UMT360’s recent webinar schedule has focused on enabling PMOs to be strategic. Great topics, with some world-class PMO professionals including Learning How to Establish a Strategic PMO with Carl Souchereau from SNC Lavalin T&D, and Changing the PMO Status Quo with Frank La Rocca from ConEd. In fact, we’ve seen so much interest in the Strategic PMO idea that we’ve created a local breakfast series, starting initially in Chicago and Houston.
But we also thought it would be good to step back and define just what makes up a strategic PMO. We reached out to some industry folks to get their views, and one response stood out in particular. Andy Jordan is the president at Roffensian Consulting, and has over 20 years within the portfolio, program, project and PMO space. Andy’s response aligned very closely with our view, and so we thought we’d let Andy share directly! You can reach Andy at email@example.com, and we thank him in advance for the guest post! – Paul
Just What is a Strategic PMO?
By Andy Jordan
In the last few years PMOs have been asked to take on much more ‘business critical’ functions. Some have embraced this opportunity, some have not. The idea of a project focused central services style PMO (people, process, tools, training) is rapidly losing favour because it is not delivering business results. Instead, the idea of a PMO more aligned with the business is gaining traction, and that is what PMOs should always have been. 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. That’s what we expect for sales, or operations, or fill in the blank other department, and that’s what we should expect of PMOs.
When it comes to what that means in specific terms, the needs of individual organizations will lead to variations, but we should expect 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.
How organizations get there varies considerably, but it has to have executive support – a strategic PMO isn’t strategic without a clear purpose/goal set by leadership and performance measures to ensure accountability. That’s the biggest challenge to PMOs becoming truly strategic – executives frequently don’t know how to leverage PMOs in optimal ways. The current crop of PMO leaders are often not able to help because they have been appointed based on their project leadership experience, not their business leadership experience.