings and best practice

Develop and implement Competencies

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Step 1: Methodologies, Processes and Templates

Step 1

Determine Objectives and PMO Functions

Identify Roles and Responsibilities

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1. 2. 3. 4. 5. 6. 7. 8.

The Role of the Project Office RACI Methodology Stakeholder Management Template 1: PMO Vision, Working Values and Team Meetings Template 2: PMO Quality Process Template 3: Roles and Responsibilities Overview Template 4: PMO Terms of Reference Template 5: Stakeholder Mapping and Methodology
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1. The Role of the PMO

Three main roles of the PMO over time

The Role in General Function as arms and legs or execution interface of Steering Committee

Make sure initiatives around the world are synchronized and coordinated through a single point of focus
Terms to describe role: Conduit, Facilitator, Optimizer, Translator

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The Immediate Role Communicate frequently with Steering Committee and Operating Units as we understand what will happen and what is already underway
Reason is to act as a resource allocation mechanism Ensure resources are not duplicating work unnecessarily Ensure resources are deployed in areas of highest impact May want to request additional resources where necessary

The Long-term Role Set up as a mechanism to surface barriers and to quickly pull levers to remove barriers Act as the catalyst to identify, collect and transition core learnings and best practice into the wider organisation
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 How will PMO accomplish its given role Develop a strategic framework through which Client X will achieve its strategic objectives Provide training to enable Client X to achieve its strategic objectives Develop a roadmap to define how people, groups, and organizations will interact with each other over time

What does the PMO need from the Steering Committee in order to succeed in its role

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The Steering Committee needs to identify new ways of operating to enable step change quickly

Illustration of PMO role

Steering Committee PMO

Change Community
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Measurement and tracking philosophy

Set up/recommend mechanisms so people can control at the local level Have the ability to receive and communicate an update at any time on all Operating Unit projects

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All initial plans are collected and compiled in a master binder for on the spot updates/status

Focus tracking resources on the most critical projects Balance of tracking efforts is done on and exception / issue basis

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The PMO has three key activities

Create Framework & Mechanisms

Define savings measurement system Determine data & IT support requirements Build for knowledge transfer mechanisms Ensure internal capabilities to sustain performance

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Communication

Internally to our people Externally to our business partners One voice

Coordinate Activities

Single point of focus for overall programme (IC, training, risk) Activate the necessary change programme (aid change mgt) Develop interfaces between all Client X businesses (governance)

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Project Management provides the critical link between decision making and managing on the ground issues

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Responsibilities

Strategy Project championship Critical resources Decision making DD Risk management Development of guiding principles Guiding principles Visible and active support Resource support

Master planning Risk management Performance measurement Positioning/Communications Quality control Change management Master project plan Over project risk assessment Project benefits measurement

Local management & control Project execution

Deliverables

Individual project plan Individual project risk assessment

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Steering Committee

Project Direction

Project Teams

2. Definition of RACI Methodology

RACI is a powerful charting technique for identifying function areas where there are ambiguities, bringing out differences into the open and resolving them through team effort RACI means: Responsible, Accountable, Consulted and Informed see below:
Name Responsible Key R Description The individual who actually completes the task The doer and operator Responsibility can be shared The degree of responsibility is determined by the individual with the A A The individual who is ultimately responsible Includes yes or no authority and veto power Only one A can be assigned to a function or workstream Approves and signs off Consulted C The individual to be consulted prior to a final decision or action

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Accountable

2-way communication
Support Provider of input Informed I The individual who needs to be informed after a decision is taken 1-way communication
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Overview of the 8-step RACI process

Overview of the 8-step RACI process

Step 1 2 Description Hold introductory meetings to agree and inform management of the RACI process Develop decision and function lists Collate into a master function list

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Conduct workshop to finalise functions and assign RACI codes The output is a RACI responsibility chart for the AS-IS organisation

Examine the AS-IS RACI to reveal areas for improvement Hold second workshop to develop and agree changes per role The output is a RACI responsibility chart for the TO-BE organisation

Document and distribute the TO-BE RACI organisation Agree implementation date

6 7 8

Communicate to relevant stakeholders Meet with stakeholders for follow-up Meet with team to ensure relationships and RACI functions are being adhered to

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Developing the RACI responsibility chart

In the RACI process, the functions/decisions and the team members and their inter-relationships are arranged in a matrix Output of the responsibility chart is a role sheet for each team member

Team members

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Activity A Activity B

A C I

R A R I

Example

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Functions/Decisions

FTE 1

FTE 2

FTE 3

FTE 4

FTE 5

FTE 6

FTE 7

Developing the RACI role sheet

The role sheet can be used to develop/modify detailed job descriptions and identify needs for change to existing team functions

Role Sheet

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Accountable 1. Design new warroom layout to reflect the new project needs Design new warroom principles

Responsible 1. Design new warroom layout Approve changes in war-room layout Make changes in war-room layout

Consulted 1.

Informed Aware of when and how the changes will be made

2.

Support 1. generation of ideas for new war-room layout

2.

3.

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Manager of the War Room

Critical Success factors

Need for RACI Facilitation Willingness of the team to employ a participative process and invest time for the AS-IS and TO-BE Team members learning how each task relates to the other tasks Taking actions once gaps/issues are revealed: No As or Rs Duplicate As Excess Rs Insufficient/Excess Cs Insufficient/Excess Is No empty spaces potential overload

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Team willingness to ask the following questions once AS IS is revealed: Should the function be performed at al? What is the value added by the function? Is the function also performed elsewhere in the organisation? Is the function performed at the appropriate level? What is the impact of the function?

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3. Stakeholder Management
Identification and Mapping of Stakeholder Positions Stakeholder Group 1 (Internal)
Involvement Level

Stakeholder Group 2 (External)

Involvement Level

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x x x x x x x x x x x x x x x x Against Change For Change x x Against Change x x x

x For Change

Key:

Group 1

Group 2

Group 3

Group 4
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Value propositions must be built for each stakeholder group with tailored messages

Change and New Policy Concept

Whats in it for me

Whats against my interest

Message

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Mapping out A. T. Kearney coverage of key stakeholders

A. T. Kearney Coverage of the Key Client Stakeholders

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X X X

X
X

A. T. Kearney Officer/Principal/Manager

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A. T. Kearney Stakeholder Schedule

Stakeholder X Title Chairman Date TBC Communication/Content Desired Outcome X Responsible/Owner

CIO
Director Director Director, Corporate Development

TBC
TBC TBC March

X
X X X

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X X X

Director, Finance & Technology

Director, Personnel

TBC

TBC

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Template 1: PMO Vision, Working Values and Team MeetingsTemplate 1: PMO

Team Vision

Operate as a high performance team to support the X Initiative to deliver X Responsibility: anyone who has an action by their name is wholly responsible for validating scope, timing, the exact deliverable and communication required to make it happen Openness to Improve: as a team we are all responsible for ensuring that we regularly check the effectiveness of our modus operandi and act on identified improvement steps Renewal of Information: after any number/content change the owner of the task is responsible for updating any older and/or related presentations and communicating the change to the team

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Having fun!
Date/ Time Monday 1100-1200 Attendees Purpose Objectives Agenda Product

X X

Weekly progress update

Team Meetings Friday 1000-1100 X Quality Stopcheck

-Update on deliverables -Identify weekly actions -Identify/discuss risks

-Review action list -Go through individual sheets -Generate new action list

Action list

-High performance check -Review team progress -Identify what went well -Stakeholder management T Acct. (T-Accnt) -Identify any even more -Coaching contract feedback -Identify burning issues for Monday
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Team Working Values

Template 2: PMO Quality Process

7-step PMO Quality Work Process
1 Monday Progress Meeting Identify Task 2 Agree owner, scope and deliverable 3 Book time for Quality Check 4 Seek/Obtain team input (content) if required 5 Hold Quality Check 6 Make final adjustments 7 Deliver on time Friday Stopcheck Meeting

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Required for all work for key stakeholders Discretionary for all other individual tasks

Dials/Financials: Format/Spelling: Content/Final Check

To X

Examples of Quality Checks

General Formatting: Check and add the source Validate and add notes Lead titles in bold/shadow/Arial font 24 Check font consistency throughout Increase font size for presentations Check page layout when printing presentations Observe confidentiality guidelines Title graphs, tables and charts Check spelling Maintain version control Check date on the bottom right hand corner

Finance: Check when the latest update was state date of next update Check reporting quarter and year Check percentages Check difference between submitted/identified/actual/total savings Check latest movements on dial hands and if correctly represented If numbers change - ensure other documents are updated

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Template 3: Roles & Responsibilities Overview

Name

Responsibilities

Accountable to

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X Project mgt support Focus: Organisation/Stakeholder Mgt and Communications

Managing project stakeholder management, organisation change and and overall communications Accountable for ensuring project quality and effectiveness Support: risk management

X (Project Tracking & Reporting/Analyst) X (PMO/Analyst)

Owner and analyst of the global project tracking/reporting Owner and site manager of the intranet site Owner and manager of the project team database and tracking system War Room manager Manager of PMO war room presentation Support for savings methodology, baselining and modelling Coordination of Intellectual Capital, Strategic Sourcing Training, E-room library

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X Project Mgt Focus: Commercial

Responsible for ensuring the project strategy/objectives stays on track Owner and manager of overall project savings methodology and reporting frameworks Communication liaison for X Accountable for project teams KPIs and benefits/milestone reporting

Template 4: PMO Terms of Reference

Project Management Office Terms of reference

DESCRIPTION X

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SIZE OF OPPORTUNITY Develop X Deliver X by X

OBJECTIVES Create framework and mechanisms Communicate objectives and progress Coordinate activities

SCOPE Project Tracking Benefits Measurement KPI Development RESOURCES Client: X

Information Requirements Progress and risk reporting Stakeholder management and communication Consultants: X

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Template 5: Stakeholder Management Map

Stakeholder Mapping and Methodology

Stakeholders
Involvement Level

Methodology

Collect organisation charts

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Brainstorm with client and team separately who the key stakeholders are
x

List stakeholders (example: governing body, sponsors, finance, internal and external communities)
x

Define for change and against change Define level of involvement Map stakeholders

x x x x

Brainstorm key objectives, action plans and value propositions per stakeholder Set up a future mapping session schedule to measure results

For Change

Against Change

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Step 2: Development of the Global Project Management Office

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Step 2 addresses the development of the Global Project Management Office

Steps Required to Establish a Project Management Office (PMO) and Transition Learnings

Step 1

Step 2

Step 3

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Determine Objectives and PMO Functions

Identify Roles and Responsibilities

Build the PMO Infrastructure

Develop Methodologies & Processes

Develop Communication and Intranet Strategy

Capture learnings and best practice

Develop and implement Competencies

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Step 2: Methodologies, Processes and Templates

Step 2 Build the PMO Infrastructure
Develop War Room Develop the Bible Build the eRoom Develop the Work plan

Develop Methodologies & Processes

Project Information Collection Process Measurement Methodology Risk, Phase and Prioritisation Methodologies PMO Progress Measurement

Develop Communication and Intranet Strategy

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1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Development of the PMO War Room Development of the PMO Bible Development of the PMO eRoom Development of the Work plan Develop Project Information Collection Process and Measurement Tools (see Word and Excel Attachment) Develop the PMO Risk, Phase and Prioritisation Methodologies Develop Communication Strategy Develop PMO Intranet Strategy Template 1: Saving Measurement Dials Template 2: PMO Progress Report Template 3: PMO War Room Visitor Log Book Template 4: PMO War Room Project Timeline Template 5: PMO War Room Project Roadmap Template 6: Communication Strategy Scorecard Author: Gemma Harman (London Office) 12-04-01 Template 7: PMO A. T. Kearney Activity Tracker (for ATK only meetings) 33

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1. Development of the PMO War Room

The War Room is a central room which is PMOs primary communication tool to display the status of all ongoing initiatives

The objective of the War Room is to display the status of all ongoing activities and developments under the Purchasing Initiative

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As such, the information displayed in the War Room should track the progress of the project by:
displaying performance against targets and milestones highlighting current issues, risks, and key success factors maintaining information on global activities providing information on PMOs plans for Way Forward Moreover, the materials presented should be dynamic, up-to-date, and displayed in a logical sequence

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War Room approach is a means by which the PMO uses visual communication and performance measurement to integrate initiatives with strategy
War Room Wall Plan 1. What is Client X future business direction? 2.

3.

What is Client Xs Vision?

How will the vision be achieved?

Performance Metrics Value Drivers/Strategic Map Prioritized Initiatives Roles and Responsibilities

What is the State of the Union?

Market Connectivity Process Effectiveness Objectives Timeline Key Performance Indicators

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How will we get there? How will we know?

What are the high-level issues of focus?

Rationale for Prioritized Issues Impact Assessment to related initiatives and business Action plan

4.

What is our Progress and Status? What are the key messages?
Communication Plan Targets model Operating Statistics Overall Performance

How are issues being addressed?

Risk Management Scorecard

7.

6. How is Client X performing?

5.
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Why are we here and where are we going?

What does Client X need to get there?

The War Room provides an effective method of objectively communicating project progress, issues, risks, and processes within the organization
Illustrative

Wall One - Project Management

Milestone/ Deliverable -------------------Start & End Date xx/xx/xx xx/xx/xx -------------------xx/xx/xx xx/xx/xx -------------------xx/xx/xx xx/xx/xx -------------------xx/xx/xx xx/xx/xx -------------------xx/xx/xx xx/xx/xx -------------------xx/xx/xx xx/xx/xx OS ----------------------------xx/xx/xx BeS ----------------------------xx/xx/xx OS ----------------------------xx/xx/xx BeS ----------------------------xx/xx/xx OS ----------------------------xx/xx/xx Status OS Comments (Priority/Impact) -------------------Action Required & By Whom ---------Action Due By xx/xx/xx

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Wall Four - Project Process

War Room Methodology A Objective and current summary of relevant project information for entire organization Central meeting and communication area Central decision-making point Present and future focus Modular and scalable Real-time Performance Measurement

Wall Two - Metrics Development(1)

Project ------------------------Mainframe Metrics Deliverable(s) Issue(s) ---, ---, ----,--- ------------------, ---, ----,--- ------------------, ---, ----,--- ------------------, ---, ----,--- ------------------, ---, ----,--- ------------------, ---, ----,--- ---------------Owner -------------------------------------------------------------

--------------------------------------

Wall Three - Risk Management

Risk Management Project Risk(s) Mitigation Plan Owner ---------------- ---------------------------------- ---------------------------------- ---------------------------------- ---------------------------------- ---------------------------------- -------------------

Note: (1) Refer to Project Progress Tracking templates enclosed in this IC pack
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Four steps are necessary to setup and manage a Best-Practice War Room

Steps Required to Setup and Manage a War Room Agree on the Information Content Assign Responsibilities for Information Collection Organize Display of Information Achieve Continuous Improvement

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Key Principles:

Information content Information is Information display Information is should fully reflect collected according is visually continuously updated vision and objectives to a process attractive Internal and external of the Project or the previously agreed Information is views and practices are Program, prior upon presented in a incorporated (via achievements, logical sequence regularly held War current status, and Room Improvement plans for future meetings, visitor surveys and visits to other War Rooms)

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2. Development of the PMO Bible

PMO Bible is a dynamic centrally managed document containing the most up-to-date, concise and comprehensive information on the Project and the PMO
Principles of the PMO Bible The PMO Bible is for the use of PMO team members and PMO stakeholders only

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the vision and the objectives of the Project or Program

current Project status (e.g. progress of each workstream, ongoing PMO initiatives) future plans methodologies and procedures set by the PMO

A hardcopy will be kept in the War Room, an electronic copy will be maintained in the PMO eRoom and several copies will be distributed to key stakeholders (e.g. Steering Team, A.T. Kearney Client and Project Officers) Bible will be updated according to an agreed update procedure PMO members and key stakeholders will be regularly informed of modifications to the PMO Bible by a weekly Bible update email1 stating: what has been updated/added what has been taken off
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PMO Bible is a central document that contains all the critical information regarding

Bible Update Protocol

Example

ACTION
Forward updated documents, if any, to X

WHEN
Every Thursday noon

BY WHOM
Section Owners*

COMMENTS

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Maintain the master copy (both confidential and public***) in the War Room and PMO eRoom up-to-date

Continuous

The master copies will be printed in color The public version will be left on a specified bookshelf and the confidential version will be locked in the file cabinet

Note: *

Please refer to the Appendix for Bible Section Owners

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** includes PMO stakeholders such as the Steering Committee, ATK Client Officer, ATK Project Officer (list to be determined) *** Public version is the one where all sensitive information is removed

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Upload the updated electronic copy of the Bible onto PMO eRoom

Every Friday

Whenever a new version is uploaded onto the eRoom an update notification email will be sent to PMO members an update notification email as well as the Bible attachment will be forwarded to stakeholders** who do not have access to the PMO eRoom

Bible Information
Example
Bible Section Project Overview Project Objectives PMO Initiatives Contents Project Overview (objectives, vision, plan, and governance of PMO) Detailed information on Project Objectives Information on PMO Website Owner Date of Last Update

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Workstream Progress Information PMO Methodologies and Procedures Communications Plan PMO Stakeholder List . . . .

Overview of PMO Intranet Site (objectives, vision, and way forward) Detailed information on Methodologies and Procedures Communication Overview PMO Directory (contact information for the PMO, Operating Unit, Steering Committee, etc.) .. .. .. ..
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3. Development of the PMO eRoom

Principles of the PMO eRoom

PMO eRoom aims to provide easy access to key documents and achieve efficient version control

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The PMO eRoom is for the use of PMO team members only Documents are named in accordance with Client X nomenclature Only final versions of complete documents and up-to-date (latest) versions of working documents are kept eRoom is updated every Date X what has been updated/added what has been taken off

PMO members are regularly informed of modifications to the eRoom by a weekly eRoom update email 1 (on Date Y) stating:

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Structure of the PMO eRoom

PMO eRoom is a central location of reference storing important documents that PMO has accumulated and created during the implementation of the Programme. It should reflect the PMO Bible
Example PMO eRoom Folders and Subfolders Key Presentations (Final Version)
Various Stakeholder Presentations Project Updates

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Project Management Information (Up-to-date version of every document in progress and final versions of complete documents)
PMO Bible
Project Collection Measurement s PMO Governance Roles and Responsibilities PMO Timeline and Roadmap

Training Materials Library (Final materials used in all A.T. Kearney Client X training Sessions)
Non-sourcing Training Materials
Sourcing related Training Materials

Client X News Weekly News Alerts PMO Calendar PMO Contact List
PMO Roster PMO Stakeholder Roster

PMO Weekly Progress Updates

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Client X ATK eRoom Information

Client X ATK eRoom is a central point of communication for ATK consultants working on Client X projects

Internal Global ATK eRoom

Inform A.T. Kearney consultants working on Client X projects on recent developments and achievements in Client X projects worldwide

Objective:

Facilitate the share of best practices and tools across groups

Maintain global key A.T. Kearney documents produced (Intellectual Capital Documentation) PMO Information Current Status Public version of the PMO Bible PMO Contact Information Archives of the weekly Client X news update

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Directory:

Membership:

A.T. Kearney consultants working on a Client X engagement only A.T. Kearneys internal eRoom is password protected Firewall prevents the access of non-Client X A.T. Kearney consultants into the global eRoom

Security:

Confidential materials and work-in progress are not posted eRoom members are instructed not to share the displayed information with anyone
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4. Development of the Work plan

A Week by Week Workplan Across Workstreams Needs to be Developed
WORKSTREAM PLANNER PMO Workstreams Phase 1 Intranet Risk management Intellectual capital Communication to Stakeholders Team quality control (ensure all actions are completed, project is on track) Savings methodology Project KPIs, milestone reporting and tracking ATK Global expertise input War Room Display War Room Presentations Bible Timeline Workstream planning chart Roadmap Linking mechanisms between other Projects Tracking Tool Non PMO Scope Organisation Global Training Knowledge Management Other Year X 01-Jan 08-Jan 15-Jan 22-Jan 29-Jan

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5. Development of Project Information Collection Process and Measurement Tools

Objectives

Establish the process for collecting all Operating Unit projects

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Provide data collection milestones Provide guidelines to complete Excel Project Collection Template

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Define key roles and responsibilities in the collection process for the PMO, Buying Teams and Operating Units

What is a project?

A Buying Savings Project is any initiative resulting in savings that contribute to the Purchasing Project savings targets
In due course, these will be augmented with Buying Infrastructure Projects which drive the development of key enablers to build sustained Buying performance

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The Project Management Office (PMO) is required to report on Operating Unit progress on buying projects to the Purchasing Project Steering Team

The PMO will create and maintain a database which includes all buying projects

For the purpose of risk and project management, it is recognised that the Purchasing Project Steering Team and Buying Teams will focus on projects that meet any of the following criteria: Projects which represent a significant proportion of Operating Units savings target Projects that involve two or more Operating Units Projects requiring global resources outside the Buying function Projects that support Purchasing Power Consolidation Projects that support e-Procurement
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Required Data Fields For All Projects

Unique Project Number (PMO assigned to Operating Unit) Project Name Project Description Operating Unit Purchase Segment Buying Team Purchase Group Category Project Contact Contacts phone number Project Phase Idea Feasibility Capability Launch Complete Dropped Baseline Spend Project Start Date Project Risk Low Med High Savings by quarter (Year A, Year B, Year C, Year C+) Savings type Volume concentration Best price evaluation Global sourcing Product specification improvement Joint process improvement Relationship restructuring

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Additional Data Fields (not required)

Key Issues, Assumptions and Suppliers Assumptions)

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PMO project data collection process

Example
Categories Potential Sources of Projects

Buying Teams

Step 1
Operating Units consolidate projects and complete templates

Step 3
Operating Units validate reports and submit any changes to PMO

Step 7a
Operating Unit assumes full responsibility for managing the project

Step2 Step 4 Step 5

PMO reviews Operating Unit project lists

Step 8
PMO completes review and generates final reports

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Step 6
Buying Team Leaders review Operating Unit project lists

Step 7

No

Step 7b
Ensure lead Operating Unit & participant Operating Units are properly identified and

Buying Team Projects

Is the project part of a regional/global initiative?

Yes

Step 9
Purchasing Project Steering Team reviews project reports at meeting

PMO Project Collection Technology

Data Collection Templates (Excel)

Project Database (Access) Reports

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PMO consolidates project input and generates draft reports

PMO generates revised Operating Unit Project reports

Step 1 - Operating Units consolidate projects and complete project templates

Action: PMO will provide each Operating Unit with an Excel based template. The template will ensure that minimum data are captured and consistent responses are provided (e.g. purchase group nomenclature, buying team project names, etc.). The Head of Buying for each Operating Unit will ensure the templates are completed for their Operating Unit.

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Coordination: Operating Units return completed templates to PMO via email.

Requirements: Operating Units submit projects that deliver savings exclusively to their group. For cross-Operating Unit projects, each Operating Unit will account for their portion of the project in accordance with the template instructions. Submission should be completed by Date X.

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Step 2 - PMO consolidates project input and generates draft reports

Action: PMO will upload the Excel spreadsheets into a database. The PMO will then generate draft reports. The draft reports will provide multiple views of the existing data and provide the Operating Unit, PMO and Buying Teams with a consolidated and consistent view of the project inventory.

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Coordination: PMO receives templates from Operating Units. The turn-around time for the generation of reports once the complete set of templates is received is expected to be quick

Requirements: PMO consolidates project templates and generates draft reports

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Step 3 - Operating Units validate reports and submit any changes to PMO

Action: PMO provides each Operating Unit with a report listing their respective projects. Each Operating Unit Buying Head validates the list and provides any corrections to the PMO

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Coordination: Unless otherwise noted, the default point of contact for managing project lists and providing interface to the PMO will be the Operating Unit Buying Heads.

Requirements: The Operating Unit Buying Heads must ensure that processes are in place to allow the appropriate validation of the projects they submit and validate under steps 1 through 3.

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Step 4 - PMO generates revised Operating Unit project reports

Action: PMO generates validated Operating Unit project reports from the Access database

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Coordination: Reports are distributed to the Operating Units, and Buying Teams and validated for final review by the PMO

Requirements: PMO will have the capability to conduct queries of the project database and will provide support to the Operating Units and Buying Teams as required to validate the projects submitted in step 3.

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Step 5 - PMO reviews project lists (may occur in parallel to Step 6)

Action: PMO will review each Operating Unit project list for completeness, clarity and accuracy.

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Coordination: PMO will coordinate any necessary clarification with the Buying Teams

Requirements: The PMO will perform a preliminary risk assessment of the initial project list to assess key areas where additional information/focus is needed, and will subsequently give feedback to the Buying Teams and Operating Unit Buying Heads as appropriate

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Step 6 - Buying Teams and Buying Team Leaders review Operating Unit project lists

Action: Buying Teams will receive reports on the projects from the PMO. The Buying Teams and Buying Team leaders will assess the projects against their list of projects to ensure a complete list of projects exists.

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Coordination: Buying Teams need to help ensure that the record of the projects is complete

Requirements: Buying Teams and Buying Team leaders will review and validate project list

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Step 7, 7a, 7b - Is the project already part of a regional or global initiative?

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Coordination: Buying Teams and Buying Team leaders decide if the project is cross-Operating Unit or global
If yes, the Buying Teams need to ensure the lead Operating Unit is identified and that each participating Operating Unit is aware of their appropriate commitment to the project and the associated savings attributed to them. Consistent nomenclature (i.e. an agreed project name) must be used to allow these projects to be rolled up at the global level for reconciliation with Buying Team and Buying Team project lists If no, the Operating Unit is fully responsible for managing and reporting on the project

Requirements: The short-term tool does not effectively track regional and/or global projects. Therefore, it is important that Operating Units and Buying Teams identify projects which meet this criteria

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Action: Buying Teams and Buying Team leaders need to review each Operating Unit project list to ensure completeness of category sponsored projects. Additionally, the Buying Teams should scan the lists to identify opportunities to leverage resources and opportunities across Operating Units. Finally, the Buying Teams must ensure that regional and global projects are properly documented in the Operating Unit lists

Step 8 - PMO completes review and generates final reports

Action: These reports represent a first-pass of the projects by Operating Unit which support the $ x target. This list has been reviewed by the Operating Units, Buying Teams, Buying Team leaders and the PMO for completeness and savings methodology soundness.

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Coordination: PMO serves as the single interface to the database and consolidates all feedback from Buying Teams and Buying Heads

Requirements: The PMO will ensure that an overall risk assessment is available to the Purchasing Project Steering Team PMO will generate final reports for review by Date Y

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Step 9 - Purchasing Project Steering Team reviews project reports at Date X meeting

Action: PMO reports to Steering Team to prepare feedback to Senior Management

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Instructions for Completing Excel Project Template

Project Collection: Excel template

Objective: This document will provide the guidelines to enable any user to input projects into the Project Management Office database. Projects will be submitted via an Excel spreadsheet template.

General Guidelines:
All currency information will be denominated in currency X Users should ONLY input savings estimates that are applicable to their Operating Units (Operating Units). For example, if a single regional project will deliver savings both for Operating Unit X and Operating Unit Y, project leaders from each Operating Unit would input their own savings only The symbol (*) denotes that the specific field is NOT required input to the database. All other fields are mandatory

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Project Collection: Excel template

General Guidelines (continued): Input spreadsheet contains six tabs. Instructions: overview of general instructions on how to use spreadsheet Project input tabs Raw materials: projects involving one specific Raw Material purchase groups Packaging: projects involving one specific Packaging Material purchase groups Indirects: Indirects projects Semi-Finished goods: Projects involving Semi-Finished goods (e.g. Co-Packing)

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Dropdown menu maintenance: contains fields used in dropdown menu. No input necessary.
User will input projects according to their Purchase Group classification. E.g. A project delivering savings through volume concentration on dairy products will be input in the Raw Materials tab.

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Template Field Descriptions

1

Purchase Segment: No input required. This field is the default that corresponds to the users selection among the different tabs in the template The default currency for the template is Currency X. All local currencies should be converted under normal reporting conventions (i.e. average prior year rates for non-hyperinflationary countries) This field corresponds to the y number of Operating Units that make up Client X, plus Corporate Center. User selects a group that is responsible for delivering project savings from the dropdown menu options.

Currency:

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Operating Unit:

Date Spreadsheet started:

User enters the date that the template is submitted to the PMO
No input required. Database will automatically generate and assign project ID numbers User will enter the project name. As each Operating Unit will claim their own respective savings, users are urged to coordinate with counterparts in other Operating Units to use the same name to describe the cross-Operating Unit projects

Client X PMO ID:

5

Project Name:
6

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Template Field Descriptions

7

Project Description: Description should outline the main drivers/considerations by which savings will be attained. Further, for cross category and/or cross-Operating Unit projects, please add note describing interaction/dependency issues (if any) User selects the Buying Team responsible for generating the buying savings from the dropdown menu. The listed Buying Teams are in accordance to those agreed by the Buying Teams

Global Buying Team (Buying Team):

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Purchase Group:

User selects the Purchase Group responsible for generating the buying savings from the dropdown menu. e.g. Yeast (within the Raw Materials tab). Input for this field is at level below Purchasing Segment in the materials classification The Operating Unit contact for queries relating to the project Please include international country and city codes

10

Project Contact:

11

Contact Phone No.:

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Template Field Descriptions

12

Project Phase: This field will describe the status (or phase) of the project. The options from the dropdown menu are Idea, Feasibility, Capability, Launch, Complete and Dropped. Idea: when a project is identified as a potential savings source, although it has not been determined if project will/can be implemented. Nevertheless, project leader, savings type, Operating Unit, category and key assumptions should have been identified. Feasibility: this phase determines that the project is possible and key metrics and assumptions by which to measure project delivery are validated.

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Capability: at this phase, project details are known to support implementation. All key data has been collected (e.g. volume forecast, planned launch date) and required investments and resources have been determined Launch: Project is 'good to go', and the Project Start Date is certain. Further, in cross-Operating Unit projects, allocations have been finalized and project savings have been phased by quarter for Year A, Year B and Year C or Year C+ Complete: project is finalized and firm savings are known and delivered Dropped: project will not be implemented and will not be considered as on going contribution to the PMO target

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Template Field Descriptions

13

Project Risk: Description of the perceived risk level of the project. Dropdown menu includes Low/Med/High. This field should refer to the likelihood of the projects implementation and its ability to deliver the committed savings. Among risks that may affect projects: Schedule (e.g. resources, timing, market changes, impact of Brand Focus initiative, etc) and Financial (e.g. volumes, barriers)

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14

User will input the projected date that the project will be launched. It is possible that projects in idea/feasibility phases may not have firm launch dates but an estimated timeframe will still be required as input

15

Baseline Spend:

User will input the baseline spend amount to which the savings are applied. Input is in thousands

Savings:
16

Project savings should be estimated following the agreed methodology. Calendar phasing: savings should be phased by quarter for Year A, Year B and Year C, except for Year C+ If project is still at a premature stage where phasing cannot be determined, user should input projected savings in Q4

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Project Start Date:

Template Field Descriptions

17

Savings Type: User will choose description of main driver behind the project savings from the dropdown menu. The options in the menu refer to the six main approaches that lead to Buying Cost Focused - Exploiting Buying Power Volume Concentration: e.g. consolidate number of suppliers, pool volume across units Best Price Evaluation: e.g. renegotiate prices Global Sourcing: e.g. expand geographic supply base, develop new suppliers Relationship Focused - Creating an Advantage Product specification Improvement: e.g. substitute materials, optimize life cycle costs Joint Process Improvement: e.g. share productivity gains, integrate logistics Relationship restructuring: e.g. develop key suppliers, make vs.. buy, strategic alliances

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Template Field Descriptions

18

Key Issues, Assumptions and Suppliers (*): This field may include some of the following factors: Key issues: schedule (delays); financial (resource constraints); opportunity (e.g. supplier market changes, scope changes, etc. Assumptions: e.g. market price movements; potential barriers, etc. Key suppliers: main global or regional suppliers involved Lead Category: The primary Product Category that the project impacts

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19

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6. PMO Risk, Phase and Prioritisation Methodologies

Vision for the Phase and Risk Tracking Procedure
Three main improvement areas have been identified that need to be addressed by the new Project Phase and Risk Tracking Procedure

VISION

GUIDING PRINCIPLES

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Provides a formal definition for project phase and risk categories

Includes risk tracking feature

Definitions for project phase and risk categories are detailed, clear, and consistent
Actions taken against risks are regularly recorded and monitored Risks are prioritized at project level and attention in terms of verification of accuracy of the submitted information and risk management is only given to high priority projects
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Incorporates a project prioritization methodology

DRAF

The Project Phase and Risk Tracking Procedure

Project Risk Definition

Various key risk drivers may impact the success of a sourcing project

KEY RISK DRIVERS IN SOURCING PROJECTS

RISK DRIVER
Constrained Resources External Dependencies

DESCRIPTION
Lack of key expertise for a crucial part of a project Timescale dependencies on external factors e.g. timescale dependencies on other projects (complexity reduction)or external suppliers Complications in transitioning from existing to new suppliers or from old ways of working with existing suppliers to new ways e.g. slow or inharmonious transition Slow existing decision making process due to lack of executive buying authority or problems in regional innovation decision or category decision making structure Obstacles in achieving savings due to long-term contracts, restrictions on imports, or competitive market dynamics Problems in obtaining data on spend or suppliers due to inadequacy of Management Information Systems Decrease in savings due to negative Underlying Volume Growth (UVG)

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Implementation Issues

Unnatural Cooperation

Supply Market Constraints

Poor Data Volume Risks

Source: A.T. Kearney Analysis

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Project Risk Definition

The project risk level is determined by two factors: Risk Driver Criticality and Complexity

Highly Critical
Less than 75% of targeted savings can be achieved Delay of achieving the savings is more than 6 months

Medium Level Risk

Amber Light

High Level Risk Red Light

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Critical

Only 75-90% of savings can be achieved Delay of achieving the savings is 3-6 months

Risk Driver Criticality Impact-level on the project Low Level Risk Green Light Medium Level Risk Amber Light

Not Critical

More than 90% of targeted savings can be achieved Delay of achieving the savings less than 3 months

Risk Driver Complexity

Are there barriers stopping the elimination of risk? Complex Highly Complex
Cost of workaround is higher than projected savings or not possible
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Not Complex
Workarounds are possible and will completely eliminate risk Source: A.T. Kearney Analysis

Workarounds are possible but will not completely eliminate risk

DRAF

Project Risk Definition

Risk Register filled out by Operating Units will allow accurate risk classification and efficient risk tracking

Example:

Risk Driver
Inadequate Resources

Description
Chemical Engineer is needed to advise chemical ingredient purchases Supplier needs 4 months to update its systems to be ready for joint-process Price volatility reached 10% per month

Potential Impact
Might delay the launch of the project by 2 months

Action Status
Contacted Human Resources to hire a chemical engineer Continuous pressure on the supplier to promptly update its systems

Action Owner
S.Jones

Risk Level
Low

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Phase-In Plan Complexities

Might delay the launch of the project by 4 months Margin required to smooth down volatility is 5 %, thus projected savings can not be achieved

H. Holt

Medium

Highly Variable Commodity Market

No Action

High

Milestone Risk

The Project can not be launched until Project X is completed and Project X is 6 months behind the schedule

Might delay the launch of the project by 6 months

Contacted the owner of Project X

S. Jacob

High

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Project Risk Definition

Operating Units apply A.T. Kearneys Seven-Step Strategic Sourcing Methodology Overview of A.T. Kearneys Seven-Step Strategic Sourcing Methodology

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Key Activities
Define purchase Determine PG group (PG) based positioning on characteristics according to supply of purchases and market constraints and business market impact; identify understanding sourcing strategy and tactics according to positioning Identify potential Pursue competitive suppliers, supplier establish selection or evaluation supplier criteria & development methodology, depending on develop prestrategic qualified positioning supplier list Develop a negotiations strategy based on PG objectives and margins for negotiation, conduct RFP process Transition from existing to new suppliers or from old ways of working with existing suppliers to new ways Monitor supply market conditions and purchasing group evolutions; reevaluate when deemed necessary

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Profile Of Purchasing Group(PG)

Develop Sourcing Strategy for Purchasing Group

Generate Supplier Portfolio

Select Implementation Path

Negotiate / Select Competitive Supplier(s)

Operational Integration With Suppliers

Continuous Benchmarking Of Supply Market

Project Risk Definition

Project Phase Classification Method can be mapped to A.T. Kearneys Strategic Sourcing Methodology Overview of the Seven-Step Strategic Sourcing Methodology

DRAF T

Idea

Feasibility

Capability

Launch

Complete

Overview of Project Phase Classification Method

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Profile Of Purchasing Group(PG)

Develop Sourcing Strategy for Purchasing Group

Generate Supplier Portfolio

Select Implementation Path

Negotiate / Select Competitive Supplier(s)

Operational Integration With Suppliers

Continuous Benchmarking Of Supply Market

Project Risk Definition

Such a mapping will allow the identification of key activities under each Project Phase Overview of the Five-Step Project Phase Classification Method

Idea

Feasibility

Capability

Launch

Complete

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Key Activities
Identify potential suppliers

Develop a phase-in Develop a plan for new Solicitation/ Establish suppliers/ sourcing Negotiation strategy evaluation/screening criteria methods & measurement Conduct Request for Collect basic data e.g. volume, Transition from Proposal (RFP) volume trends and forecasts, suppliers, methodologies existing to new Process pricing, etc - for the PG Develop pre-qualified suppliers or from old supplier list Evaluate Supplier Analyze the supply market (e.g. ways of working with Responses analysis market segmentation) and determine existing suppliers to Select implementation path of price and nonPG positioning according to supply new ways (competitive supplier price elements market constraints and business selection or supplier Track accrued impact Select competitive relationship development) savings since the suppliers depending on strategic Identify sourcing strategy and tactics project start date positioning according to positioning Define Purchase Group based on characteristics of purchases and market understanding

Complete transition from existing to new suppliers or from old ways of working with existing suppliers to new ways Fully realize estimated savings

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Project Phase Definition

As a guide, the following should be useful to determine the appropriate phase throughout the project life cycle
INFORMATION TO BE FILLED ON A TEMPLATE
Place-holder for cross-Operating Unit projects that do not have Operating Unit based identified savings (e.g. large regional/global or indirect projects) Savings indications only (not counted for reporting purposes)

IDEA

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FEASIBILITY FEASIBILITY CAPABILITY CAPABILITY LAUNCH LAUNCH

Has the supplier been selected/approved? Is the project dependant upon significant inputs from other parts of the organisation? Are these departments aware and committed to the goals? Have they provided the required resources? Has the revised specification been approved by the category? Is capital available if required? Have tooling requirements been specified and commissioned? Are project related savings being generated and reported? Are supplier agreements in place? Is there a project plan/schedule and key milestones identified? Is there a contingency plan? Targeted savings are fully achieved and reported

COMPLETE COMPLETE
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Has the estimated cost/benefit been established by Operating Unit? Has an approach been defined (e.g. regional data collection, negotiation, benchmarking, cost modelling)? Are local and non-local resources identified and available and allocated to the project team (e.g. Buying, Development, Factory, central technical resources as appropriate)

Project Prioritisation Methodology

Since there are more than x number of identified projects, a Project Prioritization Methodology needs to be established

Project Phase and Risk templates to be filled by Operating Units will provide the PMO with accurate information on project status
However, there are already more than x number of identified projects Such a detailed reporting of project phase and risk by Operating Units for each undertaken project will be time-consuming

DRAF T

A project prioritization methodology that takes into account both the benefits and drawbacks associated with detailed project phase and risk reporting needs to be established
Under such a project prioritization methodology Projects must be prioritized by using a globally consistent rule Operating Units should provide detailed reporting for only those projects that are deemed critical under the project prioritization methodology Operating Units should only record the project phase (idea, feasibility, capability, launch, complete) and risk profile (low, medium, and high) for those projects that are not found critical

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Project Prioritisation Methodology

Alternative methods exists for project prioritization

Project Prioritization Project Size and Project Complexity

High

Illustrative

Project E

Project A

DRAF T

Project D

Project Volume Projected Amount of Savings

Project B

Project C

In this example, Project A and Project D are both critical and complex, requiring a detailed project phase and risk reporting

Project F
Low
Low

Project Complexity How many dedicated FTEs will be working on the project? Or Complexity Ranking of Savings Type

High

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Project Prioritisation Methodology

Alternative methods exists for project prioritization (cont)
Project Prioritization Project Risk and Project Phase
Illustrative

High

DRAF T

Medium

Project A

Project B
Low Idea Feasibility

Project F

Capability

Launch

Complete

Project Phase

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Project C

Project E

Project D

Project Risk

In this example, Project C and Project E are both critical and complex, requiring a detailed project phase and risk reporting

7. PMO Communication Strategy

A plan must be developed to ensure the right communication processes are put in place to ensure the right messages are delivered at the right time to the right people Develop Communication Plan
Supply Demand

DRAF T

Navigation
Actively manage communication to optimise investment in change

Leadership
Get the senior management to champion internal communication

Who are the communicators? are the audience? What do they currently know? do we want them to think? are the specific messages? How should we say it? can we ensure they hear it? will we know it works? will feedback be used?

Identify Key stakeholders Brainstorm Map Develop strategy plan

Enablement

Ownership
Shift to involving people in creating communication

and

Use appropriate channels to build commitment to communication and train people how to do it effectively

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PMO Communication Strategy

The communication plan must align itself with the overall programme activity plan and focus on both broad and specific messages across the internal and external communities
Example

General
From Rudy Markham/ John Rothenburg
Broad levels of understanding and awareness to a variety of wide audiences organised in waves

Audience Breadth

DRAF T

Top 100 Execs

Programme Plan
Specific communications to engage and align parts of the extended organisation behind a specific milestone driven objective

y
Audience Depth

Focused
From Project teams/ Steering Committee to specific business areas

l
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Buying Community

Business Groups

PMO Communication Strategy

Fundamental principles on how best to communicate must be developed and agreed
Ensure leverage and executive buying slant Communications & Education will focus on both push & pull tactics to gain buy-in Sell as the Future of X not just the project Identify new required performance metrics to achieve objectives and implement Develop straightforward and timely communications Retain a simplistic approach Involve to obtain buy-in and to avoid resistance Ensure cultural versatility: tailor for business area, language, culture, local challenges

Approach

DRAF T

Style

Ensure communications are concise Ensure a quality look and feel to all materials Ensure there are not too many fancy tools or vehicles but down to earth Remember not to lecture but to keep interactive

Process

Maintain a constant stream of information: little and often Communicate to all the Business Groups at once - not segmented Build in formal communication feedback channels that are USED and not forgotten

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PMO Communication Strategy

The internal communications plan must first identify key stakeholders and the nature of their role and impact on the project
Stakeholders
Individual Senior Management Stakeholders

Role

Source of Influence
High

Stakeholder Position

DRAF T

Executive Champion

Change Agent

Other key stakeholders

Ability to enable Change

Global Teams

Pupil

Supporter/ Gatekeeper

Low Low

Level of Project Involvement

High

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PMO Communication Strategy

Value propositions must be built for each stakeholder with tailored messages
Example Whats in it for me
Achievement of savings target Reinvestment of money saved Best sourcing deals

Stakeholder & Role

Whats against my interest

Hard targets to achieve Extra work to drive initiative Lose potential preferred suppliers

Key Message/Plan

DRAF T

X Business Groups/Change Agents

Demonstrate success stories Long-term benefits (leverage) Make their lives easier once done

X/Potential gate keeper or change agent

Confidence in best deal Makes life easier to find supply solution

Lose potential preferred suppliers Lose decision-making power

Demonstrate success stories Long-term benefits (leverage) Make their lives easier once done

X Committee/Change Agent

Confidence in best deal Makes life easier to find supply solution

Lose potential preferred suppliers Lose decision-making power

Demonstrate success stories Long-term benefits (leverage) Make their lives easier once done

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PMO Communication Strategy

The plan must integrate with existing communication events to ensure a timely cascade and delivery
Example

Key Event

Communication

December

January

February

DRAF T

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8. PMO Intranet Strategy

PMO Intranet Vision
To develop a phased and tailored stages of excellence intranet site to support the Buying Project and ultimately, the implementation of the Buying Programme and transformation to a new world class supply management organisation
Phase 1: Pilot Data/Reference Focus/Buying Project only Provide up-to-date quality information for the Buying Project at the right time to the right people to support the target Owned by the PMO

DRAF T

Phase 2: Learning Focus/New generic site for the new supply management organisation, Global Purchasing Program and Project (PMO site to be integrated as a component of the main site) Provide a dynamic central point for global supply management information and knowledge exchange to ensure support for and completion of projects identified, implementation of the new supply management organisation and the related processes and infrastructure Owned by the Competency Centre

Phase 3: Phase 4: Not in scope Strategic Best Practice Focus Integrated with core strategic suppliers to achieve a truly world-class dynamic information and supply management exchange Owned by Strategic Knowledge Management function Client X Best Practice Focus Development of the Client X global best practice supply management platform through the establishment of an e-supply management university, building global competency and intellectual capital and the required knowledge management infrastructures Owned by Business As Usual

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achievement of the $ x

PMO Intranet Strategy

Three development phases are planned from Date X Date Y to reflect the changing needs of the project
Intranet Phase Development Strategy
Example

Phase 1

Phase 2 Learning Focus

Phase 3 Client X Best Practice Focus

Phase 4 Strategic Best Practice Focus

Not in scope

DRAF T

Data/Reference Focus

2 Months
Milestone: identify project savings that equate to $ x Project tracking tool complete Recast of targets approved and communicated

4 Months
Acceleration of sourcing progress Identification and mobilisation of crossdivisional big global projects High level of supplier and market information generated Sharing experiences and lessons learned regarding various methodologies Competency Centre established and up and running

Continuous
Global collection and dissemination of key experiences and lessons learned Iterated and improved project methodologies and sourcing techniques Establishment of a global supplier database, compliance processes and benchmarking practices

Key Project Events

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PMO Intranet Strategy

Each phase will focus on increasing the level of interaction and penetration into business as the global best practice supply management site
Intranet Phase Target Audience, Usage and Interaction Levels High Phase 4

Example

Global Supply Management Organisation

Phase 3: Client X Best Practice Owned by the business

DRAF T

Business Usage

Various Business Stakeholder Groups Phase 2: Learning Driven by the Competency Centre Steering Team Buying community Leaders Leadership Team

Phase 1: Data/Reference Driven by the PMO

Low Low Level of Interaction High

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PMO Intranet Strategy

In alignment with each phase, site objectives will change to reflect the new target audience and their information requirements
Intranet Phase Target Audience and Information Requirements
Site Phase
Phase 1: Data & Reference Focus

Target Audience
Senior Management Buying Teams Leadership Team

Objectives
Increase awareness/understanding of Operating Unit activities Provide quality and up-to-date easily accessible information on overall progress Demonstrate that the PMO and project database physically exist Provide transparency on resources and actual progress

Site Content
Progress dials Project information Material Classification Measurement methodologies Buying Groups activity update

DRAF T

Phase 2: Learning Focus

As above Various Buying Community Groups

Improve/disseminate understanding of the Project Provide key information to help teams mobilise Educate teams on working methodologies (risk, knowledge management, strategic sourcing etc.)

As above Home of global project tracking database Central point of reference for governance meeting information (documentation, minutes, events) e-Q&A rooms

Provide a dynamic central point to ask questions and receive just in time answers promote global information sharing and knowledge Provide live example tutorials of project cases to help troubleshoot and guide progress

Project reference library Global Supply Management organisation Communicate global supply management vision, guiding principles, new processes and strategy Continue to use to update on the Buying Project Use as a key communication tool for the Buying Programme and e-Initiatives Utilise to create linking mechanisms between the global organisation i.e. global job rotation opportunities Develop an e-supply management university with competencies linked to HR development training courses and performance objectives (divisional heads and mnagers as mentoring experts to encourage knowledge dissemination and sharing Build supply management e-university course modules, materials and live e-debates Global best practice tools, techniques and methodologies Global contact information Global, interactive supply management euniversity faculty Global benchmarking tool and tracking process As above Live and dynamic supplier information Links to global industry best practice sites Stages of excellence of supply management practices

Phase 3: Client X Best Practice

Phase 4: Strategic Best Practice

Global Supply Management organisation Selected strategic suppliers

As above Integrate the world class best practice supply management site with key strategic supplier live up-to-the-minute data, contract information, preferred supplier services

Not in scope

Author: Gemma Harman (London Office) 12-04-01 87

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PMO Intranet Strategy

Different site infrastructures will need to be developed for each phase
10 Intranet Site Infrastructure Building Blocks

Business Integration Promotion Measurement Vision/Objectives Ownership/Mgt

DRAF T

Investment Structure/Content

Target Audience

Functionality

Information Mgt

Phase 1 Data/Reference Focus

Phase 2 Learning Focus

Phase 3 Client X Best Practice Focus

Phase 4 Strategic Best Practice Focus

Author: Gemma Harman (London Office) 12-04-01 88

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PMO Intranet Strategy

Phase 1, as the Pilot, focuses on targeting a small number of stakeholders to identify future requirements and desired functionality whilst providing a fundamental level of information currently required
Building Block
Vision/Objectives

Definition/Specification
Vision: The PMO site will provide up-to-date quality information for the Buying Project at the right time to the right people to ensure the achievement of $ x Objective: 1)Gain an understanding through the provision of an interactive and dynamic 2-way feedback channel of user requirements in order to build a tailored Phase 2 site 2)Provide a strategic overview of the Project

DRAF T

3) Share project data, tracking information and reference materials 4)Provide measurement methodologies to educate key stakeholders Project Collection contacts , Operating Unit Leaders, Buying Teams, Leadership Team, Senior Management About The Project. The People, Contact Us, Buying Information (Project Savings, Actual Savings, Reference, Links, Site management)

Target Audience Structure/Content

Functionality

Progress tracking barometer Publishing tool Links News and Events Update (message board) Feedback email capability

Ownership/Management Promotion Business Integration Investment

FTE X Email launch letter to target audience None in Phase 1 $x for initial development plus $y for additional changes May send a brief Feedback Review Questionnaire Email to Phase 1 Users PMO input onto the site Feedback and comments from users to be structure/discussed at the weekly progress meeting Author: Gemma Harman (London Office) 12-04-01 89

Measurement
Information Management

DRAF

Template 1: Dials - Divisional Project Forecasts(1)

Identified Project Savings ($) Division A:
$ $

Submitted Projects by Division

Status Projects Submitted $ $ $ $ % Target % % % %

$ Target: $

Division A: Division B:

DRAF T

Division C: Total:

Division B:
$

$ $ Target: $

$ $ $ $ $ Target $ $ $ Target: $ $ $ $

Division C:

Overall

Author: Gemma Harman (London Office) 12-04-01 90

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Division A
Identified Project Savings (Year X Year Z)
$ $
Target $x

Actual Qx Year Y Cumulative Savings

$ $ Actual $

Pending Recast

634m

$
Target $ x

DRAF T

Identified Project Portfolio Profile Estimated Timing of Submitted Savings

Segment

Risk

Phase

70% 40%
Ingredients Packaging Co-Packing NPI Unidentified Low Medium High Unidentified Launch/Complete Feasibility/Capability Idea Unidentified

20%
Year A Year B

30% 10%
Year C Total NI

10%
Year C+

Author: Gemma Harman (London Office) 12-04-01 91

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Division A
Savings1
Range A Range B Range C Range D Range E

# of Projects

Total Value ($
000)

Number of Projects per Savings Range

Total Value of Projects per Savings Range

DRAF T

Range F Total

Percentage Contribution per Individual Project

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Pctge contribution

Top 50 projects: - representing: 80% of forecasted savings:

$x y % of target x # of projects

Number of Projects

Author: Gemma Harman (London Office) 12-04-01 92

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Division A
Project Portfolio Breakdown by Category
Category Y Category X Category Z Category Y Category X Materials C Category Z Category Y Materials B Materials A Materials C

Project Portfolio Breakdown by Materials

Materials D Materials C Top 10 Groups: All Other: Total: $ $ $ x y z

Materials B
Materials A

DRAF T

Category X Category Z

Category Y

Materials B
Materials A 0 0

Category X

Key Projects Overview

Project Name

Project Description

Segment

Savings ($
million)

Risk

Phase

Submitted by

Author: Gemma Harman (London Office) 12-04-01 93

DRAF

Division A Progress and Risk Report

Accountable: Leader:
$ $ Target $ $

Programme Progress to Date

Estimated Timing of Submitted Savings

DRAF T

Risks / Issues / Dependencies

70% 40% 20% 10% 30% 10%

Year A Year B Year C

Total

NI

Key Upcoming Milestones/Actions

Who

Date

Year C+

Classification of Project Savings (Risk and Phase)

$a

$d $e $f

$g $h $j

High

$x
Regretted Losses
Unidentified

$b $c
Idea

Medium

Low

Feasibility/ Launch/ Capability Complete

Author: Gemma Harman (London Office) 12-04-01 94

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Division Progress Report A

Project Portfolio Breakdown by Region
Group F Group D

Project Portfolio Breakdown by Supply Groups (Top10)

: Identified
: Forecast

Group E Group D Group C Group B

: Identified : Forecast

Group C

: Savings Target

Group B

Top 10 Groups: All Other: Total: $y

$x $x

DRAF T

Group A

Group A Group D

Group C

Group C Group B
Group A 0 0

Group B

Group A

Key Projects Overview

Project Name

Project Description

Segment

Savings

( million)

Risk

Phase

Actions/Decisions Required

Author: Gemma Harman (London Office) 12-04-01 95

DRAF

Dials Key Colour Coding

Example Identified Project Savings

Red: Q4 2000 savings less than 75% of 3-year target Q4 2000 savings between 75% - 100% of 3-year target

Yellow:

Green: Q4 2000 savings greater than 100% of 3-year target

DRAF T

Author: Gemma Harman (London Office) 12-04-01 96

DRAF

Template 2: PMO Team Progress report

Week:
Who Activity A FTE 1 FTE 1/ FTE 2 FTE 1/ FTE 2 Draft x y z Review x y z Final x y z

Top 3 Priorities

Activity B Activity C

DRAF T

Workstream A: Activity A Activity B Activity C Workstream B: Activity A Activity B Activity C Workstream C: Activity A Activity B Activity C

FTE 1 FTE 2 FTE 3/FTE1

Date X Date Y Date Z

FTE 1 FTE 2 FTE 3/FTE1

Date X Date Y Date Z

FTE 1 FTE 2 FTE 3/FTE1

Date X Date Y Date Z

Author: Gemma Harman (London Office) 12-04-01 97

DRAF

Actions

Who

By When

Template 3: PMO War Room Visitor Log Book

Information Content in
Not Useful Slightly Useful Useful Very Useful No Basis for Rating Reason for Rating

Panel A

Panel B

DRAF T

Panel C

Panel D

Panel E

What information is missing? What improvements could be made (from your experience with other War Rooms)? Who do you think will benefit the most from visiting the War Room? Include any other comments or suggestions regarding the PMO War Room. Thank you very much for completing our survey, Project Management Office

Author: Gemma Harman (London Office) 12-04-01 98

DRAF

Template 4: PMO War Room The Project Timeline

Year A OctDec Year B Jan Feb March April May June July August

Key:

Launch Key decision Brief

Meeting Results

Year C Oct Nov Dec Jan

Sept

Key Enablers

DRAF T

Workstream A

Workstream B

Workstream C

Workstream D

Workstream E

Author: Gemma Harman (London Office) 12-04-01 99

DRAF

Template 5: PMO War Room Project Roadmap

Key: Change engines Enabling activities Strategic Objectives
Vision

BEST PRACTICE A

BEST PRACTICE B

OBJECTIVE X OBJECTIVE Y OBJECTIVE Z

BEST PRACTICE C

Performance Impact

DRAF T

BEST PRACTICE D

OBJECTIVE A

Continuous Improvement

OBJECTIVE B
BEST PRACTICE E

BEST PRACTICE F

OBJECTIVE C
BEST PRACTICE G

Establish Infrastructure

Drive and Embed Change

Move into Business As Usual

Critical Success Factors

Author: Gemma Harman (London Office) 12-04-01 100

DRAF

Template 6: PMO Communication Strategy Scorecard for each Stakeholder Group

Broad Objectives for Communications to this Stakeholder Group Existing Communication Vehicles

Roadshows around world Develop awareness of initiative Define how it fits with client Xs vision Focus away from cost reduction toward growth Establish vision Clarify objective of initiative Communicate urgency Need to take it seriously Need to contribute to its success Communicate progress Client X Today (monthly newsletter) Regional/local publications

DRAF T

Courses
Email Internal Websites (multiple global sites)
Potential Communication Vehicles

Client X Magazine (global, quarterly) Videotape

CD-Rom

Author: Gemma Harman (London Office) 12-04-01 101

DRAF

Template 7: A. T. Kearney Client Activity Tracker

PMO X Office Officer X # of Consultants Duration

Highlights :

Key milestones or next steps:

DRAF T

Highlights :

Key milestones or next steps:

Activity Area 2

Officer X

# of Consultants

Duration

Highlights :

Key milestones or next steps:

Author: Gemma Harman (London Office) 12-04-01 102

DRAF

Activity Area 1

Officer X

# of Consultants

Duration

Step 3: Embedding Learnings and Best Practice and Developing Organisational Competencies

DRAF T

Author: Gemma Harman (London Office) 12-04-01 103

DRAF

Step 3 addresses the capture, development and transition of best practice learnings into the wider organisation
Steps Required to Establish a Project Management Office (PMO) and Transition Learnings

Step 1

Step 2

Step 3

DRAF T

Determine Objectives and PMO Functions

Identify Roles and Responsibilities

Develop PMO Infrastructure

Develop Methodologies and Processes

Develop Communication and Intranet Strategy

Capture learnings and best practice

Develop and implement Competencies

Author: Gemma Harman (London Office) 12-04-01 104

DRAF

Step 3: Methodologies, Processes and Templates

Step 3

Capture learnings and best practice

Develop and implement Competencies

DRAF T

1. 2. 3. 4. 5. 6.

Identify Project Best Practice Learnings and Core Competencies (Example) Development of the Core Competencies Embedding the Core Competencies Developing a Core Competency Centre to sustain Growth Template 1: Capturing Key Learnings and Best Practice Template 2: Development of a Core Competency Training Plan

Author: Gemma Harman (London Office) 12-04-01 105

DRAF

1. Identify Project Best Practice Learnings and Core Competencies

The performance of the Project Management Office is based upon five critical success factors
PMO Critical Success Factors

DRAF T

Long-term Client X Mindset

Strong & Active Governance

Harnessing the Client Xs Network

Knowledge & Information Engine

Exploitation of External Insights

Each Critical Success Factor is supported by a set of key principles

Author: Gemma Harman (London Office) 12-04-01 106

DRAF

Identify Project Best Practice Learnings and Core Competencies

Critical Success Factor 1: Long-term Client X Mindset

Global Purchasing Plan (GPP)

Key Principles Delivery on the project is the passport to successful implementation of the programme Emphasis placed on achieving both: The project goals Putting in place a sustainable effective new supply management organisation

DRAF T

Client X
Achieve and Sustain World Class Buying
People Process Suppliers Technology Organization

Deliver the $ x by Year Y

Agree Targets Identify Projects Provide Resources Ensure Enablers Measure and Track

Transfer the credibility and logic gained from the project targets to the programme
Target focus Long-term

Project Management Office (PMO) Scope

Author: Gemma Harman (London Office) 12-04-01 107

DRAF

Project

Programme

Identify Project Best Practice Learnings and Core Competencies

Critical Success Factor 2: Strong and Active Governance
Higher Senior Management Committee (HSMC)
Big Project HSMC Representative

Key Principles
Steering Team
Visible steering team reporting to an active champion in HSMC Small influential team whose members are generally operators chosen for knowledge, interest and resource they bring, not x representation Effective delineation of roles and responsibilities within the team

DRAF T

Project Direction
Steering Committee Sponsor

ATK Client Officer

Senior Manager X Senior Manager Y

Senior Manager A Senior Manager B ATK Project Manager Senior Manager Z

PMO (PMO)
PMO is the operating arm of the steering team Well-connected, small, nimble and able to deal with ambiguity Linked to an active operating unit and sponsor and, thus not isolated in an ivory tower Well defined, concrete target visible both internally and externally Active stakeholder management up and down to ensure engagement of champions and not just looking from the sidelines

PMO

Operating Units

Author: Gemma Harman (London Office) 12-04-01 108

DRAF

Identify Project Best Practice Learnings and Core Competencies

Critical Success Factor 3: Harnessing the Client X Network

Client X Organisation Conscious active linkage between other initiatives and X

DRAF T

Leveraged key Individuals in other areas of the Business

PMO

Located in a profit centre versus cost centre

Did not destroy existing initiatives but harnessed to transfer and leverage

Author: Gemma Harman (London Office) 12-04-01 109

DRAF

Identify Project Best Practice Learnings and Core Competencies

Critical Success Factor 4: Knowledge & Information Engine

Project Management Office Linking Mechanisms

Key Principles
Rigorous and globally consistent project tracking Dissemination and ongoing support of clear and structured methodologies for all Business Units One living central dynamic coordinating focus: the war room Establishment of working linking mechanisms between the field and the steering team to ensure:
Identified project savings status reports operating unit progress reports Creation of frameworks and mechanisms Communication updates to the business Project plans Project saving reports Project risk assessments

DRAF T

Steering Committee

PMO

Stakeholders

Responsibilities Strategy Project championship Critical resources Broad decision making Communication Deliverables Development of milestones Project status report

Tracking/measuring results Develop structure in activities Coordination of activities

Local management & control Operational decision making Project execution

Credible and fair calculation and distribution of the targets Dynamic flow of information provided on a need-to-know basis

Author: Gemma Harman (London Office) 12-04-01 110

DRAF

Identify Project Best Practice Learnings and Core Competencies

Critical Success Factor 5: Exploitation of External Insights

Key Principles

Internal

External
Consulting firm intellectual capital Access to industry thought leaders Provision of connectivity that Client X does not possess Best practice insights Processes enabling Client X to quickly mobilise

DRAF T

Internal intellectual capital Internal insights

PMO

Application of Assessment on Excellence in Procurement* benchmarking criteria Maintain external scan and perspective Be open to external ideas to avoid winning formula mindset and isolation from trends

* A. T. Kearneys regular industry-wide procurement benchmarking study

Author: Gemma Harman (London Office) 12-04-01 111

DRAF

Regular review of external best practice through A. T. Kearney organised benchmark visits or meetings

Identify Project Best Practice Learnings and Core Competencies

Aside from the Principles, several areas of improvement were identified along the way

Learnings from Year 1

Resource communication roles and responsibilities to the business (both the PMO and steering team)

DRAF T

Ongoing refinement of the PMO teams core skills and allocation of roles accordingly Drive ownership to the field faster More explicit push of best practice identification, dissemination and sharing (e.g. training) Celebrate and communicate success!

Author: Gemma Harman (London Office) 12-04-01 112

DRAF

2. Development of the Core Competencies

Competency Functions are critical enablers that need to be developed to drive and embed Programme vision and the thrusts
The Supporting Role of the Competency Functions to drive the Programme

Competency Function Definition

Competency Function Strategic Sourcing

Competency Function Knowledge Sharing

Competency Function e

DRAF T

1. Fundamental organisational capability critical to effective organisational operation and growth

Information: the blood of the organisation Knowledge Sharing: the veins of the organisation HR: the brain of the organisation Strategic Sourcing: the mind of the organisation e: the growth hormone of the organisation

Client X Programme Vision & Strategic Thrusts

Window to the Future

External Environment

2. Key driver to facilitate best practice development

Competency Function HR

Competency Function Information

Author: Gemma Harman (London Office) 12-04-01 113

DRAF

Development of the Core Competencies

Example of Core Competency Functions

Supply Management Organisation

DRAF T

HR

Strategic Sourcing

Knowledge Sharing

Information

Author: Gemma Harman (London Office) 12-04-01 114

DRAF

Development of the Core Competencies

Each Competency Function is aligned with the key Strategic Objectives
Competency Function and Strategic Objective Linkages
Example only

The Five Competency Functions

Competency Functions Generic

Strategic e Knowledge Sharing Information HR Sourcing

DRAF T

Supporting Activities
Internal
Benchmarking Measurement Communication Integration with other initiatives External Benchmarking

Author: Gemma Harman (London Office) 12-04-01 115

DRAF

Development of the Core Competencies

Identification of workstreams to develop the Core Competencies
Competency Function and Related Workstream Activities
Workarea
Career Development Buying Power Consolidation HR Strategic Sourcing
Competencies and skills Individual performance measurement Training Rewards Career development Redeployment Leverage strategy Organisation roll-out Supply management Supplier management Global category interface Process compliance Complexity reduction

Complexity Reduction Strategic Sourcing

Knowledge Management

Strategic Sourcing

Competency Function

HR

Knowledge Sharing Information

Infrastructure Classification (nomenclature) Project list database (short-term) Project tracking tool (mid-term) Actual savings reporting capability Buying team support Executive buying information support Market intelligence/knowledge Other infrastructure technology Content Strategic sourcing and savings methodologies E-sourcing Process Benefits management Actuals reporting KPIs and measurement process Project tracking and risk management process Knowledge management process Measurement Analytics and reporting Internal and external benchmarking

HR Strategic Sourcing
Organisation and scoping Leverage indirect strategy Investigate use of e

DRAF T

Workstreams

E education and roll-out training Internal connectivity External connectivity E auctions

Author: Gemma Harman (London Office) 12-04-01 116

DRAF

E market intelligence

Development of the Core Competencies

Identification of Responsibility for development of workstream activities across the business
Workstream Activity Responsibility for each Linking Mechanism
Example only
D=Develop, E=Execute, M=Maintain Manager X Activity A Activity B Activity C Activity D Activity E Activity F Activity G Activity H Activity I Activity J Activity K Activity B Activity L Activity M Activity N Activity O Activity P Activity R Activity S Activity T Activity U Activity A Activity B Activity C Activity D Activity E Activity F Activity G Activity H Activity I Activity J Activity K Activity B Manager Y D/E D/E D D D D D/E/M D/E D D Manager Z D/E D/E D/M D/M M M M D/E E E/M E D/E D D D D D D/E/M D/E D/E D D/E D/E Group A Group B

Infrastructure Content

E E

DRAF T

Process

Measurement

E E

Example only!

D/E/M E

D D D D

D/E D/E D D D D

E E/M D/E/M D/E/M D/E/M D/E/M D/E/M

Author: Gemma Harman (London Office) 12-04-01 117

DRAF

Development of the Core Competencies

Development of the Competency Functions can be addressed by following four process steps
Competency Function Development Process
Example only

1 Identify and prioritise Competency Functions Stages of Development

3 Appoint Workstream Leaders

4 Align and Resource Workstream Teams

Monitor and Track

DRAF T

Key activities

Perform diagnostic Agree workstream of leader selection competency levels criteria across the business Nominate workstream leaders (this may not be required if there are existing thought leaders in the business) Inventory of List of qualified Competency Function and steering team levels across the sponsored business workstream leaders Stages of Excellence across the business map

Identify and assign resource for global teams Align team with Linking Mechanism team/sponsor and other existing resources Build and execute development plan Mobilised global Competency Function virtual team/incubator Established way of working Competency Function development plan/milestones Workstream Leaders

Develop transformation objectives and plan Establish metrics and measurement process across the business

Deliverables

Embedded best practices across the business Ongoing process of identifying, developing, harnessing and embedding best practice

Who

Current PMO

Senior Managers

Workstream Leaders

Author: Gemma Harman (London Office) 12-04-01 118

DRAF

Development of the Core Competencies

Prioritisation of Core Competency Development
Prioritisation of Competency Function Workstream Activities
Example only Competency Function First Priority Workstream Activities (< 6 Months) Second Priority Workstream Activities (> 6 Months)
e
Identification & development of e-sourcing tools Interface with B2B leader Establish e-market intelligence Develop & enable supply management e-competency E-education & roll-out training Identify needs & mobilise projects: Buying Team Support Executive Buying Info Support Own Projects: Intranet Site Project Tracking Tool Maintain & Monitor Progress: Classification Connectivity Benchmarking (internal) and development of a best practice database KPI Development & Roll-out Knowledge Management Process & Roll-out Strategic Sourcing Methodology & Tools Benchmarking (external) Supplier Management Process Compliance Identify needs & mobilise projects: Knowledge Management Other infrastructure

DRAF T

Information

Knowledge Sharing

HR

Skills development & training programmes for team leaders Develop Awards

Identify needs & gaps Develop individual scorecard framework Develop training programmes & educate trainers Interface with Training and Development Team

Strategic Sourcing

Mobilise SWAT teams and launch

Non applicable

Author: Gemma Harman (London Office) 12-04-01 119

DRAF

Development of the Core Competencies

Transforming the different Competency Functions into World Class Practices may require different development approaches
Example: The Lifecycle of the e Competency Centre
Identifying E-team Best Practice Harnessing E-team Content, Process & Resource

DRAF T

Central Coordination

Central Coordination

Analyse, Define and Map: Content/Process Best Practice levels Best Practice Group per topic area Resource leverage potential

Level of existing expertise, knowledge and experience

Sophistication of learning and knowledge sharing network Easily identifiable thought leaders Access to external best practice insights Benchmarking regularity and

Embedding & Monitoring E-team Best Practice

Each business area is responsible for embedding Virtual teams support each other Competency Centre supports where required

Developing E-team Content, Process & Resource

Best Practice Group and the Competency Centre lead development Establish links to virtual development teams for input Best Central Practice Coordination Group

Central Coordination

Key: Bubbles: Operating Units Straight lines: Information flow Dotted lines: Knowledge and Best Practice Flow

Author: Gemma Harman (London Office) 12-04-01 120

DRAF

Influencing factors on the development of each Competency Function

3. Embedding the Core Competencies

In order to satisfy the new supply organisation principles when selecting workstream leaders to develop and embed Core Competencies, we suggest three implementation considerations
Implementation Considerations
1. In order to comply with the overall supply management principles, the workstream leaders must be: qualified to lead a global change effort visibly recognised across the business aware of current practices globally able to think and act across business knowledgeable of external best practice

DRAF T

2.

The workstream leaders must also be empowered to: identify and utilise resource to establish a team for each workstream lead and coordinate centrally without centralising make decisions and take actions pace and prioritise implementation activities

3.

The workstream leaders will be measured on: results embedded best practices across the business

Author: Gemma Harman (London Office) 12-04-01 121

DRAF

Embedding the Core Competencies

In order to kick-off development of the Core Competencies, there are eight key specific actions

Next Step Activities 1. Agree Competency Functions

Who Senior Managers

By When Date X

2.

Agree which mobilisation approach (diagnostic versus nomination)

Senior Managers

Date X

DRAF T

3.

Agree immediate resource required

Senior Managers

Date X

4.

Perform Competency Function Diagnostic

PMO

Date Y

5.

Prioritise Competency Function development

Senior Managers

Date Y

6.

Nominate workstream leaders per Competency Function

Senior Managers

Date Z

7.

Announce workstream leaders per Competency Function

Senior Managers

Date A

8.

Introduce workstream leaders

Senior Managers

Date B

Author: Gemma Harman (London Office) 12-04-01 122

DRAF

4. Developing a Core Competency Centre to Sustain Growth

The Competency Centre Vision is to act as the catalyst to drive and embed the new supply management organisation
The Transformation Role of the Competency Centre Degree of Change Global Purchasing Plan
Institution
Institution Political

Political

DRAF T

Business

Social

Business

Social

Tactical push

New Organisation

Create pull from Client X

Institution Political

World class ways of working Continuing change capability

Business

Social

Current Organisation
Current ways of working Limited desire to change

Time
Author: Gemma Harman (London Office) 12-04-01 123

DRAF

Developing a Core Competency Centre to Sustain Growth

A Competency Centre is based on four key principles

Drives Organisational Learning Globally

The Competency Centre is based on bundles of organizational learning that can encompass skills, technologies or structures, which transcend product lines or business units The Competency Centres competency workstreams or capabilities and knowledge - are directly related to business objectives and goals

DRAF T

Develops Best Practice

Identification and development of internal best practice to facilitate and drive leverage opportunities

Creates Value and Competitive Advantage

The Competency Centre is not a static entity - it is dynamic. It must continually map competencies to provide insights into which competencies are core and therefore create value and competitive advantage for the firm

Author: Gemma Harman (London Office) 12-04-01 124

DRAF

Translates and Drives Business Goals & Objectives in Practice

Developing a Core Competency Centre to Sustain Growth

The Competency Centre is based on bundles of organisational learning that can encompass skills, technologies or structures, which transcend product lines or business units

The Competency Centre bundles are those that:

1. Provides Competitive Advantage 2. Broadly Applicable 3. Difficult to Replicate 4. Are Means & Mechanisms For Delivering Value to Customers

DRAF T

Sources of distinct benefits and functionality Provide tangible benefits that competitive offerings do not

Possessing utility across products, markets, and businesses Providing corporate value that warrants funding at business unit level even if not justified by business unit

Blending of proficiencies (relative emphases, unique contributions, interdependencies) are difficult for competitors to disentangle/imitate

Animate: Not a thing (e.g., a physical asset, a structural barrier), but rather the process for developing, leveraging and renewing the thing Meaningful and actionable: Specific in definition and intent Multi-faceted: Weave together various process, people, and technological proficiencies

Author: Gemma Harman (London Office) 12-04-01 125

DRAF

Developing a Core Competency Centre to Sustain Growth

The Competency Centre bundles or capabilities and knowledge - are directly related to business objectives and goals Core Competency and Business Objective Connection
Business objective Business strategy and model What is the ultimate goal of the business? (e.g. create shareholder value through increased customer value) How will the objective be achieved? (eg develop innovative products)

DRAF T

Business goals Evaluation metrics

What goals must be satisfied? (e.g. bring high value, innovative products to market and improve market place positioning) How will each goal be measured? (e.g. NPV of pipeline, NPV of marketed products)

Competencies

Core

Core

What core competencies enable the firm to meet the business goals? (e.g. product design and specification; flexible manufacturing).

Capabilities

Supporting Knowledge
Copyright A.T. Kearney. Proprietary and Confidential. All rights reserved, 1999.

What capabilities are required to deploy the competency? What capabilities do we need just to compete? (e.g. packaging design) What specific knowledge is required to enable the capabilities? (shown for completeness only)

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DRAF

Developing a Core Competency Centre to Sustain Growth

The Competency Centre identifies and develops internal best practice to facilitate and drive organisational leverage opportunities
The Role of the Competency Centre to drive Best Practice

Disseminating

DRAF T

Codification

Structuring

Competency Centre

Absorbing

Scanning

Diffusion

Author: Gemma Harman (London Office) 12-04-01 127

DRAF

Developing a Core Competency Centre to Sustain Growth

The Competency Centre Terms of Reference
Competency Centre Terms of reference
Example

VISION Achieve and sustain Global Purchasing through people, processes, suppliers, technology and organisation

DRAF T

SIZE OF OPPORTUNITY Implementation of the new Global Supply Management Organisation Drive and support the new Supply Management Strategy Continue to coordinate the Project

OBJECTIVES Develop and drive global core competencies to maximise leverage opportunity Develop and implement new global processes in alignment with business goals Establish knowledge management system to create and disseminate best practice To create value for Client X by continuously mapping and developing core competencies

SCOPE Global Supply Management Organisation

RESOURCES TBC for review in the document

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Developing a Core Competency Centre to Sustain Growth

In addition, the fundamental difference between the Competency Centre and the PMO lies in the interaction with the organisation and degree of development versus execution
The Current PMO Organisation Interaction vis--vis the future Competency Centre Current PMO Activity Future Competency Centre Activity Wider Organisation

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Other Projects/Initiatives Create Geocentric Focus & Interaction With the Organisation

Competency Centre

Communicate

Focus & Interaction With the Organisation

Coordinate

Dynamic Interaction to Create and Implement Core Competencies

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Developing a Core Competency Centre to Sustain Growth

The Competency Centre mapping provide insights into which competencies are core and therefore create value and competitive advantage for Client X
The Role of the Competency Centre to create value for Client X

Industry Level Analyse & Develop Competencies/ Capability Linkages

Conduct

Map Competencies and Capabilities

Map Competencies/ Capability Linkages

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Firm Level

Determine key stakeholders

Overview of knowledge management

Conduct customer/ stake holder functionality assessment Develop hypotheses competencies and capabilities

Disaggregate customer functionality into competencies and capabilities Assign priorities Map capabilities onto matrix - codification and diffusion/ customer value and application Determine centre of gravity of competency Discuss results

Determine linkages between capabilities Map linkages onto matrix codification and diffusion Determine centre of gravity of linkages Discuss results

Identify and prioritise development work for each competency/capability Mobilise effort to improve and/or initiate competency development

Measure
Handover to the business

Copyright A.T. Kearney. Proprietary and Confidential. All rights reserved, 1999.
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Preliminaries

Developing a Core Competency Centre to Sustain Growth

The existing PMO should evolve into the Competency Centre PMO Resource Profile

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Competency Centre

Additional Activities Ad-hoc project support to Steering Team (e.g. Organisation Design, Communication, Information)

Core Activities Target Allocation Project Tracking and Savings Measurement War Room Management

PMO Role

Time

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Transition to Best Practice / Organisational Learning

Core Activities Knowledge Management (process & content) E related activities Information Systems Development People SWAT Team Support

Embed in the Business

Developing a Core Competency Centre to Sustain Growth

Development and establishment of best practice is driven by three key waves
Resource Allocation over The Project/Programme Lifecycle Time

Wave 1: Build the Infrastructure Identify and recruit Client X staff Initial stop gap resource support from ATK Build way forward infrastructure Strategy: identify and drive effort from the centre

Wave 2: Implementation & Embedding Onboard Client X additional staff Train Client X additional staff Embed practices into the business Build new content required Kick-off new processes Identify change champions to run with and embed the Global Purchasing Plan learning, principles and targets

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driven

Level of Centre-led Effort and Resource Required

0 - 0.5 Years

0.5 - 2 Years

2+ Years

The time needed to shift to Phase 3 depends on the level of support and commitment across the Business
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Level of Change/Competency embedded Embed practices into the business in the organisation shift from centre driven to globally

Wave 3: Business Ownership

Developing a Core Competency Centre to Sustain Growth

Harness Identify Embed & Monitor Develop

Example

The Competency Centre and the Business can be compared to a Conductor and its Orchestra.. The Competency Centre will Set the direction and pace of the overall initiative

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Maintain and monitor the overall performance Harness the best of the organisation Lead and coordinate centrally WITHOUT centralising Support the business become the best it can be by changing behaviour and embedding way of doing things

and therefore ensure the business is harmonised, playing at the same time in the same direction
using 1 common language to achieve the same goal maximising talent/knowledge by excellent organisation of resources
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Developing a Core Competency Centre to Sustain Growth

Harness
Capture information across the business Leverage information across the business Connect the best of the business together Harness best practice across the business

The Competency Centre has 4 main roles:

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1.Identify opportunity and the best of the organisation 2.Harness existing knowledge, competencies and best practice 3.Develop and coordinate the dissemination of best practice across the business 4.Support the business units embed best practice competencies and continue to monitor new opportunities

Identify
Best practice across the organisation/in the industry Resources to build and disseminate best practice Efficient processes to disseminate best practice

The Competency Centre Development Lifecyce

Develop
Content the knowledge acquired across the business Information systems and processes to disseminate knowledge Resources in the business to maintain knowledge management processes/systems

Embed & Monitor

Pace the overall initiative Lead and coordinate centrally without centralising Support the business embed change and monitor new opportunities
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Developing a Core Competency Centre to Sustain Growth

Harness Identify Embed & Monitor Develop

Example

Identification of Existing Activities across the Organisation*

Strategic Sourcing

Strategic Sourcing

Identify Scope/Opportunity:

Strategic Sourcing

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Process Resources

Competency Centre

For: E
Strategic Sourcing Information HR External Scan

Strategic Sourcing

E
Strategic Sourcing

Info Systems

1
Develop assessment/ audit tool

Core Process Steps of Identify Identif y 4 2 3 existin 5

Identify existing practices per business area (process & content)

C E
Strategic Sourcing

Captur e& define

practic e per area

resourc es workin g on content for each topic area (ie HR, e)

Identif y benchmarks

* Inner circles highlight existing areas of activity

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Content

Developing a Core Competency Centre to Sustain Growth

Harness Identify Embed & Monitor Develop

Capturing and Harnessing Best Practice

Example

Harness Scope/Opportunity:
Content
Process Resources
Capture, funnel and analyse information

External Scan

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Competency Centre

For: E
Strategic Sourcing Information HR External Scan

Best Practice Stages of Excellence Function E Strategic Sourcing Establi sh links with Best Practic e group and other experts across the busines s Compliance Poor Average Very Good Best in Class

Set up process to funnel & analyse inform ation across the busines s

Core Process Steps of Harness Build 4 2 3 stages 5

Analyse Information

Develo p definiti ons and bench marks of best practic e

of Excelle nce Model and map busines s Groups

Information Systes
Harness

Connect experts
Competency Centre

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Developing a Core Competency Centre to Sustain Growth

Harness Identify Embed & Monitor
# of Business Efforts 1 2 3 4 5 6 7 8

Example
Develop As Is: High 4 Level of Duplication to Future Leverage
Content
x X X X X X

Information Resources
x x x x x x x x x x x

Develop Scope/Opportunity:
Content
Process Resources

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Competency Centre

For: E
Strategic Sourcing Information HR External Scan
Best Practice E-Team Incubator Establi sh a process of teams dissemi n-ating current knowle dge & ongoin g learnin g Best Practice Information Systems Development Team

Best Practic e group & the Compe tency Centre develo p best practic e

Core Process Steps of Develop 4 2 Identif 3 Establi 5

y owners & develo pers In the busines s

Define virtual develo pment incubat or teams

sh virtual teams with shared and/or resourc es

Competency Centre

Best Practice Strategic Sourcing Development Team

Best Practice Compliance Development Team

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Developing a Core Competency Centre to Sustain Growth

Harness Identify Embed & Monitor Develop

Example

The Lifecycle of the Competency Centre

Identifying E-team Best Practice

Harnessing E-team Content, Process & Resource

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Competency Centre

Competency Centre

Analyse, Define and Map: Content/Process Best Practice levels Best Practice Group per topic area Resource leverage potential

Embedding E-team Best Practice

Each business area is responsible for embedding Virtual teams support each other Competency Centre supports where required

Developing E-team Content, Process & Resource

Best Practice Group and the Competency Centre lead development Establish links to virtual development teams for input Best Practice Group
Competency Centre

Competency Centre

Key: Bubbles: Operating Units Straight lines: Information flow Dotted lines: Knowledge and Best Practice Flow

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Developing a Core Competency Centre to Sustain Growth

Harness Identify Embed & Monitor Develop

Example

Overview of Step 1 in the Competency Centre Lifecycle

Bubbles
E-team

Responsible
PMO-led

How
Identify competencies/experience and link with other e-initiative leaders to create a virtual e-team Link with regional HR Link with regional heads to identify existing competencies, prioritise and run with global SWAT efforts

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HR Strategic Sourcing (SWAT)

Competency Centre

HR team led PMO-led

Communication Knowledge Management

Not applicable PMO-led as driven by internal and external scans External: benchmarking by PMO Internal: link with existing resources and business areas with competencies to create virtual team and new knowledge Management process

Information Systems

PMO-led initially to mobilise, coordinate and drive thereafter run by the business

Set up projects, identify champions/competencies in the business and roll-out

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Identifying Best Practice

Developing a Core Competency Centre to Sustain Growth

Harness Identify Embed & Monitor Develop

Example

Overview of Step 2 in the Competency Centre Lifecycle

Bubbles
E-team

Responsible
PMO-led

How
Work with virtual e-team to audit, analyse and define ecapabilities in the business Map out existing state of the nation: resource levels, best practices and future trends

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Competency Centre

HR

HR team led

Analyse, Define and Map: Content/Process Best Practice levels Best Practice Group per topic area Resource leverage potential

Strategic Sourcing (SWAT) Communication

PMO-led

Launch SWAT teams to perform this stage of the lifecycle

Not applicable

Knowledge Management

PMO-led

PMO to divide time between working on external best practice mapping/benchmarking and internal best practices Business teams to create data and support PMO analysis

Information Systems

PMO coordinated and business driven

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Harnessing E-team Content, Process & Resource

Developing a Core Competency Centre to Sustain Growth

Harness Identify Embed & Monitor Develop

Example

Overview of Step 3 in the Competency Centre Lifecycle

Bubbles
E-team

Responsible
Best practice team led Virtual business team supported

How
The identified best practice team to work with the virtual team leaders to develop best practice further PMO adds value by providing external scan insights and coordinating work and managing progress

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Best Practice Group and the Competency Centre lead development Establish links to virtual development teams for input Best Practice Group

HR
Competency Centre

HR team led PMO-led SWAT teams identify virtual team leaders and establish/coordinate team learning and dissemination of knowledge

Strategic Sourcing (SWAT)

Virtual team leaders develop best practices

Communication
Knowledge Management Information Systems

Not applicable
PMO-led PMO to work with virtual team leaders to embed new knowledge management process and content Business team leaders to work as virtual teams to drive best practice PMO to coordinate
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PMO coordinated and business driven

DRAF

Developing E-team Content, Process & Resource

PMO coordinated/managed

Developing a Core Competency Centre to Sustain Growth

Harness Identify Embed & Monitor Develop

Example

Overview of Step 4 in the Competency Centre Lifecycle

Bubbles
E-team

Responsible
Local e-teams: implementation PMO: tracking and change management support

How
Each business leader is responsible for embedding new practices and required change PMO monitors progress and provides change management support

Embedding E-team Best Practice

Each business area is responsible for embedding Virtual teams support each other Competency Centre supports where required

DRAF T

HR
Competency Centre

HR team led Local business teams Local business teams embed all best practices and strategic sourcing action plans

Strategic Sourcing (SWAT)

PMO continues to provide ongoing strategic sourcing insights and change management support Communication Knowledge Management Not applicable Local business teams Each local business is responsible for maintaining its role in the knowledge management process and information update Each local business team is responsible for completing and following a new method of updating information
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Information Systems

Local business teams

DRAF

Developing a Core Competency Centre to Sustain Growth

Example

Lifecycle and Roles

Identify Harness Develop Embed & Monitor

Competency Centre

Develop assessment audit Audit Operating Unit practices/knowledge Identify current practices (for content and process) in the business

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Map differences in content, process and resources across the business for each topic area (e, HR etc) Develop definitions and benchmarks of best practice, process and content across each Operating Unit and topic area Build stages of excellence model with data Identify THE best practice Operating Unit Establish links in each Operating Unit to harness ideas as a virtual team Not Applicable

Identify other owners and developers in each Operating Unit Build virtual development/ incubator teams and leverage existing resources Establish and agree way of working and an ongoing process of working virtually

Capture and define best practice

Identify total number of existing resources developing content and process in each topic area Identify most efficient processes

Best Practice Group/Team

Not Applicable

Nominate a resource to work with the Competency Centre on developing and harnessing input from the virtual teams Nominate a resource to work in the virtual teams to develop and harness best practice

Lead the change transformation (pilot)

All Operating Units

Provide information to the Competency Centre for the assessment audit

Provide name for each topic area for virtual teams e.g. representative in e, HR etc.

Responsible for ensuring acceptance, communicating and embedding new best practices

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Set up process and methodology to capture, funnel and analyse different practice and knowledge levels

Establish working link with the Best Practice team

Identify change or embedding issues and support teams

Developing a Core Competency Centre to Sustain Growth

Each step has a series of tasks that must be accomplished
Development plan of the Competency Centre (40% Ramp Up)_

Month Activities

Month X

Month Y

Month Z

Month A

Month B

Month C

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Establish core team Build induction pack Deliver induction/training Establish team roles/responsibilities Establish team objectives and targets Develop governance Identify key champions Build CC global forum Develop org stakeholder map Organise first CCGF Hold first CCGF Communicate output and targets Set up regular governance meetings Communication plan Develop global introduction communications Develop global communication plan in line with PMO Execute

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Build development plan Identify objectives Build and approve targets Identify skills and experience required for Competency Centre team Identify resources for strategy, process, people and e dimensions of the CC Identify and build induction/training required Set up team location/facilities

Developing a Core Competency Centre to Sustain Growth

Immediate steps required to launch the Competency Centre Initiative:
1. 2. 3. 4. 5. Determine Competency Centre Principles Develop Competency Centre Terms of Reference Create matrix with workstreams and linking mechanisms Finalize required resource number Plan mobilisation ramp up

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6.

Identify tactical next steps

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Template 1: Capturing Learnings

Example Methods of Capturing Learnings
1. Forum Groups with key stakeholders

2.

Learning Audits and Questionnaires

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3.

Face to Face Interviews with sample of stakeholders

4.

Intranet Feedback and/or Learning Page Using existing meetings to organise Learning Walls

5.

6.

Collecting information provided by visitors to the PMO war room

7.

Requesting 3 lessons learned and best practices from each project team

8.

Organising a quarterly best practice competition

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Template 2: Core Competency Training Template

Key Training Questions Content What is the content? What are the elements/chunks of the content to be communicated? Is the content a need to know and USE IMMEDIATELY or a nice to know and occasionally use?

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Who should be the owner of the content post training? Audience What are the audience segments? Are the knowledge/learning levels different in each audience? What are the desired outcomes per audience? What should the audience segments know by when? How do you want the audience to use the content? Is the goal for post training train the trainer? How can you test whether the audience has a) understood and b) uses it?
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Is the content a one-off piece of training or developed and disseminated over time?

Core Competency Training Template

Key Training Questions Delivery Medium Do the audience segments require a central place for information (prereading/reference) if so, is there a place developed? Does the content require demonstration?

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Can the demonstration be delivered online or face-to-face? What number of the audience segments are online? If face-to-face, where are the audience segments located? Do the audience segments regularly meet in a central place? Is there a normal/regular training vehicle used for each audience segment? Can the content be integrated into any existing training forums? Are there any upcoming events that bring the audience segments together? Can the content be disseminated as reference on takeaway tools? What tools would be most effective per audience segment?
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Core Competency Training Template

Key Training Questions Roll-out Can the existing content owners train the audience segments? Who can act as supporting trainers? What resources are available/qualified for train the trainer roles? Who can train the trainers?

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What the key characteristics required for trainer roles? Are there timing objectives and prioritisation for training the audience segments? How long will it take to: a) Format content Package content into training modules and relevant supporting materials Develop and test measurement system of implementation and use Identify the trainers Train the trainers Training to be completed per region/function Monitor implementation
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b) c) d) e) f) g)

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