How I Build Strategic PMOs: The Pragmatic Success Factors for High Return PMO

Author: Philippe A. Abdoulaye – (1) 646 688 2228 – philippe.abdoulaye@yahoo.com


EXECUTIVE SUMMARY Top

No one will doubt the important role the PMO can play in support of the achievement of of business objectives. The problem is, over the years, the PMO has been confining itself in a pure project management facilitator role which keeps it off the pivotal role it can play in supporting business priorities.  The debates around the particular meaning of a PMBOK, CMMI and PRINCE2 terms or keywords or around the innovation of Project Portfolio Management (PPM) software are great and of a high intellectual value. Let’s say things straight, they are getting annoying and irritating for an increasing number of business leaders. They improve project management practice but still do not result in the value expected by the business.

As a matter of fact, the concept of PMO is held hostage by a number of organizations specializing in project management. As implemented today, it has nothing to do with the perspective of pioneer like J. Kent Crawford who was the first to signal the important role of the PMO in improving organizational performance. Today’s approach clearly damages the PMO’s credibility as a central strategic management lever. They do not properly address the crucial issues of strategy planning and strategy execution. Despite repeated references to marketing hypes such as “The Business Value of Project”, “Greater Focus on Value”, and “Short Time-to-Market,” they are still based on the old and outdated Cost-Time-Scope paradigm.

Denying  or overlooking the critical fact that the PMO has to do with strategic management practices has resulted in the proliferation of erroneous beliefs and myths about what it takes to generate value. Let’s say it straight, the PMO has nothing, let me say that again, nothing to do with the complete implementation of models such as PMBOK, CMMI and PRINCE2. Rather, the PMO primarily reflects the organization’s leadership vision and the consensus over common sense processes and practices identified as key to deliver business priorities. PMBOK, CMMI, or PRINCE2 processes and practices might be among these common sense processes and practices.

This blog presents a pragmatic approach for implementing strategic PMOs. It capitalizes on 20 years of experience in project / program management leading large-scale IT and business transformation initiatives, exploring and leveraging project management practices and drawing on innovative best practice models to deliver the value expected by prestigious global firms. The objective is to provide you, as simple as possible, with the insights you need to understand and tackle the implementation of strategic PMOs. It addresses:

  • The definition of the strategic PMO
  • The myths and practices to bust
  • The dramas of today’s PMO approaches
  • The key notion of value chain
  • The key success factors to implementing PMOs that result in sustainable value

This is a Pragmatic Perspective from PMPragmatic!

DEFINING THE NOTION OF STRATEGIC PMO Top

As I have been implementing it, the Strategic PMO is the function that monitors the organization’s value chain to facilitate the  planning, development and delivery of the portfolio of projects supporting business priorities and objectives. It is structured around four fundamental elements:

  • The project portfolio governance
  • The key processes and practices to leverage
  • The cross-functional portfolio delivery team
  • The tools and infrastructure supporting governance, the key processes and practices.

Except the central notion of value chain which is ignored by today’s PMO practitioners, this definition of the strategic PMO sounds consistent with the IT industry’s perspective. So, why does the business continue to complain? Why is it so skeptical? What is wrong with today’s strategic PMOs? The devil is in the details. Let’s take a look at the myths, erroneous beliefs and deficient practices that have been developing over the years.

SOME OF THE MYTHS, BELIEFS AND PRACTICES TO BUST Top

Since the early 2000’s two schools of thought have been dominating the industry and intensifying the proliferation of erroneous beliefs and myths. The first one, let’s call it Techno Centrism, led by the major IT brands; it claims and considers that technology by itself creates value. The second, the Process Centrism, claims that the process is the central element to creating value. Let’s examine some of these myths and erroneous beliefs.

Myth #1 – Information Technology (IT) by Itself Generates Value

The first myth is the widespread belief that generating value is just a matter of deploying sophisticated software, hardware and infrastructure. This erroneous assumption is unfortunately dominant in the industry. It is false. For illustration, iPad, an Apple’s high value product, wasn’t invented by technology e.g., MacOS v10.6.8, CA Clarity PPM v12.0.0.1, and HP Proliant BL460c Blader Server. Rather, it primarily resulted from the imagination, innovation, commitment and marketing strategy developed by Steve Jobs and his team. This is to say that the multidimensional nature of value involving the people, process, organizational configuration, technology and culture factors is ignored by the vast majority of PMOs practitioners.

Deploying sophisticated project management and project portfolio management software isn’t enough to extract value from the strategic PMO. As long as it’s not associated with skilled / experienced resources, effective organizational configuration, and efficient management practices, deploying CA PPM Clarity, HP PPM or Microsoft Project Portfolio Server will result in very limited business value.

Myth #2 – Process Efficiency Guarantees Value Creation

The second myth is also widespread, it is the belief that deploying project management and project portfolio management processes shared across the company increases practice maturity and improve cost and time-to-market. As observed on the ground, processes are used as guidelines, thinking that you can follow the steps and accurate planning and budget, risk escalation, problem anticipation, resource coordination and stakeholders’ engagement will miraculously occur. In today’s fast-paced business environment, processes are increasingly seen as factors of rigidity and  bureaucracy, they reinforce silos between departments particularly between the business and IT.

Processes represent 15-20% of what it takes to run a project, the remaining 80-85% have to do with leadership, good judgement, effective management, and tactical vision. As long as it’s not associated with skilled / experienced resources, effective organizational configuration and efficient management practices, deploying PMBOK, CMMI or PRINCE2 in its entirety will result in very limited business value.

Myth #3 – Project Selection and Strategic Planning are Two Sides of the Same Coin

The third myth to bust is the completely erroneous notion that project selection / prioritization and strategic planning are two sides of the same coin. The major IT consulting firms and PPM vendors have institutionalized the misconception that project selection and strategic planning made no difference. It’s not uncommon to see client organizations equipped with highly sophisticated project selection and prioritization tools supposedly based on proven approach such as the Balanced Scorecard developed by Harvard’s Robert Kaplan and David Norton. Project selection is not strategic planning. Strategic planning is a more complete process with five structured phases:

  1. Identification of the customer and market objectives
  2. Financial benefit projection based on the customer and market objective
  3. Identification of the key processes and practices considered key to achieve the objectives
  4. Identification of the assets to mobilize including skills, application systems, IT infrastructure, management capabilities
  5. Selection and prioritization of projects intended to support the achievement of objectives

The strategic planning process results in the establishment of a complete Value Chain – a complete framework of people, processes, practices and tools –  that mobilizes executives and operational from both the business and IT to support the delivery of expected value.

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15 thoughts on “How I Build Strategic PMOs: The Pragmatic Success Factors for High Return PMO

  1. pmpragmatic October 12, 2013 / 1:23 am

    Thanks a lot Joris. I appreciate.

  2. pmpragmatic October 14, 2013 / 9:20 am

    Senior PMO Director at McCarthy Tetrault

    Phillipe- I like a lot of this material. I completely agree that the greatest value of a PMO is at the portfolio level and that Strategic PMOs are the way to go. I believe in linking business process architecture, business performance measures and strategy with the PMO to help create a closed and self regulating loop. PMOs that are focused just on reporting and methodology are not operating at the level that is required for maximum value and are at risk. I look forward to further discussions.

  3. pmpragmatic October 14, 2013 / 9:20 am

    Thanks David for this comment in LinkedIn! I appreciate.

  4. pmpragmatic October 14, 2013 / 9:21 am

    Vice President- Projects at Reliance

    @ Philipe I liked the linkages in the value chain of a PMO.
    @ David, I liked your comment ‘self regulating loop’ which is one of the results of a PMO
    May we agree that instituting a PMO is not a mean to end of all problems. It takes collaborated organizational effort. This is of course represented in the framework shown by Philipe. We should also recognize this effort takes a long time. I.e it is not a ‘quick fix’

  5. pmpragmatic October 14, 2013 / 9:22 am

    Thanks Rajan! You got it, the value of the PMO is the way to go.

  6. pmpragmatic October 14, 2013 / 9:23 am

    Senior PMO Manager and Vice President at Chubb Insurance

    Philippe,
    Having managed many IT Transformation efforts, your point on capturing executive expecations by incorporating their vision into the formation of the identity of the PMO is critical. Executives must support the value proposition of the newly formed organization. Without that sponsorship and pro-active support of the PMO mission, it cannot succeed.
    I really enjoyed the article.
    Thank you.
    Mary Anne Martucci

    • andrew October 21, 2013 / 2:06 pm

      I concur

  7. pmpragmatic October 14, 2013 / 9:25 am

    Thank you Mary Anne, I truly appreciate!

  8. pmpragmatic October 14, 2013 / 9:26 am

    Experienced Project Portfolio and PMO Manager

    Very interesting perspective! So many executives and senior management view PMO as a project reporting and PM process management function only. In doing so, they fail to leverage the true potential and, as was rightly pointed out, “extract from it the sustainable value you expect”. Once the implementation of PMO is done on the wrong track (under the auspices of the narrow perspective of PM reporting and process management), it is very challenging to do an about face – but well worth the effort to make the change!

  9. pmpragmatic October 17, 2013 / 10:34 pm

    Senior Vice President, CIO – Claims at Chubb wrote:

    “Great ideas, well worth the read. I think that you are spot on regarding the positioning and purpose of the PMO. Thanks for posting”

  10. pmpragmatic October 20, 2013 / 10:52 am

    Daniel Breston
    IT Service & Operations Management Improvement Advisor, Coach, Motivator, Org & Process Design-Change, Speaker

    Excellent article, thank you!

  11. pmpragmatic October 23, 2013 / 5:57 am

    Richard Ahlgren
    Partner Technology Consulting, Manufacturing and Distribution at Hewlett-Packard

    Phillipe I like your perspective and totally agree with your comments.

    Regards

    Rick

    • pmpragmatic November 8, 2013 / 2:17 am

      Thanks Anton for your contribution

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