Traditional PMOs vs. Enterprise PMOs that Deliver Value to the Business

Traditional PMOs vs. Enterprise PMOs that Deliver Value to the Business

manage value, not tasksThe common Program Management Office (PMO) is constantly challenged and called into question by senior management and the C-level. Without executive support, the PMO struggles to be successful in delivering program and project outcomes that effectively provide business value.

Traditional PMOs have a tendency of becoming too bureaucratic and too focused on managing tasks instead of value, increasing project complexity and causing headaches across the enterprise. But recent research proves PMOs can still be effective at delivering business value if managed the right way—at the enterprise level.

To deliver value with initiatives and reduce project complexity, the organization requires centralized coordination of processes and practices. In a traditional, departmentally-based PMO, it is very difficult to align projects with the strategic priorities of the organization. These types of PMOs may be successful on a departmental level but are often not taken seriously by the rest of the organization. When PMOs are departmentally-based, they tend to define value in different ways, skewing project results. Instead, the organization needs a PMO that provides a consistent mechanism to standardize practices and evaluate progress of initiatives across the organization, without creating unnecessary complexity.

When the PMO is operating at an executive level, there is an increased likelihood that project outcomes align with organizational strategy because the PMO has the ability to affect the entire organization. According to a recent study, strategic PMOs that implemented an enterprise-wide approach in 2013 tended to have the most mature processes and practices, and were the most likely to achieve consistently successful project outcomes. The findings indicate that the traditional approach to Program Management Offices is transforming to an approach in which there is one central Enterprise Program Management Office (EPMO) held accountable for the organization’s entire program portfolio.

The EPMO provides a way of effectively managing projects in today’s complex, global marketplace. The traditional PMO lacks direction and control on enterprise-wide initiatives. Without executive sponsorship, projects fail. Resources are reluctant to work with and report to individual PMOs within their own silos without executive support. A centralized EPMO has the respect and executive sponsorship necessary to get people involved. The EPMO creates the appropriate decision-making processes for addressing issues that arise, including how to resolve issues that cross multiple projects. The EPMO structure varies from company to company; most organizations have a single EPMO at the executive level that oversees all projects, but larger organizations have departmentally-based PMOs reporting to a central EPMO that ensures projects are aligned with the strategic plan and manage project prioritization.

The EPMO has the ability to align all projects, either at the corporate or departmental levels, with the organization’s strategic plan to better manage project prioritization and resource allocation. When organizations take on too many projects or programs at once, resources are stretched thin. There needs to be an EPMO in place that can determine whether the projects in the portfolio are carefully aligned with organizational objectives, and that can prioritize projects according to those objectives, making sure to eliminate low-value added projects or projects that don’t align with the enterprise strategy.

A major advantage of the EPMO is that its perspective spans across departments and initiatives, meaning it has insight to all projects and programs across the organization. Unlike a traditional, departmentally-based PMO, an EPMO is able to perform impact analysis on a project in the context of the entire organization—how will the project affect existing people, processes, and technology, as well as concurrent projects.

An EPMO can do a lot more for your organization than a traditional PMO. Implementing an EPMO will improve the way the program portfolio is managed, increasing the business value delivered with each initiative by…

  • Defining a consistent definition of value across the organization
  • Ensuring projects meet or exceed customer expectations
  • Aligning projects with organizational strategy
  • Ensuring projects are successfully delivered—on-time, on-budget, and aligned with customer needs
  • Mitigating risk early
  • Reducing cycle times
  • Reduce project costs
  • Identify impacts on the organization, individual departments, and customers
  • Resolves issues that cross multiple projects
  • Provide transparency to project stakeholders
  • Communicate project progress across silos
  • Ensuring project teams have appropriate skills and competencies
  • Standardize project processes, tools, and templates
  • Standardize measurements and metrics

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