May 7, 2018
5 Secret Killers of Your IT PMO: Part 1
In a recent webinar, project management experts Naomi Caietti, director and managing editor at Naomi Caietti Consulting, and Nick Scholz, solutions marketing manager at Workfront, shared five secret IT PMO killers and tips for overcoming them. What follows is the first in a three-part recap of the webinar. If you want to watch the entire webinar on demand, click here.
Naomi Caietti: As leaders, every day you get the opportunity to partner with their customers to find solutions to their business problems is a great day to honor the discipline of project management and PMOs around the globe.
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In the last decade, PMOs have undergone many challenges, have seemed to experience an identify crisis, have not won over stakeholders about the value they offer, or how they fit into their respective cultures.
Today, we’re pleased to share new PMO insights, emerging trends, how PMO failures have shaped new approaches and models, review best in class PMOs, and discuss the five secret killers of PMOs.
I'd like to level set for our audience today. My goal is to share the latest research trends and just-in-time information so you walk away with tips you can immediately put into action.
So my focus for the first half will address four of the top 10 trends in project management that have recently been released for 2017.
The first one will be evolving the PMO; second, making improvements in key processes; three, increasing the value of PMO to the organization; and four, staying in touch with the business.
I’ll only skim the surface on this important topic, so please jot your questions down throughout the presentation as you think of them. We will have poll questions during the first and second half of the webinar, so reflect on your questions and at the end, Ashley will facilitate our Q&A for us.
I'd like to also share, this presentation will offer value to private and public sector project program portfolio managers, project management office directors and executives, chief information officers, and consultants in the public and private sector. So, let’s get started.
As a thought leader, I’m focused on staying in touch with current trends, on change from leading experts in the field, conferences, and social media.
So over the last few years, there have been some emerging ideas from many of these leading experts including PMI and their Pulse of the Profession reports. It’s great to see PMOs be champions and beacons of hope again for many organizations and their business.
And there has never been a better time for PMOs. They can be the conduit for executing an organization’s portfolio of projects and strategic initiatives.
So, let’s review how the PMO has evolved in the last decade. Evolving the PMO, this is one of the top 10 challenges for PMOs in 2017 that was identified at PMI’s PMO Symposium 2016. As we look at these models, notice the change in mindset.
So, what did we learn over the last decade? We launched PMOs using the old model, and we failed over and over again. So there was so much to learn from this.
And basically, the chart represents the shift from what I’ll call a fixed mindset to a more open, flexible, and adaptable or growth mindset. As we moved through the current model, we embraced change and adapted to the current model, but still there was more work to be done.
In the emergent model, we leveraged new approaches like Agile, and pivoted to emerge as a strategic partner with the business to help deliver services to drive innovation, return on investment, and achieve competitive differentiation.
The percentage of organizations with a PMO continues an upward trend from 61 percent in 2007, to 71 percent today in 2017.
Executive leaders, PMO directors, and project teams are charged with meeting the challenges to be more agile, customer-focused, and competitive. Many are looking at the very structured capability and purpose of the PMO for answers, and that’s a good thing.
So, let’s review how the shift has impacted PMO roles. So what is the role of the PMO? Well, I want to share that earlier this year at PMI’s PMO Symposium, Mark Price Perry gave a talk called “The Golden Rule—It’s Not Your PMO.”
Mark basically shared that the PMO doesn’t belong to you. The PMO belongs to the business. And then he set out to say that PMO management is not project management at all; it’s business unit management. This is a whole new ballgame for us, in looking at it from this perspective.
PMOs need to change to evolve, so basically this slide depicts a nice transition from the grey—from traditional roles—reflecting to a more strategic focus in the red with the business in mind, using lean tools to track data for project portfolio prioritization, more focus on resource management, and offering consulting services like coaching, mentoring, and training.
So let’s talk about new models and new approaches. There are many new PMO models that have surfaced. And in this example, this is a depiction of a strategic PMO.
But there are also PMOs like hybrid, Agile, and virtual PMOs out there and the impacts have been seen in IT and business. These models have shifted due to global changes in the marketplace, the Internet of Things, and emerging IT technology.
In fact on the IT side, going by research firm Gartner, bimodal IT describes a way of managing two separate modes of IT delivery projects. One is focused on stability and the other agility.
This particular model that we’re looking at here, I think might be more of what I call enterprise or center of excellence model, and I’m sure you’ve seen those terms used before.
Project portfolios are becoming more and more interdependent, so the long-term trend is going to grow even more in the coming years.
So the interdependencies among your projects and internalization are on the rise, and as a result, the strategic project management office model will gain considerable importance.
So now it’s time for a poll, and I’m going to ask you a question. And let’s see how many get the right answer.
I’m just going to flip over to the next slide so we can see what some of the results are. It looks like many of you are choosing "organizational resistance to change," but I don’t see any of you choosing any of the other options, yet.
Well, certainly if you answered any of the challenges, you are correct; but it’s basically "all of the above." In this particular list there was a top recurring challenge that continues to have the highest percentage from the survey from this report, your PMO to the top.
It is "PMO processes seen as overhead." It’s interesting to see this particular challenge still facing PMOs. When I worked in my PMO it was a challenge to constantly be having to demonstrate and talk about what value we were bringing to the organization.
So it’s still out there, it’s still a challenge, and it’s still one of the top ones. But these are all actually a high percentage, anywhere from 30 to 50 percent.
So let’s briefly talk about failure; looking back and learning lessons and moving forward. If we look at this slide, don’t many of the failures look familiar?
Most of these are unfortunately true, but what about the first bullet? "Fifty percent of project management offices close within three years." So, do you think this is true?
Did you know that there’s fake news in project management, too? So John McIntire also gave a presentation at PMI’s PMO Symposium called “Beyond the Tricky Third Year” to debunk the myth about PMO closures.
He shared: let’s bring it out in the open, that stat of PMOs closing within three years is wrong, and it always has been. The original research paper actually said that PMOs change and evolve into something else.
They are never the same PMO three years down the line as they were when they first started, so there you go.
So it’s really been a tough decade for sure, as many of you are out there working hard, trying to stand up your PMOs, improve your PMOs, or mature your PMOs. And many of these statistics are still only a few years old.
So, it’s finally time for some good news, right?
The recent statistics show that PMOs are now not only on the rise, they’re demonstrating success with new approaches, methods, and partnerships with the business. So let’s take a peek at what PMO success looks like.
My favorite bullet on this slide is the top one: a majority of firms, or 85 percent, have a PMO in place. Successful PMOs feel good from the inside out, and there are so many benefits for the organization and for the staff working in the PMO.
PMO implementation has increased, as I mentioned, 10 percent in the last few years. And as in the previous slide, many orgs are leaning towards a more strategic model. The magic number for experienced PMOs is three to six years.
So it does take some ramp up time to actually begin to improve your processes and work on that maturity at many levels in your PMO, from staffing to your standards, to your processes and project delivery. And PMO alignment enables strategic planning, governance, and portfolio management.
Let’s see what more good news we’ve got out there. So again, here’s some other great news from PMOs that are out there just really doing good work. The takeaway from this slide is finally, value is being demonstrated.
Resource management is being better managed, training is being offered to staff so that they can improve processes, standards, project delivery, and they can focus on those things like governance and strategic planning and resource management.
PMO maturity is on the rise, and maturity and value are mutually exclusive. This looks really good and successful, right? Are you wondering how you get there?
Let’s talk about best in class PMOs. PM Solutions is a service provider, and has completed some recent research on best in class PMOs. Also, PM Solutions has given out PMO awards in the last decade and is now turning them over to PMI.
And I’ve followed PM Solutions probably for this last decade, and they have a really nice archive of winners and runners-up from many industries in an ebook you can download.
The beauty of the information that they’re providing there is you can take a look at your PMO and see what things that you may want to model after. It talks about different PMOs, the runners-up, and the winners who have won from various industries, and it’s a really great resource for you.
A best in class PMO has specific criteria and can be defined as they work on far more projects than less capable PMOs; they have been in place for six years on average, and I mentioned that it takes some time to ramp up, but six years seems to be the magic number for best in class.
And they’re more likely to report to an executive VP or above. So the alignment is there to the C-suite, which is really great to have for your PMO.
More visibility, strong support from the C-suite, you can get more resources, and you can also plug yourself into that strategic planning and have a seat at the table.
They also have a wider variety of roles within the PMO, from schedulers and planners on up to portfolio managers. They engage in tests that impact strategic planning, governance, and portfolio management.
I’m glad to say that the PMO I worked in at the datacenter for the State of California, it was all of these things. It was acting as a best in class PMO. We were striving to provide services and service delivery of projects for our customers.
So there are many strategy services and competencies PMOs can excel in, so this particular slide is just basically showing you these are the top three from the latest State of the Report 2016.
These are the three things that the best in class PMOs are excelling in: strategic focus, sophisticated resource management, and advanced training. It’s all about going from good to great, but again, it’s going to take time.
So let’s talk about agility; and Agile project management is not just a buzzword anymore.
Jesse Fewell also spoke at the PMI PMO Symposium, and he’s a consultant and Agile expert and considers that PMOs excel in three forms of agility: personal agility, project and product agility, and organizational agility. I think it’s good to think of agility from those perspectives.
PMOs are shifting in methods and approach to more lean or Agile methods and practices like Scrum, Kanban, and others. They’re lean, business-aligned, and focused on delivery to meet business needs more rapidly.
Many approaches may even use a hybrid of Waterfall and Agile approaches to meet the delivery of the project.
So, if any of you listening today are thinking of implementing a PMO, planning improvement or changes in your PMO, or are dealing with many of the challenges mentioned, you may wish to consider a road map.
Do you have a road map for your PMO success? Did you hope to come here to find out more about how you could create yours?
Consider these steps as you review how you will evolve, improve processes, build partnerships with the business, and move toward the target to increase the value of your project management office.
In The State of the Report 2016, they listed the top five PMO priorities you should focus on for the next 12 months.
The interesting thing about these priorities is that they addressed organizations with and without PMOs—small and large organizations, industry-specific like healthcare or finance, functional like IT or datacenter, internal and external, and low or high performing PMOs.
The top five priorities are governance, resource planning, PM processes, reporting, and portfolio management. None of these are a surprise to me, but again, I read these actually in a priority order, also.
So if you are looking at this and maybe yourselves thinking, "I should go after reporting first," or "I’m going to focus on my processes; they’re suggesting governance."
I’m going to save it for our Q&A at the end. I can share with you more specifically for those areas what they do state and we can discuss that.
Mature PMOs should focus on adding capabilities, and less mature PMOs should do a comparison of their own functions and processes to a mature PMO and this stated PMO report.
And you can basically use it as a model to create your own road map to improve your functionality and performance. And again, each organization is unique, so you want to make sure you focus on creating the road map that fits your organization.
So, let’s wrap up. Today’s PMO challenges can be addressed with proper planning, approaches, and business partnerships—like I’ve discussed today—to continue to evolve.
You’re now ready to put together a plan and define your path forward.
To watch the entire "5 Secret Killers of Your IT PMO" webinar on demand, featuring Naomi Caietti and Nick Scholz, click here.