A part of the program control is project issues escalation, a process where issues that cannot be resolved by the project manager will be presented to more senior executives (e.g., the project’s sponsor, the project steering committee, or even the CEO), who will have the final say. Steps and processes followed in the escalation model can be similar to the dispute resolution model in the organization. The presence of a third independent party, such as the PMO, is necessary because it gives more credibility to the decision in the eyes of the disputing parties.
The first step involves the project manager’s informing the PMO and requesting an issue resolution by a third party. In this instance, the PMO attempts to arbitrate the issues prior to escalating them to the next level. The PMO also documents the proceedings.
However, there are also instances when the escalation is initiated by the PMO, such as when the PMO identifies that a certain project is not run according to the organization’s project management standard and is thus having negative impacts on the company (e.g., l oss of money, project delay, and so on). In these circumstances, the PMO first discusses the matter with the particular project managers on their capabilities in correcting the problems, before escalating the issues to senior executives.
When an issue cannot be resolved at the project level, there are a number of escalation levels, each taking the issue to the next higher level of management. At each level, the authority, in consultation with the other stakeholders, will attempt to provide a timely resolution to the issues.
The project manager escalates issues related to clients, vendors, or other third parties (for example, contract-related disputes over the terms of budget or completion date) to the PMO. Usually, the type of issues brought up to the PMO are more project related and small in scale (in comparison to issues brought up to level 2 and 3). The PMO then acts as an independent arbiter between the project and the other party (i.e., it reviews the contract and facilitates a negotiation between the two parties).
When project issues cannot be resolved within the project, even with the assistance of the PMO, then the PMO facilitates the escalation process to the project sponsor. Thus, in the preceding example, assuming the PMO cannot resolve the contract dispute, it brings it up to the senior executive who’s in charge of overseeing the project. For example, if the project is commissioned by the research and development department, the departmental head will have more authority than the PMO to make a decision to, say, allocate more money from the department to the project, thus ending the dispute with, say, the vendor.
When issues still cannot be resolved by the project sponsor, the PMO escalates them to the project executive committee level. The committee, which has the company’s senior executives (e.g., CEO, CFO, member of the board of directors, and so on), takes into account inputs from the managers, the PMO, the clients and vendors, and the project sponsors to come up with a resolution. The project executive committee’s decision is final.
The PMO’s responsibility for managing the organization is the most complex role it has on its plate. It is in an iterative process that involves various parties with varying interests, making it a delicate balancing act. In this chapter, we decided to not delve too much into the poliical issues (whose resolutions and negotiation methods have been provided in numerous managerial books). Instead, we equipped readers with simple tools that will allow the PMO to carry out its program monitoring and control tasks in the most objective manner.
Lia Tjahjana has more than seven years of project management experience in various industries, including finance and construction, both in the public and private sectors. She is co-author of The Program Management Office Advantage.
Paul Dwyer, PMP, has been involved in project management in the financial services industry for over ten years. A senior development manager for Fidelity Investments, Paul is also president of the Ireland Chamber of Commerce United States, New England Chapter, a trade organization based in Boston, and he runs their small business incubator center in the city’s financial district. He is co-author of The Program Management Office Advantage.
Mohsin Habib is associate professor of management at the University of Massachusetts, Boston. He received his Ph.D. in Strategic Management from the University of North Carolina, Chapel Hill. He teaches Strategy and International Management at the University of Massachusetts and the Harvard University Extension School. He is co-author of The Program Management Office Advantage.
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