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The PMO as a Strategic Partner

By TwentyEighty Strategy Execution

The PMO as a strategic partner has gained traction over the last five years or so as more and more Enterprise PMOs (ePMO) have come into existence. These ePMOs tend to sit at an executive level, overseeing all portfolio, programme and project activity in an organisation. The strategic partner label has more recently been discussed because of the gap between the organisation’s strategy and the programmes and projects that execute the strategy. The gap has started to be addressed with portfolio management processes and methods – areas like project prioritisation and investment appraisals – are enabling organisations to choose which programmes and projects best deliver the strategic outcomes based on factors like benefits realisation and resource management.

The latest Trends in Strategy Execution were discussed at the recent Executive Briefing hosted by TwentyEighty Strategy Execution in London. The ninth trend, “The PMO as a strategic partner” is one which is causing much discussion in the PMO community.

The PMO as a strategic partner has gained traction over the last five years or so as more and more Enterprise PMOs (ePMO) have come into existence. These ePMOs tend to sit at an executive level, overseeing all portfolio, programme and project activity in an organisation. The strategic partner label has more recently been discussed because of the gap between the organisation’s strategy and the programmes and projects that execute the strategy. The gap has started to be addressed with portfolio management processes and methods – areas like project prioritisation and investment appraisals – are enabling organisations to choose which programmes and projects best deliver the strategic outcomes based on factors like benefits realisation and resource management.

The PMO is the obvious entity to help bridge this gap.

Types of PMO

The ePMO is not the only type of PMO within organisations today. PMI’s view is that there are four main types:

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  1. TheEnterprise/Organisation Unit
  1. TheProject Support PMO, which is very much focused on the processes and tools to support project management across the organisation – this role is about providing the methodology, processes, templates etc – the best practice that an organisation needs to give every chance that projects will be successful.
  1. TheCentre of Excellence (CoE) PMO is one which is about knowledge sharing, coaching and mentoring, advice and guidance for practitioners across the delivery organisation.
  1. TheProject-Specific PMO is about providing individual support to projects, a home if you like for Project Co-ordinators and Analysts to live whilst being allocated to individual projects.

There are two trends currently being seen:

  1. There is still a disconnect between executives and the PMO – especially in the value of the PMO to the organisation – being seen as an overhead – not seen as strategic are some of the objections levelled at the PMO
  2. The opposite – or juxtaposition – is that ePMOs that are in existence and successful are giving some great returns on investment (PMI’s research on High Performing Organisations)

Of course, these four categories are only one model – there are many others i.e., Portfolio Management Office, Programme Management Office, Change Management Office and so on. But what is important is the dynamics involved in having different types of PMOs within the business and also how the culture and context of the business shapes those.

There is also value in each one of these types of PMO – it is not suggested that organisations just strive for an ePMO and forsake all others – but more a recognition that the ePMO is growing in organisations and that there is a risk that the other three are seen as overheads in comparison.

The Value of PMO

The State of the PMO Report issued by TwentyEighty Strategy Execution last year did look into this question about value of the PMO. The table below highlights that the PMO is still reporting on the traditional metrics we would expect to see in a project environment – time, cost etc. Yet we can also see that PMOs are also tracking the alignment of programmes and projects to strategic objectives – just what you would expect if the PMO was becoming more of a strategic partner. This is a significant increase over the last four years.

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There is also data from PMI’s Pulse of the Profession Report which shows the value of a more strategic enterprise PMO in operation.

With this particular trend of PMOs becoming a more strategy partner, the effectiveness of these kind of PMOs comes down to the ability to educate and influence the senior executives within the organisation which helps maintain their levels of funding, uplifting the view of PMOs and moving away from a nice to have, to being that strategic partner.

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