A new approach for enabling your IT program to achieve results
The program management office (PMO) has earned its stripes as the method of choice for guiding large information technology (IT) programs to the finish line on time and on budget. But today, that may not be enough. Leaders are under more pressure than ever to deliver and show business results from their technology programs—and to adapt technology rapidly to adjust to changing business demands. Many of these leaders work with the assumption that if the program fundamentals remain on target, they will achieve the targeted outcomes.
In truth, that does not always happen. While PMOs are designed to keep programs on track, they are not structured to ensure that business results are delivered, and while they are certainly related, those are two very different things. If you have ever delivered what you thought was a successful technology program, only to be met with an underwhelming response, you already know the difference.
A New Yardstick for Success
A results management office (RMO) is an extension of the PMO that provides a framework for achieving the successful delivery of program objectives. An RMO increases focus on the business outcomes a program can deliver, directly links programs with broader organizational strategy, and provides for effective business and technology integration. The RMO model requires organizations to rethink and reprioritize their approach to program management. Exhibit 1 shows the four components of the RMO.
Exhibit 1. Components of the RMO
The RMO approach takes the traditional management functions of scope, quality, schedule, budget, resources, and risk to another level by focusing on these areas:
- Program Strategy and Mission Alignment: RMOs are designed to cultivate deeper understanding of the organization’s strategy and align program goals with those of the organization.
- Domain Authority: RMOs depend on a team of leaders who have the deep domain-specific knowledge needed to achieve integration.
- Organizational Readiness: RMOs establishes and maintains throughout the life of a program a strong emphasis on the importance of organizational dynamics and human factors in program success.
In this paper, we will explain how an RMO can expand on and enhance the PMO, and we will offer some specific guidance on ways to build an RMO-based approach using the assets and approaches you already have in place, sharing real-world stories of RMOs along the way.
Program Strategy and Mission Alignment
Organizations launch technology initiatives to achieve a specific set of business and technical benefits. However, once the program is started, the teams responsible for implementation often tend to define success in a way that prioritizes schedule, cost, and scope over business needs. The RMO approach recognizes that benefits are the reason that organizations charter programs in the first place—and that these benefits can and do change along the way. As a result, the RMO places program strategy and mission alignment at the forefront of effective results management. Success for the program is defined in terms of the program’s ability to deliver the business and technical benefits that make sense as the program evolves. Exhibit 2 shows the key components of program strategy and mission alignment.
Exhibit 2. Key Components of program strategy and mission alignment
To achieve benefits, an RMO must have a specific definition of the benefits. Working with stakeholders, an RMO identifies and quantifies a particular set of benefits that are grounded in the business case of the program and align with the overall mission of the organization. Quantification is necessary in order to be able to objectively measure progress against them as the program moves forward. Programs then treat benefits the same as any other “release” component—schedule a timeframe to realize the benefits, allocating them to portions of the solution, and measuring them rigorously. In an RMO, benefits are the standard by which program success is measured.
If nobody is on the hook for measuring and reacting to business results, the odds of achieving those results are slim. In an RMO, therefore, benefits management becomes a formalized process just like any other PMO process. RMOs measure business benefits as rigorously as any of these traditional aspects of program management.
Managing—or even measuring—benefits can be harder than it sounds, and it is easy to get lost in a sea of data. When it comes to measurement, start simple. Use standard business measures that can be easily tracked and make sure you can obtain a reasonable baseline. It is also important to avoid the temptation to overanalyse the choice of measures. This is not an exact science. Be specific wherever possible, but remember that it can be just as valuable to identify overarching trends.
Exhibit 3. RMO in action
Program strategy, placed within the context of business benefits, becomes a critical lens in decision making: how do our choices affect our ability to deliver business benefits? What projects do we charter first? How do our chartered projects align with the strategy of the program and drive progress to achieving the benefits defined for the program? Benefits realization becomes a motivating factor in the decision-making model used by program managers and influences the decision style used for individual decisions. Delivering “on-strategy” becomes just as important as delivering on time and on budget. Exhibit 3 shows an example of an RMO in action.
Staying on strategy becomes much easier when the experienced business and technical specialists are in a position to guide the program. In an RMO, a domain authority is a team of specialists that provides those types of insights and professional judgment that keep the RMO on its strategic track. Domain authority is not about the ability to apply resources or expend funds. Rather, the domain authority is charged with a particular type of oversight of all projects operating with the program portfolio. Exhibit 4 shows the key components of domain authority.
Exhibit 4. Key components of domain authority
A domain authority is comprised of thought leaders rather than delivery managers—specialists who bring deep business and technology experience and are responsible for establishing a common business and technical architecture for the program. They are people who understand how technology enables the business, and can drive the program in a direction that delivers the results customers need. Just as important, they have the authority to make, communicate, and enforce decisions about program strategy, integration, and implementation throughout the life of the program.
The Domain authority “connects the dots” between the benefits of the program and tactical execution, delivering relevant, specific knowledge to the people who need it most. It defines the path forward and facilitate that projects develop components that are cohesive with the overall solution architecture. When business needs shift, the domain authority stands ready to make the appropriate changes to create the specific solution that satisfied those changing needs. This type of oversight by the domain authority greatly increases the likelihood that individual projects can integrate smoothly, deliver intended results, and drive the program forward. Exhibit 5 shows an example of an RMO in action.
Exhibit 5. RMO in action
Engaged and committed stakeholders play a big part in the success of any program. Even the best-managed programs will fail if the organization is not ready to adopt the solution and respond to changes in the way it does business. For RMOs tasked with driving significant change, this is not something to leave to chance. Exhibit 6 shows the key components of the organizational readiness (Exhibit 6).
Exhibit 6. Key Components of organizational readiness
As is true with traditional PMOs, stakeholder engagement is critical to the long-term adoption of the program solution, and achieving the results of the program. Embrace stakeholders early and bring them along on the program journey. They may not know exactly what they want, and they will have questions. That is okay. In fact, it is welcome. Make stakeholders key players in problem solving from the start and you will wind up with a solution that is much more likely to be adopted by the organization.
The RMO approach takes a broad view of organizational readiness, starting at the very beginning of the program and extending through its life cycle. These are the four components of the RMO’s organizational readiness:
- Sponsorship: Effective programs are supported by strong executive sponsorship. In the RMO approach, one or more senior executives will own, guide, and champion the program. This helps to facilitate that organization agrees with what the program is trying to achieve, at the necessary levels.
- Organizational Change Management: RMOs require a commitment to stakeholder engagement and change management. The RMO approach champions entire organizational change management to incorporate stakeholder needs into program priorities, reduce unknowns and mitigate potential fears. The goal remains the same: an organization that is prepared, trained, and ready to adopt change.
Exhibit 7. RMO in action
- Outreach and Communications: An RMO is both an owner and an integrator of programs, which is reflected in the way an RMO communicates. A coordinated set of projects marching towards a common goal (the program benefits) needs a correspondingly coordinated plan and method for communicating. Transparent and consistent stakeholder communications keep stakeholders informed of the evolving program solution and how the program will impact their organizations.
- Training: By their very nature, programs entail implementation of broad solutions. An RMO must take a program-wide view in defining training needs and facilitating that the organization is prepared with the necessary skills and support to embrace the program solution.
While these components may seem familiar, the fact is that in practice, they are often overlooked. In an RMO, they are built into the process. Exhibit 7 shows an example of an RMO in action.
The RMO does not replace the PMO. In fact, the RMO cannot exist in the absence of the PMO. Each of the principles that guide the PMO remains as important as they have always been—organizations need to maintain a firm grip on the fundamentals of program management, from budget to timing and beyond. Exhibit 8 shows the key components of program management (Exhibit 8).
Exhibit 8. Key components of program management
Flexibility can be a key factor in getting better results from program management—focusing on the right type and amount of management required to achieve program results. Program management is not one size fits all, and an effective RMO does not impose monolithic standard processes on a program. Instead, processes are customized and tailored to the requirements of the program and the individual nature of the organization, and they are able to respond to unforeseen shifts in the evolution of the program and its component projects. While discipline is important, it should not become all consuming. An RMO is not about process for process’ sake and “checking the boxes”; it is about managing to results.
PMOs are already built to deliver rock-solid program management. As a result, organizations typically do not have to start from scratch in building an RMO. It depends on the program management capabilities and strengths already in place in the organization. In most cases, the core work is to execute many of the same things—governance, reporting, decision-making, risk management—in slightly different ways, shifting to a focus on business benefits and outcomes in addition to simply meeting project milestones.
Making It Happen
The RMO model reflects an important shift in thinking about the role of program management. Business goals are more reliant on successful technology program delivery than ever before. Today, technology programs do not only exist to support or implement business capabilities—for many businesses, effective program management has become a primary facilitator of strategy. In that context, the PMO has begun to show its limits. As one of the most important tools that the organization has for making business goals a reality, the PMO simply is not properly outfitted to help make the transition to strategy partner.
That means the move to an RMO approach is not just a functional change. It has to be accompanied by a reorientation of the organization’s program management philosophy. Here are some demonstrated ways to tackle all of the previously mentioned issues.
Start With Leaders
An RMO needs a strong leader at the helm with clear authority and accountability to drive program results. This reflects a point of distinction between the PMO and the RMO. Where the PMO might merely administer the program, the RMO owns the program. That means the RMO has the authority to guide and direct the overall program, not just administer it. It also means the RMO team is on the hook for delivering desired business outcomes. In today’s rapid-fire business environment, an organization’s business goals can shift frequently, and the RMO must routinely assess whether its objectives and outcomes are still on-strategy, and change course accordingly as conditions dictate. All of this takes a special type of leader—someone who understands the business and technology landscape, has the ability to stay focused on the big picture, and who can keep the entire team moving in the right direction at every turn. This is an important structural feature of the RMO, not an accessory. Successful RMOs require strong leadership. Paper tigers need not apply. Exhibit 9 shows an example of an RMO in action.
Choose an Operational Model
The RMO approach does not prescribe a specific organizational structure—it is an approach to program management that is flexible in its implementation. No one organizational model will work for every program, but there are two common methods of rolling out an RMO to your organization:
Exhibit 9. RMO in Action
Option: Introduce an Enterprise RMO
One method of introducing the RMO concept to an organization is to establish an enterprise-wide RMO. In this approach, an organization develops the enterprise RMO from the ground up, staffing with a mixture of seasoned program managers, thought leaders, and delivery staff. An experienced, high-level executive should lead the enterprise RMO, to provide the sponsorship needed to help the RMO gain traction and to guide the RMO as it matures. The enterprise RMO charters programs and projects to achieve the business goals of the organization, in alignment with strategic priorities. It oversees execution of individual PMOs and stand-alone projects, and may provide subject matter specialists and logistical support where needed.
The enterprise RMO approach may be more suitable for organizations that require enterprise standards for program management or are undertaking significant business or technology transformations.
Option: One RMO per Program
An alternative to the enterprise RMO is to establish an independent RMO for each program chartered within the organization. In this approach, the organization establishes a program, defines an organizational structure to implement the RMO components, and staffs the RMO with appropriate domain specialists and supporting program management staff. Each program may choose to implement the RMO in phases depending on the particular needs and constraints of the program. As individual programs progress, the organization may choose to standardize aspects of results management based on lessons learned from individual programs.
The “one RMO per program” approach may be more suitable for organizations that have mature program management disciplines but are in need of additional capabilities to drive program results. It may also be a better fit for smaller organizations that do not need the results management infrastructure provided by the enterprise RMO.
The RMO: An Idea Whose Time Has Come
The principles that shape the RMO approach should not look new. What is new is that an effective RMO builds them into a structured, orderly process designed with one goal in mind: delivering real business value from investments in technology programs.The RMO approach provides a way to expand the traditional PMO and introduce complementary roles and responsibilities that drive program effectiveness. The RMO is not about introducing additional overhead. Instead, it requires a new ownership role for the PMO. The RMO drives efforts to closure, aligns program objectives with organization goals and missions, integrates domain specific expertise across the enterprise, readies the organization and its member for change, and proactively manages risk to help programs achieve the desired business outcomes.
It is past time to evolve program management to results management, and the RMO is the tool for the job.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.
Copyright © 2011 Deloitte Development LLC. All rights reserved.
Member of Deloitte Touche Tohmatsu Limited
© 2011, Diane Murray
Originally published as a part of 2011 PMI Global Congress Proceedings – Dallas/Fort Worth, Texas