Strausser PMI Global Congress 2009 NA Paper

Business Change Management Using Program Management
Glenn Strausser, MBA, PMP, SSBB
Siemens

Abstract

The use of Program Management, and its focus on benefit management, results in organizational initiatives being
more effective and efficient. It enables organizational programs to succeed, as opposed to running the initiatives as
projects, which can lead to missed benefits, wasted resources, and failed efforts.

Two key international standards for Program Management, PMI’s The Standard for Program Management – Second
Edition and OGC’s Managing Successful Programmes, are being used within Siemens to implement organizational
program management and to support organizational project management maturity improvement efforts. This paper
will introduce the standards, compare them, and describe how they are being implemented and used within Siemens.

Introduction

Project Management Institute (PMI®) defines a Program as “a group of related projects managed in a coordinated
way to obtain benefits and control not available from managing them individually” (PMI, Standard for Program
Management, 2008, p 5). PMI defines Program Management as the “centralized coordinated management of a
program to achieve the program’s benefits and objectives. It involves aligning multiple projects to achieve the
program goals and allows for optimized or integrated cost, schedule, and effort.” (PMI, Standard for Program
Management, 2008, p 6).

The United Kingdom’s Office of Government and Commerce (OGC) defines a program as a temporary, flexible
organization created to coordinate, direct and oversee the implementation of a set of related projects and activities in
order to deliver outcomes and benefits related to the organization’s strategic objectives (OGC, 2007, p 4).

The key concept is that programs deliver benefits tied to the organization’s strategic objectives. This idea, along
with the concept that programs may be charted to deliver a mandated benefit, or group of benefits, with no clear path
or method to achieve the benefits, has been very useful to implementing program management at Siemens and other
companies.

The use of Program Management, and its focus on benefit management, results in organizational initiatives being
more effective and efficient. It enables organizational programs to succeed, as opposed to running the initiatives as
projects, which can lead to missed benefits, wasted resources, and failed efforts. Two key international standards for
Program Management, PMI’s The Standard for Program Management – Second Edition and OGC’s Managing
Successful Programmes, are being used within Siemens to implement organizational program management and to
support initiatives like organizational project management maturity improvement efforts. This paper will introduce
the standards, compare them, and describe how they are being used within Siemens.

Is program management a fundamental new method, tooling, or fad? Is it a breakthrough? Is it revolutionary?
Unfortunately, no – it is the application of fundamental principles in an organized fashion – where the normal
reaction by individuals in training classes and implementations is “why don’t we already do this” and “this is so
simple – it is common sense”. It is not common by any means, it is not complex, but it is apparently difficult to do
well and consistently. The research data shows that most organizations are not organizationally mature in program
management.

Examples of Programs

A key discussion point in most early interactions with organizations is the clarification question of “what is a
program?”. The definitions from OGC and PMI are good, but generic. The best explanation that is used by Siemens

© 2009, Glenn Strausser Page 1 of 9
Originally published as a part of 2009 PMI Global Congress Proceedings – Orlando, Florida

is if you can set up the scope, cost, schedule, WBS, etc., baselines from the start – even if they are complex – it is
likely a project. If the first reaction to the mandate is “I’m not sure how to do that” or “I have an idea how to start,
but not how to finish”, then it may be a program. Programs are not just large or complex projects, although large
and/or complex projects can benefit from program management methodologies. One of the comparisons utilized
within Siemens is shown in Exhibit 1. Programs can be internal initiatives such as improvement programs, business
change initiatives, or product development programs – or externally focused (e.g. customer programs).

Program Management Project Management

Achieves benefits Creates a capability
Broad scope Tightly focused
Broadly defined objectives Clear objectives
Specifics not clear at the start Clear deliverables
Complex threads of work Often single threaded
Often 3 – 5 years long Often 3 months – 2 years
Usually major investments Can be small, cheap, fast
Uses senior staff Uses less senior staff
Project Board members Project Manager & teams

Exhibit 1, Comparison of Projects and Programs, Copyright Core I.S. Ltd, UK, 2009, MSP Training Materials

Some examples of Programs are SAP Implementations; SG&A Reductions; Reorganizations; Implementing a
Project Management Office; Organizationally Adopting Six Sigma; Improving Project Management Maturity, New
Product Development, some Customer Solutions, etc. The best use of a Program Management approach is when a
mandate tied to the organization’s strategy is clear, but the path is not well defined.

For example, organizational project management improvement initiatives are business change programs. They are
characterized by the creation and standardization of processes, delivering new capabilities, transformation of the
business, and embedding change in many functional groups with the goal of achieving program benefits. Although,
Siemens has done this improvement process many times with many business units, each unit’s specific path is
unclear at the start of their program.

The Standards

In early 2007, as a standard Siemens US methodology, the United Kingdom Office of Government Commerce
(OGC) Managing Successful Programmes (MSP) Standard was selected as a basis for training, certification, and
implementation. MSP was selected because:

MSP provided a best practice methodology that addressed the relationships between business as usual,
business change, benefits management, and program governance.
Business Change Managers are formally defined and are responsible for defining capability
requirements, transition planning, embedding change, and achieving the program benefits.
Maturity – MSP was launched by the UK OGC in 1999 and the standard is in its third revision (2007).
A training and certification network through Accredited Training Organizations that enabled
practitioners.
The other worldwide standards at that point in time were not adequate


Project Management Institute issued the second revision of their program management standard in December 2008.
The second edition is a significant improvement over the first edition published in 2006. Detailed changes are noted
in an Appendix A to the standard, but in general, this is a totally new document, not merely a revision. The standard
is now 324 pages, versus 109 pages, themes were deleted, knowledge areas added, and other major modifications
were performed.

PMI’s The Standard for Program Management – Second Edition is linear in approach, with very generic good
practice recommendations. It assumes that the entire scope of the program is known early on, which is not true in all
programs, or it plans for an R&D type phase that will answer the outstanding questions. The standard is very non-
prescriptive in nature, allowing the implementing organization to create the best implementation method. This type
of standard is helpful, but requires significant organizational expertise to help the implementation process. The PMI
standard does have more detailed guidance in certain functional areas than MSP does (e.g. procurement
management).

MSP has a more proscriptive implementation of program management, with key roles and responsibilities defined.
The PMI standard is less proscriptive in nature, but as a result requires more infrastructure development and the
creation of specific organizational methodologies, processes, etc.. While MSP has a more specific method of
delivering programmes than the PMI standard, it is still very flexible in nature, allowing organizations to tailor the
basic methodology, while keeping the important principles in place. The MSP standard is useful for all types of
programs and it has more direct emphasis on Benefit Management than the PMI standard, which is a key success
factor for organizations delivering programs.

Three specifics that illustrate some of the differences:

In the PMI standard procurement is addressed in chapter 12, “Program Procurement Management”, a 23-
page section that addresses good practices in procurement for a program. MSP has two paragraphs in
section 16.10, plus one paragraph in section 4.8.

MSP has an entire governance theme devoted to Benefits Realization and Management (all of chapter 7),
and additional references into this theme in all of the transformational flows, and most of the other themes.
The PMI standard has a subsection in the governance knowledge area devoted to it – 15.6, Manage
Program Benefits that is 4 ½ pages, and discussion in other areas, notably an additional two pages in
Chapter 2, “Program Life Cycle and Benefits Management”.

PMI states that benefits are to be managed; MSP has created an entire structure, including specific roles
and responsibilities, around this concept.

There are some important similarities between the two standards. Both advocate strongly the implementation and
use of Program Management Offices, preferably at the organizational level. They both focus on Benefit
Management, which is critical to success. There is also an emphasis on program and project level governance.

It should be noted that utilizing MSP for linear programs, even with a well defined scope, does work as well as the
PMI standard. Essentially MSP is applicable for all types of programs, and is especially useful for the less well
defined mandates. Following the MSP standard will align an organization or a program with the PMI standard, as
the integral components are similar. As previously stated, the PMI standard is more of a generic document; the MSP
provides one instance of implementation of the standard.

Based on an internal evaluation, and use of both standards, the MSP standard was selected for implementation by
Siemens in the United States, as it is easier for individuals to understand, and for organizations to implement. The
new PMI standard is a good resource for helping to write certain individual processes thanks to the detail and
information provided in the various knowledge areas, especially where the MSP standard does not have sufficient
coverage. Siemens is using both program management standards, in conjunction with PMI’s Organizational Project
Management Maturity Model Knowledge Foundation (OPM3®). It is recommended that other organizations
evaluate the standards for utilization in their businesses and select whatever combination will optimally support their
businesses.


Program Management Methodology

VISION

Define desired benefits
Embed realised benefits

Define changed Use the new
capabilities needed capabilities

Projects change the
capabilities

Exhibit 2, Flow of MSP, Copyright Core I.S. Ltd, UK, 2009, MSP Training Materials

Focus on Benefits

A common failure mode of some projects is the lack of focus on benefits – the reason for spending the money. This
is even more critical in Programs, where some of the components and projects may have no inherent benefit; they
are supporting components that enable or help to deliver a benefit from the overall program. The overall flow in
MSP is shown in Exhibit 2. The organization has some vision that ties to the strategic plan, the vision is tied to
benefit(s) from a specific program, the program delivers the capabilities required to deliver the benefit through
projects, the capabilities are used by the organization, benefits are realized and embedded in the organization, thus
delivering the vision of the program and supporting the organization’s strategy.

Organizations have many diverse efforts, initiatives, projects and programs in place at any one time. Typically not
all of them have clearly defined benefits or ties to organizational strategy. Many times Siemens Program
Management implementation teams during the initial stages identify many projects and initiatives that have no clear
sponsor, owner, or organizational benefits tied to strategy. In one example there were approximately 60 efforts in
place, 20 were terminated after this review, 20 were put into an future evaluation category, and the remaining 20
were put into the program management methodology to run in a more standardized manner to deliver explicit
benefits. Optimization of scarce resources by focusing them on benefit delivery and the organizational strategy is
the outcome of these efforts.

Program Management Organizational Structure

A key element of Program Management adopted by Siemens from the MSP standard is the organizational structure.
Prior to its adoption Siemens had the Program Manager in place, without the standardized support structure provided
by MSP as shown in Exhibit 3. The addition of the role of Senior Responsible Owner (or program sponsor)
provides a key link to the senior management of the organization. The SRO is accountable for delivering the
benefits to the organization and must provide support to the Program Manger and Business Change Manager(s).

The Business Change Manager concept is also a key addition to the team. It is normal practice to hold the Project or
Program Manager responsible for delivery of the capability to the organization, and then the capability was
supposed to be utilized by the organization as envisioned. This ad-hoc method does not always result in capabilities
being used effectively by the organizations. The Business Change Manager role is now responsible for taking the
capability from the Program Manager and implementing it into their business and deriving the benefit(s) from its
actual utilization. The Business Change Manager(s) should come from the functional groups being impacted by the
program. For example, when a Siemens business unit improves its project management maturity, the changes affect
not only the project management group. The changes also affect many other groups: sales and marketing,
procurement, quality, financial reporting, configuration management, proposal teams, engineering, etc. Business
Change Managers or change agents from each impacted stakeholder group are critical to successful implementing
these types of organizational changes. MSP provides many examples of ways to implement this role or function in
various organizational configurations.

Exhibit 3, Organizational Structure for Programs,
© Crown Copyright 2007, Page 30, Managing Successful Programmes.

Programme Board

Senior Responsible Owner

Programme Business
Manager Change Manager

Programme
Office Delivering Capability Realising Benefits

Discipline and Methodology of Program Management

Organizations need maturity in the execution of their work and program management is no exception. While
individuals can be very successful in implementing business changes and running programs, organizations need
mature methodologies in place to ensure consistent, reliable, scalable delivery of programs and the benefits that they
deliver to the organization.

MSP provides a detailed methodology including quality gates, recommended documents, phases, etc., that drive
successful program implementation. MSP is more proscriptive than PMI’s standard, but is still flexible in
application. MSP defines the roles and responsibilities of all who need to form part of the leadership of a program. .

The MSP framework is based on three core concepts:
1. MSP Principles. These are derived from positive and negative lessons learned from program experiences.
They are the common factors that underpin the success of any transformational change
2. MSP Governance Themes. These define an organization’s approach to program management. They allow
an organization to put in place the right leadership and delivery team, organization structures and controls.
These are similar to PMI’s knowledge areas.

3. MSP Transformational Flow. This provides a route through the lifecycle of a program from its conception
through to the delivery of the new capability, outcomes and benefits. These are similar to PMI’s phases.

There are numerous artifacts generated by going through a standardized MSP program including the Program
Mandate, Program Brief, Program Preparation Plan, Vision Statement, Blueprint, Business Case, Benefits Profiles,
Stakeholder Map, Program Plan, Quality Management Plan, etc. These are used to help define and manage the
program. These can be customized for each organization and can be tailored for specific programs.

Tranches

Another useful concept from the MSP standard is tranches - these are a group of projects structured around distinct
step changes in capability and benefit delivery. The concept facilitates those programs whose total plan cannot be
determined at the beginning. The concept is to plan and obtain approval for the first tranche, during which the view
for the next tranche will become clearer. Tranches can also be organized around things like fiscal years, locations,
etc. A program may have only one tranche, or could have dozens.

Referring back to Exhibit 2 - a tranche can be envisioned in simple terms to be one cycle around the circle, where
the organization has some vision that ties to the strategic plan, the vision is tied to benefit(s) from a specific tranche
of a program, the program delivers the capabilities required to deliver the benefit through projects, the capabilities
are used by the organization, benefits are realized and embedded in the organization. If the full vision is not yet
realized, another cycle around the circle is performed in a new tranche and this process is repeated until the vision is
realized and all the benefits from the program are embedded in the organization.

Program Management Training and Certification

Siemens is actively training and certifying its employees in the US on Program Management, using the MSP
methodology. At this time, Siemens has just over one hundred certified employees, and continues to hold MSP
training/certification classes throughout the year. MSP is now a standard offering of Siemens Learning Campus, in
cooperation with an external vendor, Core I.S. Ltd. Siemens long-term commitment to this plan has led to certifying
two Siemens employees as Instructors in MSP.

In October 2007, PMI released its Program Management Certification called the Program Management Professional
(PgMPSM) Credential. OGC’s MSP standard has had multi-level certification in place since 1999. There are
currently three qualifications available for MSP: Foundation, Practitioner and Advanced Practitioner.

The MSP certifications are forward looking – enabling personnel to participate in or lead a program. The PgMPSM
certification is historical facing – it certifies that someone has led programs successfully in the past and understands
a certain body of knowledge. Siemens is recommending that its personnel look to the MSP certifications as a good
front end process with the PMI certification as a capstone.

How Siemens is Implementing Program Management and the Path Forward

One of the ongoing missions within Siemens is to improve organizational project management maturity to support
the project business. Overall, Siemens is progressing to higher levels of sustained maturity. Due to the importance
of project management maturity to Siemens, the United States region of Siemens decided to accelerate the
improvement effort. Based on a review of assessment results and evaluation of global consulting experiences, the
following key success factors were determined to be fundamental characteristics for implementing and sustaining
organizational project management maturity:

Executive Support
Organizational Project Management Office (PMO)
Process Management Infrastructure
Program Management Best Practices

Siemens began implementing Program Management in the United States under the Successfully Defined Program,
sponsored by Siemens Corporate in the US starting in 2007. This program supported project management maturity

under the PM@Siemens initiative and addressed all four success areas noted above. This program, executed by
Siemens Corporate Research, concluded in 2008. Continuing efforts are targeted at the business unit level and are
not presently sponsored at the corporate level. Siemens Corporate Research is continuing to develop Siemens
program management capability and improve the maturity level within specific business units.

Training & Certification

As noted previously Siemens is actively training and certifying employees in the MSP methodology. This extends
the knowledge of standardized program management into the organization, creating awareness. It also opens
opportunities for the various business units to run programs more successfully and engage in sponsored
improvement programs. Individuals have the capability to improve their own results – one of the participants stated,
“I now know why my project is failing – it’s a program – and I know how to fix it”. There is also an effort to
incorporate program management into our leadership development and training program.

Program Management Infrastructure Development and Individual Program Support

Siemens Corporate Research (SCR) provides support to individual business units to develop and implement a
program management methodology. The development of policies, procedures, tools, methodologies, organizational
structure, etc., is ongoing with selected business units.

SCR also provides services to our business units to successfully plan and execute individual programs. One of the
tools is called a Program Acceleration through Coaching and Teamwork (PACT), which helps plan and kickoff a
program.

Execute /
Evaluate & decide Prepare Present Document
Conduct PACT

Act / Implement
Measures

Team Development
Workshop Frame Manage the
Identify a Program Define a Program Program Planning
Tranches
Participants Program Mandate Finalize Vision Program Organization Strategic Review
Workshop targets Outline Vision Statement Benefit Realization Deliver Capability
Agenda Statement Blueprint Communications Plan Realize the Benefits
Roles & Outline Blueprint Benefit Profiles Transition Plan
Responsibilities Outline Benefits Risk / Issues Governance
in the Workshop Benefits Map
Outline Business Documents
Case Project Dossier Identify Tranches

Exhibit 4, PACT, Copyright 2009, Siemens AG

SCR is in the process of finalizing Program Management Maturity Assessments for Siemens businesses. We have
an internal model created and will be evaluating the use of PMI’s OPM3 Product Suite® tool for suitability.
Siemens is also working on several organizational level internal projects to develop infrastructure (tools, templates,
procedures, processes, etc.) to facilitate the use of program management by our business units.


Recommendations and Conclusions

The use of a standardized Program Management Methodology is critical to successful internal and external
programs. Maturity in Project, Program, and Portfolio Management is a significant contributor to the success of
project and service based businesses. A Standardized Program Management methodology is currently being utilized
successfully in parts of Siemens and its adoption is continuing and expanding. The benefits achieved so far have
been impressive spawning a number of internal case studies that are under development.

It is recommended that organizations adopt a combination of PMI’s The Standard for Program Management –
Second Edition and OGC’s MSP Standard for all programs including internal business change initiatives, customer
facing programs, R&D programs, quality initiatives, etc. It is critical to successfully implementing programs, and
also enables Portfolio Management.

Siemens is working to tie Program Management maturity into our entire portfolio of organizational initiatives and
methodologies including portfolio management, project management, project management offices, six sigma, lean
six sigma, CMMI, and other key initiatives.

It should be clearly stated that this paper is only an introduction to program management and the standards. The
foundation level course for OGC’s MSP standard is three days, and Siemens uses a combination
foundation/practitioner course that is four and one-half days of training and testing to introduce our employees to the
method. The other critical component is utilizing expert subject matter expert support – both in training and
implementation of program management.
.


References

Managing Successful Programmes and MSP™ are registered Trade Marks of the UK Office of Government
Commerce

The Standard for Program Management – Second Edition, Copyright 2008, Project Management Institute, 14 Campus
Blvd., Newtown Square, PA 19073, USA

Office of Government Commerce, (2007), Managing Successful Programmes: Delivering Business Change in Multi-
project Environments Book, 8th impression, The Stationery Office, Norwich, UK.

Glenn Strausser, Joseph Sopko. Improving organizational project management maturity: a Siemens case study / PMI
Global Congress 2008--North America. Proceedings, ADV18NA08.PDF. 2008. Conference paper

Hobbs, Brian (2007), The Multi-Project PMO: A Global Analysis of the Current State of Practice, Project
Management Institute, Newtown Square, PA

Mittelstaedt, A., Lebsanft, K., (2008), Use and support of the PMI OPM3® Standard in conjunction with Siemens
internal Maturity in Project Management (MPM) Assessment protocol and Project Management best practice
methodology, PM@Siemens, 2008 PMI EMEA Global Congress Proceedings, Project Management Institute ,
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Organizational Project Management Maturity Model Knowledge Foundation (OPM3®) – Second Edition, Copyright
2008, Project Management Institute, 14 Campus Blvd., Newtown Square, PA 19073, USA

PMI (2003). Organizational Project Management Maturity Model. Newton Square, PA: Project Management Institute

Terry Cooke-Davies and Tony Teague, Is there anything new under the sun? The changing and unchanging faces of
project management. PMI Global Congress 2007--North America. Proceedings, TRN07.PDF.

Strausser, Glenn and Sopko, Joseph, Effective Organizational Change Management in Siemens using Managing
Successful Programmes Methodology: PMOs and other Key Success Factors, pp.239-248, International Journal of
Knowledge, Culture and Change Management, Volume 9, Issue 1, 2009

Strausser, Glenn; Sopko, Joseph; Barney, Stephen, Improving Organizational Project Management Maturity: A
Siemens Case Study, Series: ASQ World Conference on Quality and Improvement, Minneapolis, MN, Vol. 63, No. ,
May 2009, pp. 1-9, http://www.asq.org/qic/display-item/index.html?item=30302

Strausser, Glenn; Sopko, Joseph, (2007), PM@Siemens USA White Paper, Project Management Maturity: Siemens
Corporation, New York City, NY

Strausser, Glenn; Sopko, Joseph, (2007), Guide to Project Management Maturity: Siemens Corporation, New York
City, NY

Insights and Trends: Current Programme and Project Management Practices, The second global survey on the current
state of project management maturity in organisations across the world, © 2007 PricewaterhouseCoopers.

Sopko, Joseph, McDevitt, Kevin, Accelerating Organizational Project Management Maturity at Siemens, 2009 PMI
Global Congress NA, Orlando, FL


Strausser PMI Global Congress 2009 NA Paper

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