I recently became a (proud) member of Forbes Technology Council, and just published my first article focusing on the PMO function in times of digital and agile trends. Almost 9.000 people have already read the article, and to reach an even broader audience I am also sharing the article through my PPM tech blog. I hope you will enjoy it and look forward to getting some feedback or questions.
Link to Forbes article – or read it below:
The Identity Crisis Of A PMO In Times Of Digital And Agile Trends
The role of a project management office (PMO) has always been to assist project managers with organizational methodologies, practices and tools. Most PMOs have also acted as portfolio offices and, at a minimum, promised high levels of data quality for management-level reporting. In this case, data typically covers key performance indicators, financial forecasting, resource demand versus capacity, top risks, key deliverables and more.
From an operational point of view, most PMOs also struggle with identifying the actual tasks to plan and execute. Furthermore, the PMO is often pressured by having to justify itself to the rest of the organization while providing a useful service both short- and long-term. For most, the solution has been to establish a catalog of services the PMO can offer its customers and users — project managers and management. On top of this, a PPM/PMO tool has probably been purchased and implemented in order to digitalize processes, harvest data and ensure governance is enforced and followed.
Despite the big challenge establishing a functional and value-generating PMO, quite a few succeed in overcoming the justification matter — and some end up becoming strategy execution offices.
Why call it an identity crisis? The explanation is found in trends in recent years toward implementing or improving business agility. In this case, top management’s focus on the “digital transformation” impacts PMOs as well as the way of working and organizational structure. The impact before, during and after a digital transformation is an organizational implementation of agile practices and principles — in other words, a new work culture built on new methodologies like scaled agile.
In my experience, the organization hasn’t understood the difference between agile, traditional, scaled agile and DevOps, and the digital transformation/agility ambition is anchored in the buzz from trends alone. The organization hasn’t asked itself what it really needs and discovered the appropriate methods, processes and system support. Even worse, an “unexperienced agile” leadership team quickly feels it has lost its control of the business — and especially in those business units that have become most agile.
Suddenly, we see a PMO in doubt of its own purpose. Is the “P” in “PMO” short for “portfolio,” “program,” “project” or perhaps even “product”? What is our new identity, and how can we satisfy top management demands for business insights? Can we convert story points to hours? Can we ask an agile team to timesheet? Can we compare a portfolio epic to a business case? How do we simulate scenarios across agile and nonagile business units?
The real question to ask is whether an organization needs a PMO on top of its agile activities. If that’s still the case, the “P” should stand for “portfolio,” as there is a high chance it needs to cover a diverse set of work types spanning products, projects, initiatives and so on. However, a portfolio management office also finds itself in a gray zone, not knowing what story and status it can give to management and/or shareholders, whose concerns and focus have not changed.
Here, it’s all about the quality reviews, minimizing risks, controlling the budgets and measuring progress toward milestones and deliverables. In this environment, “story points” and “business epics” won’t help you, and classical questions asking when you’ll be done and how much it’s going to cost will pop up sooner or later.
Another thought is that despite our business agility, many organizations are still stuck in a world where we pay salaries by the hour, provide estimates by the hour and invoice our services by the hour. Also, most find that capital and operational expenses still need proper tracking to provide the input for financial statements and quarterly briefings. Again, we are back to traditional work management practices to accurately provide these insights.
So what is the solution? On many levels, I believe it comes from training top management in the purpose and benefits of agile, traditional and — for some — DevOps practices followed by an open dialogue on the need for control versus trust. I also believe the real PMO is a “both-and” office; in other words, it’s a function that takes care of the sum of all work not being operations.
The PMO should also ensure that a common language and business understanding is applied across agile and nonagile information workers. Here, we find elements such as time, money and resources to be comparable for all types of work and that business value from any work under execution should be connected to organizational strategy and priorities.
One thing is for sure: There is no single recipe for what a PMO is anymore. It’s all related to the organizational culture, traditions and circumstances. Some need multiple PMOs; others just need one — and then there are those that close them down. However, one thing that all organizations have in common is the demand for overview and insights anchored in real data and at the right point in time.
Some are also accountable for the execution of a strategy and whether past work and projects have actually delivered the benefits expected. Especially in large organizations, I am a big fan of implementing an enterprise PMO, which functions to translate strategy to execution and measure progress continuously.
It’s also here that I have experienced the most success in finding a common language to be used in both the agile and nonagile business units. It isn’t necessarily a function that helps project managers, scrum masters or product owners to do better, but it is a function that ensures the combined initiatives under execution to better serve its internal and external stakeholders while ensuring transparency for what should happen, what is happening and what is not happening.
A PMO journey should always start by understanding what issues or challenges it solves, ensuring long-term organizational sponsorship, and establishing clear service offerings for its customers. From there, decisions can be made around methodologies, execution of work and digital support from IT systems.