Rethinking the program management office (PMO)

The past several years have seen many points of view on the value of a program management office (PMO).  Some recent studies have shown an actual decline in the number of companies utilizing PMOs. The irony of the situation is that the desire and necessity for businesses to transform to meet ever changing market forces is only increasing. To remain relevant and beneficial to the business, a PMO’s role and focus must transform.

Project standards are important, but aligning diverse constituencies is even more so
Traditionally, a PMO is defined as, “a group or department within a business, agency, or enterprise that defines and maintains standards for project management with the organization.” In organizations of any size or complexity, this can be a monumental task. There are many dynamics affecting the culture and make up of today’s businesses: mergers and acquisitions, varied and dynamic workforces, outsourcing, partnerships, aging workforces, and others.

Through our experience with large-scale transformational efforts over the past several years, we have found that an effective, focused PMO is a critical component for successful completion of any major program or project effort. While implementing project management standards is important, getting varied and diverse constituencies all on the same page is even more so.

Common themes
Today, just about every company focuses on two objectives: driving profitable growth, and cutting operating costs while getting stronger. While the objectives may be straightforward, many factors—including changing global, regulatory, and competitive challenges—can inhibit a business’s ability to transform.  

When a company decides to focus on a major transformational effort, we typically see a number of consistent themes. These include:

  • External pressure to complete the initiative. Typically, a significant event triggers the need to transform; for example, a carve-out of a division or product line, a pending merger and integration effort, changes in regulations, and/or a competition-driven initiative such as a new product or service introduction.
  • The scope of the effort involves multiple departments or divisions within the organization. One of the most critical roles of a transformational PMO is to drive cross-functional alignment. Just about every major transformational initiative involves a major process that is central to the business’s operating effectiveness and affects multiple constituents.
  • External partners are an essential part of the overall solution and effort. Multiple partners and vendors often are a critical component of transformation; in many cases, these are outsourcing providers for certain functions and/or processes. These interactions require a high degree of management to ensure clear delineation of roles and responsibilities. These efforts also typically involve multiple technology partners, particularly now given the proliferation of “cloud solutions” and “best of breed” technology portfolios.
  • Information technology is a key enabler. People, processes, and then technology must be the driving force behind any transformation. It’s critical that the technology component be viewed as an enabler of change, not the driver of the change.

Critical success factors
In our experience, a transformational PMO is critical to the change effort and must serve as the core driver of the program. Certainly it’s important to have consistency and cadence relative to program execution, but the PMO must dive much deeper, working hand in hand with executives and sponsors to ensure:  

  • Clarity around the program’s scope, goal, and expected benefits. Far too often, we see programs where the goals or issue(s) aren’t clearly and distinctly defined. There must be a clear vision of what the business or affected operating model will look like at the end of the project.
  • Each affected team understands (at least at a high level) their component and impact on the overall goal. This helps the team understand how it fits into the larger effort.
  • Sufficient metrics are in place to track and manage not only progress of the work effort, but also progress toward achieving goals. Project plans, including milestones and budgets, are but one key metric among those that must be tracked. It also is important to identify, communicate, and manage critical path items and core dependencies.
  • Cross-functional risks and issues are tracked, communicated, and driven to conclusion. Teams, functions, departments, and divisions cannot operate in a vacuum. Risk and issues (as appropriate) must be tracked, escalated, and resolved in a timely manner.
  • Process and culture changes are at the forefront of the effort. Change management is a critical component of any successful transformation effort. People inherently do not like or want change. Do not underestimate the positive effect of a disciplined and professional change management approach.
  • Clear roles, responsibilities, and accountabilities are identified, communicated and updated as changes to the program effort occur. Clarity around roles and responsibilities is a “must” so that program leaders can clearly communicate and manage accountability. Changes will occur as the effort progresses, so consistent and continuous communication is vital.

Enabling successful transformation
By utilizing the PMO in this manner, stakeholders will view the team driving the PMO as a transformation agent and not just some bureaucratic organization that must be placated to keep management happy. Typically, a small and focused PMO team works best. This team should be completely focused on the effort (i.e., no other major commitments) and be willing to jump in to resolve issues and conflicts and bring adequate executive attention to the program when needed.

When properly focused, an effective transformational PMO aligns strategy, people, processes, and technology around a common set of goals and milestones to enable successful business transformation.

West Monroe Insights
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