What is Strategic PMO (SPMO)?

Posted By Posted by: Derek Halawa on November 30, 2017

UMT360 declare that A Strategic PMO is a project-centric business department and should be structured and managed in the same way as other business departments – goals and objectives set by enterprise leadership that help the organization as a whole succeed.

When it comes to what that means in specific terms, the needs of individual organizations will lead to variations, but we should expect a focus on the following areas:

Portfolio management – idea generation through selection, execution and benefits realization. This is obviously a huge area and organizations will evolve to this, but it is becoming more and more important.

Financial management – closely tied to portfolio management the PMO needs to be accountable for ensuring that project investments are appropriate and that they align with business goals. The PMO also needs to ensure that responsible budget management occurs during project execution. Additionally, the PMO should be accountable for monitoring and tracking the business unit benefit realization responsibilities.

Enterprise-wide project-related processes and approaches – strategic risk management (i.e. management of organizational risk exposure created by the portfolio, proactive risk selection to match organizational tolerance, etc), integration of finance with benefits, consistent quality standards, etc.

Proactive resource management – capacity and capability planning, skills inventory management, etc – ensuring that the project execution functions have the right people with the right skills when they are needed.

‘Strategic partner’ – this borders on cultural change, establishing the PMO as an independent and objective consultant to the organization on project execution. In much the same way that IT has had to evolve from service provider to business enabler, PMOs need to demonstrate that they are business leaders supporting the organization’s work rather than a tactical execution only function.

 

The different levels of PMO strategic alignment

Peter Tylor, a two best-selling book author, believes that a PMO can operate at three levels of ‘Strategic’ maturity within an organisation:

  1. Strategy Creation and this refers to having a role in helping organisations decide on which strategic options to pursue (and then to translate them into projects – Strategy Delivery – and to manage their success – Strategy Management). It is a rare situation that a PMO has reached this position of trust and influence inside an organisation but it is the (potential) future for the enterprise PMO that is successfully embedded inside an organisation and blessed with the right sponsorship.
  2. Strategy Delivery where the PMO translates the key strategic objectives into new projects to add to the existing portfolio (and perhaps to remove some from the portfolio if such objectives have changed). This ‘Strategy Delivery’ is supported by the ‘Strategy Supervision’ capability. It may be that the PMO also takes some direct ownership for the execution of large and complex programmes (or projects) that are specifically critical to a key strategic initiative, such as relocation activity for example.
  3. Strategy Supervision of such strategic intentions through the ownership of the projects themselves, each of which should in some way relate directly or indirectly to a strategic intention of the organisation. This can be considered as Edit My Profile‘Strategy Supervision’ whereby the PMO acts as the governing and advisory body to the executive by:
  • Validating that all projects that are initiated fit one or more strategic initiative
  • Tracking the current and valid alignment between projects and strategies
  • Making recommendations for ‘stalls’ and ‘kills’ for projects that no longer align with current business strategic thinking

 

Contrasting PMO with SPMO

Now that we are at the end of the second blog, here is a summary of the differences between a PMO and a Strategic PMO:

PMO SPMO
Receives a mandate from the Strategic Apex to supervise and deliver Participates in the selection of corporate strategic objectives
Operational, static Adaptive to changes in corporate direction and priority
Limited influence on resources and decisions outside the realm of its projects Influence extends to all aspects needed to achieve the corporate goals
Focus on delivering project deliverables. Communication with PM is about the scope Focus on delivering aligned project benefits. Communication with PM is about value

Stay tuned for our next blog, SPMO and Agile!


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