Project management office helps CIO navigate rough financial waters |
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By Linda Tucci, Senior News Writer, SearchCIO.com
04 Feb 2010 | SearchCIO.in |
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Sharon Gietl is CIO at The Doe Run Co., the largest primary lead producer in the western world, with annual revenue that fluctuates from $500 million to $800 million. To call her business environmentally volatile might be an understatement. From 2008 to 2009, the price of lead plummeted from about $2 a pound to 45 cents.
"We had to lay people off and cut budgets -- and that meant cutting projects," Gietl said in a phone interview from the company's headquarters in St. Louis. More recently, a sister company in Peru filed for bankruptcy. Then there are the ever-present and mounting compliance requirements associated with mining a heavy metal.
Her anchor in these rough waters? A tiny, two-person project management office (PMO) Gietl began pushing four years ago.
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The PMO keeps everybody honest. ... And it helps me keep my organization focused on what its priorities are; and that way, we can deliver actual business value, instead of trying to do everything.
Sharon Gietl
Vice president of IT and CIO, The Doe Run Co.
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Gietl is in her element, so to speak, at Doe Run. A chemistry and biology major in college, she was introduced to computer systems at the metallurgical labs at Peoria, Ill.-based Caterpillar Inc. There, she climbed the managerial ranks before moving with her husband to St. Louis and to an executive position overseeing IT and administrative functions at Petrolite Corp., a specialty chemicals company. When that business was sold, she moved out of her comfort zone in the late 1990s to oversee IT at -- make that introduce IT to -- the city's then-largest law firm, Bryan Cave LLC, which was still running DOS on its computers. She joined Doe Run as CIO five years ago.
Back in heavy industry, among like-minded engineers and scientists, she has succeeded in methodically pushing the 146-year-old company out of its comfort zone: The tiny, two-person PMO, backed by a project delivery system based on 1,600 pages of methodology, is managing projects across the business.
The test case for the PMO? A strategically critical project, valued at hundreds of millions of dollars, that will bring to market a water-based technique for smelting lead that significantly reduces the toxic emissions and energy generated by traditional heat-based methods -- quite a coup for a CIO.
How is Doe Run's strategic technology project going?
Sharon Gietl: We are now at a point where we are doing the detailed feasibility study and plan to have that finished this summer.
How did this enterprise-wide PMO get started?
When I was brought in, Doe Run needed to comply with Sarbanes-Oxley, and was bringing in a new ERP [enterprise resource planning] system. It was clear then that the company had not done a lot of project management and planning. So, as a member of the executive team, I talked to other executive team members and said we really need to form a project office. And it should not just be for IT, because IT [$5 million to $7 million] is such a small part of the spend. This really needs to be across the enterprise so we do a better job of delivering our projects on time, on budget and as planned.
Around about the same time, we had a new CEO coming on board. He had been a leader at Doe Run Peru. He is a very process-type person, whereas the former CEO was not. He said that if I could convince the rest of the executives that we needed this, he thought it was a good idea.
Any holdouts?
Probably the biggest obstacle was convincing our chief operating officer. He's worked for Doe Run or its various affiliated companies for 30-some years. This was the only culture he has known and the only way he has known how to do things. He said, "I'll make a deal with you." I had brought in a person I had worked with before, at Bryan Cave law firm. He told me I could keep this person as the lead for my project office and try it for a year, giving her an independent employment contract, versus making a long-term commitment. He said, "If you can convince us that we need this after a year, we'll go for it." We have gotten buy-in from the entire executive team, and that is where this needed to get sold first.
How has the PMO evolved since you championed the idea four years ago?
Each year we have set different objectives for the PMO. Now we have the whole project portfolio for the corporation prioritized. We started that by having people present their projects and their justification for their projects to the executive team and our senior leaders as part of our annual planning. People have to have done their scoping; If they haven't done all their homework, they can't present. They present in front of their peer group. Then everyone gets to give their opinions on where it should fall -- a must-have, should-have, nice-to-have. And we break up the projects into strategic, maintenance and compliance.
Which projects generate the most debate?
Typically, where we have the most discussion are those projects that are considered strategic. We can't do everything, so which ones are top priority and where we draw the line in terms of the capital we have available get a lot of discussion.
How do you define strategic?
A strategic project is one that is over $500,000 or has corporate-wide impact. So, for example, one of our projects was a new performance management system for people doing their goals and appraisals. That followed our project delivery system even though much of it was internally developed and it fell way below the $500,000 mark, because it impacted the entire organization.
You said your IT organization is lean, 25 people. How do you spread the word on taking a process-oriented approach to projects?
We have project managers throughout the organization, and they tend to be engineers. We work with them on what the process is, how they go about doing it; we hold classes on things like how to complete an authorization for expenditure, on basic project management, on Microsoft Project. Besides that, we have workshops. Those might be on topics like, how to do a SWOT analysis on the project, or on risk identification and risk mitigation.
Do you have an example of a project where all the options were not considered?
This happened when the executive team was just learning about the program management office; people had been to some business meeting where there were a bunch of mine management vendors, and had seen software systems that looked "just awesome." They started bringing the companies in. Initially we were not invited, but heard about this only later. We found out the software was going to be X millions of dollars, and no one was thinking about the rest of it. We said, "If the software alone is this much, what do you think the hardware, the implementation and the amount of change it brings to the organization will cost us? You might as well take that software number and multiple by two or three." It was something they were not familiar with and weren't thinking about.
Our participation really helped them think through it, and we were able to work together. It was really the business that decided there was not enough value-added to make the change. That project, in and of itself, was a big help to the business.
How has having a PMO made the IT department better?
Because we have this process where everybody presents and we prioritize, it is easier for me from a demand-management standpoint to say, "Oh, that is not on the priority list." For example, we had some folks come to us who were doing some demos of a communication system to monitor our large underground equipment that transports the ore back and forth. We talked to the division general manager, and I said, "Where does this fit into your plans? I don't see anything on it." And he said, "I don't even know what you're talking about!"
So, the process helped bring light to him on some projects that, I hate to say it, might have been underground and he might not have known about. He said, "Oh no, we're not going to do it this year; we're looking at an alternative." Which was a little different from what we heard a month before that.
The PMO keeps everybody honest and helps keeps the organization focused on what the priorities are. And it helps me keep my organization focused on what its priorities are; and that way, we can deliver actual business value, instead of trying to do everything.
What do you tell other CIOs about the benefits of a PMO?
It allows you to be embedded in the business. You're not just seen as over there and to the side.
Let us know what you think about the story; email Linda Tucci, Senior News Writer
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