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"The
Portfolio Management element of IT Governance is vital for
IT leaders faced with too many initiatives and the challenge of satisfying the needs of multiple business
stakeholders."
Source : Innotas
The PMO Conflict: So Much Promise, So Little Alignment
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INTRODUCTION
When a Project Management Office (PMO) operates
well, the impact can be extraordinary. A client
recently described how a PMO changed the effectiveness
of an entire division “where nothing was getting
done on time or meeting the needs of the business.
Within 30 days of getting the PMO off the ground, you
could already see signs of improvement. By day 90,
the entire operation had turned around to the point of
becoming the rising star of the business. Now there’s
no looking back.”
What the PMO achieved for this project-driven organization
was to:
- Clarify the demand on the available resources
- Simplify the prioritization process
- Provide visibility, accountability and control
- Transform delivery from a liability to an asset
Why is it then that some PMO’s add tremendous value
and others struggle to gain basic relevance? This
paper outlines some of the issues and challenges that
can thwart the effectiveness of a PMO, whether tactical,
operational or strategic.
THE PMO EFFECT
Project-driven organizations, such as IT departments,
are often caught in a situation where project demands
are coming at them from many different directions,
reflecting many different constituencies with various
perspectives. Decisions are often made based on
who is making the most noise rather than on what is
best for the business as a whole. In addition, decisions
about what to do are often made without a
coherent picture of the resource capacity and commitments
of the organization, thus jeopardizing the
desired outputs of the entire project portfolio.
A PMO brings about a fundamental shift in how
information flows and how decisions are made in a
project-driven organization. With live projects already
under way, resources are typically deployed and
working, and yet the flow of demand for more projects
is constant. The PMO is supposed to help leaders
align go/no-go decisions with the current strategy
based on a clear picture of the current reality. As the
strategy evolves, leaders have a handle on how to
shift the focus of activities toward the new direction.
The well-run PMO shifts prioritization of work from an
ad hoc, bottom-up process to an information-driven,
top-down process. An effective PMO fuels decision-
making with cross-functional transparency and
up-to-the-minute accuracy from the bottom up; it then
enacts decisions by coordinating work assignments
to have the biggest impact. The result is a focused,
flexible, learning organization that delivers on its
promises.
All too often, though, the PMO doesn’t become a
clear asset. Due to a lack of organizational commitment
and insufficient tools, PMO team members
spend the majority of their time hunting down basic
day-to-day information and trying to figure out where
they fit in. They get lost in the shuffle and confusion
of the highly dynamic project organization. In
the worst-case scenario, the PMO becomes a choke
point for information and a source of frustration for the
delivery teams. In order to avoid the worst case, they
often become internal advisors with marginal impact
and no authority. Without clear leadership, the PMO
risks becoming a powerless data collection center
with a frustrated team and leader.
WHY THE CONFLICT?
When the PMO struggles to gain relevance and
deliver impactful value, the problem usually resides with the original mission of the PMO. There is usually
a core team responsible for the formation and the
character of the PMO, and this team determines the
success of the PMO. This team creates the charter,
sets the course, picks the tools and manages the
PMO. But all too often the PMO is in trouble before it
ever gets started.
One key reason the PMO struggles is that the core
team does not truly support the PMO initiative. By
the core team I mean the people who are responsible
for forming and funding the PMO. The PMO initiative
will often arise from a need to put in place some basic
operating controls, but the team that has to create
and govern the PMO does not even agree with the
decision in the first place. And if they do agree that
something has to be done, the team members may
have sufficiently different perspectives on what the
PMO is supposed to do to cause substantial conflict.
There are many different flavors of PMO. Is the PMO
a standards body? a reporting function? a steering
committee? a police force? an audit function? big
brother? the result of an executive reading an article
about a PMO in some in-flight magazine? Unless
the core team can fundamentally agree about the
goals and objectives of the PMO initiative, the PMO
will struggle to gain power, and without power, it will
struggle for relevance.
CONTROL VERSUS FREEDOM
Another classic conflict brought about by the PMO
is the fear that the PMO will inhibit the project teams
that are doing the daily work. The thinking can run
anywhere from “this is just more administrative overhead”
to “we know what we’re doing and don’t need
meddling from management.” The basic argument at
work here is that dispersed and distributed delivery
teams are better suited to make prioritization decisions
about where they should focus their energies.
They know their jobs and they know their customers.
The management team is responsible for the effectiveness
of the resources under their purview. At the
highest level, they are charged with making sure that their resources are optimally allocated toward the
business requirements based on the current strategy,
assuming that a strategy has been clearly articulated.
Without visibility and control over their areas of responsibility,
management will be forced to rely completely
on chain-of-command for effectiveness and
efficiency. With a project portfolio system to establish
visibility, accountability and control, management will
spend much less time managing the basics of day-today
execution and will spend more time leading the
organization forward.
While the situation is complex, the solution is not
especially complex. Basic controls are required to
establish consistency and a common level of communication
about what you’re doing and how well it’s
going. Without reliable controls, leadership effectiveness
becomes compromised and organizational flexibility
hamstrung.
The answer on how to balance control versus freedom
in the PMO will vary from organization to organization.
Too much control can lead to micro-management
and too much freedom will lead to undirected
chaos. But what’s clear is that until project-driven
organizations deploy some level of PMO control,
reliability and successful attainment of the company
goals will elude the organization.
THREE KEY PIECES
Three components that consistently emerge as keys
to successful PMO implementations are Leadership,
Goals and Implementation. These three pieces
interact with one another to form a critical success
triangle. When they are well balanced, the likelihood
of success is high. When they are out of balance, the
likelihood of success drops drastically.
Leadership sets the whole thing in motion by initiating
the PMO, setting the goals and determining the
proper implementation strategy. The goals are set
not only by the business drivers for the organization,
but also by a sober look at the issues and challenges
impacting the organization. Leadership is responsible
for defining a roadmap to success, but leaders must
also anticipate roadblocks. The goals and objectives
of the PMO will arise only from a well-understood set
of business drivers and a realistic view of the challenges
to reaching those goals.
The implementation strategy represents the approach
that leadership is taking to achieve the goals. The
implementation strategy is a key part of the road map
for a successful PMO, backed by leadership, focused
on the clearly stated goals. The implementation
strategy is perhaps the single biggest key to success.
The implementation strategy must consider tough
issues:
- How well does the organization react to change?
- Who will try to thwart the initiative?
- How will the PMO impact the organizational dy namic?
- Do we have the right experience on staff?
If the goals are out of sync with leadership’s ability
to drive change, then the PMO will struggle. If the
implementation strategy does not take into consideration
how the organization will respond to change,
then the PMO will struggle. If the leadership, the
goals and the implementation strategy are synchronized,
the PMO can have extraordinary impact. If
not, then the organization will continue operating as
before and judge the PMO as a failed attempt by
management to govern the company.
LEARNING ORGANIZATION
The term “learning organization” is frequently seen in
business publications, and most leaders agree that
it separates great organizations from the pack. Put
simply, a learning organization creates a communication
framework whereby teams of people working on
interconnected initiatives improve the outputs of their
efforts on a continuous basis. It’s not just the learning that matters but the incorporation of the lessons that
brings about rapid advancement. Organizations that
learn and incorporate lessons faster than competitors
are usually the winners.
The PMO is a key component of a project-based
learning organization. The PMO creates an information
framework that creates visibility and accelerates
communication. With effective PMO practices, team
members can raise high priority issues to the appropriate
levels quickly; project managers can identify
resource constraints and acquire capacity; and leaders
can coordinate the array of activities necessary to
deliver on evolving strategies.
A PMO focuses effort on the optimal set of work for
achieving goals, and raises awareness of the impediments
for performing that work. By creating visibility,
accelerating communication, focusing efforts and
raising awareness, the PMO becomes the engine for
learning and driving change.
KEY POINTS
- While PMO’s have demonstrated that they can
have significant beneficial impact, they often struggle
to add value
- Without executive support, the PMO can becomes
a choke point or a benign internal consulting
agency
- A well-run PMO requires that leadership first
faces the real drivers and issues in their organization
before agreeing to do something about it
- A PMO can form a critical component of a rapidly
improving organization by enabling information,
learning and agility
- Three components of the PMO must be in balance
for a PMO to succeed: Leadership, Goals and
Implementation
ABOUT INNOTAS
Innotas provides an On-Demand Project Portfolio
Management solution so mid-sized organizations can:
- Select the right mix of projects
- Optimize projects, resources, and spend
- Manage their entire project portfolio in one place