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Why PMOs are becoming more important than ever

Summary
Chances are during your career, you have likely heard of a Project Management Office (PMO), had to deal with a PMO, or have even been in a PMO. This often mysterious, often underappreciated team have been a staple of many organisations since the 80s and have responsibility for managing one of the most difficult challenges within any organisation; the need to report on the delivery status of the entire project-portfolio to senior managers and executives.

With the recent shift towards increased adoption of agile delivery practices and the disruption of digital transformations, PMOs now face their biggest challenges yet. But at the same time, there has never been such a great opportunity to prove to organisations why they are so valuable.

What is a PMO?
Before delving into specifics, it is worth clarifying what a PMO is, especially in context of the following content within this article. Whilst there are numerous exhaustive definitions of a PMO, CIO.com defines this succinctly as:

“A group — internal or external to a company — that sets, maintains and ensures standards for project management across that organisation. They’re the keepers of best practices, project status and direction — all in one spot.”

A PMO can also operate at different levels within an organisation: Portfolio, Programme or Project, and there can also be more than one PMO in an organisation. To best frame this article without getting caught up in the minutiae, it is worth talking simply about Traditional vs Modern PMOs, their fundamental differences, and why they are valuable to any organisation.

The Traditional PMO
The traditional PMO is probably the most ubiquitous form of PMO operating in organisations today. This PMO is often a single team responsible for, but not limited to, the following key functions:

  • Project management framework: They will define and own the project management framework and define the role of governance within the framework.
  • Reporting: They will own the project reporting framework and generate month, quarterly, annual and ad-hoc reporting to a variety of difference stakeholders.
  • Own the Governance function: They will own and define governance functions and provide input into various layers of corporate governance within an organisation.
  • Quality Assurance: They will be heavily involved in project quality assurance activities, typically in reviewing business case documents.

The value of the above-mentioned activities should be well understood. However, these facets often lead to the PMO becoming characterised by the following attributes:

  • Command and Control: Traditional PMOs are seen to be very focussed on compliance to standards.
  • “The Process Police”: The are regarded as the process police, for the time they spend defining and documenting delivery processes.
  • “Reports Factory”: The PMO often becomes the “reporting hub” for executives, project managers and other stakeholders and are viewed as just churning out reports for reporting’s sake.

If the PMO is not careful, the backlash from other teams can lead to the PMO becoming ineffective and obsolete. It’s possible that this is why the average PMO lasts no longer than two years within an organisation.

The “Modern” PMO
As the name would seem to suggest, the Modern PMO is, well, err, modern. It is characterised by a deliberate shift from the atypical norms of a traditional PMO. This is best summarised in the six guiding principles for the modern PMO as outlined by P3O®:

Govern effectivelyHold people to account
Prioritise investment, align and adjust to business strategySafeguard value
Invest in People and processTrack progress through highlight and exception-based reporting

Whilst Modern PMOs will perform some or all the above-mentioned traditional PMO tasks, they are more widely known for their ability to:

  • Empower and enable project teams.
  • Establish a “Centre of Excellence” to mentor and coach new/junior project managers.
  • Remove roadblocks to delivery.
  • To encourage the organisations to learn from experiences – to own the lessons learned repository and feed this into new projects.
  • This represents a move away from the traditional “process police” and “reporting factory” mentalities, that are used to tar all PMOs with the same brush.

The PMO interrupted
Since the inception of PMOs as a corporate entity, a new wave of business transformational change has occurred: Agile Software Development. This delivery model has sought to oust SDLC as the primary method of software delivery and has been gaining significant traction over the past decade. The agile delivery method quickly grew to become more than a delivery methodology and has now begun to uproot the very foundations of traditional project management. This paradigm offers a new challenge to organisations and to the way in which PMO’s operate.

Agile Surmised
Before discussing how Agile has disrupted traditional PMOs and traditional delivery methods, it is worth noting some of the key characteristics of the Agile delivery method. I don’t want to spend too long dwelling on all the facets of Agile, but instead wish to convey the key points;

“Agile software development refers to a group of software development methodologies based on iterative development, where requirements and solutions evolve through collaboration between self-organising cross-functional teams.

Agile methods or Agile processes generally promote a disciplined project management process that encourages frequent inspection and adaptation, a leadership philosophy that encourages teamwork, self-organisation and accountability, a set of engineering best practices intended to allow for rapid delivery of high-quality software, and a business approach that aligns development with customer needs and company goals.

Agile development refers to any development process that is aligned with the concepts of the Agile Manifesto.”

Challenges to traditional project management practices (and PMOs)
Agile transformation has in no small way, upset the apple-cart for traditional project management practices. This has had a knock-on effect for PMOs who are now scrambling to understand this new paradigm and justify their continued existence. The key points of disruption to traditional methods are;

  • Documentation: Agile is very light on traditional documentation and Agile teams make a point of pushing back on traditional artefacts such as business cases and project plans.
  • Different metrics: Story points, epics, burndown – These KPIs are very different to traditional metrics of cost, duration and scope.
  • Self-organising teams: Agile defines “self-organising teams” as a group of motivated individuals, who work together toward a goal, have the ability and authority to take decisions and readily adapt to changing demands. This is in stark contrast to the typical command and control mantra.

Agile project teams typically have a distain for traditional PMOs who they see as interfering in their affairs. If today’s PMO is to survive, it too must undergo transformation.

Why a PMO is becoming more important than ever
As digital transformations and agile delivery disrupt the traditional mechanics of project management, and governance and projects become less centralised – a modern, effective PMO is essential. To survive and continue to add value to organisations, PMOs must start to:

  • Place more emphasis on delivery-enablement rather than the command and control.
  • Start to play more of an active role in delivery – Removing road-blocks, providing lessons learned, being a conduit for useful insights to delivery teams.
    Focus on analysis to aid time poor executives in making decisions.
  • With the move to de-centralised teams, flat hierarchies and less formal methods, the need to put this dataset together for meaningful reporting and analysis has never been more crucial.

The PMO must not drop the ball with traditional activities – The PMO should most definitely own the project management framework. The PMO will need to work extra hard to disentangle delivery methodologies, such as SDLC and Agile from project management.

There will always need to be a governance focus to a PMO. As much as the agile purists will dislike me saying it, I will say it anyway – If you’re spending someone else’s money, you need to be held to account!

The PMO’s greatest value will be to consolidate project information from a wide variety of systems and different projects and present this to Senior Managers for informational and decision-making purposes. Like it or not, these stakeholders will still ask the same questions: How long is it going to take? How much will it cost?

And as a final point, the PMO’s greatest trump card to play is in their ability to safeguard value. The PMO must have no fear in calling out troubled projects or those that have low value – An organisation cannot rely on a project team to provide this as they are not unbiased.

By John Price, Consultant at Sensei

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