One of our objectives in putting this book together was to give readers exposure to a variety of real-life PMO and portfolio management case stud- ies. The case studies illustrate what actual PMOs are doing to bring impor- tant value to their executives and their organization. The case studies we gathered represent a variety of industries, as well as for-profit and not-for- profit organizations. We are extremely grateful to the contributors, who volunteered their personal time to make this knowledge and these insights available to our audience. We are also grateful to their organizations for releasing the information.
CASE STUDY — AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
WHO IS THE AICPA?
The American Institute of Certified Public Accountants (AICPA) is the na- tional, professional organization for all Certified Public Accountants (CPAs).
Its members range from those in industry to those in public practice, gov- ernment, and education. Its mission is to provide members with the resources, information, and leadership to enable them to provide valuable services in the highest professional manner to benefit the public, as well as employers and clients. More specifically, the AICPA:
■ establishes professional standards; assists members in continually improving their professional conduct, performance and expertise;
and monitors such performance to enforce current standards and requirements
■ promotes public awareness and confidence in the integrity, objec- tivity, competence and professionalism of CPAs and monitors the needs and views of CPAs
■ serves as the national representative of CPAs before governments, regulatory bodies and other organizations in protecting and promot- ing members’ interests
■ seeks the highest possible level of uniform certification and licens- ing standards and promotes and protects the CPA designation
■ encourages highly qualified individuals to become CPAs and sup- ports the development of outstanding academic programs.
WHAT PROJECTS DO THEY WORK ON?
Given the diverse nature of the AICPA, there are close to 60 teams in the organization. Further, there are close to 2000 volunteers who help support and provide guidance on behalf of the various member constituencies. For example, the Business and Industry Executive Committee provides guid- ance to AICPA activities related to members in industry such as controllers and financial managers. At any given time, there could be hundreds of ac- tivities, some being categorized as projects.
The projects generally can be segregated into the following categories:
■ computer systems development to improve the efficiency/effective- ness of operations
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■ communication initiatives to promote and strengthen the profession’s image
■ product development to provide members information and educa- tion
■ standards development for financial statement auditing and other attestations
■ services development for members to provide clients
WHY DID THEY ESTABLISH A PMO?
Given the highly fragmented and functional nature of the organization, many times it was difficult to coordinate, let alone be aware of, all the team activi- ties. This led to individual teams identifying and desiring projects related to their segment of the membership but did not allow senior management to properly prioritize the collective Institute’s initiatives. Senior management was left to the annual budget process, and associated quarterly update meet- ings, when each team would come to the table requesting project funds.
The AICPA also appreciated the benefits of project management prac- tices as projects using them would, on average, be more successful. The issue was that they needed these practices spread across the entire organiza- tion to ensure the predictability of outcomes. Like many organizations, the AICPA project managers were more accidental than those trained in the industry standards.
HOW DID THEY INITIALLY ESTABLISH A PMO?
Given the need for more coordination and predictability of projects, the AICPA’s Board of Directors suggested to management that a project office be developed to oversee and report on the activities of all projects. They suggested that such an office be placed close to the CEO’s office to provide executive sponsorship.
Although on paper this appeared to be an appropriate strategy, it did not take into account that the AICPA was a complex beast. With over 60 teams and thousands of volunteers providing guidance, a culture shock would en- sue if all activities needed to be managed with certain project principles and through one central reporting function. Therefore, it was decided to have the PMO initiate as a consultative rather than oversight body. The mission of the PMO was then set as: “Through consultative engagements with project teams, to sew best practices into the fabric of the AICPA, fostering increased success of the organization.”
With a mission in hand, the PMO set out to develop a referential base of internal clients. Teams requesting project management assistance saw the
benefits of such practices while also gaining successful closure to their projects. The PMO benefited through an improved reputation, more inter- nal client requests, and, most importantly, an ability to gain access to the underbelly of key projects. Project status information that would never have been provided to an oversight body was now available while the PMO as- sisted teams. As the PMO became more consultative and operational in na- ture, it began reporting to the COO instead of the CEO.
HOW DID THE PMO EVOLVE?
With a stable base of internal clients and project teams beginning to utilize industry-standard project management principles, the PMO was in a posi- tion to expand its reach. In response, the PMO adopted a project life cycle along with associated training programs.
The project life cycle was sponsored mainly by the COO who, in con- junction with the CFO, provided funding to all projects. Therefore, in order to receive project funding, projects needed to follow the life cycle. Prior to the life cycle, project funding did not have a standard method of being ap- plied. The life cycle defined a project, and the associated steps from incep- tion the establishment of the maintenance programs. Unlike many processes that depend on standard forms, this one provided guidelines. The process was not overly cumbersome and just made plain business sense. Therefore, a business case (one of the process steps) for a project could arguably be written on the back of a napkin, assuming it was an excellent case.
Although teams appreciated the freedom the guidelines provided, most utilized the preferred forms as they increased their efficiency. This was es- pecially true given the forms were provided in an easy-to-use guidebook available on the Institute’s intranet. For example, if a project needed to hire a vendor, it was much easier to use a request for proposal and contract tem- plate than write one from scratch. The forms were viewed more as tools and, hence, gained more Institute acceptance.
By instituting the life cycle, teams were more willing to identify projects and request assistance from the PMO in following the life cycle. With this, the PMO had the foundation to create a project inventory, as well as track project status on a periodic basis. Again, instead of standard status reports being sent to the PMO, the PMO would periodically meet project teams, discuss project status, and adjust the inventory schedule appropriately.
Currently, the PMO tracks projects bi-weekly for schedule, cost, and risk management status in a simple Excel spreadsheet. The results are en- tered into a project inventory for analysis and prioritization by senior man- agement. The PMO also provides regular training in the project life cycle and fulfills requests for project management assistance in the areas of:
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■ business case writing
■ vendor selection and contracting
■ software development life cycles/standards
■ project risk management
■ project planning
WHAT BENEFITS RESULTED FROM THE PMO?
In order to manage the performance of the PMO, performance measures were set for a one-year period. See Table 1.1 for specific metrics. All per- formance measures were met and, in some cases, exceeded. Specifically, the PMO provided “bottom line” savings in the following areas:
■ Integrating and, therefore, eliminating duplicative software devel- opment projects among teams who had similar objectives
Table 1.1 Performance Measures for 1 Year of the AICPA PMO
Input Process Output
Over 50 people trained in Number of days to apply Positive evaluations (4 out project management funding to projects that of 5) of the training
have a business case to materials/program though receive funding anonymous surveys Over 20 people trained in Number of projects where Project savings of over project community all necessary teams were $500,000 due to positive
coordinated with prior to evaluations provided by the start of the project the PMO
Projects planned to finish Number of projects Positive impact (qualita- in 2002 occurring outside of the tive and quantitative)
process (this is expected to of lessons learned as be kept to a minimum) captured as part of the
project budgeting system AICPA’s software life cycle Positive evaluations followed on all technology (4 out of 5) of the
projects PMO’s services though
anonymous surveys Reduction of a minimum of five projects or
$1,000,000 that had no business case or through integrating projects
■ Coordinating activities across more than 20 teams for a major AICPA initiative related to reducing fraud in the marketplace
■ Improving the business case and planning of initiatives, which led to improved execution and impact for the membership
■ Developing a best practice software development documentation stan- dard and associated vendor contract to ensure computer system in- formation assets are properly captured for later use
■ Using a parametric tool across practically all software development projects to independently estimate the project’s size and aid in the vendor negotiation process
■ Capitalizing salary costs (thereby reducing current year expenses) associated with projects that, prior to the project inventory, were not able to be identified
WHERE IS THE PMO GOING FROM HERE?
After two years, the PMO and project management are starting to become an AICPA norm. The PMO is finding a place in independently coordinating activities across multiple teams, as well as assisting managing risk across the entire organization. However, one of the ulterior motives of the PMO when it was established was to disband the function over time. Returning to the mission statement, the PMO exists to “sew best practices into the fab- ric…”. Therefore, as AICPA teams further integrate project management principles into their daily work, there will be less of a need for a PMO, but there will be more successful projects, better prioritization of projects, and an improved coordination of initiatives.
ABOUT THE CONTRIBUTOR OF THIS CASE STUDY — RICHARD B. LANZA, CPA
Rich Lanza currently heads up the PMO at AICPA. Rich has written nu- merous articles on audit technology for trade publications.
Rich received his undergraduate degree in public accounting from Pace University. He is a past president of the Northern Virginia Chapter of The Institute of Internal Auditors, and is a member of the IIA, AICPA, ISACA, and the AICPA’s Information Technology Section.
The author’s opinions expressed in this article are his own and do not necessarily represent the policies or positions of AICPA. Official positions by AICPA are determined through certain specific committee procedures, due process, and deliberation.
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