Reinventing the PMO

Introduction

Walking out of the CFO's office, I had several questions racing in my head. Apparently, they had done everything by the book. The CFO of this global bank was the sponsor of this project management office (PMO) and an advocate for project management. She laid some of the documents that the PMO was producing on the desk, but she was not sure what these documents were telling her. The PMO had established project management methodology, standard templates, and a project management training program over the course of the last two years. The problem was that while the PMO was touting their accomplishments, the stakeholders were complaining that the PMO was making their lives more complicated. She shared that even though they had a generous budget for the PMO and embraced project management and did everything the consultants recommended, project success and adoption had not necessarily gone up. While they jumped on the PMO bandwagon, she was having second thoughts and questioning the value of the PMO.

Ironically, in our practice, this scenario keeps repeating often. Our survey-based PMO research also confirms this dilemma. Fifty-two percent of PMOs are not perceived as successful by key PMO stakeholders. The question that this CFO challenged us with was, “How do we reinvent the PMO to meet our current business needs?”

PMOs have been around for a while and have become a common fixture in many organizations (70 percent of companies have some form of PMO). They have grown-up, from childhood to adolescences and youth in the process of maturing into adulthood. They have evolved from focusing on standards, methodology, and consistent delivery of project outputs and deliverables to strategic decision support and prioritization. Some of the successful PMO's have transitioned from departmental and business unit PMOs to enterprise project management offices (EPMOs) (34 percent).

The Need for Reinvention

Today's turbulent business environment poses additional challenges and growing pains on the PMO—How do you build capabilities to adapt to the dynamic changes and business uncertainties? How do you balance the need for formal structures and discipline on the one hand and the need to be responsive and adaptive to support the need for creativity and innovation on the other? How do you respond to the perception of overhead and bureaucracy? How do you prove value in the era of cost-reduction (39 percent of PMOs value is questioned)? What do you do when stakeholders are no longer satisfied with on-scope, on time, and on- budget delivery?

While some PMOs have responded to the challenges by simplification and scaling methods and processes and adapting iterative and agile approaches, yet they are still perceived as bureaucratic that stifle the need for agility and innovation and are narrowly focused on project outputs instead of achievement of business outcomes. It is imperative for the PMO to refocus, repurpose, and reinvent itself to meet today's business challenges.

Background and Research Methodology

The ideas for this paper grew out of over a decade working with executives and companies as seminar leaders, participant observers, consultants, and curious practitioners in the pursuit of next generation approaches to PMOs. This pursuit was started in 2001 with the publication of the initial paper Building the Next Generation PMO (Duggal, 2001), it should be noted that the ideas introduced in that paper have been adapted, matured and have become a common practice in many organizations over the years. In the last 10 years, we have worked with a few thousand people around the world in leading the Project Management Institute's SeminarsWorld's, Next Generation PMO, and Portfolio Management seminar where these ideas have been discussed and debated from multiple perspectives.

Additionally, we have worked with many companies around the world where our PMO framework and the DNA of the PMO have been implemented. The range of industries, including aerospace, banking and financial services, higher education, insurance, nonprofit and public sector services, health care, hospitality, defense contracting, telecommunications, electrical power, Internet and medical devices, both in information technology (IT) and non-IT environments.

In addition, we have continued to conduct and compile survey-based research since 2005 that continues to provide data from a highly selective PMO community. Interviews with executives and PMO leaders have provided insights and validation of the ideas. With each conversation, we have added to our arsenal of company cases for the need to reinvent the PMO, some of these examples will be discussed in this paper.

This paper will discuss the challenges and the need for the reinvention of the PMO and the evolving shifts in purpose, role, and value of the PMO. The need for an adaptive and ambient PMO approach will be highlighted and six PMO transformational imperatives will be outlined. In addition, a comparison of traditional/foundational PMOs from evolving and next generation will be illustrated. Furthermore, the concept of the DNA of the PMO and its application will be discussed.

Evolving Shifts in Purpose, Role, and Value of PMO

Exhibit 1 illustrates the evolution of PMO focus from tactical execution and delivery focus to portfolio prioritization and strategic benefits management and value focus.

Evolution of PMO

Exhibit – Evolution of PMO

Managing From the Future—The Need for an Adaptive and Ambient PMO

How does the PMO build capabilities to deal with the DANCE of today's turbulent business environment - the Dynamic and changing, Ambiguous and uncertain, Non-linear and unpredictable, Complex and Emergent nature of projects that causes instability.

The project environment is dynamic and constantly changing, driven by factors like a volatile economy, market forces, or shifting stakeholder needs. There is ambiguity and uncertainty, it is not clear who all of the stakeholders are, and the ones you can identify are indecisive—they do not know what they want. The project direction is not clear and there is a lot of uncertainty about the future.

Conventional approach to deal with the DANCE would be to PMO based on heavy scope, plan, execute, and control (SPEC) processes to support traditional deterministic approach of classic project management. However, reductionist plans based on sequential tasks and dependencies do not seem to hold in a non-linear changing and unpredictable project reality. Project reality is complicated due to a combination of factors like complexity of scope, sheer number of linkages and dependencies or the multiplicity of stakeholders involved. Project scope, requirements and solutions are emergent in nature and are hard to pin down and plan for in a continually shifting landscape.

To deal with the DANCE and manage the unexpected, an organic approach is required. An adaptive and ambient PMO that cultivates capabilities to sense, respond, adapt, and adjust (SRAA) to business uncertainties is required. Sensing PMOs develop acute awareness and vigilance to sense their current environment and anticipate unexpected changes. Responsiveness prepares you to view the unique situation and respond accordingly in that moment. Adaptation helps you to quickly adjust to new realities and alter the plan to accommodate the changes.

PMOs need to understand that mechanical mindset of traditional PMOs can be limiting and next generation PMOs need an organic mindset with an understanding and appreciation that project environments are complex adaptive systems. The PMO needs to build and cultivate an adaptive system with a combination of adaptive methodologies, governance structures, resources, and skills with the following characteristics.

Characteristics of an Adaptive and Ambient PMO

Sensing/Ambient—Ability to constantly sense and probe your environment—the difference between maps, compass and GPS devices. A map is like a traditional tool, which is static similar to a project plan. A compass can point the direction in real time. A GPS on the other hand is an example of a next generation tool that is sensing and ambient device that is constantly sensing and adjusting and recalculating in real time.

Less is more—Traditional approaches rely on the principle that to control the project you need heavy methods, processes and tools built on intricate rules. While next generation tools should be based on simple rules and principles

Scalable—Methodology and governance structures are scalable and adaptive based on criteria like project size, scope, complexity, and business impact.

Self-regulating—Like friendly speed indicator displays on roads that help in self-regulating our speed, PMO processes can provide project information and self-regulating feedback that helps and supports project managers rather than threatening status-reports.

Self-eliminating—Good processes should have a built-in mechanism for changing or eliminating the process. Part of the PMO's adaptive governance should be a method to decide when a process or practice is no longer useful or when it needs to be updated to make it useful again.

Simplicity—The PMO should reinvent itself as the department of simplicity. Adaptive PMOs should make things take less time and make people more efficient. The PMOs reinvented manifesto should aim to minimize the paperwork and reporting burden, ensure the greatest possible benefit, and maximize the utility of information created, collected, and maintained.

Desire Lines—Desire paths can usually be found as shortcuts where constructed pathways take a circuitous route. Similarly, a PMO's need to sense and observe the existing desire paths of methods and processes and adapt and reinvent PMO processes along desire lines.

Rigor without rigidity—On the one hand, there is a need to establish rigor with a sound governance structure, on the other there is a demand for freedom and flexibility. This is indeed a primordial paradox between the need for discipline and freedom at the same time. This dilemma hounds the successful implementation of project management and PMO processes.

Typically, the idea of project management methodologies and PMOs conjures up images of bureaucracy and loads of unnecessary paperwork. In an ongoing survey of more than 1,800 project managers conducted 2001–2010 by the Projectize Group, 72 percent of PMO stakeholders perceived their PMOs to be bureaucratic.

An adaptive PMO strives to find the sweet spot to strike the right balance of rigor without rigidity. The right balance depends upon a number of factors like your organizational culture, the nature of your business, scale, and scope of your projects, and your organizational project management maturity.

For more detailed explanation of these characteristics, please see Rigor Without Rigidity: How to Achieve Balance in the Next Generation PMO (Duggal, 2009).

Reinventing the PMO: 6 Transformation Imperatives

To reinvent the PMO, it is important to focus on the existing mindset and understand its limitations. Mindsets are like the lenses that limit us to see only what the lens filter allows us to see. Prevailing mindsets upon which current PMOs are based are a mechanical mindset that projects can be manufactured in a factory using structured processes in a controlled environment that can deliver predictable and consistent outputs each time. This is versus the reality of the need for an organic mindset and the understanding that organizations and projects are complex adaptive environments and knowledge-oriented based on information, knowledge, people, and connections.

These are six mindset shifts are imperative for the reinvention and transformation of the PMO.

  1. From change management to change leadership mindset—A healthcare organization is positioning the PMO to assume a change leadership role to manage the immense changes brought about by the new US healthcare law. Traditionally change management within project management and PMOs has focused on configuration management and procedural changes with the establishment of Change Control Boards (CCB) or Change Advisory Boards (CAB). Evolving PMOs understand the need for organizational change and get involved in change readiness assessments and preparation. The shift in mindset is to recognize the key role the PMO can play in understanding, leveraging and leading change from a purely configuration and procedural perspective to focusing on organizational and behavioral change.
  2. From service and support to ownership and accountability mindset—Traditionally, PMOs have provided project management services and support. The challenge has been to show the indirect value of support and related services like training and coaching. Evolved PMO's are offering services in a more organized way with service catalogs and some (7 percent) are also charging-back the services to the business units to quantify value and building ownership and accountability on both sides—the PMO as well as its customers. It is imperative for the PMO to find ways to assume an ownership and accountability mindset.
  3. From delivery to adoption and usability mindset —Typically PMOs are focused on project delivery, improving execution capabilities and delivering projects. The projects are implemented well but often the outputs and deliverables of these projects are never used or adopted, thus never realizing their intended benefit and value. With a shift to an adoption and usability mindset the PMO can promote and plan for adoption throughout the project lifecycle to ensure the intended realization of the benefits and value of the project.
  4. From delivery-oriented governance to business-oriented governance mindset—A government organization that had a PMO in place for five years had a recent transformational insight to shift the PMO governance function which was focused on compliance of methodology and reporting requirements, to business-oriented governance ensuring business requirements, procurement and customer needs are met.
  5. From delivery of projects to benefits realization and business value mindset—No longer is delivery of on time, on-budget projects considered successful. It is necessary but not enough. PMOs need to cultivate a mindset to shift to a benefits and outcomes focus and establish measures to ensure benefits realization and achievement of business value.
  6. From a diffused and disjointed focus to holistic and balanced adaptive approach—typically PMOs are pulled to address the current pain or fix the problem of the day. This results in a diffused and dis-jointed PMO focus and limits the ability of the PMO to provide a holistic and balanced approach. We have developed a DNA of the PMO (explained below) which addresses this issue and helps in cultivating a balanced and adaptive approach.

Traditional PMO managers would argue that these imperatives are not realistic and unfair to PMO as PMOs face the classic dilemma of responsibility and accountability without authority. This is why the above imperatives are a shift in mindset. While a mindset may not provide a step-by-step approach, with a clear mandate and defined responsibility and authority, it is more powerful in that it enables a certain focus and drives corresponding behaviors that can lead to the desired outcomes. This is similar to how certain project leaders are more successful than others are. Without defined authority they can get a lot done based on their mindset and capability to influence, motivate, and drive the right outcomes.

Exhibit 2 provides a comparison between traditional or foundational, current and evolving, and reinvented/next generation PMO approaches.

Comparison of PMO approaches

Exhibit 2. Comparison of PMO approaches

DNA of the PMO

Even though PMO have been around for a while, the core purpose and function of a PMO continue to be questioned and debated. The situation gets further convoluted in organizations in which PMOs proliferate at multiple levels with overlapping or conflicting functions. On the other hand, sometimes when there is clarity of purpose, having too narrow a focus limits PMO value.

Just as DNA contains the genetic instructions used in the development and functioning of all known living organisms, is there a code or blueprint containing all the elements to construct a successful PMO?

The specific form, function, and structure of a PMO for your organization will depend on a number of factors like these:

  • your current challenges and needs;
  • the size and type of your organization, the nature and scope of projects; and
  • your organization's project management maturity.

However, many of the core elements of a PMO can be identified and mapped.

Participants in PMI's SeminarsWorld® “Building the Next Generation PMO and Portfolio Management” seminar over the last 10 years have helped investigate core PMO functions. The challenge was to decode the DNA, or identify the core elements of a successful PMO, that could be scalable and applied to any type of organization or business.

The Six Elements of the PMO DNA

To build a holistic view of the PMO, an integrated PMO framework is necessary. The PMO DNA helps to organize the PMO functions into six broad categories (Exhibit 3).

PMO Broad Categories

Exhibit 3 – PMO Broad Categories

  1. Execution and performance: Focuses on the tactical aspects of project execution by providing standardized processes, methodologies, tools, templates, training, and support to improve execution and delivery capabilities.
  2. Strategic decision support: Facilitates portfolio management, providing information for project selection and prioritization, highlighting critical information to assess risk, resource capacity and demand management, and enabling decision support for business alignment, benefits realization, and value management.
  3. Governance: Establishes a decision-making structure to link the strategic with the tactical, and facilitates and escalates key project/program decisions, including setting policies, procedures, and establishing governance mechanisms like stage gates.
  4. Performance management and reporting: Provides consolidated information and transparency with relevant reports that help in tracking and managing project, program, and portfolio performance.
  5. Communications and relationship management: Identifies linkages and dependencies, detects systemic disconnects and bottlenecks, resolves communications and interface issues across organizational silos, and develops and manages relationships with stakeholders.
  6. Organizational change management: Since project management is the management of change, the PMO can help facilitate and prepare for change.

These elements can be found in a typical PMO, individually, or in combinations of two or more, but rarely are all six areas linked in a holistic way. How do you apply the idea of the DNA to your PMO? Assess your PMO from the perspective of each of the six elements and evaluate your strengths, weaknesses, and missing links. The current point of pain and business needs of the organization will determine the priority of focus. The idea of the PMO DNA is the interplay and impact of all the six elements on each other. These have to be linked, balanced, and optimized to sustain PMO value.

Summary

To remain a viable management alternative, the PMO has to become adaptive and continue to refocus, repurpose, and reinvent itself to meet today's business challenges. It has to shift from a mechanical, factory-oriented mindset to support the reality of organic, adaptive knowledge-oriented and networked organizations.

PMOs have evolved from focusing on standards, methodology, and consistent delivery of project outputs and deliverables to strategic decision support and prioritization. The next imperative is to transform and reinvent itself from a delivery, implementation and prioritization focus to adoption, accountability, ownership of outcomes and business value focus. The purpose and the mandate of the PMO should be aligned towards these goals and achievement of business outcomes.

The idea of the PMO should not be to be authoritative and controlling and encroach and take over, but instead it should be a force multiplier, by being the enabler, facilitator, connector and bridge builder to reduce disconnects and seek opportunities to add value. You can show value in this approach by measuring and tracking incremental benefits and outcomes that your stakeholders care about along the way. You can demonstrate how the PMO is adding business value by cost reduction or cost avoidance or in some instances enabling greater profitability and increased revenues.

Of course, this transformation is not going to be easy and particularly hard for traditional PMO managers who are stuck in the old paradigms of project management and are not open minded and are unable to see the shifting realities of today's business environment. However, the benefits of an adaptive next generation PMO approach are promising—increased stakeholder and customer satisfaction, effective project management that is responsive to the business needs for speed, agility and innovation, and ultimately better business outcomes and value.

References

Duggal, J. S. (2001). Building the next generation project management office. Proceedings of the PMI Conference, Nashville, TN.

Duggal, J. S. (2006). The secret of a successful PMO. Proceedings of the North America PMI Congress, Seattle, Washington.

Duggal, J. S. (2009). Rigor without rigidity: How to achieve balance in the next generation PMO. Proceedings of the EMEA PMI Congress, Amsterdam, Netherlands.

Duggal, J. S. (2010). Managing the DANCE: The pursuit of next generation PM approach and tools. Proceedings of the EMEA PMI Congress, Milan, Italy.

Duggal, J. S. ( 2011, April 8). The DNA of the PMO. Community Post. Newtown Square, PA: Project Management Institute.

Hobbs, B., & Aubry, M. (2010). The PMO as a temporary organization. The project management office or PMO: A quest for understanding. Newtown Square, PA: Project Management Institute.

Projectize Group. (2005-2010). PMO survey. Avon, CT: Projectize Group.

Symons, C., DeGennaro, T., & Leaver, S. (2010). The state of the PMO - increased strategic focus extends PMO roles across the enterprise. Cambridge, MA: Forrester Research.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2011, Jack S. Duggal - jduggal@projectize.com
Originally published as a part of 2011 PMI Global Congress Proceedings – Dallas, TX

Advertisement

Advertisement

Related Content

  • PM Network

    Powerful Connections member content locked

    By Fister Gale, Sarah As Australia's largest telecom, Telstra needs to meet the expectations of its hyperconnected customers head-on. From mobile networks to home internet access to pay television, the company has…

  • next-generation-pmo-thumbnail.jpg

    The Next Generation PMO

    By Capgemini Explores the impact of disruptive technologies on the next generation PMO through analysis of a survey with PMO directors and discussion with functional business managers across a variety of…

  • forge-future-disruptive-technology-thumbnail.jpg

    Forging the Future

    By Accenture Rapid advances in digital technology are fundamentally redefining our world. To build their future, organizations must be willing to actively interrupt their status quo.

  • c-suite-disruptive-tech-thumbnail.jpg

    The C-Suite Outlook

    By Forbes Insights Examines the role the C-suite should play in supporting digital transformation and how organizations can foster a culture of constant change.

  • PM Network

    Full Recovery member content locked

    Hurricane Katrina decimated thousands of buildings in New Orleans, Louisiana, USA, in 2005, including a U.S. Department of Veterans Affairs (VA) medical facility that served approximately 40,000…

Advertisement

Publishing or acceptance of an advertisement is neither a guarantee nor endorsement of the advertiser's product or service. View advertising policy.