SPMO as the evolution of the PMO function
Many organizations are questioning the value of having a PMO in delivering a return on their project investment. The traditional function of the PMO started in providing reporting and oversight, governance and checklists, and overall support for project delivery. Then that function expanded to include resource management, dependency management, and benefit Tracking. This improved organizations’ ability in delivering projects right. However, it fell short of meeting the criteria for selecting the right projects. SPMOs evolved from reality constraints, mainly finance and resourcing, and the need to select the right projects. Selected projects in an SPMOs are aligned with the strategic objectives of the organization or department. It also delivers maximum return on investment as a part of a portfolio. The selection of projects and programs (and other pieces of work) relies on how aligned they are to strategic objectives, the relationship between the different components (e.g. if Project A is performed then Project B has to be undertaken too), and financial/resources constraints. The aim is not to select projects for their individual value but for the collective strategic value of a body of work.
The latest Trends in Strategy Execution were discussed at the recent Executive Briefing hosted by TwentyEighty Strategy Execution in London. The ninth trend, “The PMO as a strategic partner” is one which is causing much discussion in the PMO community.
The challenge to PMO
Responsive, flexible, proactive and innovative is not how most executives see their PMO. Agile practices in general and in project management, in particular, are redefining the role of PMOs to the point of revisiting the need for them. Aspirational as this may sound to the majority of PMOs today, the key to longevity and PMO growth (or maturity) is the connection to the strategic plans of an organisation. An increased executive focus on project portfolio management (PPM) is the result of a growing concern about running the right projects and achieving the best possible benefit from each of these. Unfortunately, executives rarely have a concise way of knowing exactly how many projects are taking place across the organisation, how much the projects have already spent, and how much more spending is required for completion. Merely implementing a PMO in itself is not enough. The PMO must evolve over time with a continuous plan to mature the practices that are of the greatest value to executives. As a PMO matures and implements high-value services such as portfolio management, the organisational success metrics improve, and the value of the PMO increases. The rule of thumb is: flawless execution of the wrong projects is more costly to a business than the average execution of the right projects.
The opportunity for SPMOs
A strategic plan results not in a map, but in a direction, we should follow. To succeed, managers need to build organizations that are capable of accomplishing their strategic objectives more rapidly than their competitors. This requires that they build organizations to get today’s work done more effectively and to anticipate tomorrow’s discontinuities. Innovation results from creative ideas successfully implemented. SPMOs move the company where it wants to be, releasing new products, utilizing new distribution channels, and targeting new market segments. Organizations use their corporate strategies to limit objectives and goals to be pursued and optimize the use of the companies’ resources. Once the company embraces project and program management practices as a competitive advantage, the road to achieving maximum results from their projects using limited resources is enlightened.
The concept of SPMO is the application of project management practices to all organizational activities across the company. These activities may or may not be directly related to project management. A strategic PMO is one that has a deep understanding of organisational strategies and goals gained through the processes of project and portfolio management (PPM).
Beyond the project, the environment must be actively managed, allowing the project to proceed with minimal disruption by “protecting” it from factors which may negatively impact it. That is as much an exercise in relationship management as anything else, ensuring the different groups are prioritizing portfolio work appropriately, identifying and managing any issues as early as possible, actively managing portfolio related risks, and assisting business areas with the impact management on their own initiatives. More importantly, these relationships allow for a much more integrated approach to portfolio management. The successful strategic PMO will be able to build a complete picture of the interdependencies between different departments, will implement a portfolio management approach that aligns with and leverages those interdependencies, and will support and grow collaborative relationships between every function to ensure those interdependencies are managed optimally.
The bottom line is, SPMO do what an organization can’t do with their BAU. Competitive advantage is as much about execution as it is about strategy
Stay tuned for our next blog, What Is An SPOM?