SOLUTION: CIS 600 Colorado State University AtekPC PMO Case Study

CIS600 – Project Management
Case Study 8: AtekPC PMO (50 points)
Due April 29, 2020
Case: AtekPC Project Management Office, F. Warren McFarlan, John Hupp and Mark Kell,
Harvard Business Publishing (9-308-049).
Key elements:



Project Management Office (PMO) models and effectiveness
Strict governance vs. flexible project management processes
Alignment with business strategy and goals
Questions:
1. Why does AtekPC believe they need a PMO? What problems are supposed to be
solved by the PMO? What is the mission of the PMO?
2. What factors are critical to effective PMO implementation at AtekPC? What
resistance will the new model face? What can Strider do to help ensure a
successful roll-out of the new model?
3. Should AtekPC abandon the PMO, implement a PMO-light model, or implement a
PMO-heavy model? Explain your answer.
For the exclusive use of J. Williams, 2020.
9-308-049
OCTOBER 11, 2007
F. WARREN MCFARLAN
MARK KEIL
JOHN HUPP
The AtekPC Project Management Office
A rain had started in the early evening of March 3, 2007, and the streets of Metropolis were cold
and grey where the AtekPC headquarters were located. As John Strider, CIO for AtekPC, packed up
his briefcase at the end of the day, his thoughts returned to the new Project Management Office
(PMO) that he had approved several months ago. During his tenure of over twenty years at AtekPC,
Strider had never witnessed the kinds of pressures that were now facing the personal computer (PC)
industry. Strider recognized that the industry was in transition and that his Information Technology
(IT) organization would be involved in some critically important projects in the days ahead, as
AtekPC sought to take a leadership role in these changes. It was that thought which brought to mind
the PMO initiative. If it were implemented right, this PMO could be a big help to AtekPC, but Strider
had concerns about what might happen if they tried to push too hard with this idea. Instead of a help,
it could become another item on his growing list of problems. There were so many questions on his
mind:
How much PM is enough PM? How much PMO support is enough PMO support? When
do you get to the point that the PMO structure and process is enabling productivity and
contributes to a more successful outcome with fewer mistakes and a higher quality result—
whatever you define success to be at the beginning? And when does PM involvement become
administration for its own purposes? When do you cross the line?
Strider thought that he understood what this PMO could do for AtekPC, but the initiative was still
in its infancy. It needed time to prove itself. On the one hand, his management team had hired some
experienced people with real talent to spearhead the PMO program. On the other, they were new to
the PC business and to AtekPC. They didn’t understand how powerful the culture was here, he
thought. As Strider expressed it, the PMO had to become a part of the AtekPC culture, and that
required small changes over a long period of time. If the PMO found itself fighting against the
culture, it would definitely fail. As CIO he was keenly aware of the many initiatives and
responsibilities that he had to cover with his limited resources, and he knew the PMO was only one
of these. He couldn’t let things drop just to build up this new PMO. It all had to be done together.
Strider knew that his people who were working on the PMO were frustrated that they could not
move faster. He, too, was tempted by the thought of rapidly loading up the PMO with more
resources and knocking out projects. But in his opinion, that would be a bold and short-lived
initiative—too much, too soon, too fast.
________________________________________________________________________________________________________________
Professor F. Warren McFarlan, Professor Mark Keil of Georgia State University, and John Hupp (MSIS 2007) prepared this case. Certain details
have been disguised. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of
primary data, or illustrations of effective or ineffective management.
Copyright © 2007 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical,
photocopying, recording, or otherwise—without the permission of Harvard Business School.
This document is authorized for use only by James Williams in CIS600 Spring 2020 taught by Tim Rodgers, University of Colorado – Boulder from Jan 2020 to Jun 2020.
For the exclusive use of J. Williams, 2020.
308-049
The AtekPC Project Management Office
Strider closed his briefcase and headed for the elevator. His IT senior management team had been
with him many years. He felt confident that he could lead them on the right path without dampening
their enthusiasm for this new PMO. But would that be enough? To Strider the payoff was about
alignment—aligning strategic business directions with IT resources, and that was the essence of the
PMO. There was little margin for mistakes at AtekPC in these changing times.
Industry Background
The PC industry was experiencing tremendous cost pressure and was undergoing a period of
consolidation. As profit margins fell, PC makers were launching cost reduction strategies aimed at
further improving the efficiency of their supply chains, while lowering the cost of distribution.
According to a recent newspaper article:
The latest financial results for PC makers show a slow down in both sales and profitability.
Both corporations and consumers are holding on to their PCs for a longer period of time to
avoid the cost and hassles associated with upgrading their equipment. As a result, purchases
are being deferred and PC makers are looking at new markets for growth opportunities. The
industry appears to be undergoing a wave of consolidation as cost control and scale become
more important than ever before.1
In 2007, a major news magazine ran a cover article entitled “Whither the PC?” The threats
reported in their analysis were worldwide and stemmed from a variety of factors including the
growing popularity of mobile phones, PDAs and web-based application software.
For most people, email is the most important application that they use. For a long period of
time, sending and receiving email necessitated having a full-fledged PC. Nowadays, though,
businesspeople and consumers want to reap the benefit of being able to access email from
anywhere 24/7 without the inconvenience of carrying a notebook computer around with them.
Mobile phones and PDAs now provide this functionality, causing many people to question the
need for carrying a full-fledged computer. In the boom days of the PC, the market was
boundless, but growth has slowed considerably. Moreover, with the growing popularity of
web-based applications, both businesses and consumers are purchasing less expensive
machines that can access and run web-based applications and do not require massive amounts
of local processing power or storage. Having ignored reality for years, PC makers are at last
doing something. In order to cut costs, they are already streamlining their operations through
the use of information technology and looking at new products and new markets to maintain
revenue growth and boost profitability.2
AtekPC
Founded in 1984, AtekPC had grown to become a mid-sized U.S. PC maker with 2006 sales of $1.9
billion. AtekPC employed 2100 full-time workers and an additional 200 part-time workers. In spite of
its history of rapid growth in the 1990s, AtekPC found itself struggling alongside the world’s other
PC makers as they grappled with the transition from a growth industry to that of a maturing
industry. Strider explained:
1 Smith, David, “PC Makers face increased price competition and industry consolidation”, Metropolitan News Journal, February
17, 2007, p. B7.
2 “Whither the PC?”, Global News, March 20, 2007, p. 9.
2
This document is authorized for use only by James Williams in CIS600 Spring 2020 taught by Tim Rodgers, University of Colorado – Boulder from Jan 2020 to Jun 2020.
For the exclusive use of J. Williams, 2020.
The AtekPC Project Management Office
308-049
The PC industry has changed and will continue to change at an accelerating pace. At one
point, the PC industry enjoyed tremendous growth rates and good profit margins. As a result,
we tended not to be as careful as we should have been about controlling costs and dealing with
competitive threats. Now, of course, the picture has changed and we are facing increasing
competition from Asian PC makers that have transitioned from contract manufacturing to
marketing their own branded PCs.
The PC industry is going through some consolidation as larger players acquire smaller
players in order to achieve greater scale. So, that is the back-drop of our industry today. We
have a stronger need than ever before to be aggressive and to move quickly so that we can
reduce costs and tap new markets. We need to become a much more agile company so that our
capabilities are more consistent with our name implies. In the future, we are also going to have
to be much more savvy in terms of our use of IT or we will risk either becoming unprofitable
or becoming the target of a hostile takeover.
By the fall of 2006, AtekPC had already begun several initiatives aimed at positioning the
organization for the future. One of these was the establishment of a Strategic Planning Office whose
responsibilities were to propose business changes. Under the auspices of the Strategic Planning
Office, the initial PMO effort which was focused on IT projects would one day become an enterprise
PMO. AtekPC recognized that they would have to be able to manage projects more efficiently and
effectively in order for the proposals of the Planning Office to succeed. By March 2007, both the
Strategic Planning Office and the initial PMO had only been in operation for a few months.
According to Strider, AtekPC was under increasing price competition and management was under a
lot of pressure to make sure every action had a visible payback.
Information Technology at AtekPC
Over the years AtekPC had developed an extensive portfolio of applications. These applications
were principally focused at the operational level for business functions typical of a PC maker, such as
accounting, sourcing, manufacturing, sales, and distribution. Architectural integration of these
application systems was only moderately achieved, so that by 2007, functional areas were often
provided discrete information services with little cross-functional integration. Information systems
projects were typically operational or maintenance efforts undertaken at the request of a particular
functional area. They were generally small to medium-sized projects in terms of both size and
duration, and they were managed informally without standardized practices. As the Director of
Application Development, Richard Steinberg explained:
Historically, we had always just done our own thing. We had a lot of operational projects
going on and a lot of enhancements going on, but we had very few enterprise applications
going on. . . . Over the years, there were certain people throughout the company that
recognized that the quality of the work that we did on projects could be improved. As we
began to take a look at what we needed to do in the future, we realized that we had to really
hone our skills to be able to move more aggressively and sure-footedly through projects and to
be able to handle multiple projects at one time. So I put together a plan for a PMO, essentially a
project management methodology for all my areas.
The changing environment that AtekPC faced created a number of challenges which they were
planning to address with projects of a large, complex scale. The new PMO was being introduced in
order to provide standardization in managing these projects and to gain improvements in the
planning and performance of the initiatives. Although AtekPC had undertaken a few large projects in
3
This document is authorized for use only by James Williams in CIS600 Spring 2020 taught by Tim Rodgers, University of Colorado – Boulder from Jan 2020 to Jun 2020.
For the exclusive use of J. Williams, 2020.
308-049
The AtekPC Project Management Office
the past that had employed some formal practices, these projects had not resulted in lasting
formalization of practices. Steinberg explained:
You can go back over the years, to Y2K, to the conversion of our order management system;
on those major projects they used a project management approach. They didn’t realize it. They
got everyone together; they talked about what it’s going to take to get this done, and they got it
done. Everyone handed out awards and said, “That was done well. So now that we’re through
with that, we’ve got to get back to doing projects normally.” They didn’t realize that that is the
way to do it. All of a sudden when those major things go away, when that disappears, then
you go back to trying to do things out of your back pocket again.
In 2007, IT projects were typically managed by adding PM responsibilities to one of the
development staff who were assigned to specific functional areas. For example, the Lead Analyst
assigned to Manufacturing would also play the role of project manager. Lead Analysts supervised
workgroups of analysts and programmers of varying skill levels, and they were responsible for
satisfying the requests of the functional areas as well as the performance of their workgroups. Using
an informal project initiation process, users requested IT services through the Lead Analyst who then
managed the project with the support of the resources within their workgroup. The manager, in this
case the Manufacturing Systems Manager, resolved any issues and conflicts, if needed; otherwise, the
request was received, executed, and delivered through the Lead Analyst. Project methods,
documentation, practices, and tools were individualized by the Lead Analyst with little or no
consistency across IT groups or business areas.
AtekPC had realized many benefits from this informal approach to projects. Lead Analysts often
had long tenures in their areas and developed a deep knowledge of the business activities, needs, and
people. As a result of their informal approach, they provided rapid response to user requests and
were able to balance emergent critical needs within their workgroups with few conflicts. Because of
this record of responsive delivery, considerable trust was developed between the functional area and
their Lead Analyst. The trust-based relationship was highly personalized to the individual employee,
and loyalties arose from both sides. The openness of these relationships enabled the Lead Analyst to
gather and assess quickly the requirements and to reach consensus on a schedule and delivery date.
Linda Star, a Lead Analyst for Manufacturing, described her work in this role:
In my world I have a variety of users that I talk to. They would say, ‘I need this.’ Some
would say, ‘I really need this. Can I get this? This is an emergency, and I have to have it.’ I
would come back, and I would look at what my people are working on and say ‘I need you to
switch gears. I need you to give me two hours, two days, or whatever it takes. We need to get
this little piece done.’ … I do a schedule based on what everybody in my group is doing and
what I know after talking with them.
4
This document is authorized for use only by James Williams in CIS600 Spring 2020 taught by Tim Rodgers, University of Colorado – Boulder from Jan 2020 to Jun 2020.
For the exclusive use of J. Williams, 2020.
The AtekPC Project Management Office
308-049
This informal approach to project management had traditionally been the norm at AtekPC.
Historically, the prevailing view was that IT was peripheral to the core business activities at AtekPC.
As a result, IT had been seen as an order-taker, expected to provide service on demand. During the
past decade, projects had become increasingly focused on operations and maintenance in an overriding effort to improve efficiencies within the business functions. The development of crossfunctional integration systems and the use of internet technologies were only two of many emerging
needs as AtekPC struggled with radical changes in its industry and marketplace. The required new
projects were larger, more complex and they involved multiple functional areas and multiple
technological areas unlike the tightly focused projects that were performed in the past by a single
workgroup. The demands of these new initiatives and projects were expected to overtax the current
informal project management methods. The AtekPC PMO was being implemented to provide more
consistent and better practices for both business and IT projects. However, implementing a PMO at
AtekPC was itself a challenge which required skillful management to be successful. A difficult
balance had to be maintained both between maintenance and new development as well as between
resources that went into development activities versus resources that went into project management
activities under the new PMO. Strider described the challenge:
We don’t have it all figured out. That’s better than thinking you do when you don’t. In the
IT department we have to be better able to manage the conflicts between new business critical
initiatives and operations with incremental changes to existing systems. We cannot sacrifice
one for the other. The history is that we’ve only done operational maintenance, and now we’ve
got to have a culture of doing both.
PMO Mission
The mission of the AtekPC PMO had been gradually evolving since its inception in late 2006. As
of spring 2007, there was not a complete consensus regarding its purpose, its responsibilities, and its
authority. While formal documentation and plans for the PMO did not exist, the immediate goal was
to establish the office and to prove its value. The general consensus was that the purpose of the PMO
was to realize the benefits derived from consistent project practices. Although not clearly specified or
measurable at this time, these benefits were expressed in a variety of terms ranging from IT
improvements in project performance, efficiency, and resource utilization to enterprise
improvements in cost management and corporate capability to launch products. Steinberg explained
from the enterprise perspective:
If I think about the PC industry and its challenges, I think about two things that could be
driving for a PMO. One might be cost reduction. We cannot afford to be careless. Frankly, we
have to be a lot more cautious about how we use our resources. Another motivation to get
better on projects would be that we have to get more creative, adaptive, and agile in launching
new products. And in order to launch new products, what would you say is driving those
initiatives but project management?
The responsibilities of the PMO were not so clear, however. At present the responsibilities of the
PMO were limited to IT projects, although there was ongoing discussion about expanding its scope to
an enterprise level PMO that would include business projects in the future. The specific duties of a
PMO were typically divided into two categories: project-focused and enterprise-oriented. Projectfocused responsibilities such as consulting, mentoring, and training were services that enabled the
success of individual projects. On the other hand, enterprise responsibilities addressed services that
might improve all projects such as portfolio management, PM standards, methods, and tools, and …
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