A Roadmap to PMO Excellence
Sam Farid, PMP
In the world of the project management office (PMO), strategic thinking is not enough—agility and adaptability are crucial for the overall survival and sustainable growth of modern-day PMOs. Over the past 18 months, Fonterra's PMO has been through a paradigm shift. We had a vision to make our PMO great again, and to make this happen, an improvement plan was needed to reach that vision. Understanding the current state was key to knowing where to go, how to get there, and how much change the organization could tolerate before meeting its breaking point.
From a baseline of urgent needs, the journey for improvements commenced, but not without obstacles and conflicting priorities. Strong leadership, vertical and horizontal support, and engagement were pivotal for the direction we set for success.
This article will cover:
- Why the PMO needs a roadmap;
- Critical success factors for establishing a PMO roadmap;
- Eight steps we undertook to establish a PMO roadmap; and
- Insights to the benefits realized and lessons learned from our PMO roadmap journey.
PMO, strategy, roadmap, project management, project portfolio management tool, PPM, project management practice, customer focus, customer satisfaction, servant leader
Fonterra is a global dairy cooperative with a mission to supply dairy nutrition to the world. Operating from its headquarters in Auckland, New Zealand, Fonterra sources raw milk from farmers to process and produce dairy products that are exported through its global channels to over 138 countries around the world.
Like most organizations, Fonterra’s IT department has a project management office (PMO) that is responsible for supporting the delivery of technology changes. The IT PMO has been on a journey to enhance its project delivery processes and frameworks, using innovative ways to deliver value for the business more efficiently.
Modern-day PMOs need a plan to help execute on their vision and achieve their desired state. A PMO roadmap outlines that plan, which includes objectives and deliverables to achieve the desired state. The roadmap also helps define and communicate the PMO’s value proposition. It creates that sense of direction the PMO needs to continue driving optimum value.
Any roadmap-planning exercise includes a plan that outlines the tasks and activities to be undertaken to achieve the desired set of goals and outcomes.
Research has provided some telling statistics about the survival rates of PMOs. According to The State of the PMO 2010 research report (PM Solutions, 2010), 50% of PMOs close within the first 4 years. That is an astonishing figure that has not made much improvement over the years, continuing to challenge the existence and survival rate of the PMO. Furthermore, the report has put the PMO’s inability to demonstrate value as one of the top five reasons why PMOs fail.
According to Ori Schibi (2013), one of the top reasons why PMOs fail is an improper setup due to a lack of vision or planning.
There are several reasons as to why the PMO needs a roadmap.
A PMO roadmap:
- Provides focus and direction;
- Enables strategic and forward thinking;
- Helps demonstrate the value proposition;
- Allows the PMO to be front-footed, adaptive, and responsive to change (agile PMO); and
- Acts as a communication platform.
The PMO roadmap = a survival plan!
The PMO needs to be strategic and forward-thinking. Through projects and programs, the PMO delivers strategy. Therefore, they need a plan to enable alignment with the team, department, business unit, and overall organizational strategy.
A roadmap allows the PMO to prioritize and become proactive and forward-thinking, instead of becoming consumed with operational commitments and keeping the lights on.
A roadmap elevates and emphasizes the value proposition and enables the PMO to justify its existence. It is a sales and marketing strategy whereby the PMO can showcase its value-adding capabilities.
A roadmap also allows the PMO to become proactive, adaptive, and responsive to change. This relates to the principle of a roadmap enabling the PMO to be agile in its way of working.
The PMO roadmap creates a communication platform of visibility and informs stakeholders about:
A. The organization’s immediate focus and priority;
B. Direction (where we would like to go in 6, 12, 24 months); and
C. The actions, outcomes, and value being delivered to the stakeholders.
The roadmap is a survival plan for the PMO. It helps eliminate criticism of the value the PMO provides during a period of organizational restructuring, which is happening more often currently.
There are several critical success factors for establishing an effective PMO roadmap. Those are:
- Understanding your PMO type and purpose;
- Setting a direction of travel with flexibility in mind;
- Ensuring top-down and bottom-up alignment;
- Securing strong executive support;
- Establishing and executing on a prioritized action list;
- Reviewing progress regularly; and
- Above all, benefitting from strong leadership.
1) There is no one-size-fits-all PMO model, as every organization is different. Therefore, it is important that you understand the type of PMO you fit in within the organization and work to your strengths.
Your PMO can be:
A. Tactical vs. strategic;
B. Departmental vs. enterprise-focused; or
C. Authoritative vs. advisory.
Understanding the structure of your operating model, your remit, and how you fit within the organization will help you establish the appropriate and fit-for-purpose processes, frameworks, and governance.
2) A PMO roadmap should be set up with a set of goals in mind. It should not be rigid, but should be flexible and adaptable to changing environments.
3) A PMO roadmap should have both top-down and bottom-up alignment.
✓ Top-down alignment is required at a departmental, business unit, or organization-level strategy. The direction and value being delivered need to be traceable to strategy and direction at a departmental/business level.
✓ Bottom-up alignment is also required to ensure the value provided matches the direct stakeholders’ expectations.
- The PMO needs to be positioned as an enabler instead of hurdle/obstacle/red tape to the project stakeholder community.
- The PMO needs to do more listening to understand stakeholder needs and the current state challenges, helping to establish a roadmap that removes obstacles and enables efficient delivery.
- A customer focus should be a key priority for any PMO roadmap. As an initial step, PMO leaders should establish a baseline through conducting customer satisfaction surveys to help gauge engagement and feedback.
4) Executive support to the roadmap is essential. A sponsor needs to believe and understand the PMO’s value proposition, champion the cause and initiatives, and be a voice at the executive team level.
5) The PMO roadmap needs to have a list of tangible actions. Those actions need to be specific, measurable, attainable, realistic, and time-based (SMART).
6) A PMO roadmap should be set annually, but with quarterly reviews to track progress and help recalibrate as necessary. Due to evolving environments, organizations are changing, along with their strategy and operating model, and therefore, the PMO needs to ensure the alignment of focus and priorities with relation to the current state.
7) Finally, and above all, the PMO needs strong leadership that leads by example and is focused on supporting the team. The PMO must be brave and should not be afraid to call out bad practices. They also need leadership that praises people’s successes and takes a consultative approach when managing and implementing change, as opposed to a directive and dictatorial approach.
PMO leaders need to adopt a servant leader approach, which is characterized by being a good listener, being people-focused, and putting customers’ interests before anything else. They also need to be empathetic and display high levels of emotional intelligence.
The following are the eight steps we undertook to establish a PMO roadmap (see Figure 1).
Figure 1: Eight steps to creating a roadmap.
1. Understand the current state.
The first step to any roadmap-setting exercise is understanding the current state. This can involve carrying out analysis techniques, such as SWOT (strengths, weaknesses, opportunities, threats) or SOAR (strengths, opportunities, aspirations, results). Another analysis approach is using the Business Model Canvas (see Figure 2).
Figure 2: As-Is analysis tools.
Conducting a 1:1 stakeholder engagement or focus group session can help identify challenges around key areas relating to processes, systems, and data.
Conducting a PMO maturity assessment is another, more structured approach that can help determine the current state and also shape the future state. A PMO satisfaction survey is another mechanism that can provide quantitative and qualitative metrics that can be inputs to the PMO roadmap.
2. Define the purpose and objectives.
Part of the PMO roadmap-establishment process is defining clear objectives. Those objectives need to relate to what value the PMO will deliver for its stakeholders. In our example, we defined three key objectives, as outlined in Figure 3.
Figure 3: Global IT PMO—Fiscal year 2020 objectives.
It is important that objectives are clearly defined and articulated in a way that can be understood by stakeholders. A key tool for setting objectives is applying the KISS model (keep it simple, stupid).
They also need to be communicated and made visible (e.g., published via the PMO intranet site).
3. Establish a service catalogue.
The next step is to define the service catalogue—what do you do, the services you offer, service level agreements (SLAs), and your accountabilities and responsibilities.
This step is typically assisted by understanding the type of PMO positioned within the business (e.g., tactical, advisory, or strategic). See Figure 4.
Figure 4: Fonterra’s IT PMO service catalogue.
4. Define the project controls and governance.
It is important that the processes, checks, and controls that projects are expected to follow are clearly defined and communicated. Along with this is a rationale as to why, when, and how project teams can ensure that compliance is being met.
PMO governance and compliance should be approached with minimum viable bureaucracy (MVB) in mind. Do not boil the ocean. Instead, focus on ensuring the basics are covered and that this is done well. It is about finding the right balance with an MVB that will prevent you from falling into chaos, while still having just enough project governance.
5. Define a work plan that includes actions and deliverables.
The work plan outlines actions and deliverables, and is where the rubber hits the road for a PMO roadmap.
The defined actions and deliverables need to be SMART (specific, measurable, attainable, relevant, time-based) and should tie back to the service catalogue defined earlier in the process. It is important that the PMO provides periodic progress against the set of actions and key performance indicators (KPIs), establishing regular checkpoints with the PMO sponsor.
An example of how this can be demonstrated is shown in Figures 5, 6, and 7.
Figure 5: Action list.
The PMO needs to establish KPIs that are aligned to actions and deliverables. This keeps the PMO honest on the commitments established at the start of the roadmap definition journey. An example of this is outlined in Figure 6.
Figure 6: PMO key performance indicators (KPIs).
6. Identify people’s capabilities and capacity requirements.
The capacity and capability to deliver the PMO roadmap is incremental to its success. It is important to identify the key talent needed to support the roadmap execution—so who is needed, what for, and how much effort are key. This is typically formulated in a resource capability and capacity plan.
The PMO’s capability focus should be on power skills and traits, such as customer focus, emotional intelligence, empathy, and leadership. Technical skills and experience are also important, but are secondary to power skills.
In addition to people and capabilities, it is important to identify the tools required to support the portfolio and PMO maturity journey. Ensuring that data and processes are clearly defined and established is a prerequisite to the tool implementation.
7. Execute, monitor, report, and replan (including step 8).
The PMO needs to execute on the specific actions defined in the roadmap, as well as monitor progress and performance. It is crucial that measures are put in place to confirm and qualify that outcomes have been delivered.
One way to measure performance and report on it is via performance scorecards. This approach provides the sponsor and PMO’s senior management with visibility on progress toward the defined targets (see Figure 7).
Figure 7: Progress scorecards (quarterly update).
Figure 8: Simplified progress tracking.
During our journey, the PMO roadmap provided several benefits. We also gained several lessons along the way.
- Improved processes, frameworks, and methods;
- Better visibility and accurate reporting (a single source of truth);
- Uplift in engagement and customer satisfaction; and
- Better return on investment (ROI) on project delivery.
1) Through the establishment of more robust project management frameworks, processes, and methods, we have seen an uplift in quality and the consistency of our project delivery. Having fit-for-purpose methodologies that are adaptable (e.g., Lean, waterfall, agile, DevOps) has materialized a more effective project delivery model.
An example of this is in the deployment of a tailored methodology, whereby depending on the size and complexity of the project, the project deliverables and governance are tailored accordingly. The decision around which methodology is applicable is determined by a sizing tool.
A similar approach was taken around the delivery approach, whereby a guiding tool was established to help make an educated decision on whether a project should be delivered using an agile, waterfall, or hybrid approach.
In general, the project management community has a clear understanding of expectations and the available processes and tools to support them in delivering value through project delivery.
2) The implementation of a project portfolio management (PPM) solution has established a single source of truth for project information. This enabled us to move away from traditional, macro-heavy, and unstable spreadsheets to using a PPM tool that provides real-time, up-to-date information on the health state and performance of the project portfolio. This allowed key stakeholders, including the executive team, to make informed decisions on project priorities and competing demands. The platform provided visibility of troubled projects and allowed for early intervention to rescue projects. The enablement of this value has improved executive sponsorship to the PMO.
One of the key lessons from our PPM tool implementation is ensuring we have the right processes and data. The tool acts as a vehicle for managing and representing project, program, and portfolio information, but data and processes must be set up correctly (see Figures 9, 10, and 11).
Figure 9: Portfolio view—pipeline, pre-execution (concept and business case).
Figure 10: RAG for key projects per business unit portfolio.
Figure 11. Top 10 project reports, including RAG, status, and financial position (actuals, forecast, variance).
3) As a consequence of shifting to a customer-centric approach and a servant leader mindset, the PMO has been anchored as an enabler, support partner, and center of excellence, which in turn has enabled an uplift in the engagement and satisfaction of our stakeholders.
There has also been an uplift in project stakeholder engagement and participation, in addition to an improvement in PMO compliance (which had historically been in a poor state). Fonterra’s customer satisfaction rating has reached an all-time high, with further opportunities for improvement.
4) Finally, we have seen an improvement in our overall delivery and better management of the triple constraints due to better governance, visibility, and transparency through improved information management. This has resulted in recognizing an uplift in value recognition and has given the PMO the license to keep operating.
For the PMO to be successful, a roadmap—or plan—is essential to providing a needed sense of direction. A roadmap gives the PMO the license to operate and ensures it is delivering the values and benefits it has committed to meeting.
As a service provider, the PMO needs to be customer-focused and should operate with a servant leader mindset. PMOs need to listen and engage with stakeholders, and should form partnerships and deliver on those commitments.
Executive support—and having a sponsor who believes in the value proposition—is instrumental in both the success and survival of the PMO.
And as with any action plan, it needs to be clearly defined, specific, measurable, attainable, relevant, and time-bound (SMART).
The PMO roadmap is a journey, so one must be realistic with their objectives, and should innovate and drive incremental improvements. PMO leaders and their teams need to be adaptive and responsive to change, helping them to drive value with leadership, courage, and determination.
Schibi, O. (2013). Why PMOs do not deliver to their potential. Paper presented at PMI® Global Congress 2013—North America, New Orleans, Louisiana, USA. Project Management Institute.
PM Solutions. The state of the PMO 2010: A PM Solutions research report. PM Solutions Research.
About the Author
Sam Farid is an established PMO manager with over 15 years’ experience in PMO, portfolio and project delivery. He can be reached at [email protected]